Document:

EXHIBIT 10.7

                           COMMODORE HOLDINGS LIMITED

                                      -and-

                                 MERITA BANK PLC

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

                             GUARANTEE AND INDEMNITY
                           relating to obligations of
                          Crown Cruises of Panama, Inc.
                           re USD6,720,000 bridge loan

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

                           Sinclair Roche & Temperley
                                   Royex House
                              5 Aldermanbury Square
                                 London EC2V 7LE
                               Tel: 0171 452 4000
                               Fax: 0171 452 4001
                                 Ref: GFS/242921

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                                INDEX OF CONTENTS

CLAUSE            HEADING                                               PAGE NO.
------            -------                                               --------

1.    DEFINITIONS AND CONSTRUCTION.............................................2

2.    REPRESENTATIONS AND WARRANTIES...........................................3

3.    GUARANTEE AND INDEMNITY..................................................4

4.    EXPENSES.................................................................5

5.    CONTINUING GUARANTEE.....................................................5

6.    UNDERTAKINGS.............................................................6

7.    ENFORCEMENT.............................................................12

8.    CURRENCY INDEMNITY......................................................14

9.    BENEFIT.................................................................15

10.   MISCELLANEOUS...........................................................15

11.   NOTICES.................................................................16

12.   GOVERNING LAW AND JURISDICTION..........................................17

SCHEDULE A : FINANCIAL FIGURES, RATIOS AND PERCENTAGES........................18

FORM OF COMPLIANCE CERTIFICATE ...............................................20

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THIS GUARANTEE AND INDEMNITY is given the 24th day of January 2000
BY:-

(1)      COMMODORE HOLDINGS LIMITED, a company incorporated and registered under
         the laws of Bermuda whose registered office is at c/o Francis & Forest,
         Corner House, 20 Parliament Street, Hamilton HM12, Bermuda (the
         "Guarantor" which expression shall include the successors and permitted
         assigns of the Guarantor) in favour of:-

(2)      MERITA BANK PLC, a company incorporated under the laws of Finland
         acting through its London branch having its principal place of business
         at 19 Thomas More Street, London E1W 1YF (the "Trustee" which
         expression shall include its successors and assigns) as trustee for the
         Beneficiaries.

WHEREAS:

(A)      By a loan agreement dated January 24, 2000 made between (1) the Lenders
         (as therein defined), (2) Merita Bank Plc (the "Agent") as agent for
         the Lenders, (3) Crown Cruises of Panama, Inc. (the "Borrower") and (4)
         the Trustee the Lenders agreed to make available to the Borrower a loan
         of six million seven hundred and twenty thousand United States Dollars
         (USD6,720,000) pursuant to and subject to the terms and conditions
         therein contained.

(B)      In order to induce the Lenders to enter into the Agreement and to
         advance the Loan to be advanced thereunder and as a condition precedent
         thereto the Guarantor has agreed to give the guarantee and indemnity
         herein contained.

(C)      By a deed of agency and trust dated January 28, 2000 made between (1)
         the Agent, (2) the Trustee and (3) the Lenders it has been agreed that
         the benefit of this Guarantee and Indemnity shall be held by the
         Trustee on trust for itself, the Agent and the Lenders and its and
         their respective successors, assignees and transferees (together "the
         Beneficiaries" and individually "Beneficiary").

NOW THIS DEED WITNESSETH as follows:-

1.       DEFINITIONS AND CONSTRUCTION

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1.1      In this Guarantee and Indemnity unless the context otherwise requires:-

         "AGREEMENT"
         means the loan agreement referred to in Recital (A) above as
         supplemented by any amendment or supplement thereto which may from time
         to time be agreed to by the Trustee, the Beneficiaries and the
         Borrower;

         "DEFAULT RATE"
         means the rate of interest calculated in accordance with clause 4.3 of
         the Agreement;

         "INDEBTEDNESS"
         means the Loan together with all interest accrued thereon and all other
         moneys, costs, fees and expenses whatsoever which from time to time may
         be or become owing or due and payable to the Trustee or any one or more
         of the Beneficiaries pursuant to the Agreement or any of the Security
         Documents;

         "LOSS"
         means any and all losses, costs, expenses, damages, claims, demands,
         rights of set-off and/or counterclaim incurred by the Trustee or any
         one or more of the Beneficiaries in respect of or in connection with
         the Agreement and/or the Security Documents or any liability arising
         therefrom;

         "SECURED OBLIGATIONS"
         means all covenants, agreements, warranties, conditions and provisions
         expressed or implied on the part of the Borrower to be performed,
         observed or complied with under the Agreement including, without
         limitation, the due and punctual payment of the principal sum and all
         interest and other moneys expressed to be payable by the Borrower in
         accordance with the terms of the Agreement;

         "THIS GUARANTEE"
         means this Guarantee and Indemnity.

1.2      Unless otherwise defined herein or the context otherwise requires,
         words and expressions defined in the Agreement shall have the same
         meanings herein. Clause headings are inserted for convenience only and
         shall be ignored in the interpretation

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         of this Guarantee.

2.       REPRESENTATIONS AND WARRANTIES

2.1      The Guarantor hereby represents and warrants to the Trustee that as of
         the date hereof and (save in respect of sub-paragraph (B)(ii) below) as
         continuing warranties until all of the Indebtedness shall have been
         paid and discharged in full:-

         (A)      The Guarantor has full power and authority to make and perform
                  this Guarantee and the same constitutes the legal, valid and
                  binding obligations of the Guarantor enforceable in accordance
                  with its terms;

         (B)      The making and performance by the Guarantor of this Guarantee
                  will in no way exceed the powers granted to the Guarantor by,
                  or violate in any respect any provision of (i) any mortgage,
                  charge, deed, contract or other undertaking or instrument to
                  which the Guarantor is a party or which is binding on the
                  Guarantor or any of the assets of the Guarantor; or (ii) any
                  law or regulation or any order or decree of any governmental
                  authority, agency or court; or (iii) the Memorandum and/or
                  Articles of Association (or equivalent corporate documents) of
                  the Guarantor;

         (C)      All consents, licences, approvals or authorisations which are
                  required in connection with the execution, validity,
                  performance or enforceability of this Guarantee have been
                  obtained and are and will continue to be valid and subsisting;

         (D)      Save as disclosed to the Trustee in writing, the Guarantor is
                  not in default under any agreement to which the Guarantor is a
                  party or by which the Guarantor may be bound, nor in respect
                  of any financial commitment or obligation;

         (E)      The Guarantor is not engaged in litigation or arbitration
                  before any court or before any tribunal which might if
                  determined against the Guarantor have a material adverse
                  effect on the financial condition of the Guarantor and there
                  is no claim against the Guarantor which, with the passage of
                  time might result in any such litigation or arbitration; and

         (F)      The Guarantor has received a copy of the Agreement and
                  approves of and

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                  agrees to the terms and conditions thereof.

3.       GUARANTEE AND INDEMNITY

3.1      The Guarantor hereby unconditionally and irrevocably:-

         (A)      guarantees the due and punctual performance and observance of
                  and compliance with the Secured Obligations by the Borrower in
                  accordance with the terms of the Agreement and the Guarantor
                  hereby covenants that, if any amount of principal or interest
                  or other moneys payable by the Borrower under the Agreement
                  shall not be paid when the same shall be due and payable,
                  whether on maturity or otherwise, the Guarantor will,
                  forthwith on demand, make such payment, or cause such payment
                  to be made, to the Trustee (as trustee for the Beneficiaries)
                  in the manner specified by the Trustee together with all
                  interest expressed to accrue on any such amount pursuant to
                  the Agreement until the date of receipt by the Trustee; and

         (B)      without prejudice to (A) above and as a separate and
                  independent obligation thereto Indemnifies and agrees to
                  indemnify the Trustee and the Beneficiaries upon the written
                  demand of the Trustee in respect of any Loss which the Trustee
                  or any one or more of the Beneficiaries may suffer or incur in
                  good faith directly or indirectly as a result of or in
                  connection with any failure by the Borrower fully and
                  effectually to perform, observe and/or comply with the Secured
                  Obligations.

4.       EXPENSES

4.1      The Guarantor further agrees to pay to the Trustee on demand on a full
         indemnity basis all commissions, charges, costs and expenses of
         whatsoever nature incurred by the Trustee and/or the Beneficiaries in
         the administration, preservation and enforcement of any of the
         Trustee's rights hereunder together with interest thereon (both before
         and after judgment) at the Default Rate from the date of demand until
         the date of receipt by the Trustee compounded on such days in the year
         as the Trustee reasonably may select.

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5.       CONTINUING GUARANTEE

5.1      This Guarantee shall:-

         (A)      be a continuing security and shall be construed and take
                  effect as security for all of the Secured Obligations until
                  they shall have been satisfied and discharged in full and the
                  Guarantor hereby waives any right of set-off or counter-claim
                  which the Guarantor may otherwise have had against the Trustee
                  or any one or more of the Beneficiaries;

         (B)      be in addition to any other guarantee, indemnity or other
                  security which the Trustee and/or the Beneficiaries may now or
                  hereafter hold in respect of all or any of the Secured
                  Obligations whether from the Guarantor or otherwise, and shall
                  be binding on the Guarantor notwithstanding that any other
                  Security Party shall fail to give the security to be provided
                  by it or shall be released from any such security or such
                  security shall be varied;

         (C)      not be discharged by the granting to any Security Party of
                  time or any other indulgence or by compounding with any
                  Security Party or by any variation whatsoever of any of the
                  Secured Obligations or by any actual or alleged invalidity,
                  irregularity or unenforceability of or defect in any of the
                  Secured Obligations or in any of the provisions of the
                  Agreement or any one or more of the Security Documents or by
                  the absence of any action to enforce any of the rights of the
                  Trustee and/or the Beneficiaries thereunder or by any act or
                  circumstance whatsoever whereby this Guarantee would or might
                  otherwise but for the provisions of this Clause have been so
                  discharged;

         (D)      remain in full force and effect notwithstanding any change in
                  the name, constitution or otherwise of any Security Party or
                  the Trustee or any of the Beneficiaries or their respective
                  successors and assigns or the absorption or amalgamation of
                  any thereof by or with any other corporate entity.

6.       UNDERTAKINGS

6.1      The Guarantor agrees with represents and undertakes to the Trustee
         that:-

         (A)      If the Guarantor becomes liable to make any payment pursuant
                  to Clause 3 hereof, then the Guarantor will not thereafter
                  make demand for payment of
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                  any moneys for the time being due to the Guarantor from any
                  Security Party or exercise any other right or remedy to which
                  the Guarantor is entitled in respect of such moneys unless and
                  until all moneys whatsoever owing by all Security Parties to
                  the Trustee and the Beneficiaries have been irrevocably paid
                  in full;

         (B)      If any Security Party shall become insolvent or shall be wound
                  up or liquidated, the Guarantor shall not (unless so required
                  by the Trustee and then only on condition that the Guarantor
                  holds the benefit of any claim in such insolvency or
                  liquidation upon trust to pay any amounts recovered thereunder
                  to the Trustee) prove in such insolvency, winding-up or
                  liquidation until all moneys whatsoever owing by all Security
                  Parties to the Trustee and the Beneficiaries have been
                  irrevocably paid in full;

         (C)      The Guarantor has not taken and will not take from any
                  Security Party any security whatsoever for the moneys hereby
                  secured and, notwithstanding the foregoing, any such security
                  now or hereafter held by the Guarantor shall be held in trust
                  for the Trustee and the Beneficiaries and for their benefit in
                  respect of the obligations of the Guarantor hereunder;

         (D)      The Guarantor will not exercise any right to which the
                  Guarantor may be entitled as a surety until all moneys
                  whatsoever owing or due and payable by all Security Parties to
                  the Trustee and the Beneficiaries have been irrevocably paid
                  in full;

         (E)      The Guarantor hereby waives any right to require the Trustee
                  and/or the Beneficiaries to proceed first against any Security
                  Party and/or to give notice to or demand on any Security Party
                  whatsoever;

         (F)      All payments to be made hereunder shall be made in immediately
                  available funds without set-off or counter-claim and free and
                  clear of and without deduction for or on account of any
                  present or future taxes of any nature now or hereafter
                  imposed, levied, collected, withheld, deducted or assessed by
                  any taxing and/or governmental authority whatsoever or
                  wheresoever unless the Guarantor is compelled by law to deduct
                  such taxes. In that event all such taxes shall be borne by the
                  Guarantor or, if under the provisions of any

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                  applicable law this stipulation cannot be applied, then the
                  Guarantor shall increase the payments to the Trustee so that
                  the net amounts received by the Trustee shall be equal to the
                  full amounts which the Trustee would have received had payment
                  not been made subject to such taxes; provided that taxes
                  payable by the Trustee or any Beneficiary on its profits
                  arising by virtue of the transaction herein described in the
                  countries in which it carries on business shall not be
                  included in the foregoing. As used in this sub-clause the term
                  "taxes" includes all levies, imposts, duties, charges, fees,
                  deductions and withholdings whatsoever and any restriction or
                  condition resulting in a charge.

                  If the Guarantor is required to deduct taxes, the Guarantor
                  will promptly thereafter deliver all receipts and other
                  documents relating thereto to the Trustee.

                  If and when the Trustee or any Beneficiary shall receive (in
                  its reasonable opinion) a credit in respect of any taxes
                  deducted by the Guarantor and to which this sub-clause refers,
                  it shall allow the Guarantor a credit against amounts due or
                  to become due under the Agreement or any one or more of the
                  Security Documents (the "Guarantor's Credit") of such amount
                  as shall be fair and reasonable in the opinion of the Trustee
                  or that Beneficiary in respect of any such credit as is
                  received by the Trustee or that Beneficiary or, if all of the
                  Indebtedness shall have been repaid in full, shall make a
                  payment to the Guarantor equal to the amount of the
                  Guarantor's Credit. Neither the Trustee nor any Beneficiary
                  shall be under any obligation to discuss or reveal its tax
                  affairs with the Guarantor;

         (G)      The Guarantor shall give to the Trustee all such information
                  as the Trustee may request with regard to the performance by
                  the Security Parties of their respective obligations under the
                  Agreement and the Security Documents;

         (H)      The Guarantor shall not without the prior written consent of
                  the Trustee (such consent not to be unreasonably withheld)
                  sell, convey, transfer or otherwise dispose (whether by a
                  single transaction or in a series of transactions, related or
                  not) of any assets;

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         (I)      All the authorised and issued share capital of the Borrower is
                  and will remain wholly owned and controlled by the Guarantor;

         (J)      The Guarantor shall prepare or cause to be prepared, in
                  accordance with GAAP, and deliver to the Trustee annual
                  audited financial statements of the Guarantor within ninety
                  five (95) days of the end of the annual accounting periods of
                  the Guarantor and quarterly unaudited accounts of the
                  Guarantor within fifty (50) days of the end of each quarter
                  together with copies of all notices sent to shareholders or
                  any class of shareholders and such financial and other
                  information concerning the Guarantor as the Trustee shall
                  reasonably require;

         (K)      The Guarantor shall not make any single acquisition or
                  investment costing more than one million United States Dollars
                  (USD1,000,000) without the prior written consent of the
                  Trustee (such consent not to be unreasonably withheld);

         (L)      The Guarantor shall not incur any liability in respect of
                  Borrowed Money or guarantee endorse or otherwise become or
                  remain liable in respect of the obligations of any person firm
                  or corporation without the prior written consent of the
                  Trustee (such consent not to be unreasonably withheld);

         (M)      The Guarantor shall not pay any dividend for any shares except
                  preferred shares on the following terms:-

                  (i)      no covenant or undertaking binding upon the Guarantor
                           is or would be breached by the payment of such
                           dividend; and

                  (ii)     the aggregate amount of any such dividends paid in
                           any one period of twelve (12) months does not exceed
                           four hundred thousand United States Dollars
                           (USD400,000),

                  Provided That, in respect of any preferred share issued by the
                  Guarantor prior to the date of the Agreement, the Guarantor
                  (subject only to (i) above) shall be entitled to pay dividends
                  in the maximum amount of twelve per cent (12%) per annum of
                  the price at which the relevant preferred share was issued;

         (N)      The Guarantor shall procure that it has cash which is freely
                  available, which is not subject to any Encumbrance and which
                  amounts to not less than the

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                  amount specified in item 1 in schedule A hereto on the
                  Drawdown Date and not less than the amount specified in item 2
                  in schedule A hereto at all times thereafter Provided that all
                  sums standing to the credit of the Earnings Account after all
                  the applications have been made in accordance with clause 10.2
                  of the Agreement shall be deemed for the purposes of this
                  clause to be cash which is freely available to the Guarantor
                  and not subject to any Encumbrance;

         (O)      The Guarantor shall procure that its Debt Service Coverage
                  Ratio (calculated at three (3) monthly intervals as set out
                  below) shall not be less than the ratio specified in item 3 in
                  schedule A hereto (for the period from the Drawdown Date to 30
                  September 2002) and the ratio specified in item 4 in schedule
                  A hereto (for any period after 30 September 2002) and for this
                  purpose the Debt Service Coverage Ratio shall be calculated on
                  a consolidated basis in accordance with the following
                  formula:-

                                     EBITDA
                               ------------------
                               Financial Expenses

                  where

                  "EBITDA" means, for the previous period of twelve (12) months,
                  the aggregate of:

                  (i)      Net Income (but excluding gains and losses from the
                           sale of assets or reserves relating thereto and items
                           classified as extraordinary or non-recurring) from
                           the Guarantor's operations for such period and for
                           this purpose Net Income means the consolidated net
                           income of the Guarantor as determined in accordance
                           with GAAP; and

                  (ii)     the aggregate amounts deducted in determining Net
                           Income for such period in respect of depreciation,
                           amortisation, taxes, deferred income and interest
                           expense of the Guarantor; and

                  "Financial Expenses" means, for the previous period of twelve
                  (12) months,

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                  the sum of:

                  (i)      the aggregate principal payable or paid during such
                           period on any Borrowed Money of the Guarantor (other
                           than the scheduled principal repayment in respect of
                           the Loan and principal repayments under the Revolving
                           Loan Facility Agreement to the extent that they were
                           redrawn during the same period);

                  (ii)     aggregate interest expense (including, without
                           limitation, capitalised interest accrued during such
                           period) of the Guarantor for such period; and

                  (iii)    all rent and any capital lease obligations or
                           operating lease obligations by which the Guarantor is
                           bound which are payable or paid during such period as
                           calculated in accordance with GAAP and derived from
                           the then latest accounts of the Guarantor;

         (P)      The Guarantor shall procure that its Capital (Solvency) Ratio
                  (calculated as set out below) shall not be less than the
                  percentage specified in item 5 in schedule A
                  hereto (for the period from the Drawdown Date to 30 September
                  2001), the percentage specified in item 6 in schedule A hereto
                  (for the period from 1 October 2001 to 30 September 2002) and
                  the percentage specified in item 7 in schedule A hereto (for
                  any period after 30 September 2002) and for this purpose the
                  Capital (Solvency) Ratio shall be calculated on a consolidated
                  basis in accordance with the following formula:-

                                        x
                               ------------------
                                        y

                  where

                  "x"
                  means the Guarantor's Book Tangible Net Worth (calculated in
                  accordance with clause 6.1(Q) hereof); and

                  "y"

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                  means the book value of all the assets of the Guarantor
                  (calculated in accordance with GAAP);

         (Q)      The Guarantor shall procure that its Book Tangible Net Worth
                  (calculated as set out below) shall not be less than the
                  amount specified in item 8 in schedule A hereto (during the
                  period from the Drawdown Date to 30 September 2000) and the
                  amount specified in item 9 in schedule A hereto (after 30
                  September 2000) and for this purpose the Book Tangible Net
                  Worth shall be the book value of all assets calculated in
                  accordance with GAAP (excluding goodwill but including all
                  proceeds from any interest only loans which have been approved
                  in advance by the Agent as at the date of this Guarantee and
                  the proceeds of any preferred share issue made prior to the
                  date of this Guarantee) less total liabilities calculated in
                  accordance with GAAP (including without limitation the net
                  present value of financial lease commitments, estimated
                  compensation to third parties in the event of termination of
                  contracts, contingent tax liabilities and guarantee
                  obligations for the benefit of third parties but excluding any
                  debt of the Guarantor existing as at the date of this
                  Guarantee and subordinated by its terms to the Secured
                  Obligations);

         (R)      The Guarantor shall provide the Trustee with compliance
                  certificates in relation to the relevant financial covenants
                  contained in this Guarantee in the form attached hereto on or
                  before the Drawdown Date and at three (3) monthly intervals
                  after the Drawdown Date.

7.       ENFORCEMENT

7.1      The Guarantor agrees, acknowledges and declares that:-

         (A)      In order to give effect to this Guarantee the Trustee and the
                  Beneficiaries shall be at liberty to act as though the
                  Guarantor were the principal debtor and obligor in respect of
                  the Secured Obligations and in the event of the winding-up,
                  dissolution, reconstruction or amalgamation in which or as a
                  consequence of which any Security Party loses its separate
                  corporate identity the Guarantor shall become liable to the
                  Trustee and the Beneficiaries for the payment of all moneys
                  expressed to be payable by the Security Parties to the Trustee
                  and/or

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                  the Beneficiaries pursuant to the Agreement and the Security
                  Documents and the performance and observance of and compliance
                  with all the Secured Obligations;

         (B)      Any release, settlement or discharge in relation to the
                  obligations of the Guarantor hereunder shall be conditional
                  upon no security, disposition or payment to the Trustee or the
                  Beneficiaries in respect of any of the Indebtedness being
                  avoided or reduced by virtue of any provisions or enactments
                  relating to bankruptcy, insolvency or liquidation and if any
                  such security, disposition or payment be avoided or reduced as
                  aforesaid, this Guarantee shall continue to apply in respect
                  of the amount of such security, disposition or payment and the
                  Guarantor shall indemnify the Trustee and the Beneficiaries in
                  respect thereof;

         (C)      The Trustee and the Beneficiaries may take such action as the
                  Trustee and the Beneficiaries in their own discretion may
                  consider appropriate against any other Security Party or
                  Parties to recover moneys due and payable in respect of the
                  Secured Obligations, the Guarantor, however, remaining liable
                  under this Guarantee for payment and discharge of all moneys
                  payable in respect thereof;

         (D)      The Trustee and each of the Beneficiaries shall be entitled
                  (after a demand for payment has been made hereunder but
                  without further notice) to procure the setting-off of any
                  liability of the Guarantor hereunder against any moneys
                  standing to the credit of any account or accounts which the
                  Guarantor may now or hereafter have with the Trustee or any of
                  the Beneficiaries at any of their respective offices or with
                  any subsidiary or parent company of any one of them (whether
                  or not those moneys are then due to the Guarantor) and, for
                  this purpose, to combine any and all such accounts and to use
                  all or part of those moneys to buy such other currency or
                  currencies as may be required to enable the Trustee or any of
                  the Beneficiaries to effect that setting-off. The Trustee and
                  the Beneficiaries shall also be entitled to retain as security
                  for the discharge of the liability of the Guarantor hereunder
                  all securities or other property of the Guarantor held by the
                  Trustee or any one or more of the Beneficiaries at any of
                  their respective offices and/or by any subsidiary or parent
                  company of any one of them (whether for safe custody or
                  otherwise);

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         (E)      Notwithstanding that the Secured Obligations and any moneys
                  due from the Guarantor hereunder shall have been complied
                  with, paid or discharged, the Trustee shall be entitled to
                  retain this Guarantee and refrain from releasing the Guarantor
                  from this Guarantee for such period thereafter as the Trustee
                  may determine and in the event of bankruptcy, winding-up or
                  any similar proceedings being commenced in respect of any
                  Security Party or any other person as may have performed, paid
                  or discharged any of the Secured Obligations within such
                  period as aforesaid, the Trustee shall be at liberty to retain
                  this Guarantee and any security held for the obligations of
                  the Guarantor hereunder and refrain from releasing the
                  Guarantor from this Guarantee and may retain such security for
                  and during such period as the Trustee may determine;

         (F)      For the purpose of enabling the Trustee and/or the
                  Beneficiaries to sue any other Security Party or to prove in
                  its winding-up, liquidation or bankruptcy or in any similar
                  proceedings for any moneys due and unpaid by the Borrower, the
                  Trustee may at any time place and keep for such time as it may
                  think fit any moneys received hereunder to the credit of an
                  interest bearing suspense account without any obligation on
                  the part of the Trustee to apply the same or any part thereof
                  in or towards the discharge of the Indebtedness;

         (G)      The certificate of the Trustee as to the sum of money owed by
                  any Security Party shall, in the absence of manifest error, be
                  conclusive for any purpose and binding on the Guarantor.

8.       CURRENCY INDEMNITY

8.1      Any amount received by the Trustee or any Beneficiary in connection
         herewith in a currency (the "Relevant Currency") other than the
         currency in which the same should be received pursuant to the terms
         hereof (the "Agreed Currency") whether pursuant to a judgment or order
         of a court or tribunal of any jurisdiction or any enforcement
         proceedings or otherwise howsoever in connection herewith or otherwise
         shall only constitute a discharge to the Guarantor to the extent of the
         amount of the Agreed Currency which the Trustee or the relevant
         Beneficiary is able, promptly on receipt, to purchase in such foreign
         exchange market as the Trustee or the relevant Beneficiary may select
         with the amount of the Relevant Currency so received.

         If:-

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                                     - 16 -

         (A)      the amount of the Agreed Currency which the Trustee or the
                  relevant Beneficiary is so able to purchase is less than the
                  amount of the Agreed Currency due to the Trustee or the
                  relevant Beneficiary hereunder; and/or

         (B)      any condition imposed in relation to the conversion of any
                  amount paid in the Relevant Currency into the Agreed Currency
                  including, without limitation, any condition imposed by any
                  exchange control authority, reduces the amount in the Agreed
                  Currency which the Trustee or the relevant Beneficiary
                  actually receives for the amount of such payment in the
                  Relevant Currency below that amount which it would have
                  received had such condition not been imposed;

         the Guarantor will indemnify and hold the Trustee or the relevant
         Beneficiary harmless against any loss, damage, costs and/or expenses
         arising as a result.

8.2      The above indemnity shall constitute a separate and independent
         obligation from the other obligations contained herein shall give rise
         to a separate and independent cause of action and shall continue in
         full force and effect notwithstanding any judgment or order for amounts
         due hereunder.

9.       BENEFIT

9.1      The Guarantor hereby acknowledges and agrees that the benefit of this
         Guarantee and Indemnity shall be held by the Trustee on trust for the
         Beneficiaries and the Guarantor hereby covenants that this Guarantee
         and Indemnity shall remain in full force and effect and shall fully
         secure all the Beneficiaries. The Guarantor may not assign or transfer
         rights or obligations hereunder without the prior written consent of
         the Trustee (which may be withheld).

10.      MISCELLANEOUS

10.1     The Guarantor hereby agrees that at any time and from time to time,
         upon the request of the Trustee, the Guarantor will promptly and duly
         execute and deliver and/or procure the execution and delivery of any
         and all such further instruments and documents as may be deemed
         desirable by the Trustee for the purpose of obtaining for the Trustee
         and the Beneficiaries the full benefits hereof and of the rights and
         powers herein granted.

10.2     Any provisions contained herein prohibited by or unlawful or
         unenforceable under

<PAGE>
                                     - 17 -

         any applicable law shall, to the extent required by such law, be
         ineffective without modifying the remaining provisions hereof. Where
         however the provisions of any such applicable law may be waived, they
         are hereby waived by the Guarantor to the fullest extent permitted by
         such law with the intent that this Guarantee shall be valid, binding
         and enforceable in accordance with its terms.

10.3     Time is of the essence of this Guarantee but no failure or delay by the
         Trustee or the Beneficiaries in exercising any right, power or
         privilege hereunder and no course of dealing between any Security Party
         and the Trustee or the Beneficiaries shall operate as a waiver thereof,
         nor shall any single or partial exercise thereof preclude any other or
         further exercise thereof or the exercise of any other right, power or
         privilege. The rights and remedies herein are cumulative and not
         exclusive of any rights or remedies which the Trustee and/or the
         Beneficiaries would otherwise have. No notice to or demand on the
         Guarantor shall entitle the Guarantor to any other or further notice or
         demand in similar or other circumstances or constitute a waiver of the
         rights of the Trustee or the Beneficiaries to any other or further
         action in any circumstances without notice or demand.

11.      NOTICES

11.1     Any demand or notice to be given hereunder shall be in writing and sent
         by prepaid first class or airmail letter post or telex or facsimile or
         delivered by hand addressed to the Guarantor as follows:-

         Commodore Holdings Limited
         4000 Hollywood Boulevard
         Suite 385-S
         Hollywood
         Fl 33021
         USA

         Attention Chief Financial Officer
         Facsimile No: + 954 921 2147)

         with a copy to:-

         Kathleen L Deutsch, P.A.
         Broad and Cassel
         Miami Center - Suite 3000

<PAGE>
                                     - 18 -

         201 S. Biscayne Boulevard
         Miami
         Fl 33131
         USA

         Facsimile no. + 305 373 9443

         or to such other person or address as the Guarantor may notify in
         writing to the other party hereto.

11.2     Any such notice shall be deemed to have been validly given and received
         on the date of despatch if sent by telex and five (5) days after having
         been posted if sent by post.

12.      GOVERNING LAW AND JURISDICTION

12.1     This Guarantee and all agreements entered into pursuant or supplemental
         hereto shall be governed by and construed in accordance with English
         law.

12.2     The Guarantor hereby Submits for the exclusive benefit of the Trustee
         and the Beneficiaries to the jurisdiction of the English Courts and
         appoints Consult Marine whose registered office is for the time being
         at 58 London Fruit Exchange, Brushfield Street, London E1 6EP or such
         other person as the Guarantor may with the prior written approval of
         the Trustee from time to time appoint to be the attorney of the
         Guarantor for the purpose of accepting service on behalf of the
         Guarantor of any writ, notice, order, judgment or other legal process
         with respect hereto or any matter arising hereout and agrees that
         failure by any such process agent to give notice of such service of
         process to the Guarantor shall not impair or affect the validity of
         such service or of any judgment based thereon. The aforesaid submission
         shall not limit the right of the Trustee and the Beneficiaries to
         commence proceedings against the Guarantor in any jurisdiction they may
         think fit or in two or more jurisdictions.
<PAGE>

                                     - 19 -

IN WITNESS whereof this Guarantee has been executed as a deed the day and year
first before written.

SIGNED SEALED and DELIVERED            )
as a DEED                              )
by COMMODORE HOLDINGS LIMITED          )
acting by                              )
/s/ Jeffrey I. Binder                  )
---------------------------------------
its duly appointed                     )
Chairman of the Board                  )
in the presence of:-                   )EXHIBIT 10.8

                              EFF-SHIPPING LIMITED
                                   (as lender)

                                     - and -

                          CROWN CRUISES OF PANAMA, INC.
                                  (as borrower)

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

                                 LOAN AGREEMENT
                        RE USD24,480,000 SELLER'S CREDIT

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

                           Sinclair Roche & Temperley
                                   Royex House
                              5 Aldermanbury Square
                                 London EC2V 7LE
                               Tel: 0171 452 4000
                               Fax: 0171 452 4001
                                 Ref: GFS/243417

<PAGE>
                                     - 2 -

                                INDEX OF CONTENTS

CLAUSE                SUBJECT                                               PAGE
------                -------                                               ----

1.            PURPOSE AND DEFINITIONS..........................................1

2.            THE LENDER'S COMMITMENT..........................................8

3.            AVAILABILITY.....................................................8

4.            INTEREST.........................................................9

5.            REPAYMENT.......................................................11

6.            COMPULSORY AND VOLUNTARY PREPAYMENT.............................11

7.            ARRANGEMENT FEE.................................................13

8.            INDEMNITY.......................................................13

9.            PAYMENTS........................................................15

10.           APPLICATION OF MONEYS...........................................17

11.           DEFAULT.........................................................20

12.           SECURITY........................................................22

13.           REPRESENTATIONS AND WARRANTIES..................................23

14.           COVENANTS.......................................................25

15.           SET-OFF.........................................................30

16.           ASSIGNMENT AND PARTICIPATION....................................30

17.           MISCELLANEOUS...................................................31

18.           NOTICES.........................................................32

19.           PROPER LAW AND JURISDICTION.....................................32

SCHEDULE A :  CONDITIONS PRECEDENT............................................33

<PAGE>
                                     - 3 -

SCHEDULE B:   FINANCIAL RATIOS................................................36

APPENDIX I :  FORM OF UTILIZATION NOTICE......................................38

APPENDIX II : FORM OF COMPLIANCE CERTIFICATE..................................39

<PAGE>
                                     - 4 -

THIS AGREEMENT is made the 24th day of January 2000
BETWEEN:-

(1)      THE LENDER (as hereinafter defined); and

(2)      THE BORROWER (as hereinafter defined).

IT IS HEREBY AGREED as follows:-

1.       PURPOSE AND DEFINITIONS

1.1      This agreement contains the terms and conditions upon which the Lender
         will make available to the Borrower a secured loan of twenty four
         million four hundred and eighty thousand United States Dollars
         (USD24,480,000).

1.2      In this agreement the following words and expressions shall have the
         following meanings:-

         "AGENT"
         means Merita Bank Plc, a company incorporated under the laws of Finland
         acting through its London branch having its principal place of business
         at 19 Thomas More Street, London E1W 1YF in its capacity as agent for
         the Banks;

         "BANKS"
         means Merita Bank Plc, Christiania Bank og Kreditkasse ASA and
         Skandinaviska Enskilda Banken AB (publ);

         "BORROWED MONEY"
         means Indebtedness incurred in respect of (i) money borrowed or raised,
         (ii) any bond, note, loan stock, debenture or similar instrument, (iii)
         acceptance or documentary credit facilities, (iv) deferred payments for
         assets or services acquired other than for provisions, bunkers, spare
         parts or services acquired in the ordinary course of, and incidental
         to, the operation of the Vessel, (v) rental payments under and any
         amounts payable on termination of leases (whether in respect of ships,
         land, machinery, equipment or otherwise) entered into primarily as a
         method of raising finance or of financing the acquisition of the asset
         leased, (vi) guarantees, bonds, stand-by letters of

<PAGE>
                                     - 5 -

         credit or other instruments issued in connection with the performance
         of contracts and (vii) guarantees or other assurances against financial
         loss in respect of Indebtedness of any person, firm or company falling
         within any of (i) to (vi) above;

         "BORROWER"
         means Crown Cruises of Panama, Inc., a company incorporated under the
         laws of Panama with its registered office at c/o Galindo Arias & Lopez,
         Scotia Plaza No. 18, Avenida Federico Boyd & Calle No. 51, Piso 9, 10 &
         11, Panama, Republic of Panama;

         "BRIDGE LOAN FACILITY"
         means the loan of six million seven hundred and twenty thousand United
         States Dollars (USD6,720,000) made available by the Banks to the
         Borrower under the Bridge Loan Facility Agreement;

         "BRIDGE LOAN FACILITY AGREEMENT"
         means the agreement of even date herewith made between (1) the Banks,
         (2) the Agent as agent for the Banks, (3) the Borrower and (4) the
         Trustee as security trustee for the Banks in respect of the Bridge Loan
         Facility;

         "BRIDGE LOAN SECURITIES"
         means the securities provided or to be provided to the Agent pursuant
         to the Bridge Loan Facility Agreement as security for the Bridge Loan
         Facility;

         "BUSINESS DAY"
         means any day on which banks and foreign exchange markets in Helsinki,
         Oslo, London and New York are open for the transaction of business of
         the nature contemplated in this agreement;

         "CHARTER"
         means the space charter in respect of the Vessel made or to be made
         between the Borrower as owner and the Charterer as charterer;

         "CHARTERER"
         means Crown Cruises Limited, a company incorporated under the laws of
         Bermuda

<PAGE>
                                     - 6 -

         with its registered office at c/o Francis & Forest, Corner House, 20
         Parliament Street, Hamilton HM12, Bermuda;

         "DRAWDOWN DATE"
         means the date on which the Loan is advanced pursuant to clause 3
         hereof;

         "EARNINGS ACCOUNT"
         means the account in the name of the Borrower at the Agent's New York
         office at 437 Madison Avenue, New York, N.Y. 10022;

         "EARNINGS ASSIGNMENT"
         means the assignment executed pursuant to clause 12.1(C) hereof;

         "ENCUMBRANCE"
         means any mortgage, charge, pledge, lien, assignment, hypothecation,
         title retention, preferential right or trust arrangement and any other
         security agreement or arrangement;

         "EVENT OF DEFAULT"
         means any of the events or circumstances specified in clause 11.1
         hereof;

         "GAAP"
         means accounting principles generally accepted in the United States of
         America and consistently applied;

         "GUARANTOR"
         means Commodore Holdings Limited, a company incorporated under the laws
         of Bermuda with its registered office at c/o Francis & Forest, Corner
         House, 20 Parliament Street, Hamilton HM12, Bermuda;

         "INDEBTEDNESS"
         means any obligation for the payment or repayment of money, whether as
         principal or as surety and whether present or future, actual or
         contingent;

         "INSURANCE ASSIGNMENT"
         means the assignment executed pursuant to clause 12.1(B) hereof;

         "INTEREST PERIOD"
         means any period determined in accordance with the provisions of clause
         4.1 hereof

<PAGE>
                                     - 7 -

         for the calculation of interest on the Loan or any relevant part
         thereof;

         "LENDER"
         means EFF-Shipping Limited, a company incorporated under the laws of
         the Cayman Islands with its registered office at the offices of Huntlaw
         Corporate Services Ltd., The Huntlaw Building, P O Box 1350, George
         Town, Grand Cayman, Cayman Islands;

         "LOAN"
         means twenty four million four hundred and eighty thousand United
         States Dollars (USD24,480,000) or, where the context so requires, the
         aggregate amount thereof from time to time outstanding;

         "MANAGEMENT AGREEMENT"
         means the agreement for the management of the Vessel made or to be made
         between the Borrower and the Manager;

         "MANAGER"
         means New Commodore Cruise Lines Limited, a company incorporated under
         the laws of Bermuda with its registered office at c/o Francis & Forest,
         Corner House, 20 Parliament Street, Hamilton HM12, Bermuda;

         "MARGIN"
         means four per cent (4%) per annum;

         "MOA"
         means the agreement for the sale and purchase of the Vessel made or to
         be made between the Seller and the Borrower;

         "MORTGAGE"
         means the third Panamanian naval mortgage over the Vessel executed
         pursuant to clause 12.1(A) hereof;

         "PERMITTED LIENS"
         means liens for current crews' wages and salvage and liens incurred in
         the ordinary course of trading the Vessel up to an aggregate amount at
         any time not exceeding five

<PAGE>
                                     - 8 -

         per cent (5%) of the charter-free sale value of the Vessel (such market
         value to be conclusively determined as the average of the latest three
         (3) valuations obtained by the Agent as provided in clause 8.2 of The
         Revolving Loan Facility Agreement);

         "REFERENCE BANKS"
         means the Banks;

         "REPAYMENT INSTALMENTS"
         means the instalments of principal for repayment of the Loan specified
         in clause 5.1 hereof and "Repayment Instalment" means any one of them;

         "REVOLVING LOAN FACILITY"
         means the revolving loan facility of up to but not exceeding forty five
         million United States Dollars (USD45,000,000) at any one time made
         available by the Banks to the Borrower under the Revolving Loan
         Facility Agreement;

         "REVOLVING LOAN FACILITY AGREEMENT"
         means the agreement of even date herewith made between (1) the Banks,
         (2) the Agent as agent for the Banks, (3) the Borrower and (4) the
         Trustee as security trustee for the Banks in respect of the Revolving
         Loan Facility;

         "REVOLVING LOAN SECURITIES"
         means the securities provided or to be provided to the Agent pursuant
         to the Revolving Loan Facility Agreement as security for the Revolving
         Loan Facility;

         "SECURITY DOCUMENTS"
         means the documents executed pursuant to clause 12.1 hereof and any
         other document or documents from time to time providing and/or
         evidencing and/or constituting security in respect of the Loan;

         "SECURITY PARTIES"
         means the Borrower, the Guarantor and the Manager and any other party
         to any of the Security Documents from time to time (other than the
         Lender, the Seller, the Banks, the Agent and the Trustee) and "Security
         Party" means any one of them;

<PAGE>
                                     - 9 -

         "SELLER"
         means Crown Dynasty Inc., a company incorporated under the laws of
         Panama with its registered office at Vallarino, Vallarino &
         Garcia-Maritano, 20th Floor, Banco Continental Building, Calle 50 y
         Aquilino De La Guardia, Panama City, Panama;

         "SUB-CHARTER"
         means the space sub-charter of the Vessel made or to be made between
         the Charterer as disponent owner and the Sub-Charterer as charterer on
         back to back terms with the Charter;

         "SUB-CHARTERER"
         means Atkinson and Mullen, Inc. doing business as Apple Vacations, a
         company incorporated under the laws of Pennsylvania with its registered
         office at 7 Campus Boulevard, Newtown Square, Pennsylvania 19073,
         U.S.A.;

         "SUBJECT DOCUMENTS"
         means this agreement, the Security Documents, the MOA, the Charter, the
         Sub-Charter, the Management Agreement, the Revolving Loan Facility
         Agreement, the Revolving Loan Securities, the Bridge Loan Facility
         Agreement, the Bridge Loan Securities and any and all documents
         executed pursuant to any one or more of these documents;

         "TOTAL LOSS"
         means:-

         (i)      actual or constructive or compromised or agreed or arranged
                  total loss of the Vessel; or

         (ii)     requisition for title or other compulsory acquisition of the
                  Vessel otherwise than by requisition for hire; or

         (iii)    capture, seizure, arrest, detention or confiscation of the
                  Vessel by any government or by persons acting or purporting to
                  act on behalf of any government unless the Vessel is released
                  and restored to the Borrower from such capture, seizure,
                  arrest or detention within thirty (30) days after the
                  occurrence thereof;

         "TRUSTEE"
         means Merita Bank Plc, a company incorporated under the laws of Finland
         acting through its London branch having its principal place of business
         at 19 Thomas More

<PAGE>
                                     - 10 -

         Street, London E1W 1YF in its capacity as security trustee for the
         Banks;

         "UNITED STATES DOLLARS" and "USD"
         mean the lawful currency of the United States of America; and

         "VESSEL"
         means the motor vessel named "Crown Dynasty" now registered under
         Panamanian flag in the ownership of the Seller which is to remain
         registered under Panamanian flag in the ownership of the Borrower
         pursuant to the MOA.

1.3      References to any document shall be construed to mean that document as
         amended and/or varied and/or supplemented from time to time with the
         agreement of the relevant parties and (where such consent is required
         by the terms of this agreement or the relevant document) with the
         consent of the Agent and/or the Banks and/or the Trustee and/or the
         Lender.

1.4      Clause headings are inserted for convenience of reference only and
         shall be ignored in the interpretation of this agreement.

2.       THE LENDER'S COMMITMENT

2.1      In reliance upon the representations and warranties contained in clause
         13 hereof and in the Security Documents and subject to the terms and
         conditions of this agreement the Lender will make the Loan available to
         the Borrower for the purpose of financing (in part) the purchase of the
         Vessel by the Borrower pursuant to the MOA.

3.       AVAILABILITY

3.1      The Loan shall be advanced in one amount and applied in accordance with
         clause 2.1 hereof provided that:-

         (A)      all items specified in schedule A hereto have been received by
                  the Lender and are in form and substance satisfactory to the
                  Lender;

         (B)      no Event of Default and no event which with the giving of
                  notice and/or lapse

<PAGE>
                                     - 11 -

                  of time would constitute an Event of Default has occurred;

         (C)      not less than four (4) Business Days prior to the date upon
                  which the Borrower requires the Loan to be advanced the Lender
                  has received a written notice from the Borrower in the form
                  set out in appendix I hereto; and

         (D)      the obligation of the Lender to make the Loan available to the
                  Borrower shall expire on 31 January 2000 if the Loan is not
                  advanced on or before that date.

3.2      The Lender may in its absolute discretion allow the Loan to be advanced
         notwithstanding that it has not received all the items specified in
         schedule A hereto and in this event the Borrower hereby covenants to
         procure the delivery of all the missing items to the Lender within
         thirty (30) days after the Drawdown Date.

4.       INTEREST

4.1      The Borrower shall pay interest on the Loan from the Drawdown Date for
         each successive Interest Period which shall, subject to clauses 4.3 and
         6.2 hereof, be either one (1), three (3) or six (6) months at the
         option of the Borrower provided always that:-

         (A)      the Borrower shall exercise the said option by notice in
                  writing to the Lender not later than three (3) Business Days
                  prior to the commencement of each Interest Period failing
                  which the Borrower shall be deemed to have opted for an
                  Interest Period of six (6) months;

         (B)      if the relevant funds are not available to the Lender for an
                  Interest Period of the length opted for (or deemed to be opted
                  for) by the Borrower the Lender shall be entitled to determine
                  conclusively the length of that Interest Period;

         (C)      if an Interest Period will expire after the due date for
                  payment of the next following Repayment Instalment there shall
                  be a separate Interest Period in respect of that Repayment
                  Instalment expiring on the due date for payment thereof and
                  the interest rate relating to that Repayment Instalment shall
                  be separately fixed accordingly; and

<PAGE>
                                     - 12 -

         (D)      if an Interest Period would otherwise expire on a day which is
                  not a Business Day that Interest Period shall be extended to
                  expire on the next succeeding Business Day unless that next
                  succeeding Business Day falls within a fresh month in which
                  event that Interest Period shall be shortened to expire on the
                  immediately preceding Business Day. In this event the next
                  succeeding Interest Period shall in the absolute discretion of
                  the Lender (and subject always to this clause 4.1 (D)) expire
                  the relevant number of months after either (i) that next
                  succeeding or immediately preceding Business Day (as the case
                  may be) or (ii) the day on which the preceding Interest Period
                  would have expired if it had not been so extended or shortened
                  (as the case may be) or (iii) the day on which the preceding
                  Interest Period would have expired if no Interest Period had
                  ever been so extended or shortened.

4.2      Subject to clauses 4.3 and 6.2 hereof and to clause 14.1(K) of both the
         Revolving Loan Facility Agreement and the Bridge Loan Facility
         Agreement, the Borrower shall pay interest on the Loan or any relevant
         part thereof for each Interest Period at the rate certified
         conclusively (save for manifest error) by the Lender to be the
         aggregate of the Margin and the rate per cent per annum for that
         Interest Period quoted by Telerate Screen 3750 (rounded up to the
         nearest one sixteenth of one per cent)(or, if the Telerate system is
         not working, by Reuters Page ISDA (rounded up to the nearest one
         sixteenth of one per cent) or, if neither the Telerate system nor the
         Reuters system is working, the average rate per cent per annum (rounded
         up to the nearest one sixteenth of one per cent) at which deposits of
         amounts of United States Dollars equivalent to or comparable with the
         Loan or relevant part thereof are offered to the Reference Banks (or
         two of them if one is unable to quote a rate) for that Interest Period
         in the London Inter-bank Market at or about 11.00 a.m. (London time)
         two (2) Business Days (in London only) prior to the commencement of
         that Interest Period. Such interest shall accrue and be payable on the
         actual number of days elapsed, shall be calculated on the basis of a
         year of three hundred and sixty (360) days and shall be paid on the
         final day of that Interest Period and (if that Interest Period is
         longer than one (1) month) at one (1) monthly intervals.

4.3      In the event of default by the Borrower in the payment of any sum
         whatsoever due under this agreement (including interest) the Borrower
         shall pay interest on that sum from the due date until payment (after
         as well as before judgement) at a rate certified conclusively (save for
         manifest error) by the Lender to be five per cent (5 %) per annum over
         the cost to the Lender of funding that sum for such periods as the
         Lender in its absolute discretion may think fit on the Business Day
         succeeding that on which

<PAGE>
                                     - 13 -

         it became aware of the default and for so long as that sum remains
         unpaid that rate shall be re-calculated on the same basis. Such
         interest shall accrue and be payable on each day elapsing, shall be
         calculated on the basis of a year of three hundred and sixty (360) days
         and shall be paid on the demand of the Lender. In default of payment
         such interest shall be compounded.

4.4      The Lender shall as soon as reasonably practicable notify the Borrower
         of each rate of interest payable on the Loan or any relevant part
         thereof under this clause 4.

5.       REPAYMENT

5.1      Subject to clauses 6 and 11.1 hereof and to clauses 14.1(J) and (K) of
         both the Revolving Loan Facility Agreement and the Bridge Loan Facility
         Agreement, the Borrower shall repay the Loan in fifty eight (58)
         instalments. The first such instalment shall amount to six hundred and
         twelve thousand United States Dollars (USD612,000), the second to the
         fifty seventh such instalments inclusive shall each amount to two
         hundred and four thousand United States Dollars (USD204,000) and the
         final instalment shall amount to the balance of the Loan. The first
         instalment shall be paid on the date falling fifteen (15) months after
         the Drawdown Date and the subsequent instalments shall be paid at one
         (1) monthly intervals thereafter. If by virtue of the operation of
         clause 14.1(K) of the Revolving Loan Facility Agreement and/or the
         Bridge Loan Facility Agreement any such instalment is not paid or is
         only partly paid, then, unless and until the Event of Default causing
         the operation of that clause 14.1(K) has been remedied or waived to the
         satisfaction of the Banks and the Banks have agreed and notified to the
         Lender and the Borrower the basis on which payment of instalments
         hereunder may be reestablished, the due date for payment of that
         instalment or the balance thereof (as the case may be) shall be
         postponed to the due date for payment of the final instalment.
         Notwithstanding the operation of that clause 14.1(K), any failure by
         the Borrower to pay any such instalment in full on the date originally
         scheduled therefor shall constitute an Event of Default under clause
         11.1(A) hereof and shall (inter alia) entitle the Lender to charge
         interest under clause 4.3 hereof on the unpaid sum from the originally
         scheduled date.

6.       COMPULSORY AND VOLUNTARY PREPAYMENT

<PAGE>
                                     - 14 -

6.1      If for any reason whatsoever beyond the control of the Lender it shall
         become unlawful or impossible for the Lender to maintain or give effect
         to all or part of its obligations as contemplated by this agreement the
         obligation of the Lender to make the Loan available to the Borrower
         shall cease and the Borrower shall forthwith upon the demand of the
         Lender, but subject to clauses 14.1(J) and (K) of both the Revolving
         Loan Facility Agreement and the Bridge Loan Facility Agreement, repay
         the Loan (or such part thereof as the Lender shall specify in writing)
         together with interest accrued thereon and any sums due to the Lender
         by virtue of that repayment under clause 8.5 hereof.

6.2      If the Lender shall determine in good faith that:-

         (A)      by reason of circumstances affecting the London Inter-Bank
                  Market generally adequate and reasonable means do not exist
                  for ascertaining the rate of interest payable on the Loan or
                  any relevant part thereof for any Interest Period in
                  accordance with clause 4.2 hereof; or

         (B)      it would not be practicable or possible for the Lender to fund
                  or continue to fund the Loan or any relevant part thereof in
                  the London Inter-Bank Market,

         then the Lender shall inform the Borrower in writing to that effect and
         unless the Lender and the Borrower shall agree acceptable alterations
         to the terms of this agreement (on the basis of an alternative source
         of funds available to the Lender) the obligation of the Lender to make
         the Loan or relevant part thereof available to the Borrower shall cease
         and the Borrower shall, subject to clauses 14.1(J) and (K) of both the
         Revolving Loan Facility Agreement and the Bridge Loan Facility
         Agreement, be obliged on receiving a written notice from the Lender to
         that effect to repay the Loan or the relevant part thereof together
         with interest accrued thereon on the final day of the then current
         Interest Period.

6.3      The Borrower may, subject to clauses 14.1(J) and (K) of both the
         Revolving Loan Facility Agreement and the Bridge Loan Facility
         Agreement, prepay the whole or part of the Loan together with interest
         accrued thereon on the final day of any Interest Period in respect of
         the Loan provided that:-

         (A)      the Borrower shall simultaneously pay to the Lender any sums
                  due to the Lender by virtue of that prepayment under clause
                  8.5 hereof;

<PAGE>
                                     - 15 -

         (B)      any part prepayment of the Loan shall amount to a whole
                  multiple of one hundred thousand United States Dollars
                  (USD100,000);

         (C)      the Borrower shall have given the Lender not less than thirty
                  (30) days written notice of its intention to make such
                  prepayment (which once given shall be irrevocable) specifying
                  such day and the amount of intended prepayment and accompanied
                  by such evidence as the Lender may require that any
                  governmental or other consents for such prepayment have been
                  obtained or will be forthcoming; and

         (D)      no sums prepaid hereunder may be reborrowed under this
                  agreement.

7.       ARRANGEMENT FEE

7.1      Subject to clause 8.2 hereof, no arrangement fee shall be payable by
         the Borrower in connection with the Loan.

8.       INDEMNITY

8.1      If any change in law or regulation or in the interpretation thereof or
         if compliance by the Lender with any direction request or requirement
         (whether or not having the force of law) of any central bank or other
         authority shall:-

         (A)      subject the Lender to any tax with respect to the Loan or any
                  part thereof (other than tax on overall net income);

         (B)      change the basis of taxation to the Lender of payments of
                  principal or interest or any other payment due or to become
                  due hereunder;

         (C)      impose or modify any reserve, liquidity or capital adequacy
                  requirements or require the making of any special deposits
                  affecting the Lender; or

         (D)      impose on the Lender any other condition affecting the Loan or
                  any part thereof whether or not the Loan has been advanced

         and the result is either to increase the cost to the Lender of making
         or maintaining or committing to make the Loan or any part thereof or to
         reduce the amount of any payment received by the Lender hereunder or to
         reduce the rate of return which the

<PAGE>
                                     - 16 -

         Lender would have been able to obtain on its overall capital but for
         entering into and/or performing this agreement then the Borrower shall
         forthwith upon demand by the Lender pay to the Lender such amount as
         the Lender certifies to be necessary to indemnify the Lender fully for
         such additional cost or reduction. Any such demand may be made by the
         Lender at any time before or after repayment of the Loan.

8.2      All legal fees and other reasonable costs and expenses whatsoever
         (other than the costs of valuing the Vessel) incurred by the Lender in
         connection with any one or more of this agreement, the Security
         Documents and any other documents executed pursuant hereto or thereto
         shall be paid by the Borrower forthwith upon demand by the Lender on a
         full indemnity basis whether or not the Loan is advanced.

8.3      The Borrower shall pay forthwith upon demand by the Lender all stamp,
         registration and other duties (including any such duties payable by the
         Lender) imposed by any authority in respect of any one or more of this
         agreement, the Security Documents and any other documents executed
         pursuant hereto or thereto or otherwise in connection with the Loan.

8.4      Without prejudice to the rights of the Lender under or pursuant to
         clause 11 hereof the Borrower shall indemnify the Lender fully
         forthwith upon demand by the Lender for any and all losses damages
         and/or expenses whatsoever incurred by the Lender:-

         (A)      as a result of the Loan not being advanced for any reason
                  whatsoever (other than default by the Lender) in accordance
                  with a notice given pursuant to clause 3.1(C) hereof;

         (B)      as a result of an Event of Default;

         (C)      in perfecting, protecting the value of or enforcing any of its
                  rights or securities under any one or more of this agreement,
                  the Security Documents and any other documents executed
                  pursuant hereto or thereto or in attempting so to do; or

         (D)      as a result of any payment hereunder, whether pursuant to a
                  judgment or otherwise, being made, obtained or enforced in a
                  currency other than United

<PAGE>
                                     - 17 -

                  States Dollars.

8.5      In the event that the whole or part of the Loan is repaid or prepaid
         otherwise than on the final day of an Interest Period in respect
         thereof the Borrower shall (A) indemnify the Lender fully forthwith
         upon demand by the Lender for any and all losses damages and/or
         expenses incurred by the Lender in liquidating or reemploying fixed
         deposits acquired from third parties to maintain the Loan or the
         relevant part thereof (as the case may be) until the expiry of the then
         current Interest Period in respect thereof and (B) pay to the Lender
         forthwith on demand any sums due to the Lender as a result of that
         repayment or prepayment under clause 8.6 hereof.

8.6      The Borrower shall indemnify the Lender fully forthwith upon demand by
         the Lender for all losses, premiums, penalties, costs and expenses
         whatsoever incurred by the Lender in connection howsoever with any
         interest rate "swap", "cap" or other transaction entered into or to be
         entered into or arranged by the Lender at the request or on behalf of
         the Borrower at any time and from time to time with any counterparty a
         direct or indirect commercial purpose of which is to limit or offset
         the exposure of the Borrower to future increases of floating interest
         rates in connection howsoever with this agreement.

8.7      The indemnities contained in this clause 8 shall apply irrespective of
         any indulgence granted to the Borrower or any other party from time to
         time and shall continue in full force and effect notwithstanding any
         payment in favour of the Lender and any amount due from the Borrower
         under this clause 8 will be due as a separate debt and shall not be
         affected by judgment being obtained for any other sums due under any
         one or more of this agreement, the Security Documents and any other
         documents executed pursuant hereto or thereto.

9.       PAYMENTS

9.1      All payments by the Borrower hereunder shall be made to the Lender's
         account with such bank or banks as the Lender shall nominate from time
         to time.

9.2      Subject to the sub-clauses of this clause 9.2 all payments by the
         Borrower hereunder shall be made in full without set-off or
         counterclaim and free and clear of and without

<PAGE>
                                     - 18 -

         deduction or withholding for or on account of any tax of any
         jurisdiction.

         (A)      If the Borrower is required by law to make any deduction or
                  withholding from any payment hereunder for or on account of
                  tax, it shall do so and the sum due from the Borrower in
                  respect of such payment shall be increased to the extent
                  necessary to ensure that, after the making of such deduction
                  or withholding, the Lender receives and retains (free of any
                  liability in respect of any such deduction or withholding) a
                  net sum equal to the sum it would have received and retained
                  had no deduction or withholding been required to be made.

         (B)      If at any time the Borrower is required by law to make any
                  deduction or withholding from any sum payable by it hereunder
                  (or if thereafter there is any change in the rates at which or
                  the manner in which such deductions or withholdings are
                  calculated) the Borrower shall promptly and fully notify the
                  Lender accordingly.

         (C)      If the Borrower makes any payment hereunder in respect of
                  which it is required by law to make any deduction or
                  withholding it shall pay the full amount to be deducted or
                  withheld to the relevant taxation or other authority within
                  the time allowed for such payment under applicable law and
                  shall deliver to the Lender within thirty (30) days after it
                  has made such payment to the applicable authority the
                  appropriate receipt or certificate issued by such authority or
                  the Borrower as the case may be evidencing the payment to such
                  authority of all amounts so required to be deducted or
                  withheld from such payment.

9.3      If any sum becomes due for payment hereunder on a day which is not a
         Business Day the due date for payment shall be extended to the next
         succeeding Business Day unless that next succeeding Business Day falls
         within a fresh month in which event the due date for payment shall be
         brought forward to the immediately preceding Business Day. Any interest
         payable shall be adjusted accordingly. In the event that the due date
         for payment of any Repayment Instalment is so extended or brought
         forward the due date for payment of the next following Repayment
         Instalment shall not be affected thereby.

9.4      All payments hereunder shall be made in United States Dollars not later
         than 11:00 a.m. (New York time) on the due dates therefor in such funds
         as may be customary for the same day settlement of international
         banking transactions in United States

<PAGE>
                                     - 19 -

         Dollars in New York City provided that payments in respect of costs and
         expenses shall be made in the currencies in which the same are
         incurred.

9.5      The Lender shall open and maintain on its books a control account in
         the name of the Borrower showing the advance of the Loan and the
         computation and payment of interest and all other sums due hereunder.
         The Borrower's obligations to repay the Loan and to pay interest
         thereon and to pay all other sums due hereunder shall be evidenced by
         the entries from time to time made in the control account opened and
         maintained under this clause 9.5 which entries will be conclusive and
         binding in the absence of manifest error.

10.      APPLICATION OF MONEYS

10.1     All moneys assigned to the Lender under the Earnings Assignment shall
         be paid to the Earnings Account.

10.2     Subject to the relevant provisions of the Revolving Loan Facility
         Agreement and the Bridge Loan Facility Agreement (including, without
         limitation, clauses 14.1(I), (J) and (K) of both those agreements) and
         to clause 10.4 hereof all moneys paid to the Earnings Account shall be
         applied by the Agent as follows:-

         (A)      first in payment of any and all sums whatsoever certified by
                  the Lender to the Agent to be due and payable to the Lender
                  hereunder (such sums to be paid in such order as the Lender
                  may in its sole discretion elect);

         (B)      second in retention in the Earnings Account of amounts
                  equivalent in aggregate to the amount of interest next falling
                  due to be paid hereunder; and

         (C)      third in retention of any credit balance in the Earnings
                  Account

         Provided That:-

                  (i)     sums retained in the Earnings Account pursuant to
                          clause 10.2(B) hereof shall be applied by the Agent in
                          or towards payment to the Lender of interest due
                          hereunder on the due dates for payment thereof;

<PAGE>
                                     - 20 -

                          and

                  (ii)    nothing herein contained shall be deemed to affect the
                          absolute obligation of the Borrower to pay interest on
                          and to repay the Loan as provided in clauses 4 and 5
                          hereof.

10.3     Subject to the relevant provisions of the Revolving Loan Facility
         Agreement and the Bridge Loan Facility Agreement (including, without
         limitation, clauses 14.1(J) and (K) of both those agreements) and to
         clause 10.4 hereof all moneys payable to the Lender under the Insurance
         Assignment and any other moneys payable to the Lender by any one or
         more of the Security Parties under any one or more of this agreement,
         the Security Documents and any other documents executed pursuant hereto
         or thereto the application of which is not specifically provided for by
         another clause hereof shall be paid to the Lender's account with such
         bank or banks as the Lender may nominate from time to time and shall be
         applied by the Lender as follows:-

         (A)      all moneys received from a Total Loss or sale of the Vessel
                  shall be applied as follows:-

                  (i)      first in payment of any and all sums whatsoever due
                           and payable to the Lender hereunder (such sums to be
                           paid in such order as the Lender may in its sole
                           discretion elect);

                  (ii)    second in repayment of Repayment Instalments and
                          accrued interest thereon in reverse order of maturity
                          and in payment of any sums due to the Lender by virtue
                          of that repayment under clause 8.5 hereof; and

                  (iii)    third in payment of any credit balance to the
                           Borrower or to whomsoever may be entitled thereto;
                           and

         (B)      all moneys not covered by clause 10.3(A) hereof shall be
                  applied as follows:-

                  (i)     first in accordance with clause 10.3(A)(i) hereof;

                  (ii)     second (in respect only of moneys received by virtue
                           of the Insurance Assignment) in reimbursement to the
                           Borrower (if not already reimbursed pursuant to the
                           relevant provisions of the Revolving Loan Facility
                           Agreement and/or the Bridge Loan Facility Agreement)
                           for such of the costs (if any) incurred by the
                           Borrower in effecting the

<PAGE>
                                     - 21 -

                           repair of the damage in respect of which those moneys
                           are received as the Lender shall approve (such
                           approval not to be unreasonably withheld) and in
                           payment to the Earnings Account of all moneys
                           received in respect of loss of hire insurances (if
                           any);

                  (iii)   third in payment of Repayment Instalments and accrued
                          interest thereon in reverse order of maturity and in
                          payment of any sums due to the Lender by virtue of
                          that repayment under clause 8.5 hereof; and

                  (iv)     fourth in payment of any credit balance to the
                           Borrower or to whomsoever may be entitled thereto.

10.4     Subject to the relevant provisions of the Revolving Loan Facility
         Agreement and the Bridge Loan Facility Agreement (including, without
         limitation, clauses 14.1(J) and (K) of both those agreements), from and
         after the giving of notice by the Lender to the Borrower pursuant to
         clause 11.1 hereof all moneys whatsoever received or recovered by the
         Lender under any one or more of this agreement, the Security Documents
         and any other documents executed pursuant hereto or thereto and all
         moneys from time to time standing to the credit of the Earnings Account
         shall be paid to the Lender's account with such bank or banks as the
         Lender may nominate from time to time and shall be applied by the
         Lender as follows:-

         (A)      first in accordance with clause 10.3(A)(i) hereof, subject to
                  any right the Lender may have to delay any such application in
                  order to maximise its claim; and

         (B)      second in payment of any credit balance to the Borrower or to
                  whomsoever may be entitled thereto.

11.      DEFAULT

11.1     The Lender may by notice in writing to the Borrower declare the Loan to
         be immediately repayable with accrued interest thereon (plus any sums
         due to the Lender by virtue of that repayment under clause 8.5 hereof)
         and any security held by the Lender shall become immediately
         enforceable if any of the following events occurs:-

<PAGE>
                                     - 22 -

         (A)      failure by the Borrower to pay promptly on the due date
                  therefor any sum whatsoever due for payment by it under this
                  agreement;

         (B)      any one or more of the Security Parties and the Trustee making
                  default in the observance or performance of any other
                  obligation covenant or undertaking contained in any one or
                  more of this agreement, the Security Documents and any other
                  documents executed pursuant hereto or thereto and (if the same
                  is in the opinion of the Lender capable of remedy) the
                  continuation of that default unremedied for a period of
                  fifteen (15) days;

         (C)      any of the representations and warranties made or deemed to
                  have been made in any one or more of this agreement, the
                  Security Documents and any other documents executed pursuant
                  hereto or thereto being inaccurate or misleading when made or
                  becoming inaccurate or misleading at any time hereafter were
                  the same to be repeated in relation to the facts subsisting at
                  that time (whether or not any such repetition actually
                  occurs);

         (D)      any event of default occurring under any one or more of the
                  Security Documents;

         (E)      the fulfilment of any one or more of the obligations covenants
                  and undertakings contained in any one or more of this
                  agreement, the Security Documents and any other documents
                  executed pursuant hereto or thereto or the exercise of any of
                  the rights vested in the Lender hereunder or thereunder
                  becoming either unlawful under any applicable law or
                  unauthorised by any authority having jurisdiction or otherwise
                  impossible;

         (F)      a bona fide petition being presented or an order being made or
                  an effective resolution being passed for the commencement of
                  any proceedings for the liquidation winding-up or
                  re-organisation of any one or more of the Security Parties
                  except for the purpose of and followed by an amalgamation or
                  reconstruction the terms of which shall have been previously
                  approved in writing by the Lender;

         (G)      a distress or execution being levied or enforced upon or sued
                  out against any part of the assets of any one or more of the
                  Security Parties which in the Lender's opinion would have a
                  material adverse effect on any one or more of

<PAGE>
                                     - 23 -

                  the Security Parties and not being satisfied removed or
                  discharged within fourteen (14) days;

         (H)      the holder of any Encumbrance taking possession of or a
                  liquidator, administrator, receiver, administrative receiver,
                  trustee or similar officer being appointed in respect of the
                  whole or a substantial part of the assets of any one or more
                  of the Security Parties;

         (I)      any one or more of the Security Parties being unable or
                  admitting its inability to pay its or their lawful debts as
                  they mature or convening a meeting of or preparing to enter
                  into any arrangement or composition with or making a general
                  assignment for the benefit of its or their creditors or being
                  adjudicated bankrupt or insolvent;

         (J)      any other Borrowed Money of any one or more of the Security
                  Parties becoming due or becoming capable of being declared due
                  prior to its stated date of maturity by reason of default on
                  the part of any one or more of the Security Parties;

         (K)      any one or more of the Security Parties ceasing to carry on or
                  suspending or threatening to cease to carry on or to suspend
                  its or their business or a substantial part of the assets or
                  business of any one or more of the Security Parties being
                  seized confiscated or expropriated;

         (L)      a Total Loss occurring and either (i) the Lender not being
                  satisfied at any time in its absolute discretion that the
                  Total Loss is adequately covered by insurance and that the
                  relevant insurance proceeds will be paid to the Lender or (ii)
                  any insurance claim in respect thereof being rejected by the
                  underwriters at any time or (iii) the Lender failing to
                  receive the insurance proceeds in respect thereof within one
                  hundred and eighty (180) days thereafter;

         (M)      any one or more of the Subject Documents being repudiated or
                  terminated without the prior written consent of the Lender;

         (N)      a material adverse change occurring in the business, assets or
                  financial

<PAGE>
                                     - 24 -

                  condition of any one or more of the Security Parties which may
                  reasonably be considered to affect its or their ability to
                  comply with all or any of its or their respective obligations
                  under any one or more of the Subject Documents; or

         (O)      an event of default occurring under the Revolving Loan
                  Facility Agreement or the Bridge Loan Facility Agreement.

12.      SECURITY

12.1     As security for the Loan, interest thereon and all other sums due and
         to become due hereunder the Borrower shall provide the Lender with the
         following documents in form and substance satisfactory to the Lender:-

         (A)      duly registered third Panamanian naval mortgage over the
                  Vessel duly executed by the Borrower;

         (B)      third priority assignment duly executed by the Borrower of all
                  insurances whatsoever in respect of the Vessel and loss of its
                  earnings and all compensation in respect of the requisition
                  for title or other compulsory acquisition of the Vessel (with
                  the exception of requisition hire);

         (C)      third priority assignment duly executed by the Borrower of the
                  benefit of all earnings whatsoever of the Vessel (including
                  requisition hire);

         (D)      guarantee and indemnity duly executed by the Guarantor;

         (E)      third priority charge over all the authorised and issued
                  shares in the Borrower duly executed by the Guarantor;

         (F)      tripartite agreement duly executed by (i) the Agent, the
                  Trustee and the Banks, (ii) Neptun Maritime Oyj and the Lender
                  and (iii) the Borrower and the Guarantor allowing the
                  execution of the other Security Documents and coordinating the
                  Lender's interests under this agreement and the other Security
                  Documents with those of the Agent and/or the Trustee and/or
                  the Banks under (i) the Revolving Loan Facility Agreement and
                  the Revolving Loan Securities and (ii) the Bridge Loan
                  Facility Agreement and the Bridge Loan Securities; and

<PAGE>
                                     - 25 -

         (G)      letter of subordination duly executed by the Manager
                  subordinating its interests under the Management Agreement to
                  those of the Lender under this agreement.

13.      REPRESENTATIONS AND WARRANTIES

13.1     The Borrower hereby represents and warrants that:-

         (A)      each of the Security Parties is a duly incorporated company
                  validly existing and in good standing under the laws of its
                  country of incorporation and all the shares in the Borrower
                  are beneficially owned by the Guarantor;

         (B)      each of the Security Parties has full power and authority to
                  execute deliver and perform such of the Subject Documents to
                  which it is a party;

         (C)      each of the Security Parties has taken all necessary corporate
                  or other action required to authorise the execution delivery
                  and performance of such of the Subject Documents to which it
                  is a party;

         (D)      all consents licences approvals or authorisations whatsoever
                  required to make the Subject Documents legal valid enforceable
                  and admissible in evidence have been obtained and are in full
                  force and effect;

         (E)      from and after execution and delivery thereof each of the
                  Subject Documents will constitute legal valid and binding
                  obligations of the parties thereto (other than the Agent, the
                  Trustee, the Banks and the Lender) enforceable in accordance
                  with its terms and will not contravene any applicable law or
                  regulation or any contractual constitutional or other
                  restriction binding on any of the parties thereto (other than
                  the Agent, the Trustee, the Banks and the Lender);

         (F)      as at the date hereof no material litigation or administrative
                  proceedings of or before any board of arbitration, Court or
                  Governmental authority or agency is pending or (to the
                  Borrower's knowledge) threatened the result of which would or
                  might be to have a material adverse effect on the business
                  assets or financial

<PAGE>
                                     - 26 -

                  condition of any one or more of the Security Parties;

         (G)      the copies of any of the Subject Documents delivered or to be
                  delivered to the Lender hereunder constitute the full
                  agreement between the parties thereto with respect to the
                  subject matter thereof and none of the parties thereto is in
                  default thereunder;

         (H)      all historic financial information and other documentation
                  submitted to the Lender by or on behalf of the Borrower in
                  connection herewith is accurate and correct in all material
                  respects and not misleading;

         (I)      the claims of the Lender against the Borrower under this
                  agreement will rank at least pari passu with the claims of all
                  unsecured creditors of the Borrower other than claims of such
                  creditors to the extent that they are statutorily preferred;

         (J)      each Security Party and its business and assets (including,
                  without limitation, all computer systems, all systems and
                  equipment containing embedded microchips (including leased
                  systems and equipment) and any other systems, equipment or
                  parts of the business or assets whatsoever of that Security
                  Party whose proper functioning or operation is capable of
                  being affected by the incorrect processing, storing,
                  calculation or recognition of dates, together with all
                  software and data in connection with any of the foregoing)
                  shall at all times comply with the requirements of Year 2000
                  Conformity as defined in "A DEFINITION OF YEAR 2000 CONFORMITY
                  REQUIREMENTS" issued by the British Standards Institution (BSI
                  DISC PD2000-1:1998) or such later reviewed, revised or amended
                  version thereof as may be published by the British Standards
                  Institution from time to time (in which case the later version
                  shall be the relevant one for the purposes of this clause);
                  and

         (K)      no Event of Default has occurred or is continuing and no event
                  which with the giving of notice and/or lapse of time would
                  constitute an Event of Default has occurred or is continuing.

14.      COVENANTS

<PAGE>
                                     - 27 -

14.1     The Borrower hereby covenants that from the date hereof until the
         Borrower has no remaining obligations, actual or contingent, under this
         agreement:-

         (A)      the Borrower will file all requisite tax returns and will pay
                  all tax as shown to be due and payable on such returns or any
                  of the assessments made against it (other than those being
                  contested in good faith);

         (B)      the Borrower will carry on and conduct its business in a
                  proper and efficient manner and will duly pay all outgoings as
                  and when they fall due and in particular without limiting the
                  generality of the foregoing will duly observe and perform all
                  the terms and conditions of any contract of employment of the
                  Vessel to be observed and performed by it;

         (C)      the Borrower will prepare or cause to be prepared, in
                  accordance with GAAP, annual audited accounts for the Borrower
                  and unaudited quarterly accounts for the Borrower; the
                  Borrower will furnish the Lender with copies of the audited
                  annual accounts no later than ninety five (95) days after the
                  end of each financial year and copies of the unaudited
                  quarterly accounts no later than fifty (50) days after the end
                  of each financial quarter; the audited annual accounts shall
                  include profit and loss accounts and balance sheets certified
                  and audited by an accountant acceptable to the Lender which
                  shall include Grant Thornton L.L.P.;

         (D)      the Borrower will provide the Lender in a form acceptable to
                  the Lender no later than ten (10) days after the end of each
                  month monthly management information (including traffic
                  statistics, cash flows, booking reports and outstanding trade
                  debt) in respect of the Borrower;

         (E)      the Borrower shall procure that the Earnings Account is opened
                  and maintained at the bank specified in the definition thereof
                  in clause 1.2 hereof and shall not keep any accounts with any
                  bank other than the Agent unless otherwise agreed specifically
                  with the Agent;

         (F)      the Borrower shall promptly furnish to the Lender all such
                  accounts and financial information concerning any one or more
                  of the Security Parties and the Vessel as the Lender may from
                  time to time reasonably require including without limiting the
                  generality of the foregoing cash flow analyses, budgets

<PAGE>
                                     - 28 -

                  and details of the operating costs of the Vessel;

         (G)      the Vessel, its earnings and the interests of the Lender as
                  mortgagee of the Vessel shall be insured with such
                  underwriters insurance offices and clubs for such amounts for
                  such risks in such form and upon such conditions as are
                  satisfactory to the Lender from time to time provided that the
                  amount of each of the marine and war risks insurances shall
                  not in any event be less than the greater from time to time of
                  (i) the market value of the Vessel and (ii) one hundred and
                  twenty per cent (120%) of the aggregate amount of the Loan,
                  the Revolving Loan Facility and the Bridge Loan Facility then
                  outstanding;

         (H)      the Borrower will not without the prior written consent of the
                  Lender:-

                  (i)     create or allow to subsist any Encumbrance over any of
                          its assets or any part thereof save for Permitted
                          Liens and those created by any of the Security
                          Documents or the Revolving Loan Securities or the
                          Bridge Loan Securities;

                  (ii)    incur any liability in respect of Borrowed Money
                          except for the Revolving Loan Facility, the Bridge
                          Loan Facility and unsecured Borrowed Money
                          subordinated to the Loan hereunder;

                  (iii)   make loans or advances to others (except for loans or
                          advances made in the ordinary course of business in
                          connection with the chartering and/or operation and/or
                          repair of the Vessel);

                  (iv)    except in connection with the chartering and/or
                          operation and/or repair of the Vessel incur any other
                          liability to a third party which in the opinion of the
                          Lender is of a substantial nature;

                  (v)      consolidate with any other company or merge into any
                           company;

                  (vi)     engage in any business other than the ownership
                           operation chartering and management of the Vessel;

<PAGE>
                                     - 29 -

                  (vii)    guarantee endorse or otherwise become or remain
                           liable in respect of the obligations of any person
                           firm or corporation;

                  (viii)   pay any dividends or other distributions or issue any
                           new shares or transfer any shares;

                  (ix)     sell or otherwise dispose of the Vessel or any share
                           therein or any other asset (the Lender's consent not
                           to be unreasonably withheld);

                  (x)      make or allow any alteration to or waiver of the
                           terms of any one or more of the Subject Documents;

                  (xi)     appoint any manager of the Vessel other than the
                           Manager;

                  (xii)    change the class, flag or employment of the Vessel as
                           a passenger cruise ship; or

                  (xiii)   make any acquisitions or investments other than the
                           regular dry-docking and maintenance of the Vessel
                           (the Lender's consent not to be unreasonably
                           withheld);

         (I)      the Borrower will procure that the amount standing to the
                  credit of the Earnings Account shall not at any time fall
                  below two million United States Dollars (USD2,000,000);

         (J)      the Borrower shall procure that its Debt Service Coverage
                  Ratio (calculated as set out below, with the first such
                  calculation being made twelve (12) months after the Drawdown
                  Date and the subsequent calculations being made at three (3)
                  monthly intervals thereafter) shall not be less than the ratio
                  specified in item 1 in schedule B hereto (for the period of
                  twelve (12) months after the Drawdown Date) and the ratio
                  specified in item 2 in schedule B hereto (for any period
                  thereafter) and for this purpose the Debt Service Coverage
                  Ratio shall be calculated in accordance with the following
                  formula:-

                                     EBITDA
                               ------------------
                               Financial Expenses

<PAGE>
                                     - 30 -

                  where

                  "EBITDA" means, for the previous period of twelve (12) months,
                  the aggregate of:

                  (i)     Net Income (but excluding gains and losses from the
                          sale of assets or reserves relating thereto and items
                          classified as extraordinary or non-recurring) from the
                          Borrower's operations for such period and for this
                          purpose Net Income means the consolidated net income
                          of the Borrower as determined in accordance with GAAP;
                          and

                  (ii)    the aggregate amounts deducted in determining Net
                          Income for such period in respect of depreciation,
                          amortisation, taxes, deferred income and interest
                          expense of the Borrower; and

                  "Financial Expenses" means, for the previous period of twelve
                  (12) months, the sum of:

                  (i)     the aggregate principal payable or paid during such
                          period on any Borrowed Money of the Borrower (other
                          than the scheduled principal repayment in respect of
                          the Bridge Loan Facility and principal repayments
                          under the Revolving Loan Facility Agreement to the
                          extent that they were redrawn during the same period);

                  (ii)    aggregate interest expense (including, without
                          limitation, capitalised interest accrued during such
                          period) of the Borrower for such period; and

                  (iii)   all rent and any capital lease obligations or
                          operating lease obligations by which the Borrower is
                          bound which are payable or paid during such period as
                          calculated in accordance with GAAP and derived from
                          the then latest accounts of the Borrower;

         (K)      the Borrower shall provide the Lender with compliance
                  certificates in relation to the relevant financial covenants
                  contained in this agreement in the form set out in appendix II
                  hereto on or before the Drawdown Date and at three (3)

<PAGE>
                                     - 31 -

                  monthly intervals after the Drawdown Date and, for the
                  avoidance of doubt, the covenant in clause 14.1(J) hereof
                  shall not be deemed to be a 'relevant financial covenant' for
                  the purposes of this clause 14.1(K) until the date falling
                  twelve (12) months after the Drawdown Date;

         (L)      the Borrower will promptly inform the Lender if any Event of
                  Default or any event which with the giving of notice and/or
                  lapse of time would constitute an Event of Default occurs or
                  if any event occurs which may materially adversely affect its
                  ability to perform any of its obligations under any one or
                  more of this agreement, the Security Documents and any other
                  documents executed pursuant hereto or thereto; and

         (M)      the Borrower will from time to time at the request of the
                  Lender execute and deliver to the Lender or procure the
                  execution and delivery to the Lender of all such documents as
                  the Lender shall deem desirable in its absolute discretion for
                  giving full effect to this agreement and for perfecting,
                  protecting the value of or enforcing any rights or securities
                  granted to the Lender under any one or more of this agreement,
                  the Security Documents and any other documents executed
                  pursuant hereto or thereto.

15.      SET-OFF

15.1     The Lender is hereby authorised to combine any and all accounts held by
         the Borrower with the Lender at any of the Lender's offices and to
         apply (without any prior notice) any credit balance to which the
         Borrower is then beneficially entitled on any such account (whether or
         not that credit balance is then due to the Borrower) in or towards
         satisfaction of any sums then due and payable by the Borrower
         hereunder. For that purpose the Lender is hereby authorised to use all
         or part of that credit balance to buy such other currency or currencies
         as may be required to enable it to effect that application. The Lender
         shall not be obliged to exercise any of its rights under this clause,
         which shall be without prejudice and in addition to any right of set
         off, combination of accounts, lien or other rights to which it at any
         time otherwise is entitled (whether by operation of law, contract or
         otherwise).

16.      ASSIGNMENT AND PARTICIPATION

16.1     This agreement shall be binding upon and inure to the benefit of the
         Lender and the Borrower and their respective successors and assigns.

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                                     - 32 -

16.2     The Borrower may not assign its rights or obligations hereunder without
         the prior written consent of the Lender.

16.3     The Lender may at any time with the prior written consent of the
         Borrower (such consent not to be unreasonably withheld and not to be
         required at all if an Event of Default has occurred and is subsisting)
         assign transfer or grant participations in all or part of its rights
         and obligations hereunder and for this purpose:-

         (A)      no such consents shall be required from the Borrower if such
                  assignee, transferee or grantee is a subsidiary company,
                  holding company or sister company of the Lender;

         (B)      the Lender shall be at liberty to disclose on a confidential
                  basis to any such assignee transferee or grantee (or to any
                  potential such assignee transferee or grantee) all such
                  information concerning any one or more of the Security
                  Parties, the Vessel and the Subject Documents as the Lender
                  may deem appropriate; and

         (C)      the Borrower shall upon demand by and at the expense of the
                  Lender execute and deliver to the Lender all such documents
                  and do all such acts and things as the Lender may deem
                  necessary or desirable in its absolute discretion for giving
                  full effect to any such assignment transfer or participation.

17.      MISCELLANEOUS

17.1     Time shall be of the essence of this agreement but no failure or delay
         on the part of the Lender to exercise any power or right hereunder
         shall operate as a waiver of such power or right nor shall any single
         or partial exercise of any power or right hereunder preclude any other
         or further exercise thereof or the exercise of any other power or right
         hereunder. The powers and rights provided to the Lender in this
         agreement are cumulative and shall not exclude any powers or rights
         provided to the Lender by law.

17.2     In the event of any of the provisions contained in any one or more of
         this agreement, the Security Documents and any other documents executed
         pursuant hereto or thereto

<PAGE>
                                     - 33 -

         being invalid, illegal or unenforceable in any respect under any law,
         the validity, legality and enforceability of the remaining provisions
         herein or therein contained shall not in any way be affected or
         impaired thereby.

17.3     The Lender shall not be liable for any failure to meet its obligations
         hereunder resulting from any cause whatsoever beyond its control.

18.      NOTICES

18.1     Any notice or other correspondence in connection herewith required to
         be sent or given by the Borrower to the Lender shall be sent to the
         Lender in the English language at c/o Neptun Maritime Oyj, Bulevardi
         1A, FIN-00100 Helsinki, Finland, Attention: Finance Department
         (facsimile no. + 358 9 180 4640) or to such other address or addresses
         as may from time to time be notified by the Lender to the Borrower for
         such purpose.

18.2     Any notice or other correspondence in connection herewith required to
         be sent or given by the Lender to the Borrower shall be sent to the
         Borrower in the English language at c/o Commodore Holdings Limited,
         4000 Hollywood Boulevard, Suite 385-S, Hollywood, Fl 33021, U.S.A.,
         Attention: Chief Financial Officer (facsimile no. +954 921 2147) with
         copies to Kathleen L Deutsch, P.A., Broad and Cassel, Miami Center -
         Suite 3000, 201 S. Biscayne Boulevard, Miami, Fl 33131, U.S.A.
         (facsimile no. +305 373 9443) or to such other address or addresses as
         the Borrower may from time to time notify to the Lender in writing and
         shall be deemed to have been validly given and received on the date of
         dispatch if sent by telex and five (5) days after having been posted if
         sent by prepaid first class or airmail post.

19.      PROPER LAW AND JURISDICTION

19.1     This agreement shall be governed by and construed in accordance with
         the Laws of England and for the exclusive benefit of the Lender the
         Borrower and the Lender hereby irrevocably submit to the jurisdiction
         of the High Courts of Justice in England. The Borrower hereby
         irrevocably authorises and appoints Consult Marine of 58 London Fruit
         Exchange, Brushfield Street, London E1 6EP as its agent in England for
         the acceptance of service of legal proceedings on it hereunder.

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                                     - 34 -

IN WITNESS whereof the parties hereto have executed this agreement the day and
year first above written.

SIGNED by                              )
/s/ Per Arvid Skult                    )
---------------------------------------
for and on behalf of                   )
EFF-SHIPPING LIMITED                   )
in the presence of:-                   )

SIGNED by                              )
/s/ Jeffrey I. Binder                  )
---------------------------------------
for and on behalf of                   )
CROWN CRUISES OF PANAMA, INC.          )
in the presence of:-                   )

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