Document:

EXHIBIT 10.1

                              NORDBANKEN AB (PUBL)

                                     - and -

                           COMMODORE HOLDINGS LIMITED

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

                                 LOAN AGREEMENT

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

                           Sinclair Roche & Temperley
                                   Royex House
                              5 Aldermanbury Square
                                 London EC2V 7LE

                            Tel: +44 (0)20 7452 4000
                            Fax: +44 (0)20 7452 4001
                                 Ref: GFS/252680

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                                INDEX OF CONTENTS
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CLAUSE            SUBJECT                                                                                  PAGE

<S>              <C>                                                                                     <C>

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

2.                THE LENDER'S COMMITMENT.....................................................................5

3.                AVAILABILITY................................................................................5

4.                INTEREST....................................................................................6

5.                REPAYMENT...................................................................................7

6.                COMPULSORY AND VOLUNTARY PREPAYMENT.........................................................7

7.                ARRANGEMENT FEE.............................................................................8

8.                INDEMNITY...................................................................................8

9.                PAYMENTS...................................................................................10

10.               APPLICATION OF MONEYS......................................................................12

11.               DEFAULT....................................................................................13

12.               SECURITY...................................................................................16

13.               REPRESENTATIONS AND WARRANTIES.............................................................16

14.               COVENANTS..................................................................................18

15.               SET-OFF....................................................................................21

16.               ASSIGNMENT AND PARTICIPATION...............................................................21

17.               MISCELLANEOUS..............................................................................22

18.               NOTICES....................................................................................22

19.               PROPER LAW AND JURISDICTION................................................................23

Schedule A : Conditions Precedent............................................................................24

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THIS AGREEMENT is made the 20th day of June,  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 floating interest rate
         term loan of two million United States Dollars (USD2,000,000).

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

         "Bareboat Charter"
         the bareboat charter in respect of the Vessel made between the
         Guarantor and the Bareboat Charterer;

         "Bareboat Charterer"
         means New Commodore Cruise Lines Limited, a company incorporated under
         the laws of Bermuda with its registered office at c/o Cox Hallett
         Wilkinson, Milner House, 18 Parliament Street, Hamilton HM12, Bermuda;

         "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

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         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 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 Commodore Holdings Limited, a company incorporated under the laws
         of Bermuda with its registered office at c/o Cox Hallett Wilkinson,
         Milner House, 18 Parliament Street, Hamilton HM12, Bermuda;

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

         "Drawdown Date"
         means the date on which the Loan is advanced pursuant to clause 3
         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;

         "Guarantor"
         means Almira Enterprises, 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 y Calle 51, Pisos 9, 10 & 11,
         Panama, Republic of Panama;

         "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;

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         "Insurance Assignments"
         means the assignments executed pursuant to clause 12.1(A)(ii) hereof;

         "Interest Period"
         means the period determined in accordance with the provisions of clause
         4.1 hereof for the calculation of interest on the Loan or any relevant
         part thereof;

         "Lender"
         means Nordbanken AB (publ), a company incorporated under the laws of
         Sweden acting through its office at Ostra Hamngatan 16, SE-405 09
         Gothenburg, Sweden;

         "Loan"
         means two million United States Dollars (USD2,000,000) or, where the
         context so requires, the amount thereof from time to time outstanding;

         "Margin"
         means two per cent (2%) per annum;

         "Mortgage"
         means the second preferred Panamanian naval mortgage over the Vessel
         executed pursuant to clause 12.1(A)(i) 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 per cent (5%) of the charter-free sale
         value of the Vessel;

         "Prior Loan"
         means the loan made to the Guarantor for the purchase of the Vessel and
         secured by (inter alia) a first mortgage and first assignments of
         insurances and requisition compensation in respect of the Vessel;

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         "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, the Bareboat Charterer and any other
         party to any of the Security Documents from time to time (other than
         the Lender) and "Security Party" means any one of them;

         "Settlement Agreement"
         means the agreement made or to be made between the Borrower and certain
         other parties in relation to the settlement of claims resulting from
         the refurbishment and/or repositioning and/or operation of the
         Panamanian flag vessel named "ENCHANTED SUN";

         "Subject Documents"
         means this agreement, the Security Documents, the Settlement Agreement,
         the Bareboat Charter, the documents evidencing and/or securing the
         Prior Loan and any and all documents executed or to be 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;

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         "United States Dollars" and "USD"
         mean the lawful currency of the United States of America; and

         "Vessel"
         means the motor vessel named "ENCHANTED ISLE" registered under
         Panamanian flag in the ownership of the Guarantor.

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 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 moneys to be
         lent by the Borrower pursuant to the Settlement Agreement.

3.       AVAILABILITY

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

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

         (2)   no Event of Default and no event which with the giving of notice
               and/or lapse of time would constitute an Event of Default has
               occurred;

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         (3)   the Lender has received adequate written notice from the Borrower
               in form and substance satisfactory to the Lender specifying date
               upon which the Borrower requires the Loan to be advanced; and

         (4)   the obligation of the Lender to make the Loan available to the
               Borrower shall expire on 31 July 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
         the Interest Period which shall be the six (6) months commencing on the
         Drawdown Date and ending on the due date for repayment for the Loan.

4.2      Subject to clauses 4.3 and 6.2 hereof the Borrower shall pay interest
         on the Loan or any relevant part thereof for the 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 at which
         deposits of amounts of United States Dollars equivalent to or
         comparable with the Loan or relevant part thereof are offered to the
         Lender by prime banks for the 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 the 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 the Interest
         Period.

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4.3      In the event of default by the Borrower in the payment of any sum
         whatsoever due to the Lender 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 three per
         cent (3%) 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 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 the Borrower shall repay the Loan
         in full on the date falling six (6) months after the Drawdown Date.

6.       COMPULSORY AND VOLUNTARY PREPAYMENT

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 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:-

         (1)   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

         (2)   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,

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         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 be obliged forthwith upon receiving a written
         notice from the Lender to that effect to repay the Loan or the relevant
         part thereof together with interest accrued thereon.

7.       ARRANGEMENT FEE

7.1      The Borrower shall pay no arrangement fee 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:-

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

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

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

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

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         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 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 costs and expenses whatsoever 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;

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

         (2)   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

         (3)   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 States Dollars.

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

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         (1)   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.

         (2)   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.

         (3)   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.

<PAGE>

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 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     Subject to clause 10.2 hereof all moneys payable to the Lender under
         any one or more of the Insurance Assignments and any other moneys
         payable to the Lender 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:-

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

               (1)  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);

               (i)  second in repayment of the Loan and accrued interest thereon
                    and in payment of any sums due to the Lender by virtue of
                    that repayment under clause 8.5 hereof; and

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

         (2)   all moneys not covered by clause 10.1(A) hereof shall be applied
               as follows:-

<PAGE>

               (1)  first in accordance with clause 10.1(A)(i) hereof;

               (2)  second (in respect only of moneys received by virtue of any
                    one or more of the Insurance Assignments) in reimbursement
                    to the Guarantor and/or the Bareboat Charterer for such of
                    the costs (if any) incurred by the Guarantor and/or the
                    Bareboat Charterer in effecting the repair of the damage in
                    respect of which those moneys are received as the Lender
                    shall approve (such approval not to be unreasonably
                    withheld);

               (3)  third in repayment of the Loan and accrued interest thereon
                    and in payment of any sums due to the Lender by virtue of
                    that repayment under clause 8.5 hereof; and

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

10.2     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 shall be applied by the Lender as follows:-

         (A)   first in accordance with clause 10.1(A)(i) hereof, subject to any
               right the Lender may have to delay any such application in order
               to maximise its claim; and

         (1)   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>

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

         (2)   any one or more of the Security Parties 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;

         (3)   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);

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

         (5)   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;

         (6)   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;

<PAGE>

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

         (8)   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;

         (9)   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;

         (10)  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;

         (11)  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;

         (12)  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;

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

<PAGE>

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

         (15)  an event of default occurring in respect of the Prior Loan.

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:-

         (1)   a guarantee and indemnity duly executed by the Guarantor together
               with the following documents securing that guarantee and
               indemnity:-

               (1)  duly registered second preferred Panamanian naval mortgage
                    over the Vessel (ranking immediately after the first
                    mortgage securing the Prior Loan) duly executed by the
                    Guarantor;

               (ii) second priority assignments (ranking immediately after the
                    first assignments securing the Prior Loan) duly executed by
                    the Guarantor and the Bareboat Charterer 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); and

         (2)   deed of subordination duly executed by the Bareboat Charterer
               subordinating its interests under the Bareboat Charter to those
               of the Lender under the Mortgage.

<PAGE>

13.      REPRESENTATIONS AND WARRANTIES

13.1     The Borrower hereby represents and warrants that:-

         (1)   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 Guarantor are
               beneficially owned by the Borrower;

         (2)   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;

         (3)   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;

         (4)   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;

         (5)   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 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
               Lender);

         (6)   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 condition of any one
               or more of the Security Parties;

         (7)   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;

<PAGE>

         (8)   all 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; and

         (9)   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

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

         (1)   the Borrower will and will procure that the Guarantor 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);

         (2)   the Borrower will and will procure that the Guarantor 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 the
               Settlement Agreement to be observed and performed by it and will
               procure that the Guarantor will duly observe and perform all the
               terms and conditions of the Bareboat Charter and any other
               contract of employment of the Vessel to be observed and performed
               by the Guarantor;

         (B)   the Borrower will prepare or cause to be prepared audited
               consolidated accounts for the Borrower at least once in every
               period of 12 consecutive months and the Borrower will furnish the
               Lender with copies of those accounts no later than 31 December in
               each year; the first such accounts shall relate to the period
               ending on 30 September 1999; those accounts shall include profit
               and loss accounts and balance sheets certified and audited by
               Grant Thornton or an accountant of similar standing acceptable to
               the Lender;

<PAGE>

         (3)   the Borrower will 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 and details of the
               operating costs of the Vessel;

         (4)   the Borrower will procure that the Vessel and the Lender's
               interest 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;

         (5)   the Borrower will procure that the Guarantor will not without the
               prior written consent of the Lender:-

               (1)   create or allow to subsist any Encumbrance over any of its
                     assets or any part thereof save for Permitted Liens, those
                     created to secure the Prior Loan and those created by any
                     of the Security Documents;

               (2)   (save for the Prior Loan) incur any liability in respect of
                     Borrowed Money except for unsecured Borrowed Money
                     subordinated to the Loan hereunder;

               (3)   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);

               (iii) 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;

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

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

<PAGE>

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

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

               (8)   sell or otherwise dispose of the Vessel or any share
                     therein; or

               (9)  make or allow any alteration to or waiver of the terms of
                    any one or more of the Subject Documents (other than the
                    Settlement Agreement);

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

               (1)   (save in the ordinary course of its business) incur any
                     liability in respect of Borrowed Money except for unsecured
                     Borrowed Money subordinated to the Loan hereunder; or

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

         (7)   the Borrower will inform the Lender in writing as soon as
               practicable after making or allowing any alteration to or waiver
               of the terms of the Settlement Agreement specifying in reasonable
               detail the relevant alteration or waiver;

         (8)   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

<PAGE>

         (9)   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.

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 assign transfer or grant participations in
         all or a proportion of its rights and obligations hereunder to any
         other bank or financial institution and for this purpose:-

<PAGE>

         (1)   the Lender shall be at liberty to disclose on a confidential
               basis to any other bank or financial institution which has taken
               or may take such an assignment transfer or participation all such
               information concerning any one or more of the Security Parties,
               the Vessel and the Subject Documents as the Lender deems
               appropriate; and

         (2)   the Borrower shall upon demand by and at the expense of the
               Lender execute all such documents and do all such acts and things
               as may be necessary to give effect to any such assignment
               transfer or participation.

16.4     A person (including any body of persons) who is not a party to this
         agreement has no right under the Contracts (Rights of Third Parties)
         Act 1999 to enforce any term of this agreement but this does not affect
         any right or remedy of a third party which exists or is available apart
         from that Act.

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 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

<PAGE>

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 Ostra Hamngatan 16, SE-405 09
         Gothenburg, Sweden (telex no.12399 (NBBANK S) facsimile no. + 46 31 771
         6470) 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 4000 Hollywood Boulevard, Suite
         385-S, Hollywood, F1 33021, U.S.A., Attention Chief Financial Officer
         (facsimile no. + 954 967 2135) with copies to Kathleen L Deutsche,
         P.A., Broad and Cassel, Miami Center - Suite 3000, 201 S. Biscayne
         Boulevard, Miami, F1 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 despatch 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 hereby irrevocably submits to the jurisdiction of the High
         Courts of Justice in England. Such submission shall not limit the right
         of the Lender to commence any proceedings relating to this agreement
         (in addition or alternatively) in any other jurisdiction which the
         Lender deems fit. The Borrower hereby irrevocably authorises and
         appoints Consult Marine, 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.

<PAGE>

                        SCHEDULE A : CONDITIONS PRECEDENT

10       A copy certified as true by the secretary of each of the Security
         Parties of the certificate of incorporation and memorandum and articles
         of association (or equivalent corporate documents) of the relevant
         company evidencing its due incorporation under the laws of the relevant
         country and its power to do all such things as it is required to do
         under or pursuant to the Subject Documents.

20       A certificate signed by the secretary of each of the Security Parties
         stating the names of the present officers and directors of the relevant
         company and the names of the shareholders and what proportion of the
         shares is held by each shareholder.

30       Evidence that the names of the officers, directors and shareholders of
         each of the Security Parties are duly registered in the Companies
         Registry in the relevant country.

40       A certificate of good-standing in respect of each of the Security
         Parties.

50       Minutes of meetings of the directors and (in the case of the Guarantor)
         the shareholders of each of the Security Parties at which there was
         approved the entry into execution delivery and performance of such of
         the Subject Documents to which the relevant company is a party.

60       Evidence of the due authority of any person signing the Subject
         Documents on behalf of the Security Parties.

70       Copies certified as true by the Borrower's solicitors of the Settlement
         Agreement, the Bareboat Charter and the documents evidencing and/or
         securing the Prior Loan.

80       Evidence that there is no dispute under any of the Subject Documents as
         between the parties thereto.

90       Certificate issued by the Registrar of Bermudian Companies evidencing
         the due registration in the Bermuda Companies Registry of such of the
         Security Documents as are executed by the Bareboat Charterer.

<PAGE>

100      The Security Documents.

110      Evidence that each and every agent for service of process appointed by
         any of the Security Parties under any one or more of this agreement and
         the Security Documents has duly accepted that appointment.

120      Evidence that all necessary licences consents permits and authorities
         (including exchange control) have been obtained by the Security Parties
         for due performance of their obligations under or pursuant to the
         Subject Documents.

130      Certificate of registration issued by the relevant Panamanian
         authorities evidencing permanent registration of the Vessel under
         Panamanian flag in the ownership of the Guarantor and the due
         registration of the Mortgage.

140      Opinions from Bermudian, Panamanian and English lawyers appointed by
         the Lender as to all such aspects of the relevant laws concerning the
         Security Parties and the Subject Documents as the Lender shall deem
         relevant.

150      Evidence by way of copy cover notes and entry certificate that the
         Vessel and the Lender's interest as mortgagee are insured fully and in
         accordance with the provisions of this agreement and the Mortgage.

160      Notices of assignment of the insurances of the Vessel.

170      Letters of undertaking addressed to the Lender in respect of the
         insurances on the Vessel.

180      An opinion from an insurance adviser appointed by the Lender as to all
         such aspects of the insurances in respect of the Vessel and the
         Lender's interest as mortgagee as the Lender shall deem relevant.

190      Evidence that the Vessel is classed to the highest classification with
         a classification society acceptable to the Lender free of
         recommendations affecting class.

200      Copies of the tonnage and SOLAS certificates of the Vessel.

<PAGE>

210      Bank mandate forms duly signed in respect of any and all bank accounts
         to be opened under or pursuant to this agreement.

220      A copy certified as true by the Borrower's solicitors of the carrier
         initiative agreement executed pursuant to the Mortgage.

230      Evidence that all class and structural surveys required by the Vessel's
         insurers and/or by any relevant regulations made pursuant to the U.S.A.
         Oil Pollution Act of 1990 (and any similar legislation in force in any
         other jurisdiction to which the Vessel may trade) have been carried out
         and that the Vessel complies in all respects with the requirements of
         the said insurers and/or regulations.

240      A copy certified as true by the Borrower's solicitors of any current
         certificate of financial responsibility in respect of the Vessel issued
         under the U.S.A. Oil Pollution Act of 1990.

25.      A copy certified as true by the Borrower's solicitors of a valid safety
         management certificate (or interim safety management certificate)
         issued to the Vessel in respect of its management by the Guarantor (or
         by any operator of the Vessel after its acquisition by the Borrower)
         pursuant to the International Safety Management Code.

26.      A copy certified as true by the Borrower's solicitors of a valid
         document of compliance (or interim document of compliance) issued to
         the Guarantor (or to any operator of the Vessel) in respect of ships of
         the same type as the Vessel pursuant to the International Safety
         Management Code.

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

SIGNED by                                                 )
Jan Albertson                                             )  /s/Jan Albertson
for and on behalf of                                      )
NORDBANKEN AB (PUBL)                                      )
in the presence of:-                                      )
Inger Mellberg /s/Inger Mellberg
Birgithia Andersson /s/ Birgithia Andersson

<PAGE>

SIGNED by                                           )
Jeffrey I. Binder and Frederick A. Mayer            ) /s/ Jeffrey I. Binder
for and on behalf of                                ) /s/ Frederick A. Mayer
COMMODORE HOLDINGS LIMITED                          )
in the presence of:-                                )
Louise M. Batista /s/ Louise M. Batista
Kathleen L. Deutsch /s/ Kathleen L. DeutschEXHIBIT 10.2

                            ALMIRA ENTERPRISES, INC.

                                     - and -

                              NORDBANKEN AB (PUBL)

                           ---------------------------
                              SECOND NAVAL MORTGAGE
                                   - on the -
                              m.v. "ENCHANTED ISLE"
                           ---------------------------

                           Sinclair Roche & Temperley
                                   Royex House
                              5 Aldermanbury Square
                                 London EC2V 7LE
                            Tel: +44 (0)20 7452 4000
                            Fax: +44 (0)20 7452 4001
                                 Ref: GFS/252680

<PAGE>

                                INDEX OF CONTENTS
<TABLE>
<CAPTION>

Clause            Heading                                                                              Page No.

<S>                                                                                                          <C>
1.                DEFINITIONS.................................................................................2

2.                OWNER'S COVENANT TO PAY.....................................................................5

3.                MORTGAGE....................................................................................6

4.                OWNER'S COVENANTS AS TO INSURANCE...........................................................7

5.                OWNER'S COVENANTS AS TO OPERATION & MAINTENANCE............................................12

6.                EXPENSES...................................................................................17

7.                PROTECTION AND MAINTENANCE OF SECURITY.....................................................18

8.                EVENTS OF DEFAULT..........................................................................19

9.                ENFORCEMENT OF RIGHTS......................................................................19

10.               APPLICATION OF MONEYS......................................................................22

11.               NO WAIVER..................................................................................22

12.               POWER OF DELEGATION........................................................................22

13.               POWER OF ATTORNEY..........................................................................22

14.               FURTHER ASSURANCE..........................................................................23

15.               WAIVER OF RIGHTS AS SURETY.................................................................23

16.               AMOUNT SECURED BY MORTGAGE.................................................................25

17.               NOTICES....................................................................................25

18.               GOVERNING LAW, SEVERABILITY, ETC. .........................................................25

19.               MISCELLANEOUS..............................................................................26

20.               RECORDING OF THIS MORTGAGE.................................................................26

</TABLE>

<PAGE>

THIS SECOND NAVAL MORTGAGE is made the 21st day of June 2000 by ALMIRA
ENTERPRISES, 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 51, Pisas 9, 10 & 11, Panama, Republic of Panama ("the
Owner") in favour of NORDBANKEN AB (PUBL) a company incorporated under the laws
of Sweden acting through its office at Ostra Hamngatan 16, SE-405 09 Gothenburg,
Sweden ("the Mortgagee" which expression shall include its successors and
permitted assigns).

WHEREAS:-

(A)      The Owner is the sole owner of the whole of the motor vessel named
         "ENCHANTED ISLE" built in 1958 at Pascagoula, E.U.A. duly documented in
         the name of the Owner under the laws and flag of the Republic of Panama
         under Permanent Patente of Navigation Number 14087-84-E having radio
         call letters in the international Code of Signals 3FMG2 with a gross
         capacity in tons of 23,875 net capacity in tons of 9,568 length of
         173.74 meters breadth of 25.60 meters and depth of 13.80 meters.

(B)      By a loan agreement dated the 20 day of June 2000 made between (1) the
         Mortgagee and (2) Commodore Holdings Limited ("the Borrower")
         (hereinafter as the same may from time to time be amended, varied or
         supplemented called the "Loan Agreement") the Mortgagee has agreed to
         make available to the Borrower a loan of two million United States
         Dollars (USD2,000,000) (the "Loan" which expression shall also mean
         where the context so requires the amount thereof from time to time
         outstanding) on the terms and conditions therein set forth. A copy of
         the form of the Loan Agreement in the form executed is attached hereto
         and forms an integral part hereof.

(C)      By a guarantee and indemnity dated 20 day of June 2000 executed by the
         Owner in favour of the Mortgagee (hereinafter as the same may from time
         to time be amended, varied or supplemented called "the Guarantee") the
         Owner has (inter alia) guaranteed the due and punctual payment of any
         and all sums due and to become due from the Borrower under the Loan
         Agreement. A copy of the form of the Guarantee in the form executed is
         attached hereto and forms an integral part hereof.

<PAGE>

(D)      The Mortgagee agreed to advance the Loan on condition that the Owner
         should execute and deliver to the Mortgagee the Guarantee and such a
         second priority mortgage of the Vessel as hereinafter appears.

(E)      In fulfilment of the said condition and in order to secure the payment
         to the Mortgagee of the Outstanding Indebtedness (as hereinafter
         defined) and the performance and observance of and compliance with all
         the covenants terms and conditions in this Mortgage contained expressed
         or implied the Owner has duly authorised the execution and delivery of
         this Mortgage and is duly permitted to give as security for the payment
         of the Outstanding Indebtedness and the performance and observance of
         and compliance with all the said covenants terms and conditions a
         second preferred mortgage on the Vessel under and pursuant to the laws
         of the Republic of Panama.

(F)      By a first naval mortgage dated 14 July 1995 ("the Prior Mortgage")
         executed by the Owner in favour of Effjohn International Cruise
         Holdings, Inc. ("the Prior Mortgagee") the Owner has mortgaged the
         Vessel in favour of the Prior Mortgagee.

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:-

1.       DEFINITIONS

(1)      In this Mortgage unless the context otherwise requires any term defined
         in the preamble or recitals hereto has the meaning ascribed to it
         therein and:-

         "Default Rate"
         means interest at the rate calculated in accordance with clause 4.3 of
         the Loan Agreement;

         "Event of Default"
         means any of the events set out in clause 8 hereof;

<PAGE>

         "Insurances"
         means all policies and contracts of insurance (which expression
         includes all entries of the Vessel in a protection and indemnity or war
         risks association) which are from time to time taken out or entered
         into in respect of the Vessel and her earnings or otherwise howsoever
         in connection with the Vessel with the exception of Mortgagees interest
         insurances;

         "Outstanding Indebtedness"
         means the aggregate of all sums of money whatsoever now or in the
         future actually or contingently due or owing to the Mortgagee under the
         Security Documents or any of them;

         "person"
         includes any body of persons;

         "Requisition Compensation"
         means all moneys or other compensation whatsoever payable by reason of
         the requisition for title or other compulsory acquisition of the Vessel
         (otherwise than by requisition for hire) or the 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;

         "Security Documents"
         means the Loan Agreement, the Guarantee, this Mortgage and any other
         document as may have been or may hereafter be executed to secure the
         Loan;

         "Security Period"
         means the period commencing on the date hereof and terminating upon
         discharge of the security created by the Security Documents by
         irrevocable payment in full of the Outstanding Indebtedness;

         "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

<PAGE>

         (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 Owner from such capture, seizure, arrest or
               detention within thirty (30) days after the occurrence thereof;
               and

         "Vessel"
         means the vessel described in Recital (A) hereto and includes her
         engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable
         or other stores, belongings and appurtenances whether on board or
         ashore and whether now owned or hereafter acquired.

(2)      In clause 4.1(A) hereof:-

         "excess risks"
         means the proportion of claims for general average and salvage charges
         and under the ordinary running down clause not recoverable in
         consequence of the value at which a vessel is assessed for the purpose
         of such claims exceeding her insured value;

         "protection and indemnity risks"
         means the usual risks covered by an English protection and indemnity
         association including without limitation pollution risks (whether
         relating to oil or otherwise howsoever) and the proportion not
         recoverable in case of collision under the ordinary running down
         clause; and

         "war risks"
         includes the risks of mines and all risks excluded from the standard
         form of English marine policy by the free of capture and seizure
         clause.

(3)      This Mortgage shall be read together with the Loan Agreement.

(4)      Clause headings are inserted for convenience of reference only and
         shall be ignored in the interpretation of this Mortgage.

<PAGE>

2.       OWNER'S COVENANT TO PAY

(1)      In consideration of the premises the Owner covenants with the Mortgagee
         as follows:-

         (1)   to guarantee repayment of the Loan to the Mortgagee at the time
               and in the manner specified in clause 5 of the Loan Agreement;

         (2)   to guarantee payment of interest on the Loan to the Mortgagee at
               the rate at the times and in the manner specified in clause 4 of
               the Loan Agreement;

         (3)   to pay interest at the Default Rate to the Mortgagee (both before
               and after any judgment) on any sum or sums payable under the
               Security Documents which is not paid to the Mortgagee on the due
               date;

         (4)   to pay each and every other sum of money that may be or become
               owing to the Mortgagee under the terms of the Security Documents
               or any of them at the times and in the manner specified therein;

         (5)   to pay to and/or indemnify the Mortgagee for such additional
               amounts as may be necessary in order that all payments under this
               Mortgage after deduction or withholding for or on account of all
               present or future taxes (other than corporate taxes on the
               overall net income of the Mortgagee) imposed by any competent
               authority in any jurisdiction relative to the Owner shall be no
               less than such payments would have been had there been no such
               taxes; and

         (6)   to perform observe and comply with the obligations, covenants,
               terms and conditions set out in this Mortgage.

(2)      Notwithstanding anything to the contrary contained in this clause 2 the
         Outstanding Indebtedness shall become immediately payable on demand
         upon the happening of any Event of Default.

<PAGE>

3.       MORTGAGE

(1)      In consideration of the premises and in order to secure by this
         Mortgage the repayment to the Mortgagee of the Loan plus interest at
         the rate set forth in the Loan Agreement and the payment of all such
         other sums as may hereafter from time to time and at any other time
         form part of the Outstanding Indebtedness and to secure the performance
         and observance of and compliance with the covenants terms and
         conditions herein contained, the Owner in accordance with the
         provisions of Chapter V Title IV of Book Second of the Code of Commerce
         of the Republic of Panama and of the pertinent provisions of the Civil
         Code and other legislation of the Republic of Panama hereby executes
         and constitutes a Second Preferred Naval Mortgage on the whole of the
         Vessel in favour of the Mortgagee, subject to the Prior Mortgage, to
         have and to hold the same unto the Mortgagee its successors and assigns
         forever upon the terms herein set forth, PROVIDED ONLY and the
         condition of these presents is such that if the Owner its successors
         and assigns shall pay or cause to be paid to the Mortgagee its
         successors or assigns the Outstanding Indebtedness as and when the same
         shall become due and payable in accordance with the terms of the Loan
         Agreement and this Mortgage and shall observe and comply with the
         covenants, terms and conditions in the Loan Agreement and this Mortgage
         contained expressed or implied to be performed, observed or complied
         with by and on the part of the Owner then these presents and the rights
         hereunder shall cease determine and be void and the Mortgagee will, at
         the request and cost of the Owner, execute a release in such form as
         the Owner may reasonably require, of the security created by this
         Mortgage.

<PAGE>

(2)      It is declared and agreed that the security created by this Mortgage
         shall be held by the Mortgagee as a continuing security for the payment
         of the Outstanding Indebtedness and the performance and observance of
         and compliance with all of the covenants terms and conditions contained
         in the Security Documents and that the security so created shall not be
         satisfied by any intermediate payment or satisfaction of any part of
         the amount hereby and thereby secured and that the security so created
         shall be in addition to and shall not in any way be prejudiced or
         affected by any collateral or other security now or hereafter held by
         the Mortgagee for all or any part of the moneys hereby and thereby
         secured and that every power and remedy given to the Mortgagee
         hereunder shall be an addition to and not a limitation of any and every
         other power or remedy vested in the Mortgagee under any of the other
         Security Documents or at law and that all the powers so vested in the
         Mortgagee may be exercised from time to time and as often as the
         Mortgagee may deem expedient.

4.       OWNER'S COVENANTS AS TO INSURANCE

(1)      The Owner covenants with the Mortgagee and undertakes throughout the
         Security Period:-

         (1)   at the Owner's expense to insure and keep the Vessel insured in
               United States Dollars (or such other currency as the Mortgagee
               may approve in writing) against (a) fire and usual marine risks
               (including excess risks), (b) war risks, (c) protection and
               indemnity risks, (d) oil pollution liability risks in excess of
               the limit of cover for oil pollution liability included within
               the protection and indemnity risks, (e) loss of hire and (f) any
               other risks which the Mortgagee may from time to time require;

         (A)   to effect the Insurances (a) generally in such amounts and upon
               such terms as shall from time to time be approved in writing by
               the Mortgagee, through such brokers (hereinafter called "the
               approved brokers") and with such insurance companies underwriters
               war risks and protection and indemnity associations as shall from
               time to time be approved in writing by the Mortgagee, and (b) in
               particular 01. (in respect of all risks within the protection and
               indemnity insurances other than oil pollution risks) in an
               unlimited amount, or (if unlimited cover ceases to be available)
               in the maximum amount available to the Owner for the Vessel in
               the market from time to time; 02. (in respect of oil pollution
               liability risks included within the protection and indemnity
               insurances) in the maximum amount available to the Owner for the
               Vessel in the market from time to time; and 03. (in respect of
               oil pollution liability risks in excess of the limit of cover
               included in the protection and indemnity insurances) in such
               amount and upon such terms as the Mortgagee may from time to time
               require;

<PAGE>

         (2)   to renew the Insurances at least fourteen (l4) days before the
               relevant policies or contracts expire and to procure that the
               approved brokers shall promptly confirm in writing to the
               Mortgagee as and when each such renewal is effected;

         (3)   punctually to pay premiums calls contributions or other sums
               payable in respect of all the Insurances and to produce all
               relevant receipts when so required by the Mortgagee;

         (4)   to arrange for the execution of such guarantees as may from time
               to time be required by a protection and indemnity or war risks
               association;

         (5)   to procure that the interests of the Mortgagee shall be duly
               endorsed upon all slips cover notes policies certificates of
               entry or other instruments of insurance issued or to be issued in
               connection with the Insurances and in particular, but without
               limitation, if so required by the Mortgagee, (but without
               liability as between the Owner and the Mortgagee for premiums or
               calls) to procure that the Mortgagee be named as co-assured;

         (B)   to procure that all such instruments of insurance as are referred
               to in sub-clause (F) above shall be deposited with the Mortgagee
               (or with such other person as the Mortgagee may from time to time
               direct) and that the approved brokers furnish the Mortgagee with
               a letter or letters of undertaking in such form as may be
               required by the Mortgagee;

         (6)   to procure that the protection and indemnity and/or war risks
               associations wherein the Vessel is entered shall (if so required
               by the Mortgagee) furnish the Mortgagee with a letter or letters
               of undertaking in such form as may be required by the Mortgagee;

         (7)   to operate and manage the Vessel or procure that the Vessel is
               operated and managed strictly in conformity with the terms of the
               instruments of insurance referred to in sub-clause (F) above
               (including any warranties express or implied therein) and in
               particular:

<PAGE>

               (1)   to ensure that the Vessel's classification, structure,
                     operation and management are maintained strictly in
                     conformity with any warranty as to class, structure,
                     operation or management or any other provision as to class,
                     structure, operation or management contained in the
                     Insurances and to this end to submit the Vessel or cause
                     the Vessel to be submitted to such periodical or other
                     surveys as may be required by the Vessel's classification
                     society, salvage association or otherwise howsoever not
                     less than fourteen (14) days before the date upon which
                     such surveys fall due;

               (2)   promptly and fully to implement any and all requirements or
                     recommendations contained in any report issued upon or
                     following any of the surveys referred to in sub-clause (i)
                     above and promptly after such surveys have been carried out
                     to provide evidence satisfactory to the Mortgagee that this
                     has been done together with confirmation from the relevant
                     approved brokers that the Vessel complies with such of the
                     Insurances to which such surveys are relevant;

               (3)   (without prejudice to clauses 4.1(G) and (H) hereof) to
                     procure that the approved brokers furnish the Mortgagee
                     with a letter of undertaking in terms satisfactory to the
                     Mortgagee in which the approved brokers undertake (inter
                     alia) to give the Mortgagee notice of any failure by the
                     Owner to comply with any warranty as to the Vessel's class
                     or structure;

               (4)   to comply strictly with the requirements of any legislation
                     relating to pollution or protection of the environment
                     which may from time to time be applicable to the Vessel in
                     any jurisdiction in which the Vessel shall trade and in
                     particular (if the Vessel is to trade in the United States
                     of America and Exclusive Economic Zone (as defined in the
                     Act)) to comply strictly with the requirements of the
                     United States Oil Pollution Act 1990 ("the Act") and before
                     any such trade is commenced and during the entire period
                     during which such trade is carried on:-

<PAGE>

                     (1)  to pay any additional premiums required to maintain
                          protection and indemnity cover for oil pollution up to
                          the limit available to the Owner for the Vessel in the
                          market;

                     (2)  to make all such quarterly or other voyage
                          declarations as may from time to time be required by
                          the Vessel's protection and indemnity association in
                          order to maintain such cover, and promptly to deliver
                          to the Mortgagee copies of such declarations;

                     (3)  to submit the Vessel to such additional periodic,
                          classification, structural or other surveys which may
                          be required by the Vessel's protection and indemnity
                          insurers to maintain cover for such trade and promptly
                          to deliver to the Mortgagee copies of reports made in
                          respect of such surveys;

                     (4)  to implement any recommendations contained in the
                          reports issued following the surveys referred to in
                          sub-clause (c) above within the time limit specified
                          therein, and provide evidence satisfactory to the
                          Mortgagee that the protection and indemnity insurers
                          are satisfied that this has been done; and

                     (a)  in addition to the foregoing (if such trade is in the
                          United States of America and Exclusive Economic Zone):

                          (01) to obtain and retain a certificate of financial
                               responsibility under the Act in form and
                               substance satisfactory to the United States Coast
                               Guard and to provide the Mortgagee with a copy
                               thereof;

                          (02) to procure that the protection and indemnity
                               insurances do not contain a US Trading Exclusion
                               Clause or any other provision analogous thereto
                               and to provide the Mortgagee with evidence that
                               this is so; and

<PAGE>

                          (03) strictly to comply with any operational or
                               structural regulations issued from time to time
                               by any relevant authorities under the Act so that
                               at all times the Vessel falls within the
                               provisions which limit strict liability under the
                               Act for oil pollution;

                     (5)  before allowing the Vessel to enter or trade to any
                          zone which is declared a war zone or which is rendered
                          dangerous by reason of hostility in any part of the
                          world (whether war be declared or not) to effect such
                          special insurance cover as the Mortgagee may require;
                          and

                     (6)  to notify the Mortgagee forthwith by letter or in case
                          of urgency by telex of any requirement or
                          recommendation made by any insurer or classification
                          society which has not been complied with prior to
                          fourteen (14) days before the date by which it is
                          required to be complied with;

               (8)   to apply all sums receivable in respect of the Insurances
                     as are paid to the Owner for the purpose of making good the
                     loss and fully repairing all damage in respect whereof the
                     insurance moneys shall have been received;

               (9)   not to make any alteration which would or could reasonably
                     be expected to have a material adverse effect on the rights
                     or interest of the Mortgagee to any of the terms in any of
                     the instruments of insurance referred to in sub-clause (F)
                     above which have been approved by the Mortgagee and not to
                     make, do, consent or agree to any act or omission which
                     would or might render any such instrument of insurance
                     invalid, void, voidable or unenforceable or render any sum
                     payable thereunder repayable in whole or in part;

               (10)  not without the prior approval of the Mortgagee to settle,
                     compromise or abandon any claim under the Insurances for
                     Total Loss or for a major casualty; and

               (11)  to indemnify the Mortgagee fully forthwith upon demand for
                     any and all costs and expenses incurred by the Mortgagee
                     from time to time:

<PAGE>

                     (1)  in effecting for the benefit of the Mortgagee in such
                          amount, upon such terms, through such insurance
                          brokers and with such insurance company or underwriter
                          as the Mortgagee shall in its sole discretion elect
                          (i) a Mortgagee's interest insurance policy on the
                          Vessel and (ii) an insurance policy against the
                          possible consequences of pollution involving the
                          Vessel, including without limitation, the risk of
                          expropriation or sequestration of the Vessel, the
                          imposition of a lien or encumbrance of any kind having
                          priority over this Mortgage or a claim against the
                          Vessel exceeding the amount receivable in respect of
                          pollution under the Vessel's protection and indemnity
                          insurances; and

                     (2)  in obtaining from time to time a report or reports on
                          the adequacy of the Insurances from an insurance
                          adviser appointed by the Mortgagee.

(2)      The Mortgagee shall be entitled from time to time to review the terms
         of clause 4.1 hereof in order to provide for changes occurring after
         the date of this Mortgage in legislation or circumstances affecting the
         Owner, the Vessel, the Insurances, the laws of any jurisdiction or any
         other matters which the Mortgagee deems relevant, and to modify its
         requirements in respect of the Insurances in the light of such changes.
         Any such modification, once notified in writing by the Mortgagee to the
         Owner shall be binding on the Owner and take effect as an amendment to
         clause 4.1 hereof.

5.       OWNER'S COVENANTS AS TO OPERATION & MAINTENANCE

(1)      The Owner covenants with the Mortgagee and undertakes throughout the
         Security Period:-

         (1)   to keep the Vessel registered as a Panamanian ship and not to do
               or suffer to be done anything whereby such registration may be
               forfeited or imperilled;

         (2)   not (without the previous consent in writing of the Mortgagee) to
               make any modification to the Vessel which would result in any
               substantial change in the structure type or speed of the Vessel;

<PAGE>

         (3)   at all times to maintain and preserve the Vessel in good working
               order and repair so as to maintain the highest class available to
               vessels of her type and so that the Vessel is in every respect
               seaworthy and in good operating condition and to maintain and
               preserve the Vessel in such good working order and condition as
               to comply with the requirements of the Vessel's insurers and of
               the laws, regulations and requirements (statutory or otherwise)
               from time to time applicable to vessels registered under the laws
               and flag of the Republic of Panama and if so required with the
               requirements of the laws and government of any State colony
               country province or dependency where the Vessel may trade and to
               renew and replace all parts and appurtenances thereof when and as
               they shall be worn out damaged lost or destroyed by others of a
               similar nature and of at least equal quality;

         (4)   to permit the Mortgagee or to procure that the Mortgagee be
               permitted by surveyors or other persons appointed by it in that
               behalf to board the Vessel at all reasonable times for the
               purpose of inspecting her condition and her class or other
               records or for the purpose of satisfying themselves in regard to
               proposed or executed repairs and to afford all proper facilities
               for such inspections;

         (5)   to pay and discharge or to cause to be paid and discharged all
               debts damages and liabilities whatsoever which have given or may
               give rise to maritime or possessory liens on or claims
               enforceable against the Vessel and in event of arrest of the
               Vessel pursuant to legal process or in event of her detention in
               exercise or purported exercise of any such lien as aforesaid to
               procure the release of the Vessel from such arrest or detention
               forthwith upon receiving notice thereof by providing bail or
               otherwise as the circumstances may require;

<PAGE>

         (6)   not to employ the Vessel or suffer her employment in any trade or
               business which is forbidden by international law or is otherwise
               illicit or in carrying illicit or prohibited goods or in any
               manner whatsoever which renders her liable to condemnation in a
               Prize Court or to destruction seizure or confiscation and in
               event of hostilities in any part of the world (whether war be
               declared or not) not to employ the Vessel or suffer her
               employment in carrying goods which are or may be declared
               contraband or to enter or trade to any zone which is declared a
               war zone or which is rendered dangerous by reason of such
               hostilities unless the Mortgagee shall have first given its
               consent in writing;

         (7)   to take all reasonable precautions to prevent any infringements
               of any anti drug legislation in any jurisdiction in which the
               Vessel shall trade and in particular (if the Vessel is to trade
               in the United States of America) to take all reasonable
               precautions to prevent any infringements of the Anti-Drug Abuse
               Act of 1986 of the United States of America (as the same may be
               amended and/or re-enacted from time to time hereafter) and for
               this purpose to enter into a "Carrier Initiative Agreement" with
               the United States' Customs Service and to procure that the same
               or a similar agreement is maintained in full force and effect and
               that the Owner's obligations thereunder are performed in respect
               of the Vessel;

         (8)   to comply with all laws, regulations, conventions and agreements
               whatsoever applicable to the Vessel in any jurisdiction in which
               the Vessel shall trade relating to pollution or protection of the
               environment howsoever;

         (9)   promptly to furnish to the Mortgagee all such information as it
               may from time to time reasonably require regarding the Vessel her
               employment position and engagements particulars of all towages
               and salvages and copies of all charters and other contracts for
               her employment or otherwise howsoever concerning her;

         (C)   to notify the Mortgagee forthwith by letter or in case of urgency
               by telex of:-

               (1)   any accident to the Vessel involving repairs the cost
                     whereof will or is likely to exceed five hundred thousand
                     United States Dollars (USD500,000) (or the equivalent in
                     any other currency);

               (2)   any occurrence in consequence whereof the Vessel has become
                     or is likely to become a Total Loss;

               (3)   any requirement or recommendation made by any competent
                     authority which has not been complied with prior to
                     fourteen (14) days before the date by which it is required
                     to be complied with; and

<PAGE>

               (4)   any arrest of the Vessel or the exercise or purported
                     exercise of any lien on the Vessel or her earnings;

         (10)  promptly to pay all tolls dues and other outgoings whatsoever in
               respect of the Vessel and as and when the Mortgagee may so
               require to furnish satisfactory evidence that the wages and
               allotments and insurance and pension contributions of the Master
               and crew are being regularly paid and that all deductions from
               crew's wages in respect of any tax liability are being properly
               accounted for and that the Master has no claim for disbursements
               other than those incurred by him in the ordinary course of
               trading on the voyage then in progress;

         (11)  not without the previous consent of the Mortgagee in writing
               (which the Mortgagee shall have full liberty to withhold) to let
               the Vessel:-

               (1)   on demise charter for any period;

               (2)   by any time or consecutive voyage charter for a term which
                     exceeds or which by virtue of any optional extensions
                     therein contained is likely to exceed Thirteen (l3) months'
                     duration;

               (3)   on terms whereby more than Two (2) months' hire (or the
                     equivalent) is payable in advance; or

               (4)   below the market rate prevailing at the time when the
                     Vessel is fixed;

         (12)  (save for the Prior Mortgage in favour of the Prior Mortgagee)
               not without the previous consent in writing of the Mortgagee (and
               then only subject to such terms as the Mortgagee may impose) to
               mortgage charge or otherwise assign the Vessel or any share
               therein or to suffer the creation of any such mortgage charge or
               assignment to or in favour of any person other than the
               Mortgagee;

<PAGE>

         (13)  not without the previous consent in writing of the Mortgagee to
               sell or agree to sell or otherwise dispose of the Vessel or any
               share therein or change the flag of the Vessel;

         (14)  not to put the Vessel into the possession of any person for the
               purpose of work being done upon her in an amount exceeding or
               likely to exceed five hundred thousand United States Dollars
               (USD500,000) (or the equivalent in any other currency) unless:-

               (1)   in the case of damage repairs to the Vessel, the Mortgagee
                     is satisfied that the cost of such repairs (other than any
                     deductible) is covered by the Insurances; or

               (2)   in the case of a scheduled drydocking the Mortgagee is
                     satisfied that adequate financial provision has been made
                     for payment in respect thereof; or

               (3)   the Mortgagee is satisfied that the person into whose
                     possession the Vessel is to be delivered has agreed to
                     waive any repairer's or similar possessory lien for work
                     carried out to the Vessel by such person;

         (15)  to keep proper books of account in respect of the Vessel and her
               earnings and as and when required by the Mortgagee to make such
               books available for inspection on behalf of the Mortgagee;

         (16)  to comply with all the requirements and formalities under any
               applicable legislation of the Republic of Panama necessary to
               perfect this Mortgage as a valid and enforceable second preferred
               mortgage upon the Vessel and to furnish to the Mortgagee from
               time to time such evidence as the Mortgagee may reasonably
               request to satisfy itself with respect to the Owner's compliance
               with the provisions of this sub-clause;

<PAGE>

         (17)  to place and retain a copy of this Mortgage certified by the
               appropriate Panamanian authorities with the Vessel's papers on
               board the Vessel and any other certificates or other documents
               required by law and to cause each such certified copy and such
               papers to be brought to the attention of the master for the time
               being of the Vessel and to be exhibited on demand to any persons
               having business with the Vessel or to any representative of the
               Mortgagee; and

         (18)  to comply, or procure that the operator of the Vessel will
               comply, with the International Management Code for the Safe
               Operation of Ships and for Pollution Prevention adopted by the
               International Maritime Organisation (as the same may be amended
               from time to time) ("the ISM Code") or any replacement of the ISM
               Code and in particular, without prejudice to the generality of
               the foregoing, as and when required to do so by the ISM Code and
               at all times thereafter, (i) to hold, or procure that the
               operator of the Vessel holds, a valid Document of Compliance
               (being a document issued to a vessel operator as evidence of its
               compliance with the requirements of the ISM Code) duly issued to
               the Owner or the operator (as the case may be) pursuant to the
               ISM Code and a valid Safety Management Certificate (being a
               document issued to a vessel as evidence that the vessel operator
               and its shipboard management operate in accordance with an
               approved structured and documented system enabling the personnel
               of that vessel operator to implement effectively the safety and
               environmental protection policy of that vessel operator) duly
               issued to the Vessel pursuant to the ISM Code, (ii) to provide
               the Mortgagee with copies of any such Document of Compliance and
               Safety Management Certificate as soon as the same are issued and
               (iii) to keep, or procure that there be kept, on board the Vessel
               a copy of any such Document of Compliance and the original of any
               such Safety Management Certificate.

6.       EXPENSES

(1)      The Owner undertakes to pay to the Mortgagee on demand all moneys
         whatsoever which the Mortgagee shall or may expend be put to or become
         liable for in or about the protection maintenance or enforcement of the
         security created by this Deed and the other Security Documents or in or
         about the exercise by the Mortgagee of any of the powers vested in it
         under this Deed or under any of the other Security Documents and to pay
         interest thereon at the Default Rate from the date of demand until the
         date of actual receipt (whether before or after any relevant judgment).

<PAGE>

(2)      The Owner undertakes to pay on demand to the Mortgagee (or as it may
         direct) the amount of all investigation and legal expenses of any kind
         whatsoever stamp duties (if any) registration fees and any other
         charges incurred by the Mortgagee in connection with the preparation
         completion and registration of the Security Documents or otherwise in
         connection with the Outstanding Indebtedness and the security therefor.

7.       PROTECTION AND MAINTENANCE OF SECURITY

(1)      The Mortgagee shall without prejudice to its other rights and powers
         hereunder be entitled (but not bound) at any time and as often as may
         be necessary to take any such action as it may in its absolute
         discretion think fit for the purpose of protecting the security created
         by this Deed and the other Security Documents and each and every
         expense or liability so incurred by the Mortgagee in or about the
         protection of the security shall be repayable to it by the Owner on
         demand together with interest thereon at the Default Rate from the date
         of demand until the date of actual receipt whether before or after any
         relevant judgment.

(2)      Without prejudice to the generality of the foregoing:-

         (1)   if the provisions of clause 4.1 hereof or any of them are not
               complied with the Mortgagee shall be at liberty to effect and
               thereafter to maintain all such insurances upon the Vessel as in
               its discretion it may think fit;

         (2)   if the provisions of clause 5.1(C) and 5.1(D) hereof or any of
               them are not complied with the Mortgagee shall be at liberty to
               arrange for the carrying out of such repairs and/or surveys as it
               deems expedient or necessary; and

         (3)   if the provisions of clause 5.1(E) hereof or any of them are not
               complied with the Mortgagee shall be at liberty to pay and
               discharge all such debts, damages and liabilities as are therein
               mentioned and/or to take any such measures as it deems expedient
               or necessary for the purpose of securing the release of the
               Vessel,

<PAGE>

         and each and every expense or liability so incurred by the Mortgagee
         shall be recoverable from the Owner as provided in clause 7.1 hereof
         together with interest thereon at the Default Rate.

8.       EVENTS OF DEFAULT

(1)      Upon the happening of any of the following events the Mortgagee shall
         cease to be under any further obligation to make the Loan available and
         the Outstanding Indebtedness shall immediately become payable to the
         Mortgagee on demand:-

         (1)   the happening of any of the events of default specified in clause
               11.1 of the Loan Agreement; or

         (2)   anything is done or suffered or omitted to be done by the Owner
               which in the reasonable opinion of the Mortgagee has imperilled
               or is likely to imperil the security created by the Security
               Documents.

9.       ENFORCEMENT OF RIGHTS

(1)      Upon the Mortgagee's demanding payment of the Outstanding Indebtedness
         under clause 8 hereof interest shall accrue thereon at the Default Rate
         from the date of demand until the date of payment (as well after as
         before judgment) and the security created by this Mortgage shall be
         enforceable so that the Mortgagee shall be entitled as and when it may
         see fit (subject to the rights of the Prior Mortgagee under the Prior
         Mortgage) to put into force and exercise all the powers possessed by it
         as mortgagee of the Vessel and in particular:-

         (1)   to exercise all rights and remedies in foreclosure and otherwise
               given to mortgagees by the provisions of Article 1527 of the Code
               of Commerce and any other legislation or code affecting the same;

         (2)   to bring suit at law in equity or in admiralty as it may be
               advised to recover judgment for any and all amounts due hereunder
               and collect the same out of any and all property of the Owner
               whether covered by this Mortgage or otherwise; (1)

<PAGE>

         (3)   to take and enter into possession of the Vessel wherever the same
               may be without legal process and (if it has acted in good faith)
               without being responsible for loss or damage and the Owner or
               other person in possession forthwith upon demand of the Mortgagee
               shall surrender to the Mortgagee possession of the Vessel and the
               Mortgagee, without being responsible for loss or damage where it
               has acted in good faith may hold lay up lease charter operate or
               otherwise use the Vessel for such time and upon such terms as it
               may deem to be for its best advantage and for that purpose may
               employ such agents managers masters officers crews surveyors and
               servants as it shall think fit and may repair and reclass the
               Vessel accounting only for the net profits if any arising from
               such use and charging upon all receipts from such use or from the
               sale of the Vessel by court proceeds or pursuant to sub-clause
               (G) below all costs expenses charges damages or losses by reason
               of such use and if at any time the Mortgagee shall avail itself
               of the right herein given it to take the Vessel and shall take
               her the Mortgagee shall have the right to dock the Vessel for a
               reasonable time at any place at the cost and expense of the
               Owner;

         (4)   to require that all policies contracts and other records relating
               to the Insurances (including details of and correspondence
               concerning outstanding claims) be forthwith delivered to such
               adjusters and/or brokers and/or other insurers as the Mortgagee
               may nominate;

         (5)   to collect recover compromise and give a good discharge for all
               claims then outstanding or thereafter arising under the
               Insurances or any of them and to take over or institute (if
               necessary using the name of the Owner) all such proceedings in
               connection therewith as the Mortgagee in its absolute discretion
               thinks fit and to permit any brokers through whom collection or
               recovery is effected to charge the usual brokerage therefor;

         (6)   to discharge compound release or compromise liens and/or claims
               in respect of the Vessel which have given or may give rise to any
               charge or lien on the Vessel or which are or may be enforceable
               by proceedings against the Vessel;

<PAGE>

         (7)   without being responsible for loss or damage (if it has acted in
               good faith) sell the Vessel at any place and at such time as the
               Mortgagee may specify and in such manner and on such terms and
               conditions as the Mortgagee may deem advisable free from any
               claim by the Owner in admiralty in equity at law or by statute
               except that notice of sale will be given by publication in a
               newspaper of general circulation in the city of Panama, Republic
               of Panama, not less than twenty (20) calendar days in advance of
               the sale to satisfy the requirement of notice of sale to the
               Owner and the other registered mortgagees, if any, contained in
               Article 1527 of the Panama Code of Commerce. Such notice shall be
               necessary only in respect of the initial date of sale and should
               an adjournment of the sale be deemed necessary, a new date, time
               and place for the sale may be set by the Mortgagee at the time of
               the adjournment without need for any further notice. In the event
               that the Vessel is sold under any power contained herein the
               Owner will if and when required by the Mortgagee execute such
               form of conveyance of the Vessel as the Mortgagee may direct or
               approve; and

         (8)   to manage insure maintain and repair the Vessel and to employ
               sail or lay up the Vessel in such manner and for such period as
               the Mortgagee in its discretion deems expedient and for the
               purposes aforesaid the Mortgagee shall be entitled to do all acts
               and things incidental or conducive thereto and in particular to
               enter into such arrangements respecting the Vessel her insurance
               management maintenance repair classification and employment in
               all respects as if the Mortgagee were the owner of the Vessel and
               without being responsible for any loss thereby incurred in the
               absence of gross negligence or wilful default on the part of the
               Mortgagee,

         PROVIDED ALWAYS that upon any sale of the Vessel or any share therein
         by the Mortgagee pursuant to sub-clause (G) above the purchaser shall
         not be bound to see or enquire whether the Mortgagee's power of sale
         has arisen in the manner herein provided and the sale shall be deemed
         to be within the power of the Mortgagee and the receipt of the
         Mortgagee for the purchase money shall effectively discharge the
         purchaser who shall not be concerned with the manner of application of
         the proceeds of sale or be answerable therefor in any way.

<PAGE>

10.      APPLICATION OF MONEYS

(1)      All moneys received by the Mortgagee in respect of a sale of the Vessel
         or any share therein or otherwise pursuant to the provisions of this
         Mortgage and all moneys received and retained by the Mortgagee in
         respect of the Insurances and Requisition Compensation pursuant to this
         Mortgage shall be applied by the Mortgagee in accordance with the
         relevant provisions of clause 10 of the Loan Agreement.

11.      NO WAIVER

(1)      No delay or omission of the Mortgagee to exercise any right or power
         vested in it under the Security Documents or any of them shall impair
         such right or power or be construed as a waiver of or an acquiescence
         in any default by the Owner and no express waiver given by the
         Mortgagee in relation to any default by the Owner or breach by the
         Owner of any of its obligations under this Mortgage shall prejudice the
         right of the Mortgagee under this Mortgage arising from any subsequent
         default or breach (whether or not such subsequent default or breach is
         of a nature different from the previous default or breach) nor shall
         the giving by the Mortgagee of any consent to the doing of any act
         which by the terms of this Mortgage requires the consent of the
         Mortgagee prejudice the right of the Mortgagee to give or withhold as
         it sees fit is consent to the doing of any other similar act.

12.      POWER OF DELEGATION

(1)      The Mortgagee shall be entitled at any time and as often as may be
         expedient to delegate all or any of the powers and discretions vested
         in it by the Security Documents or any of them (including the power
         vested in it by virtue of clause 13 hereof) in such manner upon such
         terms and to such persons as the Mortgagee in its absolute discretion
         may think fit.

13.      POWER OF ATTORNEY

<PAGE>

(1)      Subject to the rights of the Prior Mortgagee under the Prior Mortgage,
         the Owner irrevocably appoints the Mortgagee as its attorney for the
         duration of the Security Period for the purpose of doing in its name
         all acts which the Owner itself could do in relation to the Vessel,
         PROVIDED HOWEVER that such power shall not be exercisable by or on
         behalf of the Mortgagee unless the security created by this Mortgage
         has become enforceable pursuant to clause 9 hereof.

(2)      The exercise of such power by or on behalf of the Mortgagee shall not
         put any person dealing with the Mortgagee upon any enquiry as to
         whether the security created by this Mortgage has become enforceable
         pursuant to clause 9 hereof nor shall such person be in any way
         affected by notice that the security has not become enforceable and the
         exercise by the Mortgagee of such power shall be conclusive evidence of
         its right to exercise the same.

14.      FURTHER ASSURANCE

(1)      The Owner further undertakes at its own expense to execute sign perfect
         do and (if required) register every such further assurance document act
         or thing as in the opinion of the Mortgagee may be necessary or
         desirable for the purpose of more effectually mortgaging and charging
         the Vessel or perfecting the security constituted by this Mortgage or
         contemplated by the other Security Documents.

15.      WAIVER OF RIGHTS AS SURETY

(1)      The rights of the Mortgagee under this Mortgage, the security
         constituted by this Mortgage and the warranties covenants obligations
         and undertakings of the Owner contained in this Mortgage and/or this
         Deed shall not in any way be discharged, impaired or otherwise affected
         by:-

         (1)   any forbearance (whether as to payment or otherwise) or any time
               or other indulgence granted to any other party to any one or more
               of the Security Documents ("Security Party") under or in
               connection with any of the Security Documents;

         (2)   any amendment or variation of any of the Security Documents;

<PAGE>

         (3)   any failure of any of the Security Documents to be legal valid
               binding and enforceable in relation to any Security Party for any
               reason whatsoever;

         (4)   the winding-up or dissolution of any Security Party;

         (5)   the release (whether in whole or in part) of, or the entering
               into of any compromise or composition with, any Security Party;
               or

         (6)   any other act, omission, thing or circumstance which would or
               might, but for this provision, operate to discharge, impair or
               otherwise affect the same.

(2)      Until the Outstanding Indebtedness has been unconditionally and
         irrevocably paid and discharged in full, the Owner shall not by virtue
         of any payment made hereunder or under this Mortgage on account of the
         Outstanding Indebtedness or by virtue of any enforcement by the
         Mortgagee of its rights under, or the security constituted by, this
         Mortgage or by virtue of any relationship between or transaction
         involving, the Owner and any Security Party:-

         (1)   exercise any rights of subrogation in relation to any rights,
               security or moneys held or received or receivable by the
               Mortgagee or any other person; or

         (2)   exercise any right of contribution from any Security Party under
               any one or more of the Security Documents; or

         (3)   exercise any right of set-off or counterclaim against any
               Security Party; or

         (4)   receive, claim or have the benefit of any payment, distribution,
               security or indemnity from any Security Party; or

         (5)   unless so directed by the Mortgagee (when the Owner will prove in
               accordance with such directions), claim as a creditor of any
               Security Party in competition with the Mortgagee

<PAGE>

         and the Owner shall hold in trust for the Mortgagee and forthwith pay
         or transfer (as appropriate) to the Mortgagee any such payment
         (including an amount equal to any such set-off), distribution or
         benefit of such security, indemnity or claim in fact received by it.

16.      AMOUNT SECURED BY MORTGAGE

(1)      A certificate submitted by the Mortgagee to the Public Registry Office
         in Panama or to any court of law or public authority as to the amount
         due or to become due from the Owner to the Mortgagee under this
         Mortgage shall in the absence of manifest error be conclusive and
         binding on the Owner for all purposes.

17.      NOTICES

(1)      All certificates notices or demands to the Owner hereunder shall be
         given in accordance with the provisions of clause 11 of the Guarantee
         and all notices to the Mortgagee hereunder shall be given in accordance
         with the relevant provisions of clause 18 of the Loan Agreement.

18.      GOVERNING LAW, SEVERABILITY, ETC.

(1)      This Mortgage shall be construed and enforceable in accordance with the
         laws of the Republic of Panama.

(2)      The Owner agrees that the Mortgagee shall have liberty but shall not be
         obliged to take any proceedings in the courts of any country to protect
         or enforce the security hereby constituted or to enforce any provisions
         of the Security Documents or to recover payment of the Outstanding
         Indebtedness and for the purpose of any proceeding for the enforcement
         of the security created by this Mortgage and/or the other Security
         Documents the Owner hereby submits to the jurisdiction of the courts of
         any country of the choice of the Mortgagee.

<PAGE>

(3)      If any provision in this Mortgage or any other of the Security
         Documents is or becomes invalid or unenforceable under any applicable
         law the provisions thereof shall in all other respects remain in full
         force and effect and the provision in question shall be ineffective to
         the extent (but only to the extent) of its nonconformity with the
         requirement of the applicable law and if it is competent to the parties
         to waive any requirements which would otherwise operate as aforesaid
         those requirements are hereby waived to the extent permitted by such
         law to the end that the Mortgage and the other Security Documents shall
         be valid binding and enforceable in accordance with their respective
         terms.

(4)      Each and every power and remedy herein given to the Mortgagee shall be
         cumulative and shall be in addition to every other power and remedy
         herein given or now or hereafter existing at law in equity admiralty or
         by statute and each and every power and remedy whether herein given or
         otherwise existing may be exercised from time to time and as often and
         in such order as may be deemed expedient by the Mortgagee and the
         exercise or the beginning of the exercise of any power or remedy shall
         not be construed to be a waiver of the right to exercise at the same
         time or thereafter any other power or remedy.

19.      MISCELLANEOUS

(1)      This Mortgage may be executed in any number of counterparts each of
         which shall be an original but such counterparts shall together
         constitute but one and the same instrument.

(2)      The English text of this Mortgage is the authentic text and in the
         event of any differences arising on translation recourse shall be had
         to the English text.

20.      RECORDING OF THIS MORTGAGE

(1)      The parties hereby confer a special power of attorney on the firm of
         lawyers named Galindo Arias & Lopez of the City of Panama in the
         Republic of Panama empowering such firm of lawyers to take all
         necessary steps to record this instrument of mortgage and the
         prohibitions contained in clauses 5.1(M) and (N) hereof and a
         certificate pursuant to clause 15 hereof in the appropriate registries
         in the City of Panama in accordance with the laws of the Republic of
         Panama with full power of substitution in respect of the special power
         of attorney herein granted.

<PAGE>

IN WITNESS whereof this Mortgage has been executed the day and year first above
written.

SIGNED SEALED and DELIVERED         )
as a DEED                           )
by ALMIRA ENTERPRISES, INC.         )
acting by                           )
      Adam Leon Shire               )       /s/ Adam Shire
its duly appointed attorney-        )
in-fact                             )
in the presence of:-                )
Richard J. Seville
/s/ Richard J. Seville

<PAGE>

                             ACCEPTANCE OF MORTGAGE

The Undersigned Mortgagee NORDBANKEN AB (PUBL) a corporation organised and
subsisting under the laws of Sweden DOES HEREBY ACCEPT the foregoing Mortgage
executed in its favour by Almira Enterprises, Inc. a corporation incorporated
according to the laws of Panama on the 21st day of June two thousand covering
the Panamanian flag Vessel m.v. "ENCHANTED ISLE" and does hereby accept the said
Mortgage in all respects AND AGREES to all terms and conditions of the said
Mortgage

Dated the 21st day of June two thousand        .

SIGNED SEALED and DELIVERED         )
as a DEED                           )
by NORDBANKEN AB (PUBL)             )
acting by                           )
Gavin Le Fleming Sheperd            )      /s/ Gavin Le Fleming Shepherd
its duly appointed                  )
attorney-in-fact                    )
in the presence of:-                )
Richard J. Seville
/s/ Richard J. Seville

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