Document:

<PAGE>
                                          Certified to be a true copy of the
                                       original document this 1 day of June 2005
                                                  STEPHENSON HARWOOD

                                                                    Exhibit 10.6

11.024

                                DATED 24 MAY 2005

                           ALLENDALE INVESTMENTS S.A.
                             ALTERWALL BUSINESS INC
                                 (AS BORROWERS)

                                     - AND-

                           FORTIS BANK (NEDERLAND) N.V
                             AND OTHERS (AS LENDERS)

                                      -AND-

                           FORTIS BANK (NEDERLAND) N.V
                         (AS AGENT AND SECURITY TRUSTEE)

                                   ----------

                           US$20,000,000 SECURED LOAN
                               FACILITY AGREEMENT
                                M.V. "KUO HSIUNG"
                               M.V. "YM QINGDAO I"

                                   ----------

                               STEPHENSON HARWOOD
                            ONE ST. PAUL'S CHURCHYARD
                                 LONDON EC4M 8SH
                               TEL: 020 7329 4422
                               FAX: 020 7606 0822
                                   REF: 11.024

<PAGE>

CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
 1 Definitions and Interpretation........................................     1
 2 The Loan and its Purpose..............................................    15
 3 Conditions Precedent and Subsequent...................................    17
 4 Representations and Warranties........................................    21
 5 Repayment and Prepayment..............................................    25
 6 Interest..............................................................    26
 7 The Master Agreement..................................................    28
 8 Fee...................................................................    30
 9 Security Documents....................................................    30
10 Agency and Trust......................................................    31
11 Covenants.............................................................    40
12 Accounts..............................................................    49
13 Events of Default.....................................................    51
14 Set-Off and Lien......................................................    55
15 Assignment and Sub-Participation......................................    56
16 Payments, Mandatory Prepayment, Reserve Requirements and Illegality...    58
17 Communications........................................................    62
18 General Indemnities...................................................    63
19 Miscellaneous.........................................................    65
20 Law and Jurisdiction..................................................    69
</TABLE>

<PAGE>

<TABLE>
<S>                                                                         <C>
SCHEDULE 1...............................................................    71
   The Banks and the Commitments.........................................    71
APPENDIX A...............................................................    73
   Drawdown Notice.......................................................    73
APPENDIX B...............................................................    74
   Form of Transfer Certificate..........................................    74
</TABLE>

                                       79

<PAGE>

LOAN AGREEMENT

DATED: 24 May 2005

BETWEEN:-

(1)  ALLENDALE INVESTMENTS S.A. ("ALLENDALE") and ALTERWALL BUSINESS INC.
     ("ALTERWALL"), each a company incorporated according to the law of the
     Republic of Panama, with its registered office at Edificio Torre Universal
     Ave, Federicio Boyd, Calle 51, Piso No. 11, 12 (Penthouse) Panama 5
     Republic of Panama (together "THE BORROWERS" and each a "BORROWER");

(2)  FORTIS BANK (NEDERLAND) N.V. (the "ORIGINAL BANK") AND THE BANKS AND
     FINANCIAL INSTITUTIONS (together with the Original Bank, the "BANKS" and
     each a "BANK") named in Schedule 1, of the offices listed in that Schedule
     or such other offices as they may select and notify to the Agent from time
     to time;

(3)  FORTIS BANK (NEDERLAND) N.V. acting as arranger, agent and security trustee
     through its office at Coolsingel 93, P.O. Box 749, 3000 AS Rotterdam, The
     Netherlands (in that capacity "THE AGENT").

WHEREAS:-

(A)  Allendale is the registered owner of the Kuo Vessel and Alterwall is the
     registered owner of the YM Vessel.

(B)  Each of the Vessels is registered in the ownership of her Owner under the
     flag of the Republic of Panama.

(C)  Each of the Banks have agreed to advance to the Borrowers, as joint and
     several debtors and obligors, its respective Commitment of an aggregate
     amount not exceeding the lesser of (i) twenty million Dollars ($20,000,000)
     and (ii) fifty per centum (50%) of the Fair Market Value of the Vessels, in
     order to assist the Borrowers in re-financing certain existing indebtedness
     secured over the Vessels.

IT IS AGREED as follows:-

1    DEFINITIONS AND INTERPRETATION

     1.1  DEFINITIONS

<PAGE>

          In this Agreement:-

          1.1.1 "THE ACCOUNTS" means the Earnings Account and the Retention
               Account.

          1.1.2 "THE ACCOUNTS SECURITY DEED" means the Accounts Security Deed
               referred to in Clause 9.5.

          1.1.3 "THE ADDRESS FOR SERVICE" means HTD, Irongate House, Duke's
               Place, London, EC3A 7LP, United Kingdom or, in relation to any of
               the Security Parties, such other address in England and Wales as
               that Security Party may from time to time designate by no fewer
               than ten days' written notice to the Agent.

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

          1.1.5 "APPROVED BROKERS" means independent sale and purchase brokers
               appointed by the Agent in its discretion.

          1.1.6 "THE ASSIGNMENTS" means the deeds of assignment of the
               Insurances, Earnings, Charter Rights and Requisition Compensation
               referred to in Clause 9.2 (each, an "ASSIGNMENT").

          1.1.7 "THE AVAILABILITY TERMINATION DATE" means 31 May 2005 or such
               later date as the Borrowers may request and the Banks may in
               their discretion agree (such consent not to be unreasonably
               withheld).

          1.1.8 "BREAK COSTS" means all costs, losses, premiums or penalties
               incurred by the Agent or any Bank in the circumstances
               contemplated by Clause 18.4, or as a result of it receiving any
               prepayment of all or any part of the Loan (whether pursuant to
               Clause 5 or otherwise), or any other payment under or in relation
               to the Security Documents on a day other than the due date for
               payment of the sum in question, and includes (without
               limitation) any losses or costs incurred in liquidating or
               re-employing deposits from third parties acquired to effect or
               maintain the Loan, and any liabilities, expenses or losses
               incurred by the Agent or any Bank in terminating or reversing, or
               otherwise in connection with, any Transaction or any other
               interest rate and/or currency swap, transaction

                                        2

<PAGE>

               or arrangement entered into by the Agent or any Bank to hedge any
               exposure arising under this Agreement, or in terminating or
               reversing, or otherwise in connection with, any open position
               arising under this Agreement or the Master Agreement.

          1.1.9 "BUSINESS DAY" means a day on which banks are open for the
               transaction of business of the nature contemplated by this
               Agreement (and not authorised by law to close) in New York,
               United States of America; London, England; Piraeus, Greece and
               any other financial centre which any Bank may consider
               appropriate for the operation of the provisions of this
               Agreement.

          1.1.10 "CHARTER" means the time charter or other contract of
               employment of the Kuo Vessel at a gross daily rate of hire of (i)
               twenty two thousand Dollars ($22,000) per day with five per
               centum (5%) commission from the Drawdown Date until 16 November
               2005, (ii) sixteen thousand Dollars ($16,000) per day with five
               per centum (5%) commission until 16 November 2006, (iii) twelve
               thousand Dollars ($12,000) per day with five per centum (5%)
               commission from 17 November 2006 until 16 November 2007, which
               will expire by effluxion of time by 16 November 2007 and of the
               YM Vessel at a gross daily rate of hire of eleven thousand nine
               hundred Dollars ($11,900) with six point two five per centum
               (6.25%) commission from the Drawdown Date until 12 May 2007,
               which will expire by effuxion of time by 12 May 2007.

          1.1.11 "CHARTERER" means Cheng Lie Navigation Co. Ltd. of Taipei in
               respect of the Kuo Vessel and Yangming (UK) Ltd. of London in
               respect of the YM Vessel.

          1.1.12 "CHARTER RIGHTS" means all rights and benefits accruing to the
               Borrowers in respect of the Vessels under or arising out of the
               Charters in respect of the Vessels or any other charterparty or
               contract of employment in respect of the Vessels and not forming
               part of the Earnings in respect of the Vessels.

                                        3

<PAGE>

          1.1.13 "COMMITMENT" means, in relation to each Bank, the amount of the
               Loan which that Bank agrees to advance to the Borrowers as its
               several liability as indicated against the name of that Bank in
               Schedule 2 and/or, where the context permits, the amount of the
               Loan advanced by that Bank and remaining outstanding.

          1.1.14 a "COMMUNICATION" means any notice, approval, demand, request
               or other communication from one party to this Agreement to the
               other.

          1.1.15 "THE COMMUNICATIONS ADDRESS" means c/o Eurobulk Ltd, Aethrion
               Center, 40 Ag. Konstantinou Avenue, 151 24 Maroussi, Greece,
               marked for the attention of Mr. Aristides J. Pittas.

          1.1.16 "THE COMPANY" means, at any given time, the company responsible
               for each Vessel's compliance with the ISM Code pursuant to
               paragraph 1.1.2 of the ISM Code.

          1.1.17 a "CONFIRMATION" means a Confirmation exchanged, or deemed
               exchanged, between the Agent and the Borrowers as contemplated by
               the Master Agreement.

          1.1.18 "CORPORATE GUARANTEE" means the guarantee and indemnity
               referred to in Clause 9.3.

          1.1.19 "CORPORATE GUARANTOR" means Eurobulk Ltd of the Republic of
               Liberia, a company incorporated according to the law of the
               Republic of Liberia with its registered office with its
               registered office at 80 Broad Street Monrovia, Liberia.

          1.1.20 "CREDIT SUPPORT DOCUMENT" means any document described as such
               in the Master Agreement and, where the context permits, any other
               document referred to in any Credit Support Document which has the
               effect of creating an Encumbrance in favour of the Agent.

          1.1.21 "CREDIT SUPPORT PROVIDER" means any person (other than the
               Borrowers) described as such in the Master Agreement.

          1.1.22 "CURRENCY OF ACCOUNT" means, in relation to any payment to be
               made to the Agent or a Bank under or pursuant to any of the
               Security Documents,

                                       4

<PAGE>

               the currency in which that payment is required to be made by the
               terms of the relevant Security Document.

          1.1.23 "DEFAULT RATE" means the aggregate rate of the Margin and two
               per centum (2%) per annum above the cost to the Agent of
               obtaining funds in amount similar to the amount of the
               Indebtedness or any relevant part of the Indebtedness for such
               periods as the Agent shall determine in its discretion.

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

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

          1.1.26 "THE DRAWDOWN DATE" means the date on which the Loan is
               advanced by the Banks to the Borrowers pursuant to Clause 2.

          1.1.27 "DRAWDOWN NOTICE" means a notice complying with Clause 2.2.

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

          1.1.29 "THE EARNINGS ACCOUNT" means a bank account to be opened in the
               joint names of the Borrowers with the Agent and designated
               "Allendale Investments S.A. and Alterwall Business Inc. -
               Earnings Account".

          1.1.30 "ENCUMBRANCE" means any mortgage, charge (fixed or floating),
               pledge, lien, assignment, hypothecation, preferential right,
               option, title retention or trust arrangement or any other
               agreement or arrangement which has the effect of creating
               security or payment priority.

                                       5

<PAGE>

          1.1.31 "ENVIRONMENTAL AFFILIATE" means an agent, employee, independent
               contractor, sub-contractor or other person in a contractual
               relationship with the Borrowers relating to the Vessels or its
               carriage of cargo or its operation whose acts or omissions would
               have a Material Adverse Effect.

          1.1.32 "ENVIRONMENTAL APPROVAL" means all approvals, licences,
               permits, exemptions and authorisations required under any
               applicable Environmental Laws.

          1.1.33 "ENVIRONMENTAL CLAIM" means any and all enforcement, clean up,
               removal or other governmental or regulatory actions or orders
               instituted or completed pursuant to any Environmental Laws or
               Environmental Approval together with claims made by any third
               party relating to damage, contributions, loss or injury,
               resulting from any Release of Materials of Environmental Concern.

          1.1.34 "ENVIRONMENTAL LAWS" means all local, state, provincial,
               federal, state local, foreign and international laws,
               regulations, treaties and conventions (including any amendments
               and/or protocols thereto) for the time being in force pertaining
               to the pollution or protection of human health or the environment
               (including ambient air, surface water, ground water, land surface
               or subsurface strata and all or any part of navigable waters,
               waters of the contiguous zone, ocean waters and international
               waters (howsoever called)), including laws, regulations, treaties
               and conventions (including any amendments and/or protocols
               thereto) for the time being in force relating to the Release (or
               threatened Release) of Materials of Environmental Concern.

          1.1.35 "EVENT OF DEFAULT" means any of the events set out in Clause
               13.2.

          1.1.36 "THE FACILITY PERIOD" means the period beginning on the date of
               this Agreement and ending on the date when the whole of the
               Indebtedness has been repaid in full and the Borrowers has ceased
               to be under any further actual or contingent liability to the
               Banks or the Agent under or in connection with the Security
               Documents.

                                       6

<PAGE>

          1.1.37 "FAIR MARKET VALUE" means the average of two valuations
               obtained from two Approved Brokers.

          1.1.38 "FINAL MATURITY DATE" means the earlier of the date falling six
               (6) years after the Drawdown Date and 31 May 2011.

          1.1.39 "THE GUARANTEES" means the Personal Guarantee and the Corporate
               Guarantee.

          1.1.40 "THE GUARANTORS" means the Corporate Guarantor and the Personal
               Guarantor and/or (where the context permits) any other person or
               company who shall at any time during the Facility Period give to
               the Banks or to the Agent a guarantee and/or indemnity for the
               repayment of all or part of the Indebtedness.

          1.1.41 a "HEDGING TRANSACTION" means a Transaction entered into
               between the Agent and the Borrowers pursuant to the Master
               Agreement for the express purpose of hedging all or part of the
               Borrowers' interest rate risk pursuant to this Agreement.

          1.1.42 "THE INDEBTEDNESS" means the Loan; any Master Agreement
               Liabilities; all other sums of any nature (together with all
               interest on any of those sums) which from time to time may be
               payable by the Borrowers to the Agent or to the Banks pursuant to
               the Security Documents; any damages payable as a result of any
               breach by the Borrowers of any of the Security Documents; and any
               damages or other sums payable as a result of any of the
               obligations of the Borrowers under or pursuant to any of the
               Security Documents being disclaimed by a liquidator or any other
               person, or, where the context permits, the amount thereof for the
               time being outstanding.

          1.1.43 an "INSTRUCTING GROUP" means any one or more Banks whose
               combined Proportionate Shares exceed seventy per centum (70%).

          1.1.44 "INSURANCES", in respect of each Vessel, means all policies and
               contracts of insurance (including all entries in protection and
               indemnity or war risks associations) which are from time to time
               taken out or entered into in respect of or in connection with the
               Vessel or her increased value or

                                        7

<PAGE>

               her Earnings or the loss of hire and (where the context permits)
               all benefits thereof, including all claims of any nature and
               returns of premium.

          1.1.45 "INTEREST PAYMENT DATE" means each date for the payment of
               interest in, accordance with Clause 6.

          1.1.46 "INTEREST PERIOD" means each interest period selected by the
               Borrowers or agreed by the Agent pursuant to Clause 6.

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

          1.1.48 "THE ISPS CODE" means the International Ship and Port Facility
               Security Code adopted by the International Maritime Organisation
               (as the same may be amended from time to time).

          1.1.49 "KUO VESSEL" means the container motor vessel "KUO HSIUNG",
               built in 1993 of approximately 18,154 dwt and 1,169 TEU
               registered in the ownership of Allendale under the laws and the
               flag of the Republic of Panama and everything now or in the
               future belonging to her on board and ashore.

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

          1.1.51 "LIBOR" means the rate displayed as the British Bankers'
               Association Interest Settlement Rate on any information service
               selected by the Agent on which that rate is displayed (without
               rounding), for deposits in Dollars of amounts equal to the amount
               of the Loan or any relevant part of the Loan for a period equal
               in length to the relevant Interest Period, or

                                        8

<PAGE>

               (if the Agent is for any reason unable to ascertain that rate)
               the average rate at which deposits in Dollars of amounts
               comparable to the amount of the Loan (or any relevant part of the
               Loan) are offered to the Agent in the London Interbank market for
               a period equal in length to the relevant Interest Period.

          1.1.52 "THE LOAN" means the aggregate amount from time to time
               advanced by the Banks to the Borrowers pursuant to Clause 2 or,
               where the context permits, the amount advanced and for the time
               being outstanding.

          1.1.53 "THE MANAGERS" means Eurobulk Ltd., or such other commercial
               and/or technical managers of the Vessels nominated by the
               Borrowers as the Agent may in its discretion approve.

          1.1.54 "MANAGER'S UNDERTAKINGS" means the Undertakings of the Managers
               referred to in Clause 9.7.

          1.1.55 "THE MARGIN" means:-

               (a)  one point two five per centum (1.25%) per annum for as long
                    as the amount of the Loan outstanding remains below sixty
                    per centum (60%) of the Fair Market Value of the Vessels;
                    and

               (b)  one point three seven five per centum (1.375%) per annum for
                    as long as the amount of the Loan outstanding exceeds sixty
                    per centum (60%) of the Fair Market Value of the Vessels.

          1.1.56 "MASTER AGREEMENT" means any ISDA Master Agreement (or any
               other form of master agreement relating to interest or currency
               exchange transactions) entered into between the Agent and the
               Borrowers during the Facility Period, including each Schedule to
               any Master Agreement and each Confirmation exchanged pursuant to
               any Master Agreement.

          1.1.57 "THE MASTER AGREEMENT LIABILITIES" means, at any relevant time,
               all liabilities of the Borrowers to the Agent under or pursuant
               to the Master Agreement, whether actual or contingent, present or
               future.

          1.1.58 "MATERIAL ADVERSE EFFECT" means a material adverse effect on
               the Borrowers' ability to meet its obligations to the Agent in
               respect of the

                                        9

<PAGE>

               Indebtedness or on the security provided to the Agent and the
               Banks in respect of the Indebtedness.

          1.1.59 "MATERIAL OF ENVIRONMENTAL CONCERN" means and includes all
               pollutants, contaminants, toxic substances, oil and hazardous
               substances as may be defined in any applicable local, state,
               provincial, federal, national and international laws,
               regulations, treaties and conventions (including any amendments
               and/or protocols thereto) for the time being in force.

          1.1.60 "THE MAXIMUM LOAN AMOUNT" means an aggregate amount not
               exceeding the lesser of (i) twenty million Dollars ($20,000,000)
               and (ii) fifty per centum (50%) of the Fair Market Value of the
               Vessels.

          1.1.61 "THE MORTGAGEES' INSURANCES" means all policies and contracts
               of mortgagees' interest insurance, mortgagees' additional perils
               (oil pollution) insurance and any other insurance from time to
               time taken out by the Agent on behalf of the Banks in relation to
               the Vessels.

          1.1.62 "THE MORTGAGES" means the first priority mortgages referred to
               in Clause 9.1 (each a "MORTGAGE").

          1.1.63 "NOTIONAL AMOUNT", in respect of any Hedging Transaction, means
               the Notional Amount as defined in the Confirmation relating to
               that Hedging Transaction.

          1.1.64 "OPERATING EXPENSES" means cash expenses properly and
               reasonably incurred by the Borrowers in connection with the
               operation, employment, maintenance, repair and insurance of the
               Vessels.

          1.1.65 "OWNER" means Allendale in respect of the Kuo Vessel and
               Alterwall in respect of the YM Vessel.

          1.1.66 "PERSONAL GUARANTEE" means the guarantee and indemnity referred
               to in Clause 9.4.

          1.1.67 "PERSONAL GUARANTOR" means a person acceptable to the Banks in
               their discretion and/or (where the context permits) any other
               person or company who shall at any time during the Facility
               Period give to the

                                       10

<PAGE>

               Banks or to the Agent on their behalf a guarantee and/or
               indemnity for the repayment of all or part of the Indebtedness.

          1.1.68 "PLEDGORS" means, Safeway Maritime Co. and Collier Holdings
               Inc. each a company incorporated according to the law of the
               Republic of Liberia with its registered office at 80 Broad
               Street, Monrovia, Liberia.

          1.1.69 "POTENTIAL EVENT OF DEFAULT" means any event which, with the
               giving of notice and/or the passage of time and/or the
               satisfaction of any materiality test, would constitute an Event
               of Default.

          1.1.70 "PROCEEDINGS" means any suit, action or proceedings begun by
               the Agent or any of the Banks arising out of or in connection
               with the Security Documents.

          1.1.71 "PROPORTIONATE SHARE" means, at any time, the proportion which
               that Bank's Commitment (whether or not advanced) then bears to
               the aggregate Commitments of all the Banks (whether or not
               advanced).

          1.1.72 "RELEASE" means an emission, spill, release or discharge into
               or upon the air, surface water, groundwater, or soils of any
               Material of Environmental Concern for which the Borrowers have
               any liability under Environmental Law, except in accordance with
               a valid Environmental Approval.

          1.1.73 "REPAYMENT DATE" means the date for payment of any Repayment
               Instalment in accordance with Clause 5.

          1.1.74 "REPAYMENT INSTALMENT" means any instalment of the Loan to be
               repaid by the Borrowers pursuant to Clause 5.

          1.1.75 "REQUISITION COMPENSATION" means all compensation or other
               money which may from time to time be payable to the Borrowers as
               a result of the Vessels being requisitioned for title or in any
               other way compulsorily acquired (other than by way of
               requisition for hire).

          1.1.76 "THE RETENTION ACCOUNT" means the bank account to be opened, in
               the joint names of the Borrowers, with the Agent, designated
               "Allendale Investments S.A., Alterwall Business Inc. - Retention
               Account".

                                       11

<PAGE>

          1.1.77 "THE SECURITY DOCUMENTS" means this Agreement, the Mortgages,
               the Assignments, the Guarantees, the Shares Pledges, the Accounts
               Security Deed, the Managers' Undertakings, the Master Agreement
               and any other Credit Support Documents or (where the context
               permits) any one or more of them, and any other agreement or
               document which may at any time be executed by any person as
               security for the payment of all or any part of the Indebtedness.

          1.1.78 "SECURITY PARTIES" means the Borrowers, the Guarantors, the
               Pledgor; the Managers, any other Credit Support Providers, and
               any other person or company who may at any time during the
               Facility Period be liable for, or provide security for, all or
               any part of the Indebtedness, and "SECURITY PARTY" means any one
               of them.

          1.1.79 "SHARE PLEDGES" means the Pledges of the issued share capital
               of each of the Borrowers referred to in Clause 9.6 (each a "SHARE
               PLEDGE").

          1.1.80 "SMC" means a valid safety management certificate issued for
               the Vessels by or on behalf of the Administration pursuant to
               paragraph 13.4 of the ISM Code.

          1.1.81 "SMS" means a safety management system for the Vessels
               developed and implemented in accordance with the ISM Code and
               including the functional requirements, duties and obligations
               required by the ISM Code.

          1.1.82 "TAXES" means all taxes, levies, imposts, duties, charges,
               fees, deductions and withholdings (including any related
               interest, fines, surcharges and penalties) and any restrictions
               or conditions resulting in any charge, other than taxes on the
               overall net income of the Agent or of a Bank, and "TAX" and
               "TAXATION" shall be interpreted accordingly.

          1.1.83 "TOTAL LOSS" means, in respect of a Vessel:-

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

                                       12

<PAGE>

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

               (c)  the capture, seizure, arrest, detention or confiscation of
                    the Vessel, unless the Vessel is released and returned to
                    the possession of its Owner within one month after the
                    capture, seizure, arrest, detention or confiscation in
                    question.

          1.1.84 "TRANSACTION" means a transaction entered into between the
               Agent and the Borrowers governed by the Master Agreement.

          1.1.85 "TRANSFER CERTIFICATE" means a certificate materially in the
               form of Appendix B.

          1.1.86 "TRANSFER DATE", in relation to a transfer of any of a Bank's
               rights and/or obligations under or pursuant to this Agreement,
               means the fifth Business Day after the date of delivery of the
               relevant Transfer Certificate to the Agent, or such later
               Business Day as may be specified in the relevant Transfer
               Certificate.

          1.1.87 "TRANSFEREE" means any bank or financial institution to which a
               Bank transfers any of its rights and/or obligations under or
               pursuant to this Agreement.

          1.1.88 "THE TRUST PROPERTY" means:-

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

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

          1.1.89 "THE VESSELS" means the Kuo Vessel and the YM Vessel.

          1.1.90 "THE YM VESSEL" means the container motor vessel "YM QINGDAO
               I", built in 1990 of approximately 18,253 dwt and 1,142 TEU,
               currently registered under the flag of the Republic of Panama in
               the ownership of

                                       13

<PAGE>

               Alterwall and everything now or in the future belonging to her on
               board and ashore.

     1.2  INTERPRETATION

          In this Agreement:-

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

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

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

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

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

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

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

          1.2.8 words and expressions defined in the Master Agreement, unless
               the context otherwise requires, have the same meaning;

          1.2.9 references to a Bank or to the Agent include its successors,
               transferees and assignees;

          1.2.10 references to times of day are to London time.

     1.3  OFFER LETTER

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          This Agreement supersedes the terms and conditions contained in any
          correspondence relating to the subject matter of this Agreement
          exchanged between the Agent or any of the Banks and the Borrowers or
          their representatives prior to the date of this Agreement.

     1.4  JOINT AND SEVERAL LIABILITY

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

          1.4.2 Each of the Borrowers agrees that any rights which it may have
               at any time during the Facility Period by reason of the
               performance of its obligations under the Security Documents to be
               indemnified by any other Borrower and/or to take the benefit of
               any security taken by the Banks or by the Agent pursuant to the
               Security Documents shall be exercised in such manner and on such
               terms as the Agent may require. Each of the Borrowers agrees to
               hold any sums received by it as a result of its having exercised
               any such right on trust for the Agent (as agent for the Banks)
               absolutely.

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

2    THE LOAN AND ITS PURPOSE

     2.1  AGREEMENT TO LEND Subject to the terms and conditions of this
          Agreement, and in reliance on each of the representations and
          warranties made or to be made in or in accordance with each of the
          Security Documents, each of the Banks agrees to

                                       15

<PAGE>

          advance to the Borrowers an aggregate amount not exceeding the Maximum
          Loan Amount to be used by the Borrowers for the purpose referred to in
          Recital (C).

     2.2  ADVANCE OF THE LOAN Subject to satisfaction by the Borrowers of the
          conditions set out in Clause 3.1, the Loan shall be advanced to the
          Borrowers in one amount by such method of funds transfer as the Banks
          and the Borrowers shall agree. The Loan shall be advanced in Dollars
          on a Business Day, provided that the Borrowers shall have given to the
          Agent not more than ten and not fewer than three Business Days' notice
          (or such lesser period of notice as the Agent may accept in its
          discretion) in writing materially in the form set out in Appendix A of
          the required Drawdown Date. The Drawdown Notice once given shall be
          irrevocable and shall constitute a warranty by the Borrowers that:-

          2.2.1 all conditions precedent to the advance of the Loan will have
               been satisfied on or before the Drawdown Date requested;

          2.2.2 no Event of Default or Potential Event of Default will then have
               occurred;

          2.2.3 no Event of Default or Potential Event of Default will result
               from the advance of the Loan; and

          2.2.4 there has been no material adverse change in the business,
               affairs or financial condition of any of the Security Parties
               from that pertaining at the date of this Agreement.

          The Agent shall promptly notify each Bank of the receipt of the
          Drawdown Notice, following which each Bank will make, subject to the
          provisions of Clause 3, its Proportionate Share of the amount of the
          Loan available to the Borrowers through the Agent on the Drawdown Date
          requested.

     2.3  AVAILABILITY TERMINATION DATE No Bank shall be under any obligation to
          advance all or any part of the Loan after the Availability Termination
          Date.

     2.4  SEVERAL OBLIGATIONS The obligations of the Banks under this Agreement
          are several. The failure of a Bank to perform its obligations under
          this Agreement shall not affect the obligations of the Borrowers to
          the Agent or to the other Banks, nor

                                       16

<PAGE>

          shall the Agent or any other Bank be liable for the failure of a Bank
          to perform any of its obligations under or in connection with this
          Agreement.

     2.5  APPLICATION OF LOAN Without prejudice to the obligations of the
          Borrowers under this Agreement, neither the Banks nor the Agent shall
          be obliged to concern itself with the application of the Loan by the
          Borrowers.

     2.6  LOAN AND CONTROL ACCOUNTS The Borrowers will open and maintain with
          the Agent such loan and control accounts as the Agent shall in its
          discretion consider necessary or desirable.

     2.7  INTEREST SEVERAL Notwithstanding any other term of this Agreement (but
          without prejudice to the provisions of this Agreement relating to or
          requiring action by the Instructing Group) the interest of the Banks
          is several and the amount due to any Bank is separate and independent
          debt.

     2.8  GENERAL TERMS AND CONDITIONS In addition to the terms and conditions
          set-out in this Loan Agreement the General Terms and Conditions of the
          Agent will apply.

3    CONDITIONS PRECEDENT AND SUBSEQUENT

     3.1  CONDITIONS PRECEDENT Before any Bank shall have any obligation to
          advance any part of the Loan, the Borrowers shall deliver or cause to
          be delivered to or to the order of the Agent the following documents
          and evidence: -

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

          3.1.2 CORPORATE AUTHORITIES A copy, certified by a director or the
               secretary of the Security Party in question as true, complete,
               accurate and neither amended nor revoked, of a resolution of the
               directors and a resolution of

                                       17

<PAGE>

               the shareholders of each Security Party (together, where
               appropriate, with signed waivers of notice of any directors' or
               shareholders' meetings) approving, and authorising or ratifying
               the execution of, those of the Security Documents to which that
               Security Party is or is intended to be a party and all matters
               incidental thereto.

          3.1.3 OFFICER'S CERTIFICATE A certificate signed by a duly authorised
               officer of each of the Security Parties setting out the names of
               the directors, officers and shareholders of that Security Party.

          3.1.4 POWER OF ATTORNEY The notarially attested and legalised power of
               attorney of each of the Security Parties under which any
               documents are to be executed or transactions undertaken by that
               Security Party.

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

               (a)  the Charters and/or any other contract of employment of the
                    Vessels which will be in force on the Drawdown Date and must
                    be reviewed and accepted by the Agent;

               (c)  the management agreement between the Borrowers and the
                    Managers relating to the Vessels;

               (d)  the Vessels' current Safety Construction, Safety Equipment,
                    Safety Radio, Oil Pollution Prevention, International
                    Tonnage and Load Line Certificates;

               (e)  the Vessels' current Certificate of Financial Responsibility
                    issued pursuant to the United States Oil Pollution Act 1990;

               (f)  the Vessels' International Ship Security Certificate issued
                    pursuant to the ISPS Code;

               (g)  the Vessels' current SMC; and

               (h)  the Company's current DOC;

                                       18

<PAGE>

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

          3.1.6 EVIDENCE OF OWNERSHIP Certificate(s) of ownership and
               encumbrance (or equivalent) issued by the Registrar of Ships (or
               equivalent official) at the Vessel's port of registry confirming
               that each Vessel is on the Drawdown Date owned by her Owner and
               free of registered Encumbrances.

          3.1.7 EVIDENCE OF INSURANCE Evidence that the Vessels are, or will
               from the Drawdown Date be, insured in the manner required by the
               Security Documents and that letters of undertaking will be issued
               in the manner required by the Security Documents, together with
               the written approval of the Insurances by an insurance adviser
               appointed by the Agent (at the cost of the Borrowers) confirming
               (inter alia) that the required Insurances have been placed and
               are acceptable to the Agent and that the underwriters are
               acceptable to the Agent.

          3.1.8 CONFIRMATION OF CLASS A Certificate of Confirmation of Class for
               hull and machinery confirming that the Vessels are classed with
               the highest class applicable to Vessels of their type with Nippon
               Kaiji Kyokai free and clear of all overdue recommendations or
               such other classification society as may be acceptable to the
               Agent.

          3.1.9 SURVEY REPORTS The latest annual survey and class status reports
               prepared by surveyors instructed by the class society for the
               Vessels (namely Nippon Kaiji Kyokai), and at the cost of the
               Borrowers, confirming the condition of the Vessels, such
               condition to be in all respects acceptable to the Agent.

          3.1.10 VALUATIONS A valuation of each Vessel addressed to the Agent
               from two Approved Brokers appointed by the Agent and approved by
               the Borrowers certifying a value for each Vessel which is not
               less than fifty per centum (50%) of the amount of the Loan,
               assessed in such manner as the Agent may require, acceptable to
               the Agent and at the cost of the Borrowers.

                                       19

<PAGE>

          3.1.11 THE SECURITY DOCUMENTS The Security Documents, together with
               all notices and other documents required by any of them, duly
               executed and, in the case of the Mortgages, registered with first
               priority through the Registrar of Ships (or equivalent official)
               at the Vessels' port of registry

          3.1.12 DRAWDOWN NOTICE A Drawdown Notice.

          3.1.13 PROCESS AGENT A letter from HTD, Irongate House, Duke's Place,
               London, EC3A 7LP, United Kingdom, accepting their appointment by
               each of the Security Parties as agent for service of Proceedings
               pursuant to the Security Documents.

          3.1.14 MANDATES Such duly signed forms of mandate, and/or other
               evidence of opening of the Accounts, as the Agent or any of the
               Banks may require,

          3.1.15 FEE Payment of the fee due from the Borrowers to the Banks
               pursuant to the terms of Clause 8 or any other provision of the
               Security Documents.

          3.1.16 LEGAL OPINIONS Confirmation satisfactory to the Agent that all
               legal opinions required by the Agent will be given substantially
               in the form required by the Agent.

     3.2  CONDITIONS SUBSEQUENT The Borrowers undertake to deliver or to cause
          to be delivered to the Agent, in the case of Clause 3.2.1 not later
          than three days after the Drawdown Date and, in the case of Clauses
          3.2.2 and 3.2.3 not later than two weeks after the Drawdown Date, the
          following additional documents and evidence:-

          3.2.1 EVIDENCE OF REGISTRATION Evidence of permanent registration of
               the Vessels and the Mortgages (with first priority) with the
               Registrar of Ships (or equivalent official) at the Vessels' port
               of registry.

          3.2.2 LETTERS OF UNDERTAKING Letters of undertaking as required by the
               Security Documents in form and substance acceptable to the Agent
               including, without limitation confirmation notices of assignment
               of Insurances, notices of cancellation and loss payable clause in
               form and substance acceptable to the Agent.

          3.2.3 LEGAL OPINIONS Such legal opinions as the Agent shall require.

                                       20

<PAGE>

     3.3  NO WAIVER If the Banks in their sole discretion agree to advance the
          Loan to the Borrowers before all of the documents and evidence
          required by Clause 3.1 have been delivered to or to the order of the
          Agent, the Borrowers undertake to deliver all outstanding documents
          and evidence to or to the order of the Agent no later than the date
          specified by the Agent, and the Banks' advance of the Loan shall not
          be taken as a waiver of the Agent's right to require production of all
          the documents and evidence required by Clause 3.1.

     3.4  FORM AND CONTENT All documents and evidence delivered to the Agent
          pursuant to this Clause shall:-

          3.4.1 be in form and substance acceptable to the Agent;

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

          3.4.3 if required by the Agent, be certified, notarised, legalised or
               attested in a manner acceptable to the Agent.

     3.5  EVENT OF DEFAULT No Bank shall be under any obligation to advance any
          part of the Loan nor to act on any Drawdown Notice if, at the date of
          the Drawdown Notice or at the date on which the advance of the Loan is
          requested in the Drawdown Notice, an Event of Default or Potential
          Event of Default shall have occurred, or if an Event of Default or
          Potential Event of Default would result from the advance of the Loan

4.   REPRESENTATIONS AND WARRANTIES

     The Borrowers represent and warrant to the Agent at the date of this
     Agreement and (by reference to the facts and circumstances then pertaining)
     at the date of the Drawdown Notice, at the Drawdown Date and at each
     Interest Payment Date as follows:-

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

                                       21

<PAGE>

          existence and the power to sue and be sued, to own their assets and to
          carry on their business.

     4.2  SOLVENCY None of the Security Parties is insolvent or in liquidation
          or administration or subject to any other insolvency procedure, and no
          receiver, administrative receiver, administrator, liquidator, trustee
          or analogous officer has been appointed in respect of any of the
          Security Parties or all or any part of their assets.

     4.3  BINDING OBLIGATIONS The Security Documents when duly executed and
          delivered will constitute the legal, valid and binding obligations of
          the Security Parties enforceable in accordance with their respective
          terms.

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

     4.5  REGISTRATIONS AND CONSENTS With the exception only of the
          registrations referred to in Clause 3.2.1, all (if any) consents,
          licences, approvals and authorisations of, or registrations with or
          declarations to, any governmental authority, bureau or agency which
          may be required in connection with the execution, delivery,
          performance, validity or enforceability of the Security Documents have
          been obtained or made and remain in full force and effect and the
          Borrowers are not aware of any event or circumstance which could
          reasonably be expected adversely to affect the right of any of the
          Security Parties to hold and/or obtain renewal of any such consents,
          licences, approvals or authorisations.

     4.6  DISCLOSURE OF MATERIAL FACTS The Borrowers are not aware of any
          material facts or circumstances which have not been disclosed to the
          Agent and which might, if disclosed, have adversely affected the
          decision of a person considering whether or not to make loan
          facilities of the nature contemplated by this Agreement available to
          the Borrowers.

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<PAGE>

     4.7  NO MATERIAL LITIGATION There is no action, suit, arbitration or
          administrative proceeding pending or to its knowledge about to be
          pursued before any court, tribunal or governmental or other authority
          which would, or would be likely to, have a materially adverse effect
          on the business, assets, financial condition or creditworthiness of
          any of the Security Parties.

     4.8  NO BREACH OF LAW OR CONTRACT The execution, delivery and performance
          of the Security Documents will not contravene any contractual
          restriction or any law binding on any of the Security Parties or on
          any shareholder (whether legal or beneficial) of any of the Security
          Parties, or the constitutional documents of any of the Security
          Parties, nor result in the creation of, nor oblige any of the Security
          Parties to create, any Encumbrance over all or any of its assets, with
          the exception of the Encumbrances created by or pursuant to the
          Security Documents and, in entering into those of the Security
          Documents to which it is, or is to be, a party, and in borrowing the
          Loan, the Borrowers is acting for its own account.

     4.9  NO DEDUCTIONS The Borrowers are not required to make any deduction or
          withholding from any payment which it may be obliged to make to the
          Agent or any of the Banks under or pursuant to the Security Documents.

     4.10 NO ESTABLISHED PLACE OF BUSINESS IN THE UNITED KINGDOM OR UNITED
          STATES None of the Security Parties has, nor will any of them have
          during the Facility Period, an established place of business in the
          United Kingdom or the United States of America.

     4.11 USE OF LOAN The Loan will be used for the purpose specified in Recital
          (C).

     4.12 PARI PASSU The obligations of the Borrowers under this Agreement are
          direct, general and unconditional obligations of the Borrowers and
          rank at least pari passu with all other present and future unsecured
          and unsubordinated indebtedness of the Borrowers with the exception of
          any obligations which are mandatorily preferred by law and not by
          contract.

     4.13 NO DEFAULT UNDER ANY OTHER INDEBTEDNESS Neither the Borrowers nor any
          other Security Party is (nor would with the giving of notice or lapse
          of time or the satisfaction of any other condition or combination
          thereof be) in breach of or in

                                       23

<PAGE>

          default under any agreement relating to any indebtedness to which it
          is a party or by which it may be bound.

     4.14 INFORMATION The information, exhibits and reports furnished by any
          Security Party to the Agent in connection with the negotiation and
          preparation of the Security Documents are true and accurate in all
          material respects and not misleading, do not omit material facts and
          all reasonable enquiries have been made to verify the facts and
          statements contained therein; to the best knowledge of the Borrowers
          there are no other facts the omission of which would make any fact or
          statement therein misleading.

     4.15 NO MATERIAL ADVERSE CHANGE There has been no material adverse change
          in the financial position of the Borrowers or any other Security Party
          from that described to the Agent in the negotiation of this Agreement.

     4.16 ENVIRONMENT Except as may already have been disclosed by the Borrowers
          in writing to, and acknowledged in writing by, the Agent, the
          Borrowers represents and warrants to the Agent as follows:

          4.16.1 the Borrowers and (to the best of the Borrowers' knowledge)
               their Environmental Affiliates have without limitation complied
               with the provisions of applicable Environmental Laws, except
               where non-compliance would not have a Material Adverse Effect;

          4.16.2 the Borrowers and (to the best of the Borrowers' knowledge)
               their Environmental Affiliates have obtained all requisite
               Environmental Approvals and are in compliance with such
               Environmental Approvals, except where the failure to obtain or
               comply with any such Environmental Approvals would not have a
               Material Adverse Effect;

          4.16.3 neither the Borrowers nor (to the best of the Borrowers'
               knowledge) any of its Environmental Affiliates have received
               notice of any Environmental Claim which alleges that the
               Borrowers are not in compliance with applicable Environmental
               Laws or Environmental Approvals, where such non-compliance would
               have a Material Adverse Effect;

          4.16.4 there is no Environmental Claim pending or, to the Borrowers'
               knowledge threatened which would have a Material Adverse Effect;
               and

                                       24

<PAGE>

          4.16.5 to the best of the Borrowers' knowledge, there has been no
               Release of Material of Environmental Concern except where the
               event would not have a Material Adverse Effect.

5    REPAYMENT AND PREPAYMENT

     5.1  REPAYMENT The Borrowers agree to repay the Loan to the Agent as agent
          for the Banks by twenty four (24) consecutive quarterly Repayment
          Instalments, the first four (4) such Repayment Instalments in the sum
          of one million five hundred thousand Dollars ($1,500,000) each, the
          following four (4) such Repayment Instalments in the sum of one
          million one hundred and twenty five thousand Dollars ($1,125,000)
          each, the following four (4) such Repayment Instalments in the sum of
          seven hundred and seventy five thousand Dollars ($775,000) each, the
          following eleven (11) such Repayment Instalments in the sum of four
          hundred and fifty thousand Dollars ($450,000) each, and the twenty
          fourth (24th) and final Repayment Instalment in the sum of one million
          four hundred and fifty thousand Dollars ($1,450,000) (comprising a
          Repayment Instalment of four hundred and fifty thousand Dollars
          ($450,000) and a balloon payment of one million Dollars ($1,000,000)
          ("THE BALLOON PAYMENT")) the first Repayment Date being the date which
          is three calendar months after the Drawdown Date and subsequent
          Repayment Dates being at consecutive intervals of three calendar
          months thereafter and the final Repayment Instalment shall be due and
          payable on the Final Maturity Date.

     5.2  REDUCTION OF REPAYMENT INSTALMENTS If the aggregate amount advanced to
          the Borrowers is less than the Maximum Loan Amount, the amount of each
          Repayment Instalment shall be reduced pro rata to the amount actually
          advanced.

     5.3  VOLUNTARY PREPAYMENT The Borrowers may without any premium or penalty
          prepay the Loan in whole or in part in minimum amounts equal to one
          hundred thousand Dollars ($100,000) or an integral multiple of that
          amount (or as otherwise may be agreed by the Agent) provided that they
          have first given to the Agent not fewer than fifteen (15) days' prior
          written notice expiring on a Business Day of their intention to do so.
          Any notice pursuant to this Clause once given shall be irrevocable and
          shall oblige the Borrowers to make the prepayment referred to in the
          notice on the Business Day specified in the notice, together with all
          interest accrued on the amount prepaid up to and including that
          Business Day.

                                       25

<PAGE>

     5.4  PREPAYMENT INDEMNITY If the Borrowers shall, subject always to Clause
          5.3, make a prepayment on a Business Day other than the last day of an
          Interest Period, they shall, in addition to the amount prepaid and
          accrued interest, pay to the Agent any amount which the Agent may
          certify is necessary to compensate the Agent and the Banks for any
          Break Costs incurred by the Agent or any of the Banks as a result of
          the making of the prepayment in question.

     5.5  APPLICATION OF PREPAYMENTS Any prepayment pursuant to Clause 5.3 in an
          amount less than the Indebtedness shall be applied in satisfaction or
          reduction first of any costs and other amounts outstanding; secondly
          of all interest outstanding; and thirdly pro rata against the
          outstanding Repayment Instalments (including the Balloon Payment).

     5.6  NO REBORROWING No amount repaid or prepaid pursuant to this Agreement
          may in any circumstances be reborrowed.

     5.7  MANDATORY PREPAYMENT - SALE OR TOTAL LOSS OF VESSELS In the event of a
          Vessel being sold or becoming a Total Loss, the Indebtedness shall be
          repaid in full. In the case of a sale or disposal of a Vessel, the
          proceeds of such sale or disposal of the Vessel shall be used to repay
          the Indebtedness immediately upon the date of such sale or disposal of
          the Vessel. In the case of a Total Loss of a Vessel, the proceeds of
          the Insurances of the Vessel shall be used to prepay the Indebtedness
          on the earlier of the date on which Insurance proceeds are received by
          the Borrowers and the date which is ninety (90) days after the date on
          which the Vessel was declared a Total Loss.

6    INTEREST

     6.1  INTEREST PERIODS The period during which the Loan shall be outstanding
          pursuant to this Agreement shall be divided into consecutive Interest
          Periods of one (a maximum of three one-month Interest Periods in any
          calendar year will be permitted), three six, nine or twelve months'
          duration, as selected by the Borrowers by written notice to the Agent
          not later than 11.00 a.m. on the third Business Day before the
          beginning of the Interest Period in question, or such other duration
          as may be agreed by the Agent in its discretion.

                                       26

<PAGE>

     6.2  BEGINNING AND END OF INTEREST PERIODS The first Interest Period shall
          begin on the Drawdown Date, and the final Interest Period shall end on
          the Repayment Date applicable to the final Repayment Instalment.

     6.3  INTEREST PERIODS TO MEET REPAYMENT DATES If the Borrowers shall
          select, or the Borrowers and the Banks shall agree, an Interest Period
          which does not expire on the next Repayment Date, there shall, in
          respect of each part of the Loan equal to a Repayment Instalment
          falling due for payment before the expiry of that Interest Period, be
          a separate Interest Period which shall expire on the relevant
          Repayment Date, and the Interest Period selected or agreed shall apply
          to the balance of the Loan only.

     6.4  INTEREST RATE During each Interest Period interest shall accrue on the
          Loan at the rate determined by the Agent to be the aggregate of (a)
          the Margin and (b) LIBOR determined at or about 11.00 a.m. on the
          second Business Day prior to the beginning of that Interest Period.

     6.5  FAILURE TO SELECT INTEREST PERIOD If the Borrowers at any time fail to
          select or to agree an Interest Period in accordance with Clause 6.1,
          the interest rate applicable after the expiry of the then current
          Interest Period shall be the rate determined by the Agent in
          accordance with Clause 6.4 for consecutive Interest Periods each of
          such duration (not exceeding six months) as the Agent may in its
          discretion select.

     6.6  ACCRUAL AND PAYMENT OF INTEREST Interest shall accrue from day to day,
          shall be calculated on the basis of a 360 day year and the actual
          number of days elapsed and shall be paid by the Borrowers to the Agent
          on the last day of each Interest Period and additionally, during any
          Interest Period exceeding six months, on the last day of each
          successive six month period after the beginning of that Interest
          Period.

     6.7  ENDING OF INTEREST PERIODS Each Interest Period shall, subject to
          Clauses 6.2 and 6.3, end on the date which numerically corresponds to
          the date on which the immediately preceding Interest Period ended (or,
          in the case of the first Interest Period, to the Drawdown Date) in the
          calendar month which is the number of months selected or agreed after
          the calendar month in which the immediately preceding Interest Period
          ended (or, in the case of the first Interest Period, in which the
          Drawdown Date occurred), except that:-

                                       27

<PAGE>

          6.7.1 if there is no numerically corresponding date in the calendar
               month in which the Interest Period ends, the Interest Period
               shall end on the last Business Day in that calendar month; and

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

          Any adjustment made pursuant to Clause 6.7.1 or 6.7.2 shall be ignored
          for the purpose of determining the date on which any subsequent
          Interest Period shall end.

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

     6.9  DETERMINATIONS CONCLUSIVE Each determination of an interest rate made
          by the Agent in accordance with Clause 6 shall (save in the case of
          manifest error or on any question of law) be final and conclusive.

7    THE MASTER AGREEMENT

     7.1  PURPOSE The Agent and the Borrowers have entered, and/or may during
          the Facility Period enter, into one or more Transactions pursuant to a
          Master Agreement, the terms and conditions of each of which are or
          will be specified in a Confirmation sent by the Agent to the
          Borrowers.

     7.2  ADDITIONAL TERMINATION EVENT If the Loan is for any reason not
          advanced to the Borrowers on or before the Availability Termination
          Date, and the Agent and the Borrowers have entered into any
          Transactions on or before the Availability Termination Date, for the
          purposes of the Master Agreement an Additional Termination Event (with
          the Agent as the Affected Party) shall be deemed to have occurred on
          the Availability Termination Date.

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     7.3  ADJUSTMENT OF NOTIONAL AMOUNTS If the aggregate amount of the Loan
          actually advanced by the Banks to the Borrowers is less than the
          Notional Amount (or the aggregate Notional Amounts) of the Hedging
          Transactions entered into on or before the Drawdown Date, the
          obligations of the Borrowers in respect of those Hedging Transactions
          shall, unless otherwise agreed by the Agent, be calculated, so far as
          the Agent considers it practicable to do so, by reference to a
          Notional Amount (or aggregate Notional Amounts) equal to the amount of
          the Loan actually advanced reduced on each Repayment Date by the
          amount of the Repayment Instalment due on that Repayment Date,
          adjusted if necessary in accordance with Clause 5.2.

     7.4  EFFECT OF PREPAYMENT If the Borrowers, subject always to Clause 5,
          prepays part of the Loan (whether pursuant to Clause 5, Clause 11.2.5
          or any other provision of this Agreement), and the amount of the Loan
          remaining outstanding after application of that prepayment is less
          than the Notional Amount (or the aggregate Notional Amounts) of the
          Hedging Transactions then in effect (reduced, if appropriate, in
          accordance with the Confirmations relating to those Hedging
          Transactions), the obligations of the Borrowers in respect of those
          Hedging Transactions shall, unless otherwise agreed by the Agent, be
          calculated, so far as the Agent considers it practicable to do so, by
          reference to a Notional Amount (or aggregate Notional Amounts) equal
          to the amount of the Loan remaining outstanding after application of
          the prepayment in question, reduced on each Repayment Date by the
          amount of the Repayment Instalment due on that Repayment Date after
          taking into account the application of the prepayment.

     7.5  AUTHORITY In order to give effect to Clauses 7.3 and 7.4, or in the
          event of voluntary or mandatory prepayment by the Borrowers of the
          whole of the Loan, the Borrowers irrevocably authorise the Agent to
          amend, restructure, unwind, cancel, net out, terminate, liquidate,
          transfer or assign any of the rights and/or obligations created
          pursuant to the Master Agreement in respect of those Hedging
          Transactions, and/or to enter into any other interest rate exchange
          and/or hedging transaction or commitment with the Borrowers or with
          any other counterparty approved by the Agent.

     7.6  TERMINATION OF TRANSACTIONS If the exercise of the Agent's rights
          under Clause 7.5 results in the termination of any Transaction, that
          Transaction shall, for the purposes of the Master Agreement
          (including, without limitation, section 6(e)(i) of

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<PAGE>

          the Master Agreement) be treated as a Terminated Transaction resulting
          from as Event of Default by the Borrowers.

     7.7  INDEMNITY The Borrowers will indemnify the Agent from time to time on
          demand in respect of all liabilities, losses, costs or expenses
          suffered, incurred or sustained by the Agent arising in any way in
          relation to the exercise by the Agent of its rights under this Clause,
          or arising in any way from any other termination, cancellation,
          unwinding or restructuring of any Transaction, together (in each case)
          with interest at the Default Rate from the date of the Agent's demand
          until the date on which the Agent receives payment or reimbursement,
          before or after any relevant judgment.

8    FEE

     The Borrowers shall pay to or to the order of the Agent on the date of this
     Agreement an arrangement fee in an amount equal to ninety thousand Dollars
     ($90,000).

9    SECURITY DOCUMENTS

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

     9.1  THE MORTGAGES a first priority ship mortgage over each Vessel;

     9.2  THE ASSIGNMENTS a deed of assignment of the Insurances, Earnings,
          Charter Rights and Requisition Compensation of each Vessel;

     9.3  THE CORPORATE GUARANTEE the guarantee and indemnity of the Guarantor;

     9.4  THE PERSONAL GUARANTEE the guarantee and indemnity of the Personal
          Guarantor;

     9.5  THE ACCOUNTS SECURITY DEED an accounts security deed in respect of all
          amounts from time to time standing to the credit of the Accounts;

     9.6  THE SHARE PLEDGES a pledge of all the issued shares of each of the
          Borrowers; and

     9.7  MANAGER'S UNDERTAKINGS an undertaking from the Managers in respect of
          each Vessel and its Owner.

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10   AGENCY AND TRUST

     10.1 APPOINTMENT Each of the Banks appoints the Agent its agent for the
          purpose of administering the Loan and the Security Documents.

     10.2 AUTHORITY Each of the Banks irrevocably authorises the Agent (subject
          to Clauses 10.4 and 10.19):-

          10.2.1 to execute the Security Documents (other than this Agreement)
               in its capacity as Agent;

          10.2.2 to collect, receive, release or pay any money on its behalf;

          10.2.3 acting on the instructions from time to time of an Instructing
               Group to give or withhold any waivers, consents or approvals
               under or pursuant to any of the Security Documents;

          10.2.4 acting on the instructions from time to time of and Instructing
               Group to exercise, or refrain from exercising, any discretions
               under or pursuant to any of the Security Documents; and

          10.2.5 to enforce the Security Documents on its behalf acting on its
               instructions.

          The Agent shall have no duties or responsibilities as agent or as
          security trustee other than those expressly conferred on it by the
          Security Documents and shall not be obliged to act on any instructions
          from the Banks or an Instructing Group if to do so would, in the
          opinion of the Agent, be contrary to any provision of the Security
          Documents or to any law, or would expose the Agent to any actual or
          potential liability to any third party.

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

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          10.3.1 the Agent (and any attorney, agent or delegate of the Agent)
               may indemnify itself or himself out of the Trust Property against
               all liabilities, costs, fees, damages, charges, losses and
               expenses sustained or incurred by it or him in relation to the
               taking or holding of any of the Trust Property or in connection
               with the exercise or purported exercise of the rights, trusts,
               powers and discretions vested in the Agent or any other such
               person by or pursuant to the Security Documents or in respect of
               anything else done or omitted to be done in any way relating to
               the Security Documents; and

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

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

     10.4 LIMITATIONS ON AUTHORITY Except with the prior written consent of each
          of the Banks, the Agent shall not be entitled to :-

          10.4.1 release or vary any security given for the Borrowers'
               obligations under this Agreement; nor

          10.4.2 waive the payment of any sum of money payable by any of the
               Security Parties under the Security Documents; nor

          10.4.3 change the meaning of the expressions "INSTRUCTING GROUP" or
               "MARGIN"; nor

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

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

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<PAGE>

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

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

          10.4.8 agree to amend this Clause 10.4.

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

     10.6 ACKNOWLEDGEMENT Each of the Banks acknowledges that:-

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

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

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

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

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

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<PAGE>

     10.7 LIMITATIONS ON RESPONSIBILITY The Agent shall have no responsibility
          to any of the Security Parties or to the Banks on account of:-

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

          10.7.2 the financial condition of any of the Security Parties;

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

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

     10.8 THE AGENT'S RIGHTS The Agent may:-

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

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

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

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

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

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<PAGE>

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

     10.9 THE AGENT'S DUTIES The Agent shall:-

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

          10.9.2 inform the Banks promptly of any Event of Default of which the
               Agent has actual knowledge.

     10.10 NO DEEMED KNOWLEDGE The Agent shall not be deemed to have actual
          knowledge of the falsehood or incompleteness of any representation or
          warranty made or deemed repeated by any of the Security Parties or
          actual knowledge of the occurrence of any Event of Default or
          Potential Event of Default unless a Bank or any of the Security
          Parties shall have given written notice thereof to the Agent in its
          capacity as the Agent. Any information acquired by the Agent other
          than specifically in its capacity as the Agent shall not be deemed to
          be information acquired by the Agent in its capacity as the Agent.

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

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

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<PAGE>

          10.12.1 all amounts payable by the Borrowers to the Agent pursuant to
               Clause 18.2 to the extent that those amounts are not paid by the
               Borrowers;

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

     10.13 EMPLOYMENT OF AGENTS In performing its duties and exercising its
          rights, powers, discretions and remedies under or pursuant to the
          Security Documents, the Agent shall be entitled to employ and pay
          agents to do anything which the Agent is empowered to do under or
          pursuant to the Security Documents (including the receipt of money and
          documents and the payment of money) and to act or refrain from taking
          action in reliance on the opinion of, or advice or information
          obtained from, any lawyer, banker, broker, accountant, valuer or any
          other person believed by the Agent in good faith to be competent to
          give such opinion, advice or information.

     10.14 DISTRIBUTION OF PAYMENTS The Agent shall pay promptly to the order of
          each of the Banks that Bank's Proportionate Share of every sum of
          money received by the Agent pursuant to the Security Documents or the
          Mortgagees' Insurances (with the exception of any amounts payable
          pursuant to Clause 8 and any amounts which, by the terms of the
          Security Documents, are paid to the Agent for the account of the Agent
          alone or specifically for the account of one or more Banks) and until
          so paid such amount shall be held by the Agent on trust absolutely for
          that Bank.

     10.15 REIMBURSEMENT The Agent shall have no liability to pay any sum to a
          Bank until it has itself received payment of that sum. If, however,
          the Agent does pay any sum to a Bank on account of any amount
          prospectively due to that Bank pursuant to Clause 10.14 before it has
          itself received payment of that amount, and the Agent does not in fact
          receive payment within five Business Days after the date on which that
          payment was required to be made by the terms of the Security Documents
          or the

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<PAGE>

          Mortgagees' Insurances, each Bank receiving any such payment will, on
          demand by the Agent, refund to the Agent an amount equal to the amount
          received by it, together with an amount sufficient to reimburse the
          Agent for any amount which the Agent may certify that it has been
          required to pay by way of interest on money borrowed to fund the
          amount in question during the period beginning on the date on which
          that amount was required to be paid by the terms of the Security
          Documents or the Mortgagees' Insurances and ending on the date on
          which the Agent receives reimbursement.

     10.16 REDISTRIBUTION OF PAYMENTS Unless otherwise agreed between the Banks
          and the Agent, if at any time a Bank receives or recovers by way of
          set-off, the exercise of any lien or otherwise (other than from any
          assignee or transferee of or sub-participant in that Bank's
          Commitment), an amount greater than that Bank's Proportionate Share of
          any sum due from any of the Security Parties under the Security
          Documents (the amount of the excess being referred to in this Clause
          as the "EXCESS AMOUNT") then:-

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

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

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

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

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<PAGE>

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

     10.18 PROCEEDINGS Each of the Banks and the Agent shall notify one another
          of the proposed commencement of any Proceedings under any of the
          Security Documents prior to their commencement.

     10.19 INSTRUCTIONS Where the Agent is authorised or directed to act or
          refrain from acting in accordance with the instructions of the Banks
          or of an Instructing Group each of the Banks shall provide the Agent
          with instructions within three Business Days of the Agent's request
          (which request may be made orally or in writing). If a Bank does not
          provide the Agent with instructions within that period, that Bank
          shall be bound by the decision of the Agent. Nothing in this Clause
          shall limit the right of the Agent to take, or refrain from taking,
          any action without obtaining the instructions of the Banks or an
          Instructing Group if the Agent in its discretion considers it
          necessary or appropriate to take, or refrain from taking, such action
          in order to preserve the rights of the Banks under or in connection
          with the Security Documents. In that event, the Agent will notify the
          Banks of the action taken by it as soon as reasonably practicable, and
          the Banks agree to ratify any action taken by the Agent pursuant to
          this Clause.

     10.20 COMMUNICATIONS Any Communication under this Clause shall be given,
          delivered, made or served, in the case of the Agent (in its capacity
          as Agent or as one of the Banks), and in the case of the other Banks,
          at the address or fax number indicated in Schedule 1.

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<PAGE>

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

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

          10.22.1 the Banks may within thirty days after the date of the Agent's
               notice appoint a successor to act as agent and/or security
               trustee or, if they fail to do so, the Agent may appoint any
               other bank or financial institution as its successor;

          10.22.2 the resignation of the Agent shall take effect simultaneously
               with the appointment of its successor on written notice of that
               appointment being given to the Borrowers and the Banks;

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

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

     10.23 NO FIDUCIARY RELATIONSHIP Except as provided in Clauses 10.3 and
          10.14, the Agent shall not have any fiduciary relationship with or be
          deemed to be a trustee of or for a Bank and nothing contained in any
          of the Security Documents shall constitute a partnership between any
          two or more Banks or between the Agent and any Bank.

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

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<PAGE>

     10.25 THE AGENT AS SECURITY TRUSTEE Unless the context otherwise requires,
          the expression "THE AGENT" when used in the Security Documents
          includes the Agent acting in its capacities both as agent and security
          trustee.

11   COVENANTS

     11.1 NEGATIVE COVENANTS

          The Borrowers will not without the Agent's prior written consent: -

          11.1.1 NO DISPOSALS OR THIRD PARTY RIGHTS dispose of or create or
               permit to arise or continue any Encumbrance or other third party
               right on or over all or any part of its present or future assets
               or undertaking (including, without limitation, any of its rights
               under or in connection with the Master Agreement and any amount
               at any time payable by it to the Agent under or pursuant to the
               Master Agreement); nor

          11.1.2 NO BORROWINGS borrow any money or incur any obligations under
               leases, except monies borrowed under this Agreement or from
               shareholders and/or affiliates, which shall be subordinated to
               the Agent; nor

          11.1.3 NO REPAYMENTS repay any loans made to it; nor

          11.1.4 NO SUBSTANTIAL LIABILITIES except in the ordinary course of
               business, incur any liability to any third party which is in the
               opinion of the Agent of a substantial nature; nor

          11.1.5 NO DEALINGS WITH MASTER AGREEMENT assign, novate or in any
               other way transfer any of its rights or obligations under or
               pursuant to the Master Agreement, nor enter into any interest
               rate exchange or hedging agreement with anyone other than the
               Agent, nor any other agreement or commitment the effect of which
               is, in the opinion of the Agent, materially to prejudice the
               hedging of the Borrowers' interest rate risk effected by the
               Hedging Transactions from time to time entered into between the
               Borrowers and the Agent; nor

          11.1.6 NO OTHER BUSINESS engage in any business other than the
               ownership, operation, chartering and management of the Vessels;
               nor

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<PAGE>

          11.1.7 NO LOANS OR OTHER FINANCIAL COMMITMENTS make any loan nor enter
               into any guarantee or indemnity or otherwise voluntarily assume
               any actual or contingent liability in respect of any obligation
               of any other person; nor

          11.1.8 NO DIVIDENDS pay any dividends or make any other distributions
               to shareholders or issue any new shares; nor

          11.1.9 NO SALE OF VESSELS sell or otherwise dispose of the Vessel
               owned by it or any shares in that Vessel nor agree to do so; nor

          11.1.10 NO CHARTERING AFTER EVENT OF DEFAULT following the occurrence
               and during the continuation of an Event of Default let the
               Vessels on charter or renew or extend any charter or other
               contract of employment of the Vessels (nor agree to do so); nor

          11.1.11 NO CHANGE IN VESSELS' MANAGERS appoint anyone other than the
               Managers as commercial or technical managers of the Vessels, nor
               terminate or materially vary the arrangements for the commercial
               or technical management of the Vessels, nor permit the Managers
               to subcontract or delegate the commercial or technical
               management of the Vessels to any third party; nor

          11.1.12 NO CHANGE IN OWNERSHIP OR CONTROL permit any change in the
               Borrowers' and/or the Corporate Guarantor's intermediate or
               ultimate beneficial ownership and control from that advised to
               the Agent at the date of this Agreement; nor

          11.1.13 NEGATIVE PLEDGE permit any Encumbrance (other than in favour
               of the Banks) to subsist, arise or be created or extended over
               all or any part of its present or future undertakings, assets,
               rights or revenues to secure or prefer any present or future
               Indebtedness or other liability or obligation of the Borrowers or
               any other person; nor

          11.1.14 NO MERGER merge or consolidate with any other person; nor

          11.1.15 ACQUISITIONS acquire any further assets other than the Vessels
               and rights arising under contracts entered into by or on behalf
               of the Borrowers in

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<PAGE>

               the ordinary course of its business of owning, operating and
               chartering the Vessels; nor

          11.1.16 OTHER OBLIGATIONS incur any obligations except for obligations
               arising under the Security Documents or contracts entered into in
               the ordinary course of its business of owning, operating and
               chartering the Vessels; nor

          11.1.17 GUARANTEES it will not issue any guarantees or indemnities or
               otherwise become directly or contingently liable for the
               obligations of any person, firm, or corporation except pursuant
               to the Security Documents and except for guarantees or
               indemnities from time to time required in the ordinary course by
               any protection and indemnity or war risks association with which
               the Vessels is entered, guarantees required to procure the
               release of the Vessels from any arrest, detention, attachment or
               levy or guarantees or undertakings required for the salvage of
               the Vessels.

11.2 POSITIVE COVENANTS

     11.2.1 REGISTRATION OF VESSELS The Borrowers undertakes to maintain the
          registration of the Vessels under the flag referred to in Recital (B)
          for the duration of the Facility Period.

     11.2.2 PROVISION OF VALUATION CERTIFICATE The Agent will within the last
          ninety (90) days of each calendar year commencing after the Drawdown
          Date obtain at the Borrowers' expense a valuation certificate
          addressed to the Agent from two Approved Brokers certifying the market
          value of the Vessels. Such valuation shall be for the cost of the
          Borrowers once during each period of twelve calendar months during the
          Facility Period (commencing on the Drawdown Date) and may be made with
          or without physical inspection of the Vessels (as the Agent may
          require) on the basis of a sale for prompt delivery for cash at arm's
          length on normal commercial terms as between a willing seller and a
          willing buyer and (at the option of the Agent) either free of or
          subject to any existing charter or other contract of employment. The
          Agent may obtain additional valuations at any time at its discretion
          at its own cost (unless there is an

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     Event of Default which is continuing in which case the cost shall be for
     the Borrowers' account).

11.2.3 VESSEL VALUATIONS FOR PURPOSES OF SECURITY DOCUMENTS For the purposes of
     the Security Documents, the market value of the Vessels shall be the value
     certified in the last valuation certificate obtained by the Agent pursuant
     to Clauses 11.2.2 PROVIDED THAT if the Vessels at the date of the Agent's
     request shall be subject to any charter or other contact of employment or
     any Encumbrance (other than as created by or pursuant to the Security
     Documents) the Agent shall for the purpose of the Security Documents, be
     entitled to deduct from the market value (determined as aforesaid) such sum
     (if any) as in the Agent's discretion shall represent the amount of the
     diminution in the market value of the Vessels arising as a result of the
     existence of such charter or other contract of employment or Encumbrance
     and in that event, for the purposes of the Security Documents, the market
     value of the Vessels shall be the said value less any amount so deducted by
     the Agent.

11.2.4 ADDITIONAL SECURITY If and so often as the aggregate of the market value
     of the Vessels (determined by the Agent in accordance with Clause 11.2.3)
     plus the value of any additional security for the time being provided to
     the Agent pursuant to this Clause shall be less than (i) one hundred and
     forty per centum (140%) of the amount of the Indebtedness for the period
     commencing on the Drawdown Date and ending on 31 May 2007 and (ii) one
     hundred and fifty per centum (150%) of the amount of the Indebtedness for
     the remainder of the Facility Period, the Borrowers will, within thirty
     days of the request of the Agent to do so, at the Borrowers' option: -

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

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

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<PAGE>

     (c)  prepay the amount of the Loan which will ensure that the aggregate of
          the market value of the Vessels (determined as aforesaid) plus the
          value of any such additional security is not less than (i) one hundred
          and forty per centum (140%) of the amount of the Indebtedness for the
          period commencing on the Drawdown Date and ending on 31 May 2007 and
          (ii) one hundred and fifty per centum (150%) of the amount of the
          Indebtedness for the remainder of the Facility Period.

     Clauses 5.4, 5.5 and 5.6 shall apply, mutatis mutandis, to any prepayment
     made pursuant to this Clause and the value of any additional security
     provided pursuant to this Clause shall be determined by the Agent in its
     discretion.

11.2.5 FINANCIAL STATEMENTS The Borrowers will supply to the Agent without
     request:

     (a)  the Borrowers' and Corporate Guarantor's annual audited financial
          statements for each financial year of the Borrowers and the Corporate
          Guarantor ending during the Facility Period, containing (amongst other
          things) the Borrowers' and Corporate Guarantor's profit and loss
          account for, and balance sheet within one hundred and eighty (180)
          days after the end of, each such financial year, prepared in
          accordance with generally accepted accounting principles and practices
          applicable to companies incorporated in the Borrowers' and Corporate
          Guarantor's country of incorporation consistently applied, and audited
          by a firm of chartered accountants (or equivalent) acceptable to the
          Agent, in each case within one hundred and eighty days of the end of
          the financial year to which they relate;

     (b)  the Borrowers' and Corporate Guarantor's semi-annual audited
          management accounts and financial statements within ninety days (90)
          after the end of each financial half year.

11.2.6 OTHER INFORMATION The Borrowers will promptly supply and will procure
     that the Corporate Guarantor supplies to the Agent copies of all

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<PAGE>

     financial and other information from time to time given by the Borrowers
     and the Corporate Guarantor to its shareholders and such information and
     explanations as the Agent may from time to time require in connection with
     the operation of the Vessels and the Borrowers' and the Corporate
     Guarantor's profit and liquidity based on the applicable laws and
     regulations and the Agent's own internal guidelines relating to the Agent's
     verification of the identity and knowledge of its customers, and will
     procure that the Agent be given the like information and explanations
     relating to all other Security Parties.

11.2.7 EVIDENCE OF GOODSTANDING The Borrowers will from time to time on the
     request of the Bank provide the Agent with evidence in form and substance
     satisfactory to the Agent that the Security Parties and all corporate
     shareholders of any of the Security Parties remain in good standing.

11.2.8 EVIDENCE OF CURRENT COFR Without limiting the Borrowers' obligations
     under Clause 11.2.6, and prior to the Vessels entering any location that is
     subject to the United States Oil Pollution Act 1990 (or any re-enactment
     thereof), the Borrowers shall notify the Agent and the Borrowers shall (and
     shall from time to time whilst the Vessels is situated in such location) at
     the request of the Agent provide the Agent with such evidence as the Agent
     may reasonably require that the Vessels has a valid and current Certificate
     of Financial Responsibility pursuant to the United States Oil Pollution Act
     1990.

11.2.9 ISM CODE COMPLIANCE The Borrowers will:-

     (a)  procure that the Vessels remain for the duration of the Facility
          Period subject to a SMS;

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

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

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<PAGE>

               (d)  immediately notify the Agent in writing of any actual or
                    threatened withdrawal, suspension, cancellation or
                    modification of the Vessels' SMC or of the Companys' DOC;

               (e)  immediately notify the Agent in writing of any "accident" or
                    "major non-conformity", as each of those terms is defined in
                    the Guidelines on the Implementation of the International
                    Safety Management Code by Administrations adopted by the
                    Assembly of the International Maritime Organisation pursuant
                    to Resolution A.788(19), and of the steps being taken to
                    remedy the situation; and

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

          11.2.10 ISPS CODE COMPLIANCE The Borrowers will:-

               (a)  procure that the Vessels and the Companies responsible for
                    the, Vessels' compliance with the ISPS Code comply with the
                    ISPS Code; and

               (b)  maintain for the Vessels throughout the Facility Period a
                    valid and current International Ship Security Certificate
                    issued under the ISPS Code ("ISSC"); and

               (c)  notify the Agent immediately in writing of any actual or
                    threatened withdrawal, suspension, cancellation or
                    modification of the ISSC,

          11.2.11 ENVIRONMENT The Borrowers covenant with the Agent as follows:

               (a)  they shall comply with all applicable Environmental Laws
                    including, without limitation, requirements relating to the
                    establishment of financial responsibility (and shall require
                    that all Environmental Affiliates of the Borrowers comply
                    with all applicable Environmental Laws and obtain and comply
                    with all required Environmental Approvals, which
                    Environmental Laws and Environmental Approvals relate to the
                    Vessels or its

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<PAGE>

                    operation or its carriage or cargo), except where that
                    non-compliance would not have a Material Adverse Effect;

               (b)  they shall conduct and complete all reasonably necessary
                    investigations, studies, sampling, audits and testings
                    required in connection with any known (or threatened)
                    Release of Materials of Environmental Concern which would
                    have a Material Adverse Effect; and

               (c)  they shall, promptly upon the occurrence of any of the
                    following events, provide to the Agent a certificate of an
                    officer of the Borrowers or of the Borrowers' agents
                    specifying in detail the nature of the event concerned:-

                    (i)  the receipt by the Borrowers or any Environmental
                         Affiliate (where the Borrowers has knowledge of the
                         receipt) of any Environmental Claim which would have a
                         Material Adverse Effect; or

                    (ii) any (or any threatened) Release of Materials of
                         Environmental Concern which would have a Material
                         Adverse Effect;

                    and upon the written request of the Agent, the Borrowers
                    shall submit to the Agent, at reasonable intervals, a report
                    updating the status of any occurrence of an Environmental
                    Claim or a Release of Materials of Environmental Concern,
                    that would have a Material Adverse Effect.

          11.2.12 INSPECTION OF RECORDS The Borrowers will permit the inspection
               of its financial records and accounts from time to time by the
               Agent or its nominee.

          11.2.13 PARI PASSU OBLIGATIONS The Borrowers will ensure that,
               throughout the Facility Period, the obligations of the Security
               Parties under or pursuant to the Security Documents rank at least
               pari passu with all other existing or future indebtedness,
               obligations or liabilities of the Security Parties, other than
               any mandatorily preferred by law.

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<PAGE>

          11.2.14 NOTIFICATION OF EVENT OF DEFAULT The Borrowers will
               immediately notify the Agent in writing of the occurrence of any
               Event of Default or Potential Event of Default.

          11.2.15 NOT IMPERIL FLAG, OWNERSHIP, INSURANCES The Borrowers will
               ensure that the Vessels are maintained and trade in conformity
               with the laws of the Republic of Panama, of the Borrowers or of
               the nationality of its officers, and in accordance with the
               requirements of the Insurances and will ensure that nothing is
               done or permitted to be done which could endanger the flag of the
               Vessels or their unencumbered (other than Encumbrances in favour
               of the Banks and/or permitted by this Agreement) ownership or
               their Insurances.

          11.2.16 CHARTERING The Borrowers will ensure and procure that in the
               event of the Vessels being employed under a charterparty, the
               duration of which exceeds twelve (12) months, the Agent shall be
               furnished forthwith with (a) details of the new employment, (b)
               (if required by the Agent) a specific charterparty assignment in
               favour of the Agent of the benefit of such charterparty and (c) a
               notice of any such assignment addressed to the relevant charterer
               and endorsed with an acknowledgement of receipt by the relevant
               charterer, all in form and substance satisfactory to the Agent.

          11.2.17 EARNINGS The Borrowers will ensure and procure that, unless
               and until directed by the Agent otherwise upon an Event of
               Default (i) all the Earnings of the Vessels shall be paid to the
               Earnings Accounts and (ii) the persons from whom the Earnings are
               from time to time due are irrevocably instructed to pay them to
               the Earnings Accounts or to such account in the name of the
               Borrowers as shall be from time to time determined by the Agent
               in accordance with the provisions hereof and of the relevant
               Security Documents.

          11.2.18 ADDITIONAL DOCUMENTS The Borrowers will from time to time and
               within ten (10) days after the Agent's request execute and
               deliver to the Agent or procure the execution and delivery to the
               Agent of all such documents as shall be deemed desirable at the
               reasonable discretion of the Agent for giving full effect to this
               Agreement, and for perfecting,

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<PAGE>

               protecting the value of or enforcing any rights or securities
               granted to the Agent under any one or more of this Agreement, the
               other Security Documents and any other documents executed
               pursuant hereto or thereto and in case that any conditions
               precedent (with the Agent's consent) have not been fulfilled
               prior to the Drawdown Date, such conditions shall be complied
               with within fourteen (14) days of the Drawdown Date (unless the
               Agent agrees otherwise in writing) and failure to comply with
               this covenant shall be an Event of Default.

          11.2.19 PHYSICAL CONDITION SURVEY OF THE VESSELS AND INSPECTION OF
               RECORDS The Borrowers will permit the Agent to conduct a physical
               condition survey of each Vessel and to conduct a comprehensive
               inspection of the class and other records of each Vessel by a
               surveyor appointed by the Agent (in its discretion) from time to
               time during the Facility Period and at the Borrowers' expense.

12   ACCOUNTS

     12.1 MAINTENANCE OF ACCOUNTS The Borrowers shall maintain the Accounts with
          the Agent for the duration of the Facility Period free of Encumbrances
          and rights of set off other than as created by or pursuant to the
          Security Documents.

     12.2 EARNINGS The Borrowers shall procure that there is credited to the
          Earnings Account, all Earnings and any Requisition Compensation of
          each Vessel.

     12.3 TRANSFERS TO RETENTION ACCOUNT On the day in each calendar month
          during the Facility Period which numerically corresponds to the day on
          which the Drawdown Date occurred (or, in any month in which there is
          no such day, on the last Business Day of that month), the Borrowers
          shall procure that there is transferred from the Earnings Account (and
          irrevocably authorise the Agent to transfer from the Earnings Account)
          to the Retention Account:-

          12.3.1 any costs or other amounts due and payable or outstanding in
               respect of the Loan; and

          12.3.2 one-third of the amount of the Repayment Instalment due on the
               next Repayment Date; and

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<PAGE>

          12.3.3 the amount of interest due on the next Interest Payment Date
               divided by the number of months between the last Interest Payment
               Date and the Interest Payment Date in question.

     12.4 ADDITIONAL PAYMENTS TO RETENTION ACCOUNT If for any reason the amount
          standing to the credit of the Earnings Account shall be insufficient
          to make any transfer to the Retention Account required by Clause 12.3,
          the Borrowers shall, without demand, procure that there is credited to
          the Retention Account, on the date on which the relevant amount would
          have been transferred from the Earnings Account, an amount equal to
          the amount of the shortfall.

     12.5 APPLICATION OF RETENTION ACCOUNT The Borrowers shall procure that
          there is transferred from the Retention Account (and irrevocably
          authorise the Agent to transfer from the Retention Account) to the
          Agent on behalf of the Banks:-

          12.5.1 on each Repayment Date, the amount of the Repayment Instalment
               then due; and

          12.5.2 on each Interest Payment Date, the amount of interest then due.

     12.6 BORROWERS' OBLIGATIONS NOT AFFECTED If for any reason the amount
          standing to the credit of the Retention Account shall be insufficient
          to pay any Repayment Instalment or to make any payment of interest
          when due, the Borrowers' obligation to pay that Repayment Instalment
          or to make that payment of interest shall not be affected.

     12.7 RELEASE OF SURPLUS Any amount remaining to the credit of the Earnings
          Account following the making of any transfer required by Clause 12.3
          shall (unless an Event of Default or Potential Event of Default shall
          have occurred and be continuing) be released to or to the order of the
          Borrowers.

     12.8 RESTRICTION ON WITHDRAWAL During the Facility Period no sum may be
          withdrawn from the Account (except in accordance with this Clause)
          without the prior written consent of the Agent.

     12.9 RELOCATION OF ACCOUNTS At any time following the occurrence and during
          the continuation of an Event of Default, the Agent may without the
          consent of the Borrowers relocate either of the Accounts to any other
          branch of the Agent, without

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<PAGE>

          prejudice to the continued application of this Clause and the rights
          of the Agent and the Banks under or pursuant to the Security
          Documents.

13   EVENTS OF DEFAULT

     13.1 THE AGENT'S RIGHTS If any of the events set out in Clause 13.2 occurs,
          the Agent may at its discretion by notice to the Borrowers declare
          itself to be under no further obligation to the Borrowers under or
          pursuant to this Agreement and may declare all or any part of the
          Indebtedness (including such unpaid interest as shall have accrued) to
          be immediately payable, in which event the Indebtedness (or the part
          of the Indebtedness referred to in the Bank's notice) shall
          immediately become due and payable without any further demand or
          notice of any kind.

     13.2 EVENTS OF DEFAULT The events referred to in Clause 13.1 are:-

          13.2.1 PAYMENT DEFAULT if the Borrowers default in the payment of any
               part of the Indebtedness when due; or if the Charterer defaults
               in the payment of any part of the hire under the Charter when
               due;

          13.2.2 OTHER DEFAULT if any of the Security Parties fails to observe
               or perform any of the covenants, conditions, undertakings,
               agreements or obligations on its part contained in any of the
               Security Documents and, where such default is capable of remedy,
               such default is not remedied within thirty (30) days if the date
               of its occurrence, or shall in any other way be in breach of or
               do or cause to be done any act repudiating or evidencing an
               intention to repudiate any of the Security Documents; or

          13.2.3 MISREPRESENTATION OR BREACH OF WARRANTY if any representation
               or warranty made or repeated, or any other information given, by
               any of the Security Parties to the Agent in or leading up to or
               during the currency of any of the Security Documents, or in or
               pursuant to any notice or other document delivered to the Agent
               under or pursuant to any of the Security Documents, is false or
               incorrect or misleading in any respect which the Agent in its
               discretion considers to be material; or

          13.2.4 EXECUTION if a distress or execution or other process of a
               court or authority is levied on any of the property of any of the
               Security Parties

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<PAGE>

               before or after Final judgment or by order of any competent court
               or authority and is not satisfied within seven days of levy; or

          13.2.5 INSOLVENCY EVENTS if any of the Security Parties or the
               Charterer: -

               (a)  resolves to appoint, or applies for or consents to the
                    appointment of, a receiver, administrative receiver,
                    trustee, administrator or liquidator of itself or of all or
                    part of its assets; or

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

               (c)  makes a general assignment for the benefit of creditors or
                    enters into a moratorium on payment of any of its
                    indebtedness; or

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

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

          13.2.6 INSOLVENCY PROCEEDINGS if any proceedings are commenced or
               threatened, or any order or judgment is given by any court, for
               the bankruptcy, liquidation, winding up, administration or
               re-organisation of any of the Security Parties or for the
               appointment of a receiver, administrative receiver,
               administrator, liquidator or trustee of any of the Security
               Parties or of all or part of the assets of any of the Security
               Parties, or if any person appoints or purports to appoint such
               receiver, administrative receiver, administrator, liquidator or
               trustee; or

          13.2.7 IMPOSSIBILITY OR ILLEGALITY if any event occurs which would, or
               would with the passage of time, render performance of any of the
               Security Documents by any of the Security Parties impossible,
               unlawful or unenforceable by the Agent; or

          13.2.8 CONDITIONS SUBSEQUENT if any of the conditions set out in
               Clause 3.2 is not satisfied within the time reasonably required
               by the Agent; or

          13.2.9 COVENANTS if any of the covenants set out in Clause 11 is not
               satisfied within thirty days; or

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<PAGE>

          13.2.10 CHANGE IN OWNERSHIP OR CONTROL if any change occurs in the
               Borrowers' and/or the Corporate Guarantor's beneficial ownership
               and control from that advised to the Agent at the date of this
               Agreement, or otherwise in accordance with Clause 11.1.12 (or in
               the case of the Borrowers) or Clause 8.1. of the Corporate
               Guarantee (in the case of the Corporate Guarantor).

          13.2.11 REVOCATION OR MODIFICATION OF CONSENTS ETC. if any consent,
               licence, approval, authorisation, filing, registration or other
               requirement of any governmental, judicial or other public body or
               authority which is now, or which at any time during the Facility
               Period becomes, necessary to enable any of the Security Parties
               to comply with any of their obligations in or pursuant to any of
               the Security Documents is not obtained or is revoked, suspended,
               withdrawn or withheld, or is modified in a manner which the Agent
               considers is, or may be, prejudicial to its interests, or ceases
               to remain in full force and effect; or

          13.2.12 MASTER AGREEMENT TERMINATION if a notice is sent by the Agent
               under section 6(a) of the Master Agreement, or by any person
               under section 6(b)(iv) of the Master Agreement, in either case
               designating an Early Termination Date for the purpose of the
               Master Agreement, or if the Master Agreement is for any other
               reason terminated, cancelled, suspended, rescinded, revoked or
               otherwise ceases to remain in full force and effect; or

          13.2.13 CURTAILMENT OF BUSINESS if the business of any of the Security
               Parties is wholly or partially curtailed or suspended by any
               intervention by or under authority of any government, or if all
               or a substantial part of the undertaking, property or assets of
               any of the Security Parties is seized, nationalised, expropriated
               or compulsorily acquired by or under authority of any government;
               or

          13.2.14 ACCELERATION OF OTHER INDEBTEDNESS if any other indebtedness
               or obligation for borrowed money for an amount exceeding one
               million Dollars ($1,000,000) in aggregate of any of the Security
               Parties becomes due or capable of being declared due prior to its
               stated maturity by

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<PAGE>

               reason of default on the part of that Security Party, or is not
               repaid or satisfied at maturity; or

          13.2.15 REDUCTION OF CAPITAL if any of the Security Parties reduces
               its authorised or issued or subscribed capital; or

          13.2.16 CHALLENGE TO REGISTRATION if the registration of the Vessels
               or the Mortgages, or any of them is contested or becomes void or
               voidable or liable to cancellation or termination, or if the
               validity or priority of the Mortgages, or either of them, is
               contested; or

          13.2.17 WAR if the country of registration of the Vessels, or either
               of them, becomes involved in war (whether or not declared) or
               civil war or is occupied by any other power and the Agent in its
               discretion considers that, as a result, the security conferred by
               the Security Documents is materially prejudiced; or

          13.2.18 NOTICE OF TERMINATION if a Guarantor gives notice to the Agent
               to determine its or his obligations under its Guarantee; or

          13.2.19 MATERIAL ADVERSE CHANGE ETC if anything is done or permitted
               or omitted to be done by any of the Security Parties which in the
               reasonable opinion of the Agent jeopardises or imperils (or may
               jeopardise or imperil) the rights conferred on the Agent by the
               Security Documents, or if there occurs (in the opinion of the
               Agent) any material adverse change in the business, affairs or
               financial condition of any of the Security Parties from that
               pertaining at the date of this Agreement; or

          13.2.20 ENVIRONMENT if the Borrowers fail to observe or perform any of
               the covenants, conditions, undertakings, agreements or
               obligations contained in Clause 11.2.12 or shall in any other way
               be in breach of or do or cause to be done any act repudiating or
               evidencing an intention to repudiate any of the covenants,
               conditions, undertakings, agreements or obligations contained in
               Clause 11.2.12; or

          13.2.21 CROSS-DEFAULT an event of default (howsoever defined) occurs
               in relation to any other loan agreement facility entered into by
               the Borrowers and/or

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<PAGE>

               the Corporate Guarantor or any subsidiary of the Corporate
               Guarantor; or

          13.2.22 CHARTER The Charter is terminated, cancelled or repudiated or
               is not in force at any time during the Facility Period, unless it
               has expired by effluxion of time, or the Borrower or the
               Charterer defaults in the performance of any of their respective
               material obligations under or pursuant to the Charter; or

          13.2.23 ANALOGOUS EVENTS if any event which (in the opinion of the
               Agent or) is analogous to any of the events set out above shall
               occur.

14   SET-OFF AND LIEN

     14.1 SET-OFF The Borrowers irrevocably authorise the Agent and the Banks at
          any time after all or any part of the Indebtedness shall have become
          due and payable to set off without notice any liability of the
          Borrowers to any of the Banks or the Agent (whether present or future,
          actual or contingent, and irrespective of the branch or office,
          currency or place of payment) against any credit balance from time to
          time standing on any account of the Borrowers (whether current or
          otherwise and whether or not subject to notice) with any branch of the
          Agent or of any Bank in or towards satisfaction of the Indebtedness
          and, in the name of the Agent or that Bank or the Borrowers, to do all
          acts (including, without limitation, converting or exchanging any
          currency) and execute all documents which may be required to effect
          such application.

     14.2 LIEN The Agent and each Bank shall have a lien on and be entitled to
          retain and realise as additional security for the repayment of the
          Indebtedness any cheques, drafts, bills, notes or negotiable or
          non-negotiable instruments and any stocks, shares or marketable or
          other securities and property of any kind of the Borrowers (or of the
          Agent or that Bank as agent or nominee of the Borrowers) from time to
          time held by the Agent, whether for safe custody or otherwise.

     14.3 RESTRICTIONS ON WITHDRAWAL Despite any term to the contrary in
          relation to any deposit or credit balance at any time on any account
          of the Borrowers with any of Banks or with the Agent, no such deposit
          or balance shall be repayable or capable of being assigned, mortgaged,
          charged or otherwise disposed of or dealt with by the

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<PAGE>

          Borrowers during the Facility Period except in accordance with the
          Security Documents, but the Agent may from time to time permit the
          withdrawal of all or any part of any such deposit or balance without
          affecting the continued application of this Clause.

     14.4 APPLICATION The Borrowers irrevocably authorise the Agent to apply all
          sums which the Agent may receive:-

          14.4.1 pursuant to a sale or other disposition of the Vessels or any
               right, title or interest in the Vessels; or

          14.4.2 by way of payment to the Agent of any sum in respect of the
               Insurances, Earnings, Charter Rights or Requisition Compensation;
               or

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

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

     14.5 MASTER AGREEMENT RIGHTS The rights conferred on the Agent by this
          Clause shall be in addition to, and without prejudice to or limitation
          of, the rights of netting and set off conferred on the Agent by the
          Master Agreement. The Borrowers acknowledges that the Agent shall be
          under no obligation to make any payment to the Borrowers under or
          pursuant to the Master Agreement if, at the time that payment becomes
          due, there shall have occurred an Event of Default or Potential Event
          of Default, or an Event of Default or Termination Event (as those
          terms are respectively defined in the Master Agreement).

15   ASSIGNMENT AND SUB-PARTICIPATION

     15.1 RIGHT TO ASSIGN The Original Bank may grant sub-participations in all
          or any part of the Loan and may assign or transfer all or any of its
          rights under or pursuant to the Security Documents to any other branch
          of that Bank or (in consultation with the Borrowers') to one or more
          other banks or financial institutions.

     15.2 BORROWERS' CO-OPERATION The Borrowers will co-operate fully with the
          Banks in connection with any assignment, transfer or
          sub-participation; will execute and procure the execution of such
          documents as the Banks may require in connection

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<PAGE>

          therewith; and irrevocably authorises the Agent to sign any Transfer
          Certificate on its behalf, and irrevocably authorises the Agent and
          the Banks disclose to any proposed assignee, transferee or
          sub-participant (whether before or after any assignment, transfer or
          sub-participation and whether or not any assignment, transfer or
          sub-participation shall take place) all information relating to the
          Security Parties, the Loan or the Security Documents which the Agent
          or the Banks may in their discretion consider necessary or desirable.

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

     15.4 TRANSFER CERTIFICATES If any Bank wishes to transfer any of its rights
          and/or obligations under or pursuant to this Agreement, it may do so
          by delivering to the Agent a duly completed Transfer Certificate, in
          which event on the Transfer Date:-

          15.4.1 to the extent that that Bank seeks to transfer its rights
               and/or obligations, the Borrowers (on the one hand) and the Bank
               in question (on the other) shall be released from all further
               obligations towards the other(s);

          15.4.2 the Borrowers (on the one hand) and the Transferee (on the
               other) shall assume obligations towards the other(s) identical to
               those released pursuant to Clause 15.4.1;

          15.4.3 the Agent, each of the Banks and the Transferee shall have the
               same rights and obligations between themselves as they would have
               had if the Transferee had been an original party to this
               Agreement as a Bank; and

          15.4.4 the Transferee shall pay to the Agent for its own account a
               transfer fee of five thousand Dollars.

          Each Bank irrevocably authorises the Agent to sign on its behalf any
          Transfer Certificate relating to the transfer of any of the rights
          and/or obligations of any other Bank.

          15.5 SECURITY DOCUMENTS Unless otherwise expressly provided in any
               Security Document or otherwise expressly agreed between a Bank
               and any proposed Transferee and

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          notified by that Bank to the Agent on or before the relevant Transfer
          Date, there shall automatically be assigned to the Transferee with any
          transfer of a Bank's rights and/or obligations under or pursuant to
          this Agreement the rights of that Bank under or pursuant to the
          Security Documents (other than this Agreement) which relate to the
          portion of the Bank's rights and/or obligations transferred by the
          relevant Transfer Certificate.

16   PAYMENTS, MANDATORY PREPAYMENT, RESERVE REQUIREMENTS AND ILLEGALITY

     16.1 PAYMENTS All amounts payable by the Borrowers under or pursuant to any
          of the Security Documents shall be paid to such accounts at such banks
          as the Agent may from time to time direct to the Borrowers, and
          (unless payable in any other Currency of Account) shall be paid in
          Dollars in same day funds (or such funds as are required by the
          authorities in the United States of America for settlement of
          international payments for immediate value). Payments shall be deemed
          to have been received by the Agent on the date on which the Agent
          receives authenticated advice of receipt, unless that advice is
          received by the Agent on a day other than a Business Day or at a time
          of day (whether on a Business Day or not) when the Agent in its
          discretion considers that it is impossible or impracticable for the
          Agent to utilise the amount received for value that same day, in which
          event the payment in question shall be deemed to have been received by
          the Agent on the Business Day next following the date of receipt of
          advice by the Agent.

     16.2 NO DEDUCTIONS OR WITHHOLDINGS All payments (whether of principal or
          interest or otherwise) to be made by the Borrowers pursuant to the
          Security Documents shall, subject only to Clause 16.3, be made free
          and clear of and without deduction for or on account of any Taxes or
          other deductions, withholdings, restrictions, conditions or
          counterclaims of any nature.

     16.3 GROSSING-UP If at any time any law requires (or is interpreted to
          require) the Borrowers to make any deduction or withholding from any
          payment, or to change the rate or manner in which any required
          deduction or withholding is made, the Borrowers will promptly notify
          the Agent and, simultaneously with making that payment, will pay to
          the Agent whatever additional amount (after taking into account any
          additional Taxes on, or deductions or withholdings from, or
          restrictions or conditions on, that additional amount) is necessary to
          ensure that, after making

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          the deduction or withholding, the Agent and the Banks receive a net
          sum equal to the sum which it would have received had no deduction or
          withholding been made.

     16.4 EVIDENCE OF DEDUCTIONS If at any time the Borrowers is required by law
          to make any deduction or withholding from any payment to be made by it
          pursuant to any of the Security Documents, the Borrowers will pay the
          amount required to be deducted or withheld to the relevant authority
          within the time allowed under the applicable law and will, no later
          than thirty days after making that payment, deliver to the Agent an
          original receipt issued by the relevant authority, or other evidence
          acceptable to the Agent, evidencing the payment to that authority of
          all amounts required to be deducted or withheld.

     16.5 ADJUSTMENT OF DUE DATES If any payment or transfer of funds to be made
          under any of the Security Documents, other than a payment of interest
          on the Loan or a payment pursuant to the Master Agreement, shall be
          due on a day which is not a Business Day, that payment shall be made
          on the next succeeding Business Day (unless the next succeeding
          Business Day falls in the next calendar month in which event the
          payment shall be made on the next preceding Business Day). Any such
          variation of time shall be taken into account in computing any
          interest in respect of that payment.

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

          16.6.1 any Bank or the Agent (or the holding company of the Bank or
               the Agent) shall be subject to any Tax with respect to payments
               of all or any part of the Indebtedness; or

          16.6.2 the basis of Taxation of payments to any Bank or the Agent in
               respect of all or any part of the Indebtedness shall be changed;
               or

          16.6.3 any reserve requirements shall be imposed, modified or deemed
               applicable against assets held by or deposits in or for the
               account of or loans by any branch of any Bank or the Agent; or

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          16.6.4 the manner in which any Bank or the Agent allocates capital
               resources to its obligations under this Agreement and/or the
               Master Agreement or any ratio (whether cash, capital adequacy,
               liquidity or otherwise) which any Bank or the Agent is required
               or requested to maintain shall be affected; or

          16.6.5 there is imposed on any Bank or the Agent (or on the holding
               company of any Bank or the Agent) any other condition in relation
               to the Indebtedness or the Security Documents;

          and the result of any of the above shall be to increase the cost to
          any Bank (or to the holding company of any Bank) of that Bank making
          or maintaining the Loan or of maintaining its obligations under the
          Master Agreement, or to cause the any Bank or the Agent to suffer (in
          its opinion) a material reduction in the rate of return on its overall
          capital below the level which it reasonably anticipated at the date of
          this Agreement and which it would have been able to achieve but for
          its entering into this Agreement or the Master Agreement and/or
          performing its obligations under this Agreement or the Master
          Agreement, the Bank affected shall notify the Agent and the Borrowers
          shall from time to time pay to the Agent on demand for the account of
          the Bank affected (or, in retention to the Master Agreement, for the
          Agent's own account) the amount which shall compensate that Bank (or
          the holding company of the Bank) for such additional cost or reduced
          return. A certificate signed by an authorised signatory of the Bank
          affected setting out the amount of that payment and the basis of its
          calculation shall be submitted to the Borrowers and shall be
          conclusive evidence of such amount save for manifest error or on any
          question of law. The Borrowers shall have the right to prepay the Loan
          in full, subject to Clauses 5.4, 5.5 and 5.6.

     16.7 ILLEGALITY AND IMPRACTICALITY Notwithstanding anything contained in
          the Security Documents, the obligation of the Banks to advance or
          maintain the Loan shall terminate in the event that a change in any
          law or in the interpretation of any law by any authority charged with
          its administration shall make it unlawful or, in the opinion of any
          Bank, impracticable for that Bank to advance or maintain the Loan. In
          that event the Bank affected shall, by written notice to the
          Borrowers, declare its obligations to be immediately terminated. If
          all or any part of the Loan shall have been advanced by the Banks to
          the Borrowers, the Indebtedness (including all

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          accrued interest) shall be prepaid within thirty days from the date of
          such notice. Clause 5.4 shall apply to that prepayment if it is made
          on a day other than the last day of an Interest Period.

     16.8 CHANGES IN MARKET CIRCUMSTANCES If at any time a Bank determines
          (which determination shall be final and conclusive and binding on the
          Borrowers) that, by reason of changes affecting the London Interbank
          market, adequate and fair means do not exist for ascertaining the rate
          of interest on the Loan pursuant to this Agreement:-

          16.8.1 that Bank shall give notice to the Borrowers of the occurrence
               of such event; and

          16.8.2 the Agent shall as soon as reasonably practicable certify to
               the Borrowers in writing the effective cost to the Banks of
               maintaining the Loan for such further period as shall be selected
               by the Banks and the rate of interest payable by the Borrowers
               for that period; or, if that is not acceptable to the Borrowers,

          16.8.3 the Agent will negotiate with the Borrowers in good faith with
               a view to modifying this Agreement to provide a substitute basis
               for the Loan which is financially a substantial equivalent to the
               basis provided for in this Agreement.

          If, within thirty days of the giving of the notice referred to in
          Clause 16.8.1, the Borrowers and the Agent fail to agree in writing on
          a substitute basis for the Loan, the Borrowers will immediately prepay
          the Indebtedness. Clause 5.4 shall apply to that prepayment if it is
          made on a day other than the last day of an Interest Period.

     16.9 NON-AVAILABILITY OF CURRENCY If a Bank is for any reason unable to
          obtain Dollars in the London Interbank market and is, as a result, or
          as a result of any other contingency affecting the London Interbank
          market, unable to advance or maintain the Loan in Dollars, that Bank
          shall give notice to the Agent and the Agent shall give notice to the
          Agent and the Banks' obligations to make the Loan available shall
          immediately cease. In that event, if all or any part of the Loan shall
          have been advanced by the Banks to the Borrowers, the Agent on behalf
          of the Banks will negotiate with the Borrowers in good faith with a
          view to establishing a mutually

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          acceptable basis for funding the Loan from an alternative source. If
          the Agent and the Borrowers have failed to agree in writing on a basis
          for funding the Loan from an alternative source by 11.00 a.m. on the
          second Business Day prior to the end of the then current Interest
          Period, the Borrowers will (without prejudice to its other obligations
          under or pursuant to this Agreement, including, without limitation,
          its obligation to pay interest on the Loan, arising on the expiry of
          the then current Interest Period) prepay the Indebtedness to the Agent
          on behalf of the Banks on the expiry of the then current Interest
          Period.

17   COMMUNICATIONS

     17.1 METHOD Any Communication may be given, delivered, made or served (as
          the case may be) under or in relation to this Agreement by letter or
          fax and shall be in the English language and sent addressed: -

          17.1.1 in the case of the Banks or the Agent to the Agent at its
               address at the head of this Agreement (fax no: +31 10 401 5323)
               marked for the attention of: Global Shipping Group; and

          17.1.2 in the case of the Borrowers to the Communications Address;

          or to such other address or fax number as the Banks, the Agent or the
          Borrowers may designate for itself by written notice to the other.

     17.2 TIMING A Communication shall be deemed to have been duly given,
          delivered, made or served to or on, and received by, the Borrowers:-

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

          17.2.2 if delivered to an officer of the Borrowers or left at the
               Communications Address at the time of delivery or leaving; or

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

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          A Communication shall only be deemed to have been duly given,
          delivered, made or served to or on, and received by, the Banks or the
          Agent on actual receipt of the whole of that Communication by the
          Agent.

     17.3 INDEMNITY The Borrowers shall indemnify the Agent against any cost,
          claim, liability, loss or expense (including legal fees and any Value
          Added Tax or any similar or replacement tax (if applicable)) which the
          Agent or any of the Banks may sustain or incur as a consequence of any
          Communication sent by or on behalf of the Borrowers by fax not being
          received by its intended recipient, or being received incomplete, or
          by reason of any Communication purportedly having been sent by or on
          behalf of the Borrowers having been sent fraudulently.

18   GENERAL INDEMNITIES

     18.1 CURRENCY In the event of the Agent or a Bank receiving or recovering
          any amount payable under any of the Security Documents in a currency
          other than the Currency of Account, and if the amount received or
          recovered is insufficient when converted into the Currency of Account
          at the date of receipt to satisfy in full the amount due, the
          Borrowers shall, on the Agent's written demand, pay to the Bank such
          further amount in the Currency of Account as is sufficient to satisfy
          in full the amount due and that further amount shall be due to the
          Agent as a separate debt under this Agreement.

     18.2 COSTS AND EXPENSES The Borrowers will, within fourteen days of the
          Agent's written demand, reimburse the Agent for all costs and expenses
          (including Value Added Tax or any similar or replacement tax if
          applicable) of and incidental to:-

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

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

          18.2.3 any other documents which may at any time be required by the
               Bank or the Agent to give effect to any of the Security
               Documents or which any Bank or the Agent is entitled to call for
               or obtain pursuant to any of the

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               Security Documents (including, without limitation, all premiums
               and other sums from time to time payable by the Agent in relation
               to the Mortgagees' Insurances); and

          18.2.4 the exercise of the rights, powers, discretions and remedies
               of the Banks and/or the Agent under or pursuant to the Security
               Documents.

     18.3 EVENTS OF DEFAULT The Borrowers shall indemnify the Banks and the
          Agent from time to time on demand against all losses and costs
          incurred or sustained by any Bank and/or the Agent as a consequence
          of any Event of Default, including (without limitation) any Break
          Costs.

     18.4 FUNDING COSTS The Borrowers shall indemnify the Banks and the Agent
          from time to time on demand against all losses and costs incurred or
          sustained by any Bank or by the Agent if, for any reason, the Loan is
          not advanced to the Borrowers after the Drawdown Notice has been given
          to the Agent, or is advanced on a date other than that requested in
          the Drawdown Notice (unless, in either case, as a result of any
          default by the Agent or any of the Banks), including (without
          limitation) any Break Costs.

     18.5 PROTECTION AND ENFORCEMENT The Borrowers shall indemnify the Banks and
          the Agent from time to time on demand against all losses, costs and
          liabilities which any Bank or the Agent may from time to time sustain,
          incur or become liable for in or about the protection, maintenance or
          enforcement of the rights conferred on the Banks and/or the Agent by
          the Security Documents or in or about the exercise or purported
          exercise by the Banks and/or the Agent of any of the rights, powers,
          discretions or remedies vested in them under or arising out of the
          Security Documents, including (without limitation) any losses, costs
          and liabilities which any Bank or the Agent may from time to time
          sustain, incur or become liable for by reason of the Banks or the
          Agent being mortgagees of the Vessels and/or a lender to the
          Borrowers, or by reason of any Bank or the Agent being deemed by any
          court or authority to be an operator or controller, or in any way
          concerned in the operation or control, of the Vessels.

     18.6 LIABILITIES OF BANKS AND AGENT The Borrowers will from time to time
          reimburse the Banks and the Agent on demand for all sums which any
          Bank or the Agent may pay or become actually or contingently liable
          for on account of the Borrowers or in

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          connection with the Vessels (whether alone or jointly or jointly and
          severally with any other person) including (without limitation) all
          sums which any Bank or the Agent may pay or guarantees which any Bank
          or the Agent may give in respect of the Insurances, any expenses
          incurred by any Bank or the Agent in connection with the maintenance
          or repair of the Vessels or in discharging any lien, bond or other
          claim relating in any way to the Vessels, and any sums which any Bank
          or the Agent may pay or guarantees which it may give to procure the
          release of the Vessels from arrest or detention.

     18.7 TAXES The Borrowers shall pay all Taxes to which all or any part of
          the Indebtedness or any of the Security Documents may be at any time
          subject and shall indemnify the Agent and the Banks on demand against
          all liabilities, costs, claims and expenses resulting from any
          omission to pay or delay in paying any such Taxes.

19   MISCELLANEOUS

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

     19.2 NO ORAL VARIATIONS No variation or amendment of any of the Security
          Documents shall be valid unless in writing and signed on behalf of the
          Banks and the Agent.

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

     19.4 SUCCESSORS ETC. The Security Documents shall be binding on the
          Security Parties and on their successors and permitted transferees and
          assignees, and shall inure to

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          the benefit of the Banks and the Agent and its successors, transferees
          and assignees. The Borrowers may not assign nor transfer any of its
          rights under or pursuant to any of the Security Documents without the
          prior written consent of the Agent.

     19.5 FURTHER ASSURANCE If any provision of the Security Documents shall be
          invalid or unenforceable in whole or in part by reason of any present
          or future law or any decision of any court, or if the documents at any
          time held by the Banks or by the Agent on their behalf are considered
          by the Banks for any reason insufficient to carry out the terms of
          this Agreement, then from time to time the Borrowers will promptly, on
          demand by the Agent, execute or procure the execution of such further
          documents as in the opinion of the Banks are necessary to provide
          adequate security for the repayment of the Indebtedness.

     19.6 OTHER ARRANGEMENTS The Banks and the Agent may, without prejudice to
          its rights under or pursuant to the Security Documents, at any time
          and from time to time, on such terms and conditions as it may in its
          discretion determine, and without notice to the Borrowers, grant time
          or other indulgence to, or compound with, any other person liable
          (actually or contingently) to the Banks and/or the Agent in respect of
          all or any part of the Indebtedness, and may release or renew
          negotiable instruments and take and release securities and hold funds
          on realisation or suspense account without affecting the liabilities
          of the Borrowers or the rights of the Banks and the Agent under or
          pursuant to the Security Documents.

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

     19.8 DELEGATION The Banks and the Agent may at any time and from time to
          time delegate to any person any of its rights, powers, discretions and
          remedies pursuant to the Security Documents on such terms as it may
          consider appropriate (including the power to sub-delegate).

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     19.9 RIGHTS ETC. CUMULATIVE Every right, power, discretion and remedy
          conferred on the Banks and/or the Agent under or pursuant to the
          Security Documents shall be cumulative and in addition to every other
          right, power, discretion or remedy to which it may at any time be
          entitled by law or in equity. The Banks and the Agent may exercise
          each of their rights, powers, discretions and remedies as often and in
          such order as they deems appropriate. The exercise or the beginning of
          the exercise of any right, power, discretion or remedy shall not be
          interpreted as a waiver of the right to exercise that or any other
          right, power, discretion or remedy either simultaneously or
          subsequently.

     19.10 NO ENQUIRY The Banks and the Agent shall not be concerned to enquire
          into the powers of the Security Parties or of any person purporting to
          act on behalf of any of the Security Parties, even if any of the
          Security Parties or any such person shall have acted in excess of
          their powers or if their actions shall have been irregular, defective
          or informal, whether or not any Bank or the Agent had notice thereof.

     19.11 CONTINUING SECURITY The security constituted by the Security
          Documents shall be continuing and shall not be satisfied by any
          intermediate payment or satisfaction until the Indebtedness shall have
          been repaid in full and neither the Banks nor the Agent shall be under
          no further actual or contingent liability to any third party in
          relation to the Vessels, the Insurances, Earnings or Requisition
          Compensation or any other matter referred to in the Security
          Documents.

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

     19.13 RE-INSTATEMENT If the Banks or the Agent takes any steps to exercise
          any of its rights, powers, remedies or discretions pursuant to the
          Security Documents and the result shall be adverse to the Banks and/or
          the Agent, the Borrowers and the Banks

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          and the Agent shall be restored to their former positions as if no
          such steps had been taken.

     19.14 NO LIABILITY Neither the Banks nor the Agent, nor any agent or
          employee of any Bank or of the Agent, nor any receiver and/or manager
          appointed by the Agent, shall be liable for any losses which may be
          incurred in or about the exercise of any of the rights, powers,
          discretions or remedies of the Banks and/or the Agent under or
          pursuant to the Security Documents nor liable as mortgagee in
          possession for any loss on realisation or for any neglect or default
          of any nature for which a mortgagee in possession might otherwise be
          liable.

     19.15 RESCISSION OF PAYMENTS ETC. Any discharge, release or reassignment by
          the Banks and/or the Agent of any of the security constituted by, or
          any of the obligations of any Security Party contained in, any of the
          Security Documents shall be (and be deemed always to have been) void
          if any act (including, without limitation, any payment) as a result of
          which such discharge, release or reassignment was given or made is
          subsequently wholly or partially rescinded or avoided by operation of
          any law.

     19.16 SUBSEQUENT ENCUMBRANCES If the Agent receives notice of any
          subsequent Encumbrance affecting the Vessels or all or any part of the
          Insurances, Earnings, Charter Rights of Requisition Compensation or
          the Accounts, the Agent may open a new account in its books for the
          Borrowers. If the Agent does not open a new account, then (unless the
          Agent gives written notice to the contrary to the Borrowers) as from
          the time of receipt by the Agent of notice of such subsequent
          Encumbrance, all payments made to the Agent shall be treated as having
          been credited to a new account of the Borrowers and not as having been
          applied in reduction of the Indebtedness.

     19.17 RELEASES If any Bank or the Agent shall at any time in its discretion
          release any party from all or any part of any of the Security
          Documents, the liability of any other party to the Security Documents
          shall not be varied or diminished.

     19.18 DISCRETIONS Unless otherwise expressly indicated, where any Bank or
          the Agent is stated in the Security Documents to have a discretion
          and/or where the opinion of any Bank or the Agent is referred to
          and/or where the consent, agreement or approval of any Bank or the
          Agent is required for any course of action, or where

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          anything is required to be acceptable to any Bank or the Agent, the
          Banks and the Agent shall have a sole, absolute and unfettered
          discretion and/or may give or withhold their consent, agreement or
          approval at its sole, absolute and unfettered discretion.

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

     19.20 SURVIVAL OF REPRESENTATIONS AND WARRANTIES The representations and
          warranties on the part of the Borrowers contained in this Agreement
          shall survive the execution of this Agreement and the advance of the
          Loan.

     19.21 COUNTERPARTS This Agreement may be executed in any number of
          counterparts each of which shall be original but which shall together
          constitute the same instrument.

     19.22 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 No term of the Agreement
          is enforceable by a person who is not a party to it.

20   LAW AND JURISDICTION

     20.1 GOVERNING LAW This Agreement shall in all respects be governed by and
          interpreted in accordance with English law.

     20.2 JURISDICTION For the exclusive benefit of the Banks and the Agent, the
          parties to this Agreement irrevocably agree that the courts of England
          are to have jurisdiction to settle any disputes which may arise out of
          or in connection with this Agreement and that any Proceedings may be
          brought in those courts.

     20.3 ALTERNATIVE JURISDICTIONS Nothing contained in this Clause shall limit
          the right of the Banks or the Agent to commence any Proceedings
          against the Borrowers in any other court of competent jurisdiction nor
          shall the commencement of any Proceedings against the Borrowers in one
          or more jurisdictions preclude the commencement of any Proceedings in
          any other jurisdiction, whether concurrently or not.

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     20.4 WAIVER OF OBJECTIONS The Borrowers irrevocably waive any objection
          which it may now or in the future have to the laying of the venue of
          any Proceedings in any court referred to in this Clause, and any claim
          that those Proceedings have been brought in an inconvenient or
          inappropriate forum, and irrevocably agrees that a judgment in any
          Proceedings commenced in any such court shall be conclusive and
          binding on it and may be enforced in the courts of any other
          jurisdiction.

     20.5 SERVICE OF PROCESS Without prejudice to the right of the Agent and the
          Banks to use any other method of service permitted by law, the
          Borrowers irrevocably agree that any writ, notice, judgment or other
          legal process shall be sufficiently served on it if addressed to it
          and left at or sent by post to the Address for Service, and in that
          event shall be conclusively deemed to have been served at the time of
          leaving or, if posted, at 9.00 a.m. on the Business Day after posting
          by prepaid first class post.

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

SIGNED by STEPHANIA KARMIRI          )   /s/ STEPHANIA KARMIRI
duly authorised for and on behalf    )   ---------------------------------------
of ALLENDALE INVESTMENTS S.A.        )
in the presence of:-                 )

/s/ ALEXANDROS F. DAMIANIDIS
---------------------------------
ALEXANDROS F. DAMIANIDIS
ATTORNEY AT LAW
STEPHENSON HARWOOD
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 216 4295 160
A.M. / (Greek characters) 2867

SIGNED by STEPHANIA KARMIRI          )   /s/ STEPHANIA KARMIRI
duly authorised for and on behalf    )   ---------------------------------------
of ALTERWALL BUSINESS INC.           )
in the presence of:-                 )

/s/ ALEXANDROS F. DAMIANIDIS
---------------------------------
ALEXANDROS F. DAMIANIDIS
ATTORNEY AT LAW
STEPHENSON HARWOOD
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 216 4295 160
A.M. / (Greek characters) 2867

SIGNED by NIGEL VAUGHAN BOWEN-MORRIS )   /s/ NIGEL VAUGHAN BOWEN-MORRIS
duly authorised for and on behalf    )   ---------------------------------------
of FORTIS BANK (NEDERLAND) N.V.      )
(AS LENDER) in the presence of:-     )

/s/ ALEXANDROS F. DAMIANIDIS
---------------------------------
ALEXANDROS F. DAMIANIDIS
ATTORNEY AT LAW
STEPHENSON HARWOOD
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 216 4295 160
A.M. / (Greek characters) 2867

SIGNED by NIGEL VAUGHAN BOWEN-MORRIS )   /s/ NIGEL VAUGHAN BOWEN-MORRIS
duly authorised for and on behalf    )   ---------------------------------------
of FORTIS BANK (NEDERLAND) N.V.      )
(AS AGENT) in the presence of:-      )

/s/ ALEXANDROS F. DAMIANIDIS
---------------------------------
ALEXANDROS F. DAMIANIDIS
ATTORNEY AT LAW
STEPHENSON HARWOOD
10 ANT. Illegible & SACHTOURI
PIRAEUS 18536 - TEL. 216 4295 160
A.M. / (Greek characters) 2867

                                       71

<PAGE>

                                   SCHEDULE 1

                          THE BANKS AND THE COMMITMENTS

<TABLE>
<CAPTION>
THE BANKS                      THE COMMITMENTS
---------                      ---------------
<S>                            <C>
FORTIS BANK (NEDERLAND) N.V.   100%
Coolsingel 93
P.O. Box 749
3000 AS Rotterdam
The Netherlands
</TABLE>

                                       72

<PAGE>

                                   APPENDIX A

To: FORTIS BANK (NEDERLAND) N.V.

From: ALLENDALE INVESTMENTS S.A.
      ALTERWALL BUSINESS INC.

                                                                            2005

Dear Sirs,

                                 DRAWDOWN NOTICE

     We refer to the Loan Agreement dated _____ 2005 made between ourselves and
yourselves ("THE AGREEMENT").

     Words and phrases defined in the Agreement have the same meaning when used
in this Drawdown Notice.

     Pursuant to Clause 2.2 of the Agreement, we irrevocably request that you
advance the sum of [_____] to us on _____ 2005, which is a Business Day, by
paying the amount of the Loan to [___].

     We warrant that the representations and warranties contained in Clause 4 of
the Agreement are true and correct at the date of this Drawdown Notice and will
be true and correct on 2005; that no Event of Default nor Potential Event of
Default has occurred and is continuing, and that no Event of Default or
Potential Event of Default will result from the advance of the Loan requested in
this Drawdown Notice.

     We select the period of [_____] months as the first Interest Period.

                                        Yours faithfully

                                        ----------------------------------------
                                           For and on behalf of
                                        ALLENDALE INVESTMENTS S.A.
                                          ALTERWALL BUSINESS INC.

                                       73

<PAGE>

                                   APPENDIX B

                          FORM OF TRANSFER CERTIFICATE

To: FORTIS BANK (NEDERLAND) N.V.

                              TRANSFER CERTIFICATE

This transfer certificate relates to a secured loan facility agreement (as from
time to time amended, varied, supplemented or novated "THE LOAN AGREEMENT")
dated ___________ 2005, on the terms and subject to the conditions of which a
secured loan facility of up to $20,000,000 was made available to
[_________________________] by a syndicate of banks on whose behalf you act as
agent and security trustee.

1    Terms defined in the Loan Agreement shall, unless otherwise expressly
     indicated, have the same meaning when used in this certificate. The terms
     "TRANSFEROR" and "TRANSFEREE" are defined in the schedule to this
     certificate.

2    The Transferor:-

     2.1  confirms that the details in the Schedule under the heading
          "TRANSFEROR'S COMMITMENT" accurately summarise its Commitment; and

     2.2  requests the Transferee to accept by way of novation the transfer to
          the Transferee of the amount of the Transferor's Commitment specified
          in the Schedule by counter-signing and delivering this certificate to
          the Agent at its address for Communications specified in the Loan
          Agreement.

3    The Transferee requests the Agent to accept this certificate as being
     delivered to the Agent pursuant to and for the purposes of clause 15.4 of
     the Loan Agreement so as to take effect in accordance with the terms of
     that clause on the Transfer Date specified in the Schedule.

4    The Agent (on its own behalf and on behalf of each of the Borrowers and
     each of the Banks other than the Transferor) confirms its acceptance of
     this certificate for the purposes of clause 15.4 of the Loan Agreement.

5    The Transferee confirms that:-

     5.1  it has received a copy of the Loan Agreement together with all other
          information which it has required in connection with this transaction;

     5.2  it has not relied and will not in the future rely on the Transferor or
          any other party to the Loan Agreement to check or enquire on its
          behalf into the legality, validity, effectiveness, adequacy, accuracy
          or completeness of any such information; and

     5.3  it has not relied and will not in the future rely on the Transferor or
          any other party to the Loan Agreement to keep under review on its
          behalf the financial condition, creditworthiness, condition, affairs,
          status or nature of any of the Security Parties.

6    Execution of this certificate by the Transferee constitutes its
     representation to the Transferor and to all other parties to the Loan
     Agreement that it has the power to become a

                                       74

<PAGE>

     party to the Loan Agreement as a Bank on the terms of the Loan Agreement
     and has taken all steps to authorise execution and delivery of this
     certificate.

7    The Transferee undertakes with the Transferor and each of the other parties
     to the Loan Agreement that it will perform in accordance with their terms
     all those obligations which by the terms of the Loan Agreement will be
     assumed by it after delivery of this certificate to the Agent and the
     satisfaction of any conditions subject to which this certificate is
     expressed to take effect.

8    The Transferor makes no representation or warranty and assumes no
     responsibility with respect to the legality, validity, effectiveness,
     adequacy or enforceability of any of the Security Documents or any document
     relating to any of the Security Documents, and assumes no responsibility
     for the financial condition of any of the Security Parties or for the
     performance and observance by the Security Parties of any of their
     obligations under any of the Security Documents or any document relating to
     any of the Security Documents and any conditions and warranties implied by
     law are expressly excluded.

9    The Transferee acknowledges that nothing in this certificate or in the Loan
     Agreement shall oblige the Transferor to:-

     9.1  accept a re-transfer from the Transferee of the whole or any part of
          the rights, benefits and/or obligations transferred pursuant to this
          certificate; or

     9.2  support any losses directly or indirectly sustained or incurred by the
          Transferee for any reason including, without limitation, the
          non-performance by any party to any of the Security Documents of any
          obligations under any of the Security Documents.

10   The address and fax number of the Transferee for the purposes of clause
     10.20 of the Loan Agreement are set out in the Schedule.

11   This certificate may be executed in any number of counterparts each of
     which shall be original but which shall together constitute the same
     instrument.

12   This certificate shall be governed by and interpreted in accordance with
     English law.

                                  THE SCHEDULE

1    TRANSFEROR:

2    TRANSFEREE:

3    TRANSFER DATE (not earlier that the fifth Business Day after the date of
     delivery of the Transfer Certificate to the Agent):

4    TRANSFEROR'S COMMITMENT:

5    AMOUNT TRANSFERRED:

6    TRANSFEREE'S ADDRESS AND FAX NUMBER FOR THE PURPOSES OF CLAUSE 11.20 OF THE
     LOAN AGREEMENT:

                                       75

<PAGE>

[NAME OF TRANSFEROR]                    [NAME OF TRANSFEREE]

By:                                     By:
    ---------------------------------       ------------------------------------
Date:                                   Date:
      -------------                           -------------

FORTIS BANK (NEDERLAND) N.V. as Agent

for and on behalf of itself, the Borrowers and each of the Banks (other than the
Transferor)

By:
    ---------------------------------
Date:
      -------------

                                       76<PAGE>
                                                                               .
                                                                               .
                                                                               .
                                                                    Exhibit 10.7

                                                                          (LOGO)

<TABLE>
<S>                                                <C>
1.   Date of Agreement                             THE BALTIC AND INTERNATIONAL MARITIME
                                                   COUNCIL (BIMCO) STANDARD SHIP MANAGEMENT
                                                   AGREEMENT CODE NAME: "SHIPMAN"
                                                                                     PART I
2.   Owners (name, place of registered office      3.  Managers (name, place of registered
     and law of registry)                              office and law of registry)

     Name                                              Name

     Place of registered office                        Place of registered office

     Law of registry                                   Law of registry

4.   Day and year of commencement of Agreement
     (Cl. 2.1.) 31/1/05

5.   Crewing (state "yes" or "no" as agreed)       6.  Technical Management (state "yes" or
     (Cl. 2.3.(i) and Cl. 3)                           "no" as agreed) (Cl. 2.3.(ii) and
     YES                                               Cl. 4) YES

7.   Insurance (state "yes" or "no" as agreed)     8.  Freight Management (state "yes" or
     (Cl. 2.3.(iii) and Cl. 5)                         "no" as agreed) (Cl. 2.3.(iv) and
     YES                                               Cl. 6) YES

9.   Accounting (state "yes" or "no" as            10. Chartering (state "yes" or "no" as
     agreed) (Cl. 2.3.(v) and Cl. 7)                   agreed; if "yes", also state period
     YES                                               of employment) (Cl. 2.3.(vi) and
                                                       Cl. 8) YES
                                                       period of employment in excess of
                                                       which owners' prior consent shall
                                                       first be obtained

11.  Sale or purchase of vessel (state "yes"       12. Provisions (state "yes" or "no" as
     or "no" as agreed) (Cl. 2.3.(vii) and             agreed) (Cl. 2.3.(viii) and Cl. 10)
     Cl. 9) YES                                        YES

13.  Bunkering (state "yes" or "no" as             14. Operation (state "yes" or "no" as
     agreed) (Cl. 2.3.(ix) and Cl. 11)                 agreed) (Cl. 2.3.(x) and Cl. 12)
     YES                                               YES

15.  Annual management fee (state lump sum         16. Redundancy costs (state maximum )
     amount) (Cl. 15.1.)                               amount (Cl. 15.3.(b))
     USD 590 perday (adjusted annually on the          NOT APPLICABLE
     1st of February for the preceeding year
     official inflation rate in Greece)

17.  Day and year of termination of Agreement
     (Cl. 23.1.)
     31/1/2010

18.  Law and arbitration (state 24.1., 24.2. or 24.3. of Cl. 24, as agreed; if
     24.3. agreed also state place of arbitration) (If Box 18 not titled in
     24.1. shall apply) (Cl. 24) ENGLISH LAW - ARBITRATION IN LONDON AS PER
     CLAUSE 24.1

19.  Notices (state postal and cable address,      20. Notices (state postal and cable
     telex and telefax number for service of           address, telex and telefax number for
     notice and communication to the Owners)           service of notice and communication
     (Cl. 25)                                          to the Managers) (Cl. 25)

     FAX:                                              TEL
                                                       FAX:

It is mutually agreed between the party mentioned in Box 2 (hereinafter called "the
Owners") and the party mentioned in Box 3 (hereinafter called "the Managers") that this
Agreement consisting of PART I and PART II as well as ANNEX "A" or ANNEX "B" (as
applicable) and ANNEX "C" attached hereto, shall be performed subject to the conditions
contained herein. In the event of a conflict of conditions, the provisions of PART I shall
prevail over those of PART II and ANNEX "A" or ANNEX "B" (as applicable) and ANNEX "C" to
the extent of such conflict but no further.

Signature(s) (Owners)                              Signature(s) (Managers)

                                      (SEAL)                                         (SEAL)
</TABLE>

Printed and sold by Fr. G. Knudtzons Bogtrykkeri A/S, 55 Toldtaodgade, DK-1253
Copenhagen K, Telefax +45 33 93 11 84, by authority of The Baltic and
international Maritime Council (BIMCO), Copenhagen

COPYRIGHT, PUBLISHED BY
THE BATIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)
July 1988

<PAGE>

                                    PART II
                  "SHIPMAN" STANDARD SHIP MANAGEMENT AGREEMENT

     DEFINITIONS

     In this Agreement save where the context otherwise requires, the following
     words and expressions shall have the meanings hereby assigned to them.

     "The Vessel" shall mean the vessel details of which are set out in Annex
     "A" hereto.

     "The Fleet" shall mean the vessels details of which are set out in Annex
     "B" hereto.

     "Crew Support Costs" shall mean all expenses of a general nature which are
     not particularly referable to any individual vessel for the time being
     managed by the Managers and which are incurred by the Managers for the
     purpose of providing an efficient and economic management service and,
     without prejudice to the generality of the foregoing, shall include the
     cost of crew standby pay, training schemes for officers and ratings, cadet
     training schemes, sickpay, study pay, recruitment and interviews.

1.   MARGINAL HEADINGS

     The Marginal Headings of this Agreement are for identification only and
     shall not be deemed to be part hereof or be taken into consideration in the
     interpretation or construction of this Agreement.

2.   APPOINTMENT OF MANAGERS

     2.1. With effect from the day and year stated in Box 4 and continuing
     unless and until terminated as provided herein, the Owners hereby appoint
     the Managers and the Managers hereby agree to act as the Managers of the
     Vessel.

     2.2. The Managers undertake to use their best endeavours to provide the
     Management Services specified in sub-clause 2.3. on behalf of the Owners in
     accordance with sound ship management practice and to protect and promote
     the interests of the Owners in all matters relating to the provision of
     services hereunder.

     Provided however that the Managers in the performance of their management
     responsibilities under this Agreement shall be entitled to have regard to
     their overall responsibility in relation to all vessels as may from time to
     time be entrusted to their management and in particular, but without
     prejudice to the generality of the foregoing, the Managers shall be
     entitled to allocate available supplies, manpower and services in such
     manner as in the prevailing circumstances the Managers in their absolute
     discretion consider to be fair and reasonable.

     2.3. Subject to the terms and conditions herein provided, during the period
     of this Agreement, the Managers shall carry out, as agents for and on
     behalf of the Owners, such of the following functions in respect of the
     Vessel as shall have been indicated affirmatively in Boxes 5 to 14 in PART
     I:

     *) (i)    Crewing (see Clause 3)

     *) (ii)   Technical Management (see Clause 4)

     *) (iii)  Insurance (see Clause 5)

     *) (iv)   Freight Management (see Clause 6)

     *) (v)    Accounting (see Clause 7)

     *) (vi)   Chartering (see Clause 8)

     *) (vii)  Sale or Purchase of Vessel (see Clause 9)

     *) (viii) Provisions (see Clause 10)

     *) (ix)   Bunkering (see Clause 11)

     *) (x)    Operation (see Clause 12),

     and shall have authority to take such actions as the Managers may from time
     to time in their absolute discretion consider to be necessary to enable
     them to perform this Agreement in accordance with sound ship management
     practice.

     2.3.(i) to (x) are options to be agreed, and Boxes 5 to 14 in PART I should
     be filled in with either "yes" or "no" accordingly.

3.   CREWING (only applicable if 2.3. (i) agreed according to Box 5)

     The Managers shall provide adequate and properly qualified Crew for the
     Vessel as required by the Owners, provision of which includes but is not
     limited to the following functions:

     (i)  employment of Master, officers and crew (hereinafter collectively
          referred to as "the Crew") of the Vessel;

     (ii) arrangement of transportation of the Crew, including repatriation;

     (iii) training of the Crew;

     (iv) supervision of the efficiency of the Crew and administration of all
          other crew matters such as planning for the manning of the Vessel;

     (v)  payroll arrangement;

     (vi) arrangement and administration of pensions and Crew insurance;

     (vii) discipline and union negotiations;

     (viii) enforcement of appropriate standing orders.

4.   TECHNICAL MANAGEMENT (only applicable if 2.3. (ii) agreed according to Box
     6)

     The Managers shall provide technical management which includes, but is not
     limited to, the following functions:

     (i)  provision of competent personnel to supervise the maintenance and
          general efficiency of the Vessel;

     (ii) arrangement and supervision of drydockings, repairs, alterations and
          the upkeep of the Vessel to the standards required by the Owners
          provided that the Managers shall be entitled to incur the necessary
          expenditure to ensure that the Vessel will comply with all
          requirements and recommendations of the classification society, and
          with the laws and regulations of the country of registry of the Vessel
          and of the places where she trades;

     (iii) arrangement of the supply of necessary stores, spares and lubricating
          oil;

     (iv) appointment of surveyors and technical consultants as the Managers may
          consider from time to time to be necessary.

5.   INSURANCE (only applicable if 2.3. (iii) agreed according to Box 7).

     The Managers shall arrange such insurances as the Owners shall have
     instructed or agreed, in particular as regards insured values, deductibles
     and franchises.

6.   FREIGHT MANAGEMENT (only applicable if 2.3. (iv) agreed according to Box
     8).

     The Managers shall provide freight management which includes but is not
     limited to the following functions:

     (i)  provision of voyage estimates and accounts and calculation of hire and
          freights and/or demurrage and despatch moneys due from or due to the
          Charterers of the Vessel if required by the Owners;

     (ii) arrangement of the proper payment to Owners of all hire and/or freight
          revenues or other moneys of whatsoever kind to which Owners may be
          entitled arising out of the employment of or otherwise in connection
          with the Vessel.

7.   ACCOUNTING (only applicable if 2.3. (v) agreed according to Box 9).

     The Managers shall

     (i)  establish an accounting system which meets the requirements of the
          Owners and provide regular accounting services, supply regular reports
          and records in accordance therewith;

     (ii) maintain the records of all costs and expenditures incurred hereunder
          as well as data necessary or proper for the settlement of accounts
          between the parties.

8.   CHARTERING (only applicable if 2.3. (vi) agreed according to Box 10).

     The Managers shall, in accordance with the Owners' Instructions, provide
     chartering services which includes but is not limited to seeking and
     negotiating employment for the Vessel and the conclusion (including the
     execution thereof) of charterparties or other contracts relating to the
     employment of the Vessel. If such a contract exceeds the period stated in
     Box 10, consent thereto in writing shall first be obtained from the Owners.

9.   SALE OR PURCHASE OF VESSEL (only applicable if 2.3. (vii) agreed according
     to Box 11).

     The Managers shall, in accordance with the Owners' instructions, supervise
     the sale or purchase of the Vessel, including the performance of any sale
     or purchase agreement, but not negotiation of the same.

10.  PROVISIONS (only applicable if 2.3. (viii) agreed according to Box 12).

     The Managers shall arrange for the supply of provisions.

11.  BUNKERING (only applicable if 2.3. (ix) agreed according to Box 13).

     The Managers shall arrange for the provision of bunker fuel of the quality
     specified by the Owners as required for the Vessel's trade.

12.  OPERATION (only applicable if 2.3.(x) agreed according to Box 14).

     The Managers shall provide for the operation of the Vessel, as required by
     the Owners, which includes but is not limited to the following functions:

     (i)  provision of voyage estimates and accounts and calculation of hire,
          freights, demurrage and/or despatch moneys due from or due to the
          Charterers of the Vessel;

     (ii) issue of voyage instructions;

     (iii) appointment of agents;

     (iv) appointment of stevedores;

     (v)  arrangement of the surveying of cargoes.

13.  INSURANCE POLICIES

     All insurances shall be in the joint names of the Owners and the Managers
     provided that, unless the Managers give their express prior consent, no
     liability to pay premiums or P & I Calls shall be imposed on the Managers,
     notwithstanding the restrictions on P & I Cover which would thereby result.

14.  INCOME COLLECTED AND EXPENSES PAID ON BEHALF OF OWNERS

     14.1. All moneys collected by the Managers under the terms of this
     Agreement (other than moneys payable by the Owners to the Managers) and any
     interest thereon shall be held to the credit of the Owners in a separate
     bank account.

     14.2. All expenses incurred by the Managers under the terms of this
     Agreement on behalf of the Owners (including expenses as provided in Clause
     15) may be debited against the Owners in the account referred to under
     Clause 14.1. but shall in any event remain payable by the Owners to the
     Managers on demand.

15.  MANAGEMENT FEE

     15.1. The Owners shall pay to the Managers for their services as Managers
     under this Agreement an annual basic Management Fee in the lump sum amount
     as stated in Box 15 which shall be payable by equal quarterly instalments
     in advance, the first instalment being payable on the commencement of this
     Agreement (see Clause 2.1. and Box 4) and subsequent instalments being
     payable every three months.

     15.2. The Managers shall, at no extra cost to the Owners, provide their own
     office accommodation, office staff and stationery. Without limiting the
     generality of Clause 14 the Owners shall reimburse the Managers for postage
     and communication expenses, travelling expenses, and other out of pocket
     expenses properly incurred by the Managers in pursuance of the Management
     Services.

     15.3. In the event of the appointment of the Managers being terminated by
     the Owners or the Managers in accordance with the provisions of Clause 23
     other than by reason of default by the Managers, or if the Vessel is lost,
     sold or otherwise disposed of, the Management Fee payable to the Managers
     according to the provisions of sub-clause 15.1. shall continue to be
     payable for a further period of three calendar months. In addition,
     provided that the Managers provide Crew for the Vessel in accordance with
     Clause 3

     a)   the Owners shall continue to pay Crew Support Costs during the said
          further period of three calendar months and

     b)   the Owners shall pay an equitable proportion of any redundancy costs
          which may materialize not exceeding the amount stated in Box 16.

     15.4. Whilst this Agreement remains in subsistence, if the Owners decide to
     lay-up the Vessel and such lay-up lasts for more than three months, an

<PAGE>

                                     PART II
                  "SHIPMAN" STANDARD SHIP MANAGEMENT AGREEMENT

     appropriate reduction of the Management Fee for the period exceeding three
     months until one month before the Vessel is again put into service shall be
     mutually agreed between the parties.

     15.5. All discounts and commissions obtained by the Managers in the course
     of the management of the Vessel shall be credited to the Owners.

16.  BUDGETS AND MANAGEMENT OF FUNDS

     16.1. The Managers shall present to the Owners annually a budget for the
     following twelve months in such form as the Owners require. Subsequent
     annual budgets shall be prepared by the Managers and submitted to the
     Owners not less than three months before the anniversary date of the
     commencement of this Agreement (see Clause 2.1. and Box 4).

     16.2. The Owners shall indicate to the Managers their acceptance and
     approval of the annual budget within one month of presentation and in the
     absence of any such indication the Managers shall be entitled to assume
     that the Owners have accepted the said budget.

     16.3. Following the agreement of the budget, the Managers shall prepare and
     present to the Owners their estimate of the working capital requirement of
     the Vessel and the Managers shall each month up-date this estimate. Based
     thereon, the Managers shall each month request the Owners for the Funds
     required to run the Vessel for the ensuing month, including the payment of
     any occasional or extraordinary item of expenditure, such as emergency
     repair costs, additional insurance premiums, bunkers or provisions. Such
     Funds shall be received by the Managers within ten days after the receipt
     of such request and shall be held to the credit of the Owners in a separate
     account.

     16.5. The Managers shall produce a monthly comparison between budgeted and
     actual income and expenditure of the Vessel as required by the Owners.

     Illegible Notwithstanding anything contained herein, the Managers shall in
     no Illegible be required to use or commit their own funds to finance the
     provision of the Management Services.

17.  MANAGERS' RIGHT TO SUB-CONTRACT

     The Managers shall not sub-contract any of their obligations hereunder to a
     third party without the consent of the Owners.

18.  RESPONSIBILITIES

     18.1. Force Majeure. - Neither the Owners nor the Managers shall be under
     any liability for any failure to perform any of their obligations hereunder
     by reason of any cause whatsoever of any nature or kind beyond their
     reasonable control.

     18.2. Liability to Owners. - Without prejudice to sub-clause 18.1., the
     Managers shall be under no liability whatsoever to the Owners for any loss,
     damage, delay or expense of whatsoever nature, whether direct or indirect,
     (including but not limited to loss of profit arising out of or in
     connection with detention of or delay to the Vessel) and howsoever arising
     in the course of performance of the Management Services

     UNLESS same is proved to have resulted solely from the negligence, gross
     negligence or wilful default of the Managers or their employees or agents,
     or sub-contractors employed by them in connection with the Vessel, in which
     case (save where loss, damage, delay or expense has resulted from the
     Managers' personal act or omission committed with the intent to cause same
     or recklessly and with knowledge that such loss, damage, delay or expense
     would probably result) the Managers' liability for each incident or series
     of incidents giving rise to a claim or claims shall never exceed a total of
     ten times the annual management fee payable hereunder.

     18.3. Indemnity. - Except to the extent and solely for the amount therein
     set out that the Managers would be liable under sub-clause 18.2. the Owners
     hereby undertake to keep the Managers and their employees, agents and
     sub-contractors indemnified and to hold them harmless against all actions,
     Illegible, claims, demands or liabilities whatsoever or howsoever Illegible
     which may be brought against them or incurred or suffered by them arising
     out of or in connection with the performance of the Agreement, and against
     and in respect of all costs, loss, damages and expenses (including legal
     costs and expenses on a full indemnity basis) which the Managers may suffer
     or incur (either directly or indirectly) in the course of the performance
     of this Agreement.

     18.4. "Himalaya". - It is hereby expressly agreed that no employee or agent
     of the Managers (including every sub-contractor from time to time employed
     by the Managers) shall in any circumstances whatsoever be under any
     liability whatsoever to the Owners for any loss, damage or delay of
     whatsoever kind arising or resulting directly or indirectly from any act,
     neglect or default on his part while acting in the course of or in
     connection with his employment and, without prejudice to the generality of
     the foregoing provisions in this Clause, every exemption, limitation,
     condition and liberty herein contained and every right, exemption from
     liability, defence and immunity of whatsoever nature applicable to the
     Managers or to which the Managers are entitled hereunder shall also be
     available and shall extend to protect every such employee or agent of the
     Managers acting as aforesaid and for the purpose of all the foregoing
     provisions of this Clause 18 the Managers are or shall be deemed to be
     acting as agent or trustee on behalf of and for the benefit of all persons
     who are or might be his servants or agents from time to time (including
     sub-contractors as aforesaid) and all such persons shall to this extent be
     or be deemed to be parties to this Agreement.

19.  GENERAL ADMINISTRATION

     19.1. The Managers shall handle and settle all claims arising out of the
     Management Services hereunder and keep the Owners informed regarding any
     incident of which the Managers become aware which gives or may give rise to
     claims or disputes involving third parties.

     19.2. The Managers shall, as instructed by the Owners, bring or defend
     actions, suits or proceedings in connection with matters entrusted to the
     Managers according to this Agreement.

     19.3. The Managers shall also have power to obtain legal or technical or
     other outside expert advice in relation to the handling and settlement of
     claims and disputes or all other matters affecting the interests of the
     Owners in respect of the Vessel.

     19.4. The Owners shall arrange for the provision of any necessary guarantee
     bond or other security.

     19.5. Any costs incurred by the Managers in carrying out their obligations
     according to Clause 19 shall be reimbursed by the Owners.

20.  AUDITING

     The Managers shall at all times maintain and keep true and correct accounts
     and shall make the same available for inspection and auditing by the Owners
     at such times as may be mutually agreed.

21.  INSPECTION OF VESSEL

     The Owners shall have the right at any time after giving reasonable notice
     to the Managers to inspect the Vessel for any reason they consider
     necessary.

22.  COMPLIANCE WITH LAW AND REGULATIONS

     The Managers will not do or permit anything to be done which might cause
     any breach or infringement of the laws and regulations of the country of
     registry of the Vessel, and of the places where she trades.

23.  DURATION OF THE AGREEMENT

     23.1. This Agreement shall come into effect on the date stated in Box 4 and
     shall continue until the date stated in Box 17. Thereafter it shall
     continue until terminated by either party giving to the other notice in
     writing, in which event the Agreement shall terminate upon the expiration
     of a period of two months from the date upon which such notice was given.

     23.2. Termination by default. - The Managers shall be entitled to terminate
     the Agreement by notice in writing if any moneys payable by the owners of
     any vessel in the Fleet, whether under this or any other Management
     Agreement, shall not have been received in the Managers' nominated account
     within ten days of payment having been requested in writing by the
     Managers.

     The Managers shall also be entitled to terminate the Agreement by notice in
     writing if after receipt of written notice of objection thereto from the
     Managers the owners of any vessel in the Fleet whether under this or any
     other Management Agreement proceed with employment of or continue to employ
     their vessel in a trade or in a manner which is, in the opinion of the
     Managers, likely to be detrimental to their reputation as Managers or
     (otherwise than by virtue of ordinary business competition) be prejudicial
     to the commercial interest of the Managers.

     This Agreement shall terminate forthwith in the event of an order being
     made or resolution passed for the winding up, dissolution, liquidation or
     bankruptcy of either party (otherwise than for the purpose of
     reconstruction or amalgamation) or if a receiver is appointed, or if it
     suspends payment, ceases to carry on business or makes any special
     arrangement or composition with its creditors.

     23.3. Extraordinary Termination. - This Agreement shall be deemed to be
     terminated in the case of the sale of the Vessel or if the Vessel becomes a
     total loss or is declared as a constructive or compromised or arranged
     total loss or is requisitioned.

     23.4. For the purpose of sub-clause 23.3. hereof

     a)   the date upon which the Vessel is to be treated as having been sold or
          otherwise disposed of shall be the date on which the Owners cease to
          be registered as Owners of the Vessel;

     b)   the Vessel shall not be deemed to be lost unless either she has become
          an actual total loss or agreement has been reached with her
          Underwriters in respect of her constructive, compromised or arranged
          total loss or if such agreement with her Underwriters is not reached
          it is adjudged by a competent tribunal that a constructive loss of the
          Vessel has occurred.

     23.5. The termination of this Agreement shall be without prejudice to all
     rights accrued due between the parties prior to the date of termination.

24.  LAW AND ARBITRATION

*)   24.1. This Agreement shall be governed by English law and any dispute
     arising out of this Agreement shall be referred to arbitration in London,
     one arbitrator being appointed by each party, in accordance with the
     Arbitration Acts 1950 and 1979 or any statutory modification or
     re-enactment thereof for the time being in force. On the receipt by one
     party of the nomination in writing of the other party's arbitrator, that
     party shall appoint their arbitrator within fourteen days, failing which
     the decision of the single Arbitrator appointed shall apply. If two
     Arbitrators properly appointed shall not agree they shall appoint an umpire
     whose decision shall be final.

25.  NOTICES

     25.1. Any communication may be sent by telex, registered or recorded mail
     or by personal service.

     25.2. The address of the Parties for service of such communication shall be
     as stated in Boxes 19 and 20, respectively.

<PAGE>

ANNEX "A" TO
THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)
STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: "SHIPMAN"

Date of Agreement:

Name of Vessel:

Particulars of Vessel:

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