Document:

SCHEDULE 2.8

            Matters Relating to the Guarantee and Exchange Agreement

                           Article 1 - INTERPRETATION
                          -----------------------------

1.1  Definitions

In this  Schedule  2.8,  the  following  expressions  shall  have the  following
meanings,  namely:

(a)  "Common   Shares"   means  common  shares  in  the  capital  stock  of  the
     Corporation, as the same are constituted on the Closing Date;

(b)  "Conversion Price" means $1.80 (U.S.) per Common Share;

(c)  "Event of Default" has any meaning  ascribed thereto in Section 3.5 of this
     Schedule 2.8;

(d)  "Interest"  means all amounts of Interest owed or owing on any indebtedness
     owed   by  the   Secured   Corporations   pursuant   to  the   Indebtedness
     Documentation;

(e)  "Maturity  Date" means the first  anniversary of the Closing Date and being
     the date  upon  which  all  amounts  owing to the  Vendor  pursuant  to the
     Indebtedness Documentation are due and payable to the Vendor by the Secured
     Corporations ;

(f)  "Principal"  means the aggregate of  $12,000,000  in lawful money of United
     States of America owed by the Secured  Corporations  to the Vendor pursuant
     to the Indebtedness Documentation;

(g)  "Secured  Assets"  means any of the  assets in  respect of which the Vendor
     shall receive  security  over for the  obligations  under the  Indebtedness
     Documentation  and the  obligations  of the  Corporation  and the Purchaser
     under  the  Guarantee  and  Exchange   Agreement  and  the  Share  Purchase
     Agreement;

(h)  "Secured  Corporations" means Windjammer  Holdings Limited,  Elgin Holdings
     Limited, Windjammer Landing Company St. Lucia (1992) Limited and Windjammer
     Landing Company Limited; and

(i)  "Share Purchase  Agreement"  means that Share and Asset Purchase  Agreement
     among the Vendor,  the  Purchaser  and the  Corporation,  and to which this
     Schedule 2.8 is attached.

1.2  Capitalized  Terms.  Capitalized  terms used in this Schedule 2.8 which are
     not defined above shall have the respective  meanings attributed thereto in
     the Share Purchase Agreement.
<PAGE>

                         Article 2- EXCHANGE/CONVERSION
                        --------------------------------

2.1  Exchange by the Vendor
     ----------------------
     At any time prior to the Maturity Date and from time to time, at the option
     of the Vendor,  the Vendor shall have the right to require the  Corporation
     to pay and satisfy any portion of the  Principal  and Interest  owing under
     the  Indebtedness  Documentation  by issuing to the Vendor Common Shares on
     the basis of one (1) Common Share for every $1.80 of Principal and Interest
     to be repaid.  Should the Vendor  desire to have all or any  portion of the
     Principal  or Interest  exchanged  for Common  Shares,  the Vendor shall be
     required to: deliver to the Corporation at its principal  offices at [*], a
     completed exchange notice (an "Exchange  Notice"),  in the form of exchange
     notice attached hereto as Schedule A, duly executed by the Vendor;  and, an
     acknowledgement to the Corporation to the effect that the obligations owing
     under the Indebtedness Documentation are reduced by the amount of Principal
     and  Interest  exchanged  for Common  Shares in the manner  aforesaid.  The
     Vendor shall be deemed to become the holder of the Common  Shares which are
     the subject of an  Exchange  Notice,  on the date on which a duly  executed
     Exchange  Notice is received by the  Corporation  at the address  specified
     above,  provided  such date is  Business  Day (the  "Exchange  Date").  The
     Corporation shall, as soon as practical thereafter (but in any event within
     three (3)  Business  Days),  deliver  to the Vendor a  certificate  for the
     Common  Shares which the Vendor is entitled to receive in  accordance  with
     Article 2 of this Schedule 2.8.

2.2  Conversion by the Corporation
     -----------------------------
     Provided  the  conditions  set out  below in this  Section  2.2  have  been
     satisfied,  the Corporation  shall,  upon written notice to be received ten
     (10) days prior to the Maturity Date,  have the right to require the Vendor
     to convert any part of the Principal and Interest into Common Shares on the
     basis of one (1) Common Share for every $1.80 of Principal  and Interest to
     be  converted.  Any amount of the  Principal  and Interest not so converted
     shall be payable  upon the  Maturity  Date.  The  conditions  which must be
     satisfied  prior to the  Corporation  being entitled to exercise its rights
     under this Section 2.2 are as follows:

     (a)  during the period  from the  Closing  Date to the  Maturity  Date (the
          "Condition Period"), the closing bid price of the Corporation's Common
          Shares,  as published on the National  Association of Security Dealers
          Automated  Securities  Systems  ("NASDASS") has for a period of thirty
          (30)  consecutive  trading  days been equal to or  greater  than $3.00
          (U.S.) per share;

     (b)  the arithmetic  weighted average closing price of the Common Shares as
          published on NASDASS for the  forty-five  (45) day period  immediately
          prior to the Maturity Date is not less than $1.80 (U.S.) per share;

     (c)  all Common  Shares  issuable on the  conversion  of the  Principal and
          Interest shall have been registered  pursuant to the Securities Act of
          1933, as provided for in Section 3.1 hereof, and will, on issuance, be
          freely  tradable  in the United  States of America  and all  necessary
          regulatory  authorizations  and approvals  with respect  thereto shall
          have been obtained;

     (d)  at no time during the  Condition  Period  will the Common  Shares have
          been  delisted or removed from trading from  NASDASS,  nor shall there
          have been any other  regulatory  orders made  against the  Corporation
          which would have a negative  impact on the ability for a liquid market
          to exist with respect to the Common Shares; and

     (e)  at all times during the Condition Period and at the Maturity Date, the
          Corporation shall have owned and continues to own, beneficially and of
          record,  at least ninety percent (90%) of each class of the issued and
          outstanding  shares  in  the  capital  stock  of  the  Purchaser  and,
          indirectly,  through the Purchaser,  all of the issued and outstanding
          shares of the Secured  Corporations  and no agreements or  commitments
          relating to the alienation or disposition of such interests shall have
          been entered into.

     The  Vendor  shall be deemed to become a holder of Common  Shares  issuable
     upon a  conversion  pursuant to the  provisions  of this Section 2.2 on the
     Maturity  Date.  Any  of  the  Principal  and  Interest  not  converted  in
     accordance  with the  foregoing  shall be payable  in full on the  Maturity
     Date.  Following any  conversion of all or any portion of the Principal and
     Interest in accordance  with the terms of this Section 2.2 and the payment,
     in full,  of any of the  remaining  Principal  and  Interest  which  may be
     payable on the Maturity  Date,  the Vendor shall be required to execute all
     such  documentation  as may be  reasonably  necessary  to reflect  the full
     payment and satisfaction of the Principal and Interest, although the timing
     of the  execution  of any such  documentation  shall in no way  effect  the
     determination  of the date upon  which the  Vendor  becomes  the  holder of
     Common  Shares as provided for above.  As soon as  practicable  following a
     conversion  contemplated by this Section 2.2, but in any event within three
     (3)  Business  Days,  the  Corporation   shall  deliver  to  the  Vendor  a
     certificate for the Common Shares issuable upon the conversion  referred to
     in this Section 2.2.

2.3  Payment of Taxes
     ----------------
     The  Corporation  shall not be required to pay any tax which may be payable
     in respect of any  transfer  involved  in the issue and  delivery of Common
     Shares  or  other   securities  or  property  any  exchange  or  conversion
     contemplated by this Article 2, in a name other than that of the Vendor (or
     in street  name),  and the  Corporation  shall not be  required to issue or
     deliver any such shares or other  securities  or property  unless and until
     the person or persons  (other  than the  Vendor or the  custodian  in whose
     street name such shares are to be held for the Vendor's account) requesting
     the issuance  thereof shall have  established  to the  satisfaction  of the
     Corporation, acting reasonably, that such tax has been paid.
<PAGE>

2.4  Anti-dilution
     -------------
     If at any time after the Closing Date the  Corporation  shall subdivide its
     Common  Shares  into a greater  number of Common  Shares or shall  issue in
     exchange for such Common Shares a greater number of Common Shares,  then in
     such case from and after the effective date of such subdivision or exchange
     of Common Shares the  exchange/conversion  rate referred to in Sections 2.1
     and 2.2 above  shall be  increased  in  proportion  to the  increase in the
     number of  outstanding  Common Shares  resulting  from such  subdivision or
     exchange at any time after the date hereof. If the Corporation shall reduce
     the  number of Common  Shares by  combination  or  consolidation  of Common
     Shares or shall  issue in  exchange  for its  outstanding  Common  Shares a
     smaller  number  of  Common  Shares,  then in each  case from and after the
     effective date of such combination, consolidation or exchange or shares the
     exchange/conversion rate referred to in Sections 2.1 and 2.2 above shall be
     decreased in proportion to the decrease in the number of outstanding Common
     Shares resulting from such combination consolidation or exchange of shares.
     The  adjustments  referred to this  Section 2.4 shall be made each time the
     Corporation   undertakes   a   sub-division,    exchange   combination   or
     consolidation of its Common Shares.

2.5  Corporate Changes
     -----------------
     If the Corporation shall be a party to: any reclassification of its shares;
     any capital reorganization; or any consolidation, merger or amalgamation of
     the  Corporation  with or into any  other  corporation  or body  corporate,
     including  by  way  of  sale,  whereby  all  or  substantially  all  of the
     Corporation's undertaking and assets would become the property of any other
     corporation, any of which is herein called a "Capital Reorganization",  the
     Vendor, provided it has not exercised the right of exchange provided for in
     Section  2.1  above   prior  to  the   effective   date  of  such   Capital
     Reorganization,   shall  be  entitled  to  receive,  upon  an  exchange  or
     conversion  pursuant to Sections 2.1 or 2.2 above,  as  applicable,  at any
     time on the effective date of such Capital Reorganization or thereafter, in
     lieu of the number of Common  Shares to which it was  theretofore  entitled
     upon  exchange,  the  aggregate  number of shares  or other  securities  or
     property of the  Corporation  resulting  from or acquired under the Capital
     Reorganization  that the Vendor  would have been  entitled  to receive as a
     result of such Capital Reorganization as if, on the effective date thereof,
     the Vendor had been the registered holder of the number of Common Shares to
     which it was  theretofore  entitled upon an exchange  under this Article 2,
     with the appropriate adjustments to the Conversion Price. Nothing contained
     in this Section 2.5 shall be construed as providing  the  Corporation  with
     the ability to undertake a Capital Reorganization without the prior written
     consent of the Vendor. Furthermore, in the event the Vendor consents to one
     or more  Capital  Reorganizations,  the  adjustments  provided  for in this
     Section 2.5 shall be made each time the  Corporation  undertakes  a Capital
     Reorganization.
<PAGE>

                     Article 3 - COVENANTS AND OTHER MATTERS
                     ----------------------------------------

3.1  Registration Statement
     ----------------------
     Forthwith following  execution of the Share Purchase Agreement,  but in any
     event  within  forty-five  (45)  days  of the  date of the  Share  Purchase
     Agreement,  the  Corporation  shall,  at its expense,  cause a registration
     statement to be filed  pursuant to the  Securities  Act of 1933 to register
     all of the Common  Shares  issuable  pursuant  to the terms of Article 2 of
     this Schedule 2.8 and the terms of the Guarantee and Exchange Agreement.

3.2  Nature of Guarantee
     -------------------
     The Guarantee and Exchange  Agreement will provide that the Corporation and
     the Purchaser absolutely, unconditionally,  jointly and severally guarantee
     to the Vendor the punctual  payment in full of all Principal,  Interest and
     costs owed to the Vendor under the Indebtedness  Documentation  and the due
     performance  and  observance by the respective  Secured  Corporation of all
     terms and conditions contained in the Indebtedness  Documentation,  and the
     Corporation and the Purchaser shall,  jointly and severally,  indemnify the
     Vendor  against any loss that may result to the Vendor  from the  Principal
     and Interest owing under the Indebtedness Documentation not being repaid to
     the Vendor in accordance with the terms of the  Indebtedness  Documentation
     and the Share Purchase  Agreement.  Furthermore,  the  Corporation  and the
     Purchaser shall be jointly and severally liable as principal  debtors until
     all  covenants  contained  in  the  Indebtedness  Documentation  have  been
     performed, despite any release in whole or in part of any security given in
     respect of the Indebtedness  Documentation (or as contemplated by the Share
     Purchase  Agreement)  or  the  Guarantee  and  Exchange  Agreement,  or the
     granting of time or other indulgences to any of the Secured Corporation who
     are a party to the  Indebtedness  Documentation,  and despite any change in
     the name, objects or members of the Secured  Corporations or the Vendor, or
     the  amalgamation  of  the  Secured  Corporations,   the  Corporation,  the
     Purchaser or the Vendor with any other corporation.  The Vendor shall be at
     liberty to act as though the  Corporation  or the Purchaser  were liable as
     principal debtors under the Indebtedness  Documentation and the Corporation
     and the  Purchaser  hereby  waive any and all  rights  they might have as a
     surety, whether at law, in equity or otherwise,  that are inconsistent with
     the foregoing.  In addition,  the Corporation and the Purchaser shall waive
     any demand and any right of  subrogation  to any of the  Vendor's  security
     granted  pursuant to the  Indebtedness  Documentation  or any other  rights
     against   the   Secured   Corporations   pursuant   to   the   Indebtedness
     Documentation, unless and until the Vendor is paid in full all amounts owed
     pursuant to the  Indebtedness  Documentation,  and the  Corporation and the
     Purchaser  shall further waive any defence  available to them as guarantors
     at law or in equity. The Vendor shall not be bound to exhaust its recourses
     against  the  respective  Secured  Corporations  or other  persons,  nor to
     realize on any security  held pursuant to the  Indebtedness  Documentation,
     nor notify either the  Corporation  or the Purchaser of any act or event of
     default  under  the  Indebtedness   Documentation,   before  requiring  the
     Corporation  and/or the  Purchaser to perform their  obligations  under the
     Guarantee and Exchange Agreement.
<PAGE>

3.3  Additional Covenants of the Corporation and the Purchaser
     ---------------------------------------------------------
     So  long  as any  indebtedness  is  owing  to the  Vendor  pursuant  to the
     Indebtedness  Documentation  and until all moneys owing thereunder are paid
     in full:

(a)  To Pay Principal and Interest:
     -----------------------------
     The Corporation and the Purchaser will duly and punctually cause to be paid
     the Principal and Interest in accordance  with the terms and  conditions of
     the Indebtedness  Documentation,  the Guarantee and Exchange  Agreement and
     the Share Purchase Agreement.

(b)  To Pay Costs:
     ------------
     The Corporation and the Purchaser,  jointly and severally, agree to pay all
     reasonable costs, charges and expenses of or incurred by the Vendor: (i) in
     any proceedings taken in enforcing the remedies provided for herein, in the
     Share  Purchase  Agreement  or  otherwise  in relation to the  Indebtedness
     Documentation;  and,  (ii)  of  any  receiver  with  respect  to,  and  all
     expenditures  made by the Vendor or any  receiver  in the course of,  doing
     anything  permitted  to be done by the  Vendor or such  receiver.  All such
     costs  and  expenses  and  other  monies  payable  under  the  Indebtedness
     Documentation, together with interest thereon at the rate applicable to the
     Principal,  shall be payable on demand.  Without limiting the generality of
     the  foregoing,  such costs  shall  extend to and  include  any legal costs
     reasonably  incurred  by or on behalf of the Vendor or  receiver as between
     solicitor and his own client.

(c)  To Pay Certain Debts:
     --------------------
     The Corporation and the Purchaser  shall  punctually pay and discharge,  or
     cause to be paid and discharged, every obligation and the failure to pay or
     discharge  which could  result in any lien or charge or right of  distress,
     forfeiture,  termination or sale or any other remedy being enforced against
     the Secured Assets and provide to the Vendor, when requested,  satisfactory
     evidence  of  such  payment  and  discharge,  but the  Corporation  and the
     Purchaser  may, on giving the Vendor such  security  (if any) as the Vendor
     may  require in its  discretion,  refrain  from paying or  discharging  any
     obligation the liability for which is being contested in good faith.

<PAGE>

(d)  To Maintain Corporate Existence and Security:
     --------------------------------------------
     The  Corporation and the Purchaser shall each, and shall together cause and
     ensure that each of the Secured  Corporations:

(i)  maintain  its  corporate  existence  and  not be a party  to any  Corporate
     Reorganization;

(ii) diligently preserve all its material rights, licences,  powers, privileges,
     franchises and goodwill;

(iii)observe and perform all material  obligations and substantially comply with
     all  conditions  under real property  leases,  material  equipment  leases,
     licences and other agreements to which it is a party;

(iv) carry on and conduct its business in a proper and efficient manner;

(v)  keep  proper  books  of  account  with  correct  entries  of  all  material
     transactions in relation to its business;

(vi) observe and conform to all  requirements of law and of any  governmental or
     municipal  authority material to the carrying on by each such entity of its
     business,  the  breach of which  could  reasonably  be  expected  to have a
     material adverse effect on the interests of the Vendor;

(vii)subject to normal  wear and tear,  repair and keep in repair and good order
     and condition all property comprising the Secured Assets;

(viii) immediately  notify the Vendor in writing of any proposed  change of name
     of such entity or of such entity's chief place of business;

(ix) keep the Vendor  informed  in writing  as to the  location  of the books of
     account and other records of each such entity;

(x)  pay all taxes, rates,  government fees and dues levied, assessed or imposed
     upon it in an amount exceeding  $25,000 as and when the same become due and
     payable  save and  except  where it  contests  in good  faith the  validity
     thereof by proper legal  proceedings  and for which  provision  for payment
     adequate in the reasonable opinion of the Vendor has been made;

(xi) forthwith  notify  the  Vendor  of any  default  (or  event,  condition  or
     occurrence  which with the giving of notice  and/or the lapse of time would
     constitute  a default)  in  connection  with any  individual  or  aggregate
     indebtedness or guarantee of such entity in an amount exceeding (A) $25,000
     with respect to any of the Secured Corporations and the Purchaser;  and (B)
     $250,000 with respect to the Corporation;
<PAGE>

(xii)advise the Vendor  forthwith  upon becoming  aware of any default under the
     Indebtedness  Documentation,  the  Guarantee  and Exchange  Agreement,  any
     security or agreements given thereunder or the Share Purchase Agreement and
     deliver to the Vendor within three (3) days following request a certificate
     in  form  and  substance  satisfactory  to  the  Vendor  signed  by a  duly
     authorized  signatory  certifying  that no such default has occurred or, if
     such is not the case,  specifying  all such  defaults  and their nature and
     status;

(xiii)  promptly  cure or cause to be cured  any  defects  in the  execution  or
     delivery  of  any   instrument   and  any   defects  in  the   validity  or
     enforceability  of any security given in connection  with the  Indebtedness
     Documentation  and/or  the  Guarantee  and  Exchange  Agreement  and at its
     expense duly execute and deliver or cause to be duly executed and delivered
     all documents as may be necessary or desirable for such purposes; and

(xiv)at its cost and expense,  upon the request of the Vendor,  duly execute and
     deliver,  or cause to be duly  executed and  delivered,  to the Vendor such
     documents  and do or  cause to be done  such  acts as may be  necessary  or
     desirable in the reasonable opinion of the Vendor to carry out the purposes
     of the Indebtedness Documentation, the Guarantee and Exchange Agreement and
     the security given in respect thereof.

(e)  Interests in Secured Corporations:
     ---------------------------------
     The Corporation  shall not sell,  transfer,  assign,  pledge,  hypothecate,
     secure or  otherwise  alienate  in any manner any of its  interests  in the
     Purchaser  as at the  Closing  Date,  other  than as  contemplated  in this
     Schedule 2.8, and the Purchaser shall not sell, transfer,  assign,  pledge,
     hypothecate,  secure or  otherwise  alienate  in any  manner  its direct or
     indirect  interests in any of the Secured  Corporations or their respective
     assets, including the Secured Assets.

(f)  Notice of Litigation and Damage:
     -------------------------------
     Each of the  Corporation  and the  Purchaser  hereby agree to promptly give
     written notice to the Vendor of: (i) all claims or  proceedings  pending or
     threatened  against  either the  Corporation,  the  Purchaser,  the Secured
     Corporations  or their  affiliates  and which  individually  or aggregately
     would reasonably be expected to give rise to uninsured  liability in excess
     of (A)  $25,000  with  respect to any of the Secured  Corporations  and the
     Purchaser and; (B) $100,000 with respect to the Corporation, or which would
     reasonably be expected to have a material adverse effect on the business or
     operations  of  any  of  the  Corporation,   the  Purchaser,   the  Secured
     Corporations  or  their  affiliates;  and  (ii)  all  damage  to or loss or
     destruction  of  any  property  relating  to  the  business  of  any of the
     Purchaser and the Secured  Corporations  which  individually or aggregately
     would  reasonably be expected to give rise to an insurance  claim in excess
     of  $25,000;  and will supply the Vendor  with all  information  reasonably
     requested in respect of any such claim.
<PAGE>

(g)  Compliance:
     -----------
     Each of the Corporation  and the Purchaser  hereby agree to strictly comply
     with every covenant and undertaking  governing the relationship between the
     Corporation,  the  Purchaser and the Vendor as the same may be amended from
     time to time and will,  forthwith upon becoming  aware of same,  advise the
     Vendor of any non-compliance with such covenants and undertakings.

(h)  Access:
     ------
     Each of the Corporation and the Purchaser  hereby permit the Vendor and its
     respective  agents,  employees and  authorized  representatives  to inspect
     either the  Corporation's,  the  Purchaser's  or the Secured  Corporations'
     premises  from time to time and in this  regard  the  Vendor (or any person
     designated by the Vendor in writing) shall have the right,  upon reasonable
     notice to and during  normal  business  hours of such entities to enter and
     have  free  access  to visit  and  inspect  any of the  properties  of such
     entities,  to examine  its  corporate  books and  financial  records and to
     discuss  with the  officers of any such entity its  affairs,  finances  and
     accounts as often as may be reasonably  required,  but in any event no more
     than  once a month,  provided  that  until  the  occurrence  of an Event of
     Default  (as  defined  before) any  information  so obtained  shall be kept
     strictly  confidential and shall not be disclosed to any person  whomsoever
     by the  Vendor,  save as required  by the Vendor in  exercising  its rights
     under the Indebtedness Documentation, the Guarantees and Exchange Agreement
     and any security  given in respect  thereof or save as to its employees and
     professional advisors upon the same terms as to confidentiality.

(i)  Distributions on Capital Stock:
     ------------------------------
     So  long as any  obligation  remains  outstanding  under  the  Indebtedness
     Documentation,  neither  the  Corporation,  the  Purchaser  nor  any of the
     Secured Corporations shall (without the Vendor's prior written consent):

     (i)  pay,  declare or set apart for such  payment,  any  dividend  or other
          distribution (whether in cash, property or other securities) on shares
          of its capital stock; or
<PAGE>

     (ii) directly  or  indirectly  or  through  any  subsidiary  make any other
          payment or distribution in respect of its capital stock.

(j)  Borrowings:
     ----------
     So long as either the  Corporation  or the  Purchaser  have any  obligation
     under the Guarantee and Exchange Agreement or any obligation is outstanding
     under the Indebtedness Documentation,  none of the Purchaser or the Secured
     Corporations  shall,  without the Vendor's prior written  consent,  create,
     incur,  assume or suffer to exist any liability for borrowed  money,  other
     than:  (i)  borrowing  in  existence or committed to on the date hereof and
     which the Vendor has been  informed  in writing  prior to the date  hereof;
     (ii)  indebtedness  to trade  creditors  incurred in the ordinary course of
     business;  and,  (iii)  the  proceeds  of which  shall be used to repay the
     obligations under the Indebtedness Documentation in full.

(k)  Liens:
     -----
     The Corporation and the Purchaser will use their respective best efforts to
     prevent  any lien being  filed or  otherwise  asserted  against any real or
     personal property of the Purchaser or the Secured Corporations or otherwise
     comprising  a part of the  Secured  Assets  and  will  promptly  cause  the
     discharge  of  same  in the  case  of any  filing  of  claim  for  lien  or
     proceedings  for the  enforcement  thereof;  provided,  however,  that  the
     Corporation or the Purchaser  shall have the right to contest in good faith
     and with  reasonable  diligence the validity of any such lien or claim upon
     furnishing  such  security  or  indemnities  as the Vendor  may  reasonably
     require.

(l)  Notice of Material Change or Default:
     ------------------------------------
     The  Corporation  and the Purchaser shall promptly notify the Vendor if any
     one of the  Corporation,  the  Purchaser or the Secured  Corporations:

     (i)  receives  notice  of  any  violation  or  potential  violation  of any
          environmental  or health laws or  environmental  orders which may have
          occurred or been  committed or is about to occur or be  committed  and
          which has a material adverse effect on the business or property of the
          Corporation, the Purchaser or the Secured Corporations;

     (ii) receives notice that any administrative or judicial complaint or order
          has been issued or filed or is about to be issued or filed against the
          Corporation,   the  Purchaser  or  the  Secured  Corporations  or  its
          representatives  alleging  violations of any  environmental  or health
          laws or environmental  orders or requiring the taking of any action in
          connection  with any  hazardous  substance  and which  has a  material
          adverse  effect on the  business or property of the  Corporation,  the
          Purchaser or the Secured Corporations;
<PAGE>

     (iii)learns of the  enactment  of any  environmental  or health laws or the
          issuance  of  any  environmental  orders  which  would  reasonably  be
          expected to have a material adverse effect on the business or property
          of the Corporation,  the Purchaser or the Secured  Corporations;

     (iv) except  for any  hazardous  substances  used by the  Corporation,  the
          Purchaser  or the  Secured  Corporations  in the  ordinary  course  of
          business,  knows of or suspects that any hazardous  substance has been
          brought  onto  any  part  of  the  property  of the  Corporation,  the
          Purchaser  or the  Secured  Corporations  or that there is any actual,
          threatened or potential  release of any hazardous  substance on, from,
          in or under any part of the property of the Corporation, the Purchaser
          or the Secured Corporations; or

     (v)  defaults  in  the  performance  of  any  covenants  contained  in  the
          Indebtedness Documentation,  the Guarantee and Exchange Agreement, any
          Security granted in respect thereof and the Share Purchase Agreement.

(m)  Books and Records:
     -----------------
     The Corporation,  the Purchaser and the Secured  Corporations will maintain
     accounting  systems  and books of  account  in  accordance  with  generally
     accepted accounting principles and practices.

3.4  Security
     --------
     The obligations of the Purchaser under the Guarantee and Exchange Agreement
     with  respect  to  its  guarantee  of  the   obligations   of  the  Secured
     Corporations under the Indebtedness  Documentation  shall be secured by all
     of the assets of the  Purchaser,  including  the  Purchased  Shares and the
     Purchased  Assets,  on a basis which is  satisfactory  to the Vendor in its
     discretion, all as provided for in the Share Purchase Agreement.

3.5  Defaults
     --------
     The Corporation and the Purchaser agree that the Principal and Interest and
     all  other  moneys  owing  under  the  Indebtedness  Documentation  and the
     Guarantee and Exchange Agreement shall become  immediately  payable and any
     security in connection therewith shall become enforceable in each and every
     of the  events  following,  each of which  shall be  deemed  an  "Event  of
     Default"  and  agree  to  execute  or  cause  to be  executed  any  and all
     instruments  as the Vendor may deem necessary to reflect same:
<PAGE>

(a)  Payment:
     -------

     if any of the  Secured  Corporations  makes a  default  in  payment  of the
     Principal or Interest owing under the Indebtedness  Documentation or either
     the  Corporation  or the Purchaser  makes a default in payment of any other
     indebtedness or liability of either of them to the Vendor when due;

(b)  Performance of Covenants:
     ------------------------
     if either the Corporation, the Purchaser or any of the Secured Corporations
     makes  default  in  the  observance  or  performance  of  any  covenant  or
     undertaking  heretofore  or  hereafter  given by any of them to the  Vendor
     whether  contained in the  Indebtedness  Documentation,  the  Guarantee and
     Exchange  Agreement,  the Share Purchase  Agreement or otherwise and, after
     notice has been given to the defaulting party specifying such default,  the
     defaulting party fails to make good such default within a period of fifteen
     (15) days;

(c)  Ownership Structure:
     -------------------
     if the ownership  structure of the Purchaser and the Secured  Corporations,
     in  effect  immediately   following  the  completion  of  the  transactions
     contemplated  by the  Share  Purchase  Agreement  changes  in  any  regard.
     Notwithstanding  the foregoing,  the Corporation  shall be allowed to enter
     into transactions which have the effect of reducing its ownership interests
     in the Purchaser to not less than ninety percent (90%) of each class of the
     issued  and  outstanding  shares  in the  capital  stock of the  Purchaser,
     without  same  constituting  an Event of  Default,  provided  that any such
     transaction(s) would not otherwise constitute an Event of Default;

(d)  Winding Up:
     ----------
     if an order is made or an effective resolution passed for the winding-up or
     liquidation  of the  Corporation,  the  Purchaser  or  any  of the  Secured
     Corporations,  or  if a  petition  is  filed  for  the  winding-up  of  the
     Corporation,  the  Purchaser  or any of the Secured  Corporations  and such
     petition is not stayed, withdrawn or dismissed within thirty (30) days;

(e)  Insolvency:
     ----------
     if the  Corporation,  the  Purchaser  or any  of the  Secured  Corporations
     becomes  insolvent  within the  meaning  of the  bankruptcy  or  insolvency
     legislation applicable to any one of them;

<PAGE>

(f)  Bankruptcy or Receivership:
     --------------------------
     if a  bankruptcy  petition  is  filed  or  presented  against  any  of  the
     Corporation,  the  Purchaser  or  the  Secured  Corporations;   or  if  any
     proceedings  with respect to the  Corporation  the Purchaser or the Secured
     Corporations are commenced under the legislation  providing for arrangement
     with creditors or otherwise providing  protection for the benefit of any of
     the  Corporation,  the  Purchaser  or the  Secured  Corporations;  or if an
     execution,  sequestration,  or  any  other  process  of any  court  becomes
     enforceable  against any of the  Corporation,  the Purchaser or the Secured
     Corporations  or if a distress  or  analogous  process  is levied  upon the
     property  of  any  of  the  Corporation,   the  Purchaser  or  the  Secured
     Corporations  or any part thereof;  unless in any such case such  petition,
     proceeding, or process is stayed,  withdrawn,  dismissed or vacated, as the
     case may be, within ten (10) days;

(g)  Cessation of Business:
     ---------------------
     if any of the Corporation, the Purchaser or the Secured Corporations ceases
     or  threatens  to  cease  to  carry  on  its  business  or if  any  of  the
     Corporation, the Purchaser or the Secured Corporations commits or threatens
     to commit any act of bankruptcy;

(h)  Other Events of Default:
     -----------------------
     Each of the  following  events  shall also  constitute  an Event of Default
     hereunder:

     (i)  if any receiver,  administrator or manager of the property,  assets or
          undertaking  of any of the  Corporation,  the Purchaser or the Secured
          Corporations  or a substantial  part thereof is appointed  pursuant to
          the terms of any trust deed,  trust  indenture,  debenture  or similar
          instrument or by or under any judgment or order of any court;

     (ii) if any of the Corporation,  the Purchaser or the Secured  Corporations
          materially  changes the nature of its business  without the consent of
          the Vendor;

     (iii)if any balance sheet or other financial  statement  provided by any of
          the  Corporation,  the  Purchaser or the Secured  Corporations  to the
          Vendor is intentionally false or misleading in any material respect;

     (iv) if any of the Corporation,  the Purchaser or the Secured  Corporations
          declares any dividends on its shares; or

     (v)  if any  representation  or  warranty  made by the  Corporation  or the
          Purchaser in any instrument or in any certificate, statement or report
          is  found  to be  false  or  incorrect  in any  way so as to  make  it
          materially misleading when made or when deemed to have been made.
<PAGE>

3.6  Waiver of Default
     -----------------
     The Vendor may waive any breach by the  Corporation or the Purchaser of any
     of the  provisions  contained in the  Guarantee  and Exchange  Agreement or
     otherwise  or any  default  by the  Corporation  or  the  Purchaser  in the
     observance  or  performance  of any covenant or condition to be observed or
     performed by the Corporation or the Purchaser;  provided always that no act
     or omission by the Vendor in the  premises  shall  extend to or be taken in
     any manner  whatsoever  to affect any  subsequent  breach or default or the
     rights resulting therefrom.

3.7  Remedies Upon Default
     ---------------------
     Upon the occurrence of an Event of Default,  the Vendor may exercise any or
     all of its rights and remedies  under the Guarantee and Exchange  Agreement
     or otherwise  and all other rights and remedies  available to the Vendor in
     law or equity including, without limitation:

     (a)  the Vendor may commence such  litigation or proceedings as it may deem
          expedient,  all without any additional notice,  presentation,  demand,
          protest or notice except as may be required by applicable law, or

     (b)  take such steps as it determines advisable to enforce its rights under
          or pursuant to any security granted in connection with the obligations
          under the  Indebtedness  Documentation,  the  Guarantee  and  Exchange
          Agreement or otherwise,  including  entering into possession of any of
          the property or assets so secured, or any other action,  notice of all
          of which is hereby expressly waived to the fullest extent permitted by
          applicable law by the Corporation and the Purchaser.

     The rights and  remedies of the Vendor  under the  Guarantee  and  Exchange
     Agreement  shall  be  cumulative  and  shall be in  addition  to and not in
     substitution  of any other  rights or  remedies  provided  by law.  Nothing
     contained in the  Indebtedness  Documentation,  the  Guarantee and Exchange
     Agreement or in any loan or security documents now or hereafter held by the
     Vendor   with   respect   to  the   obligations   under  the   Indebtedness
     Documentation,  nor any act or omission of the Vendor with  respect to such
     documents,  shall in any way  prejudice or affect its rights,  remedies and
     powers with respect to any other documents.

<PAGE>

                                  SCHEDULE "A"
                                 to Schedule 2.8

                                 EXCHANGE NOTICE

TO:  THE BAUER PARTNERSHIP, INC. ("the Corporation")

     _________The  undersigned  herby  exercises  the right to exchange $ of the
-----   Principal   and  $  of  the   Interest   obligations   owing  to  it  by
-----------------------------------
---------------------------------------------------------   ,  pursuant  to  the
terms  of  the  Guarantee  and  Exchange   Agreement   entered  into  among  the
undersigned,  the --- Corporation and the Purchaser (the "Guarantee and Exchange
Agreement") for common shares (the "Common  Shares") in the capital stock of the
Corporation.  All capitalized  terms used herein and not otherwise defined shall
have the respective  meanings  attributed  thereto in the Guarantee and Exchange
Agreement. DATED this day of , .

                                           -------------------------------------
                                           (Signature of Holder)
                                           Address of Holder:

Please have the aforementioned Common Shares registered as follows:

Name:
Address:

This Exchange  Notice must be signed and  surrendered to the  Corporation as its
offices at [[X]].LOAN AGREEMENT

     LOAN AGREEMENT, dated as of March__, 2002 (this "Agreement"),  by and among
The Bauer  Partnership  Inc.,  a Nevada  corporation  with an address at 8 Queen
Street,  Mayfair,  London  W1J  5PD,  United  Kingdom  (the  "Borrower"),  Ocean
Strategic Holdings Ltd., a Guernsey  corporation with its administrative  office
at 11 Bath St., St.  Helier JE4 OYZ Jersey  ("Ocean"),  and Turbo  International
Ltd., a corporation  organized under the laws of the Bahamas with its registered
offices at Shirley House, 50 Shirley Street,  P.O. Box N-7755,  Nassau,  Bahamas
("Turbo").  Ocean and Turbo are each also individually referred to herein as the
"Lender" and collectively as the "Lenders."

         WHEREAS, the Lenders have agreed to make a loan to the Borrower and the
Borrower  has agreed to borrow  from the Lenders  the  aggregate  amount of Five
Hundred  Thousand and no/100 U.S.  Dollars  ($500,000.00)  (the "Loan"),  ninety
percent  (90%) of which shall be loaned by Ocean and ten percent  (10%) of which
shall be loaned by Turbo,  in accordance with the terms and conditions set forth
herein and in the secured convertible  promissory note issued to Ocean,  annexed
hereto and made a part hereof as Exhibit A (the "Ocean  Note"),  and the secured
convertible  promissory  note  issued to Turbo,  annexed  hereto and made a part
hereof as Exhibit B (the "Turbo  Note"),  (the Ocean Note and the Turbo Note are
each also individually  referred to herein as the "Note" and collectively as the
"Notes");

         WHEREAS, in consideration for the Loan, the Borrower shall (a) cause to
be transferred to the Lenders,  in proportion to their respective  percentage of
the Loan,  good and  marketable  title to ten  percent  (10%) of the  issued and
outstanding  shares of the capital stock of The Bauer Windjammer  Resort and Spa
(Bahamas) Ltd.,  ("Windjammer"),  a corporation  organized under the laws of the
Bahamas and a wholly-owned  subsidiary of The Bauer Capital  Management  Limited
("BCM"),  a corporation  organized  under the laws of the British Virgin Islands
and a  wholly-owned  subsidiary  of the  Borrower;  and (b)  issue a  redeemable
Warrant to each of the Lenders and/or their  respective  assigns to acquire,  in
proportion to their respective percentage of the Loan, an aggregate of 3,000,000
shares,  subject to adjustment as provided in this Agreement and in the Warrants
(the "Warrant  Shares"),  of the common stock, par value $.001 per share, of the
Borrower (the "Common  Stock") at an exercise price of $.20 per share during the
three year period commencing on the date hereof; and

         WHEREAS,  the security for the Notes shall be 17,312,500  shares of the
Common  Stock,  pursuant  to a pledge  and  security  agreement  dated even date
herewith  among the Lenders and Fleming  Financial  Holdings Ltd., a corporation
organized under the laws of Belize  ("Fleming"),  annexed hereto and made a part
hereof as Exhibit C (the "Security Agreement");

         NOW, THEREFORE,  in consideration of the premises, the mutual covenants
and conditions set forth herein and other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereby
agree as follows:

SECTION 1. THE LOAN Subject to the terms and conditions of this  Agreement,  the
Lenders agree to loan to the Borrower and the Borrower agrees to borrow from the
Lenders the aggregate  principal amount of Five Hundred Thousand and no/100 U.S.
Dollars ($500,000.00) to be distributed to the Borrower as set forth on Schedule
1 annexed hereto and made a part hereof,  ninety percent (90%) of which shall be
loaned by Ocean and ten percent (10%) of which shall be loaned by Turbo, due and
payable in full ninety (90) days from the date hereof (the "Maturity Date"). The
date on which the Loan is  disbursed to the  Borrower is  hereinafter  sometimes
referred to as the Closing Date.
<PAGE>

SECTION 2. NOTE;  PAYMENTS The Loan shall be evidenced by the Notes and shall be
due and payable in full on the Maturity Date. Payment on the Notes shall be made
to the Lenders at their  respective  addresses set forth in Section 10.7 or such
other address as either Lender shall designate in writing.

SECTION 3.  CONVERSION

3.1 If the Loan shall have not been repaid in its entirety  within 120 days from
the date hereof,  then the Ocean Note and the Turbo Note shall  automatically be
converted into 45,000,000 and 5,000,000,  respectively,  duly issued, fully paid
and  nonassessable  shares  of  the  Common  Stock,  (individually,  the  "Ocean
Conversion  Shares"  and the  "Turbo  Conversion  Shares,  "  respectively,  and
collectively, the "Conversion Shares") and the Notes shall be cancelled.

3.2 The Borrower shall deliver  certificates  representing the Conversion Shares
to Kaplan Gottbetter & Levenson, LLP, 630 Third Avenue, New York, New York 10017
("KGL") to be held by KGL as escrow agent (the "Escrow  Agent")  pursuant to the
terms and  conditions  of the escrow  agreement  annexed  hereto and made a part
hereof as Exhibit D (the "Escrow Agreement").  The certificates representing the
Conversion  Shares  shall be  registered  in the names of Ocean and Turbo in the
denominations set forth in Schedule 3.2 annexed hereto.

3.3 Upon  conversion  pursuant to Section 3.1, the Lenders  shall  surrender the
Notes to the  Escrow  Agent  together  with the Notice of  Automatic  Conversion
annexed as Appendix I to the Conversion and Exercise  procedures annexed here to
and made a part  hereof as  Exhibit J and the Escrow  Agent  shall  within  five
business days after its receipt of the Notes,  deliver the Conversion  Shares to
the Lenders and the cancelled Notes to the Borrower.

3.4 The Conversion  Shares shall have the  registration  rights set forth in the
registration rights agreement annexed hereto and made a part hereof as Exhibit E
(the "Registration Rights Agreement").

3.5 The  Borrower  shall pay all  expenses,  issuance  taxes  and other  charges
payable for the preparation, execution and delivery of certificates representing
the Conversion Shares to be issued in connection with conversion of the Notes.

3.6 If the Loan shall have been repaid in its entirety  within 120 days from the
date hereof,  the Notes shall be cancelled and the Lenders  shall  surrender the
Notes to the Escrow Agent and the Escrow Agent shall within five  business  days
after its receipt of the Notes,  deliver the cancelled  Notes and the Conversion
Shares to the Borrower.
<PAGE>

SECTION 4. CONDITIONS  PRECEDENT TO THE LOAN The  disbursement of the Loan shall
be  subject  to the  satisfaction  or waiver  by the  Lenders  of the  following
conditions precedent:

4.1.  The Lenders shall have received their respective Notes, duly executed and
delivered by the Borrower.

4.2.  The  Lenders  shall  have  received  certificates  representing  good  and
marketable  title to ten percent (10%) of the issued and  outstanding  shares of
the capital  stock of Windjammer  (the  "Windjammer  Shares"),  in proportion to
their  respective  percentage of the Loan,  free and clear of any and all liens,
claims, encumbrances and adverse interests of any kind (collectively,  "Liens"),
in negotiable  form,  duly endorsed in blank or with stock transfer  powers duly
endorsed in blank attached thereto;  provided,  however,  that the Lenders shall
take a second position only to an institutional  lender approved by the Lenders,
which  approval  shall not be  unreasonably  withheld,  in connection  with real
estate financing on the Windjammer Project.

4.3 The Lenders shall have received the Shareholders'  Agreement dated even date
herewith among the Lenders,  BCM and Windjammer,  annexed hereto and made a part
hereof as Exhibit F, duly executed and delivered by BCM and Windjammer.

4.4. The Lenders  shall have received the Security  Agreement  duly executed and
delivered by Fleming as well as originals, each duly executed by Fleming, of all
financing  statements under the Uniform  Commercial Code, stock powers and other
documents  and  instruments  required  by the  Lenders  in  connection  with the
Security Agreement.

4.5 Ocean shall have received a Warrant  issued to Ocean and/or its assigns,  in
the form of  Exhibit  G  annexed  hereto  and  made a part  hereof  (the  "Ocean
Warrant"),  pursuant to which Ocean  and/or its assigns  shall have the right to
acquire  2,700,000  Warrant  Shares,  subject to  adjustment as provided in this
Agreement and in the Warrant,  at an exercise price of $.20 per share during the
three year period commencing on the date hereof.  Such Warrant Shares shall have
the registration rights set forth in the Registration Rights Agreement and shall
be held in escrow by the Escrow Agent  pursuant to this Agreement and the Escrow
Agreement.  Certificates representing such Warrant Shares shall be registered in
the name of Ocean and/or its assigns in the  denominations set forth in Schedule
4.5 annexed hereto.

4.6 Turbo shall have received a Warrant  issued to Turbo and/or its assigns,  in
the form of  Exhibit  H  annexed  hereto  and  made a part  hereof  (the  "Turbo
Warrant"),  pursuant to which Turbo  and/or its assigns  shall have the right to
acquire  300,000  Warrant  Shares,  subject to  adjustment  as  provided in this
Agreement and in the Warrant,  at an exercise price of $.20 per share during the
three year period commencing on the date hereof.  Such Warrant Shares shall have
the registration rights set forth in the Registration Rights Agreement and shall
be held in escrow by the Escrow  Agent  pursuant  to this  Agreement  the Escrow
Agreement.  Certificates representing such Warrant Shares shall be registered in
the name of Turbo and/or its assigns in the  denominations set forth in Schedule
4.6 annexed hereto.

4.7 The Lenders and the Escrow Agent shall have received the Escrow Agreement
duly executed and delivered by the Borrower.
<PAGE>

4.8 The Escrow Agent shall have received the  Conversion  Shares and the Warrant
Shares  for  placement  in escrow  pursuant  to this  Agreement  and the  Escrow
Agreement.

4.9. The Lenders shall have received the  Registration  Rights  Agreement,  duly
executed and delivered by the Borrower,  in connection with  registration of the
Conversion  Shares and the Warrant  Shares under the  Securities Act of 1933, as
amended (the "Securities Act").

4.10 The Borrower  shall have  delivered  to the Escrow Agent the duly  executed
Power-of-Attorney,  annexed hereto and made a part hereof as Exhibit I, pursuant
to Section 6A.11 hereof.

4.11 The  Borrower  shall have  delivered  to the Escrow  Agent a duly  executed
letter of  resignation  of Ronald J.  Bauer as a  director  and  officer  of the
Borrower (the "The Bauer Resignation").

4.12. The Lenders shall have received a legal opinion of counsel to the Company,
substantially in the form annexed as Exhibit K hereto, addressed to the Lenders.

SECTION  5  REPRESENTATIONS  AND  WARRANTIES  OF  THE  BORROWER  As  a  material
inducement  to the Lenders to enter into this  Agreement,  the  Borrower  hereby
represents and warrants that:

5.1 The Borrower is a corporation,  duly  incorporated,  validly existing and in
good  standing  under  the laws of the  state  of  Nevada,  with  the  requisite
corporate  power and authority to own and use its  properties  and assets and to
carry on its business as currently  conducted.  The Borrower has no subsidiaries
other than as set forth on  Schedule  5.1  attached  hereto  (collectively,  the
"Subsidiaries").  Except as set forth on Schedule 5.1, each of the  Subsidiaries
is a corporation, duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with the full corporate power
and  authority  to own and use its  properties  and  assets  and to carry on its
business as currently  conducted.  Except as set forth on Schedule  5.1, each of
the Borrower  and the  Subsidiaries  is duly  qualified to do business and is in
good standing as a foreign  corporation in each jurisdiction in which the nature
of the  business  conducted  or  property  owned by it makes such  qualification
necessary,  except where the failure to be so qualified or in good standing,  as
the case may be, would not,  individually  or in the aggregate,  have a material
adverse effect on the results of  operations,  assets,  prospects,  or financial
condition of the Borrower  and the  Subsidiaries,  taken as a whole (a "Material
Adverse Effect").

5.2 The Borrower has the requisite  corporate  power and authority to enter into
and to  consummate  the  transactions  contemplated  hereby  and by  each  other
Transaction  Document  (as  defined  below)  and to  otherwise  to carry out its
obligations  hereunder  and  thereunder.  The  execution  and  delivery  of this
Agreement  and each of the other  Transaction  Documents by the Borrower and the
consummation by it of the transactions  contemplated hereby and thereby has been
duly  authorized  by all necessary  action on the part of the Borrower.  Each of
this Agreement and each of the other  Transaction  Documents has been or will be
duly executed by the Borrower and when  delivered in  accordance  with the terms
hereof or thereof and will  constitute  the valid and binding  obligation of the
Borrower  enforceable  against the Borrower in accordance with its terms, except
as such  enforceability  may be limited by  applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally the  enforcement of,  creditors'  rights and remedies or by
other equitable principles of general application. "Transaction Documents" means
this  Agreement and all exhibits and schedules  hereto and all other  documents,
instruments  and writings  required  pursuant to this Agreement and the exhibits
hereto.
<PAGE>

5.3 The authorized,  issued and outstanding capital stock of the Borrower is set
forth on Schedule  5.3. No shares of Common Stock are entitled to  preemptive or
similar rights,  nor is any holder of the Common Stock entitled to preemptive or
similar rights arising out of any agreement or  understanding  with the Borrower
by virtue of this Agreement.  Except as disclosed in Schedule 5.3 and except for
the Ocean Warrant and the Turbo Warrant  (collectively,  the  "Warrants")  to be
issued pursuant to this Agreement,  there are no outstanding options,  warrants,
script, rights to subscribe to, registration rights, calls or commitments of any
character whatsoever relating to securities,  rights or obligations  convertible
into or  exchangeable  for, or giving any person any right to  subscribe  for or
acquire,   any  shares  of  the  Common  Stock,   or   contracts,   commitments,
understandings,  or  arrangements  by which the Borrower or any Subsidiary is or
may become bound to issue  additional  shares of the Common Stock, or securities
or rights  convertible or exchangeable into shares of the Common Stock.  Neither
the Borrower nor any  Subsidiary  is in  violation of any of the  provisions  of
their  respective  Certificates  of  Incorporation,   bylaws  or  other  charter
documents.

5.4 The  Conversion  Shares,  Warrants  and  Warrant  Shares  have been duly and
validly  authorized for issuance,  offer and sale pursuant to this Agreement and
constitute  the valid and binding  obligations  of the Borrower  enforceable  in
accordance with their respective  terms. The Borrower has and at all times while
the Warrants are  outstanding  will continue to maintain an adequate  reserve of
shares of the Common  Stock to enable it to perform its  obligations  under this
Agreement and the Warrants. When issued in accordance with the terms hereof, the
Conversion  Shares, the Warrants and the Warrant Shares will be duly authorized,
validly issued, fully paid and non-assessable.

5.5 The  execution,  delivery and  performance  of this  Agreement and the other
Transaction  Documents by the Borrower and the  consummation  by the Borrower of
the  transactions  contemplated  hereby  and  thereby  do not and  will  not (i)
conflict with or violate any provision of its  Certificate of  Incorporation  or
bylaws (each as amended through the date hereof) or (ii) be subject to obtaining
any of the consents  referred to in Section 5.6,  conflict with, or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the  Borrower  is a party,  or (iii)  result in a  violation  of any law,  rule,
regulation,  order,  judgment,  injunction,  decree or other  restriction of any
court or  governmental  authority to which the Borrower or its  Subsidiaries  is
subject (including, but not limited to, those of other countries and the federal
and state securities laws and regulations), or by which any property or asset of
the Borrower or its  Subsidiaries  is bound or  affected,  except in the case of
clause (ii), such conflicts, defaults, terminations,  amendments, accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,
have  a  Material  Adverse  Effect.   The  business  of  the  Borrower  and  its
Subsidiaries  is not being  conducted  in  violation  of any law,  ordinance  or
regulation of any governmental authority.
<PAGE>

5.6 Except as specifically  set forth in Schedule 5.6,  neither the Borrower nor
any Subsidiary is required to obtain any consent, waiver, authorization or order
of, or make any filing or registration with, any court or other federal,  state,
local or other  governmental  authority or other person or entity in  connection
with the execution,  delivery and  performance by the Borrower of this Agreement
and  each  of the  other  Transaction  Documents,  except  for the  filing  of a
registration  statement relating to the Conversion Shares and the Warrant Shares
contemplated  by the  Registration  Rights  Agreement  with the  Securities  and
Exchange Commission (the "Commission").

5.7 Except as specifically  disclosed in Schedule 5.7, there is no action, suit,
notice of violation,  proceeding or investigation  pending or threatened against
or affecting the Borrower or any of its  Subsidiaries or any of their respective
properties  before or by any court,  governmental  or  administrative  agency or
regulatory  authority  (federal,  state,  county,  local or  foreign)  which (i)
relates to or challenges the legality,  validity or enforceability of any of the
Transaction Documents,  the Conversion Shares or the Warrant Shares, (ii) could,
individually or in the aggregate, have a Material Adverse Effect or (iii) could,
individually or in the aggregate,  materially impair the ability of the Borrower
to  perform  fully on a timely  basis  its  obligations  under  the  Transaction
Documents.

5.8 Except as set forth in Schedule  5.8 hereto,  neither the  Borrower  nor any
Subsidiary  (i) is in default  under or in violation of any  indenture,  loan or
credit  agreement or any other agreement or instrument to which it is a party or
by which it or any of its properties is bound, except such conflicts or defaults
as do not have a Material  Adverse Effect,  (ii) is in violation of any order of
any court, arbitrator or governmental body, except for such violations as do not
have a Material Adverse Effect, or (iii) is in violation of any statute, rule or
regulation of any  governmental  authority which could  (individually  or in the
aggregate) (x) adversely affect the legality, validity or enforceability of this
Agreement or the Transaction  Documents,  (y) have a Material  Adverse Effect or
(z) adversely impair the Borrower's  ability or obligation to perform fully on a
timely basis its obligations under this Agreement or the Transaction Documents.

5.9 No fees or  commission  will be payable by the  Borrower  to any  investment
banker,  broker,  placement  agent  or bank or  otherwise  with  respect  to the
consummation  of the  transactions  contemplated  hereby  except as  provided in
Section 6A.14 hereof.

5.10 The  Disclosure  Documents (as defined  below) are accurate in all material
respects and do not contain any untrue  statement of a material  fact or omit to
state any material fact necessary in order to make the statements  made therein,
in light of the  circumstances  under  which  they were  made,  not  misleading.
"Disclosure  Documents" means (a) the Schedules  required to be furnished to the
Lenders by or on behalf of the Borrower pursuant to Section 5 hereof and (b) all
reports  required to be and as filed by the Borrower with the  Commission  under
the Securities  Exchange Act of 1934, as amended (the "Exchange Act") during the
two (2) year period prior to the date hereof.

5.11 The Common  Stock is  registered  under the  Exchange  Act, the Borrower is
subject to the  reporting  requirements  of  Section 13 or Section  15(d) of the
Exchange Act, and, except as set forth in Schedule 5.11 hereto,  the Borrower is
current in its reporting requirements.
<PAGE>

5.12 The Common Stock is listed on the NASD Over-the-Counter  Bulletin Board and
has been duly registered with the Commission in accordance with section 12(b) of
the  Exchange  Act and the  National  Association  of  Securities  Dealers  (the
"NASD").  Said Common  Stock is the only  "equity  security"  (as defined in the
Exchange  Act) of Borrower  required to be  registered  under  Section 12 of the
Exchange Act.

5.13   The Borrower has delivered to the Lenders a true and correct schedule of
liabilities as set forth on Schedule 5.13.

5.14 If at any time during the three year period  commencing on the date hereof,
the Borrower  shall  desire to enter into any  financing  arrangement,  it shall
first offer any such financing arrangement to the Lenders on the identical terms
and conditions as those offered by or to any third party. The Lenders shall have
72 hours from  receipt of written  notification  from the  Borrower  of any such
financing  arrangement to notify the Borrower in writing of their  acceptance of
any such financing.

SECTION  6.  COVENANTS  So  long  as all or any  portion  of the  Notes  remains
outstanding, the Borrower hereby agrees as follows:

6.1 The Borrower shall comply in all material respects with all applicable laws,
rules,  regulations  and orders of, and  restrictions  imposed by,  governmental
authorities,  the  violation  of which  could  reasonably  be expected to have a
Material Adverse Effect.

6.2 The Borrower shall allow  representatives  of the Lenders,  upon  reasonable
prior  notice  to the  Borrower,  to  inspect,  copy  and make  extracts  of all
applicable records,  and all properties,  of the Borrower at any reasonable time
for any reasonable purpose.

6.3 The Borrower shall promptly notify the Lenders of any litigation instituted,
or to the Borrower's knowledge, threatened against the Borrower.

SECTION 6A.  OTHER AGREEMENTS OF THE PARTIES

6A.1 The  Conversion  Shares  and the  Warrants  are being  issued  pursuant  to
Regulation S of the Securities Act. The Conversion  Shares, the Warrants and the
Warrant Shares will bear restrictions on transfer,  and will carry a restrictive
legend with respect to the exemption from registration under the Securities Act.
The transfer and resale of the Conversion  Shares,  the Warrants and the Warrant
Shares may be made only pursuant to registration  under the Securities Act or an
exemption from such registration.

6A.2 As long as the  Lenders  own any  Conversion  Shares,  Warrants  or Warrant
Shares, the Borrower will furnish to the Lenders,  promptly after they have been
prepared,  its annual report and other  reports and filings  required by Section
13(a)  or 15(d)  of the  Exchange  Act  that  are not  available  on EDGAR  (the
"Non-Edgar Filings").

6A.3 The Borrower shall, on a continuing  basis, (i) advise the Lenders promptly
after  obtaining  knowledge  of, and, if requested by the Lenders,  confirm such
advice in writing, of (A) the issuance by any state securities commission of any
stop order suspending the  qualification or exemption from  qualification of the
Conversion  Shares,  the Warrants or the Warrant Shares, for offering or sale in
any  jurisdiction,  or the  initiation of any proceeding for such purpose by any
state securities commission or other regulatory authority, or (B) any event that
makes any statement of a material fact made in the Disclosure  Documents  untrue
or that  requires the making of any  additions  to or changes in the  Disclosure
Documents  in  order  to  make  the  statements  therein,  in the  light  of the
circumstances  under  which  they are made,  not  misleading,  (ii) use its best
efforts to  prevent  the  issuance  of any stop  order or order  suspending  the
qualification  or exemption from  qualification  of the Conversion  Shares,  the
Warrants or the Warrant Shares under any state  securities or Blue Sky laws, and
(iii)  if at any time  any  state  securities  commission  or  other  regulatory
authority shall issue an order  suspending the  qualification  or exemption from
qualification of the Conversion Shares, the Warrants or the Warrant Shares under
any such laws,  and use its best efforts to obtain the  withdrawal or lifting of
such order at the earliest possible time.
<PAGE>

6A.4 The Borrower shall furnish the Lenders,  without charge,  as many copies of
the Non-Edgar  Filings and any amendments or supplements  thereto as the Lenders
may  reasonably  request.  The  Borrower  consents to the use of the  Disclosure
Documents and any  amendments  and  supplements to any of them by the Lenders in
connection  with resales of the Conversion  Shares,  the Warrants or the Warrant
Shares.

6A.5 If any event shall occur as a result of which,  in the reasonable  judgment
of the  Borrower or the Lenders,  it becomes  necessary or advisable to amend or
supplement  any of the  Disclosure  Documents  in order  to make the  statements
therein,  in  the  light  of  the  circumstances  at the  time  such  Disclosure
Document(s)  were  delivered to the Lenders,  not  misleading,  or if it becomes
necessary to amend or supplement any of the Disclosure  Documents to comply with
applicable law, the Borrower shall promptly prepare an appropriate  amendment or
supplement to each such document in form and substance  reasonably  satisfactory
to both the Lenders and Borrower so that (i) as so amended or supplemented, each
such document  will not include an untrue  statement of material fact or omit to
state a material fact necessary in order to make the statements  therein, in the
light of the circumstances  existing at the time it is delivered to the Lenders,
not  misleading and (ii) the  Disclosure  Documents will comply with  applicable
law.

6A.6 The Borrower shall, for so long as any of the Conversion  Shares,  Warrants
or  Warrant  Shares  remains  outstanding  and  during  any  period in which the
Borrower  is not  subject  to  Section  13 or 15(d) of the  Exchange  Act,  make
available to any registered holder of the Conversion Shares, Warrants or Warrant
Shares in connection with any sale thereof and any prospective purchaser of such
Conversion Shares, Warrants or Warrant Shares from such holder, such information
in  accordance  with Rule  144(c)  promulgated  under the  Securities  Act as is
required to sell the  Conversion  Shares,  Warrants or Warrant Shares under Rule
144 promulgated under the Securities Act.

6A.7 The Borrower shall not (i) distribute any offering  materials in connection
with the offering and sale of the Conversion Shares,  Warrants or Warrant Shares
other than the Disclosure  Documents and any amendments and supplements  thereto
prepared in  compliance  herewith  or (ii)  solicit any offer to buy or sell the
Conversion Shares,  Warrants,  or Warrant Shares by means of any form of general
solicitation or advertising.
<PAGE>

6A.8 If not  otherwise  publicly  available,  the Borrower  shall furnish to the
Lenders,  promptly  after filing with the  Commission,  a copy of all  financial
statements  for any period  subsequent  to the period  covered by the  financial
statements  included in the Disclosure  Documents until the full exercise of the
Warrants.

6A.9  From the date  hereof  through  the full  exercise  of the  Warrants,  the
Borrower  shall not and shall cause the  Subsidiaries  not to, without the prior
written  consent  of the  Lenders,  (i) amend its  certificate  or  articles  of
incorporation,  by-laws or other charter documents so as to adversely affect any
rights of the Lenders; (ii) split, combine or reclassify its outstanding capital
stock;  (iii)  declare,  authorize,  set  aside  or pay any  dividend  or  other
distribution with respect to the Common Stock; (iv) redeem,  repurchase or offer
to repurchase or otherwise acquire shares of its Common Stock; or (v) enter into
any agreement with respect to any of the foregoing.

6A.10 The Borrower shall (a) use its best efforts to maintain the listing of its
Common  Stock on the OTCBB or such other  exchange on which the Common  Stock is
then listed  until  expiration  of the period  during  which the Warrants may be
exercised and (b) shall provide to the Lenders evidence of such listing.

6A.11 To effectuate the terms and provisions of this Agreement and its exhibits,
the  Borrower  hereby  agrees to give a power of  attorney  as is  evidenced  by
Exhibit I annexed hereto.  All acts done under such power of attorney are hereby
ratified and approved and neither the Attorney-in-Fact nor any designee or agent
thereof shall be liable for any acts of commission or omission, for any error of
judgment or for any mistake of fact or law, as long as the  Attorney-in-Fact  is
operating  within the scope of the power of attorney and this  Agreement and its
exhibits.  The power of  attorney,  being  coupled  with an  interest,  shall be
irrevocable  while  any of the Notes  remain  outstanding,  any of the  Warrants
remains  unexercised  or any portion of this  Agreement or its exhibits  remains
unsatisfied.   In  addition,   the  Borrower  shall  give  the  Attorney-in-Fact
resolutions  executed by the Board of Directors of the Borrower which  authorize
future issuances of the Warrant Shares for the Warrants,  and which  resolutions
state that they are irrevocable while any of the Notes remain  outstanding,  any
of the  Warrants  remains  unexercised  or any portion of this  Agreement or its
exhibits remains unsatisfied.

6A.12 In accordance with the Registration  Rights Agreement,  the Borrower shall
qualify the  Conversion  Shares and the Warrant  Shares under the  securities or
Blue Sky laws of such  jurisdictions  as the Lenders may reasonably  request and
shall continue such  qualification at all times through the forth anniversary of
the date the Loan is disbursed to the Borrower;  provided, however, that neither
the Borrower nor its Subsidiaries  shall be required in connection  therewith to
qualify as a foreign  corporation where they are not now so qualified or to take
any action that would subject the Borrower to general  service of process in any
such jurisdiction where it is not then so subject or subject the Borrower to any
material tax in any such jurisdiction where it is not then so subject.

6A.13 Until the earlier of (a) the  Maturity  Date and (b) the full  exercise of
the Warrants, the Borrower and each Subsidiary will not, in a single transaction
or a series of related transactions,  (i) consolidate with or merge with or into
any other entity,  or (ii) permit any other entity to consolidate  with or merge
into it, unless (w) either (A) the Borrower shall be the survivor of such merger
or  consolidation  or  (B)  the  surviving  entity  shall  expressly  assume  by
supplemental  agreement  all  of the  obligations  of the  Borrower  under  this
Agreement and the Transaction Documents;  (x) immediately before and immediately
after giving effect to such transactions (including any indebtedness incurred or
anticipated  to be incurred in connection  with the  transactions),  no event of
default  shall have occurred and be  continuing;  (y) if the Borrower is not the
surviving entity, such surviving entity's common shares will be listed on either
The New York Stock Exchange,  American Stock Exchange, Nasdaq National Market or
Nasdaq  SmallCap  Market,  or the  OTCBB  on or  prior  to the  closing  of such
transaction(s) and (z) the Borrower shall have delivered to Lenders an officers'
certificate and opinion of counsel, each stating that such consolidation, merger
or transfer complies with this Agreement and the Transaction Documents, that the
surviving entity agrees to be bound thereby and that all conditions precedent in
this Agreement relating to such transaction(s) have been satisfied.
<PAGE>

6A.14 The Borrower will pay the following  fees and expenses in connection  with
the  transactions  contemplated  hereby  (a) to KGL  (i)  $15,000  for  document
preparation fees, and (ii) all reasonable disbursements and expenses incurred by
KGL in  connection  with such  document  preparation  fees and (b) $5,000 to the
Escrow  Agent for the escrow  agent fee.  The fees and expenses set forth in (a)
and (b) will be paid to KGL by  deducing  the  amount of such fees and  expenses
from the  Loan  proceeds  to be  received  by the  Borrower  hereunder  prior to
disbursement thereof to the Borrower pursuant to Schedule 1.

6A.15 Until the Loan is repaid in full, the Borrower hereby agrees that it shall
not offer or issue in excess of  5,000,000  shares of the Common  Stock,  either
directly or indirectly through any  convertible/exchangeable  security,  without
the prior written consent of the Lenders.

6A.16 In the event  that the Loan is repaid in full but the  Windjammer  Project
shall not have Closed within ninety (90) days from the date hereof, the Borrower
hereby  agrees  that the  Lenders  shall  have the sole  option  to  receive  an
interest,  free and clear of any and all liens, on the same terms and conditions
as the  acquisition  of a certain parcel of real estate located in St. Kitts for
$30,000,000  contemplated by Windjammer (the "Windjammer Project"),  in each and
every other next succeeding purchase, agreement to purchase, option to purchase,
hypothecation, transfer or other transaction similar in nature to the Windjammer
Project  (individually,   a  "Transaction"  and  collectively,   "Transactions")
contemplated or undertaken by the Borrower,  directly or indirectly,  until such
time as the Lenders  shall have  received  an  aggregate  ownership  interest of
$3,000,000  in one or more  Transactions;  provided,  however,  that in no event
shall  the  Lenders  interest  exceed  twenty-five  percent  (25%)  of  any  one
Transaction.  Within three (3) business  days of the  Borrower's  execution of a
letter of intent or any similar  written term sheet (the  "Terms") in connection
with a Transaction,  the Borrower  shall notify the Lenders of such  Transaction
and deliver a copy of the Terms of such  Transaction  to the  Lenders.  Upon the
Borrower's  receipt of the due  diligence  materials for such  Transaction,  the
Borrower shall  promptly  deliver same to the Lenders and the Lenders shall have
five (5) business days from their receipt of all of the due diligence  materials
for such Transaction to accept the Transaction.

6A.17 The Borrower  hereby agrees that the Lenders shall have the right,  at the
Lenders' option,  to loan up to $500,000 in four (4) separate  Transactions upon
the same terms and conditions as this Agreement, except as set forth on Schedule
6A.17,  at any time for the  greater of (a) three (3) years from the date of the
closing of the Windjammer  Project,  or (b) while any loan made pursuant to this
Agreement  or any  subsequent  agreement  by the  Lenders  to  the  Borrower  is
outstanding or (c) while the Borrower is in default in any transaction  with the
Lenders  (individually,  a "Loan Right" and  Collectively,  "Four Loan Rights").
Within three (3) business days of the Borrower's execution of a letter of intent
or  any  similar   written  term  sheet  (the  "Terms")  in  connection  with  a
Transaction,  the  Borrower  shall  notify the Lenders of such  Transaction  and
deliver a copy of the Terms such Transaction to the Lenders. Upon the Borrower's
receipt of the due diligence materials for such Transaction,  the Borrower shall
promptly  deliver  same to the  Lenders  and the  Lenders  shall  have  five (5)
business days from their receipt of all of the due diligence  materials for such
Transaction  to accept the  Transaction.  The  Borrower  shall have the right to
acquire  from the Lenders  any and all of the Four Loan Rights in  consideration
for (i)  $750,000  and (ii) the Lenders'  right to retain the  immediately  next
succeeding  Loan Right,  by notifying the Lenders of the Borrower's  exercise of
such right within 10 days prior thereto.
<PAGE>

6A.18  The  Borrower  hereby  agrees  that it shall  take all  corporate  action
necessary  to ensure that upon the Closing  Date Edward J. Tobin shall be a duly
elected member of the Board of Directors of the Borrower.

6A.19 Exhibit J sets forth the procedures  with respect to the conversion of the
Notes  and the  exercise  of the  Warrants,  including  the  forms of  Notice of
Conversion  and Notice of Exercise to be provided  upon  conversion or exercise,
and such other  information and  instructions as may be reasonably  necessary to
enable the Lenders or any permitted  transferee(s)  to effectuate  conversion or
exercise smoothly and expeditiously. Upon each and every exercise by the Lenders
the  aggregate  number of Warrant  Shares that the Lenders  shall be entitled to
exercise  shall be  subject to  adjustment  based  upon the  following  formula;
provided, however, that in no event shall the aggregate number of Warrant Shares
that the Lenders are entitled to be less than 2,000,000:

   No. of Warrant Shares =   ([the total number of issued and outstanding shares
                               of the Common Stock] x 0.05) - 2,000,000

The Borrower agrees that, at any time the aggregate  number of Warrant Shares to
which the Lenders are entitled  exceeds  3,000,000  shares,  the Borrower  shall
issue  additional  stock  certificates  in the names of each of the Lenders,  in
proportion to their  respective  percentage of the Loan, and deliver same to the
Escrow  Agent to be held in escrow  pursuant  to this  Agreement  and the Escrow
Agreement. In the event that the aggregate number of Warrant Shares to which the
Lenders are entitled is less than 3,000,000 shares,  then the Escrow Agent shall
return to the Borrower  such excess  number of Warrant  Shares held in escrow by
the Escrow Agent.

SECTION  7. THE  LENDERS  MAY  PERFORM  If the  Borrower  fails to  perform  any
agreement  contained  herein or in the Notes, the Lenders may cure such event of
default,  and the expenses of the Lenders incurred in connection therewith shall
be payable by the Borrower.
<PAGE>

SECTION 8.  INDEMNITY

8.1      Indemnification:

         (a) The Borrower shall,  without  limitation as to time,  indemnify and
hold harmless Global Emerging Markets,  Ltd.("GEM"), GEM Advisors,  Inc.("GEMA")
and the Lenders and their respective officers,  directors, agents, employees and
affiliates,  each person or entity who controls GEM, GEMA or the Lenders (within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act)  (each  such  person or  entity,  a  "Control  Person")  and the  officers,
directors,  agents, employees and affiliates of each such Control Person, to the
fullest extent permitted by applicable law, from and against any and all losses,
claims, damages,  liabilities,  costs (including,  without limitation,  costs of
preparation  and  attorneys'  fees) and expenses  (collectively,  "Losses"),  as
incurred,  arising  out  of,  or  relating  to,  a  breach  or  breaches  of any
representation,  warranty,  covenant or  agreement  by the  Borrower  under this
Agreement or any other Transaction Document.

         (b) Each Lender, severally and not jointly, shall without limitation as
to time,  indemnify  and hold harmless the  Borrower,  its officers,  directors,
agents and employees,  each Control Person and the officers,  directors,  agents
and  employees  of each  Control  Person,  to the fullest  extent  permitted  by
application law, from and against any and all Losses,  as incurred,  arising out
of,  or  relating  to, a breach or  breaches  of any  representation,  warranty,
covenant  or  agreement  by  such  Lender  under  this  Agreement  or the  other
Transaction Documents.

8.2 If any action, claim, suit, investigation or proceeding (including,  without
limitation,  an  investigation  or partial  proceeding,  such as a  deposition),
whether commenced or threatened (collectively, "Proceeding") shall be brought or
asserted  against  any person or entity  entitled  to  indemnity  hereunder  (an
"Indemnified Party"), such Indemnified Party promptly shall notify the person or
entity from whom indemnity is sought (the "Indemnifying  Party") in writing, and
the  Indemnifying  Party  shall  assume  the  defense  thereof,   including  the
employment of counsel  reasonably  satisfactory to the Indemnified Party and the
payment of all fees and expenses  incurred in connection  with defense  thereof;
provided,  that the failure of any  Indemnified  Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only) to the  extent  that it  shall be  finally
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or further  review) that such failure  shall have  proximately
and materially adversely prejudiced the Indemnifying Party.

         An Indemnified Party shall have the right to employ separate counsel in
any such Proceeding and to participate in the defense thereof,  but the fees and
expenses of such counsel  shall be at the expense of such  Indemnified  Party or
Parties  unless:  (1) the  Indemnifying  Party  has  agreed to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified  Party in any such Proceeding;  or (3) the named parties to any such
Proceeding  (including any impeded parties) include both such Indemnified  Party
and the Indemnifying  Party, and such Indemnified  Party shall have been advised
by counsel  that a conflict of  interest is likely to exist if the same  counsel
were to represent such Indemnified  Party and the  Indemnifying  Party (in which
case, if such Indemnified Party notifies the Indemnifying  Party in writing that
it elects to employ separate counsel at the expense of the  Indemnifying  Party,
the  Indemnifying  Party  shall not have the right to assume the  defense of the
claim  against  the  Indemnified  Party but will retain the right to control the
overall  Proceedings  out of which the claim arose and such counsel  employed by
the Indemnified  Party shall be at the expense of the Indemnifying  Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected  without its written  consent,  which consent shall not be unreasonably
withheld.  No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect of
which any  Indemnified  Party is a party,  unless  such  settlement  includes an
unconditional  release of such  Indemnified  Party from all  liability on claims
that are the subject matter of such Proceeding.
<PAGE>

         All fees and expenses of the Indemnified Party to which the Indemnified
Party is  entitled  hereunder  (including  reasonable  fees and  expenses to the
extent  incurred in connection  with  investigating  or preparing to defend such
Proceeding in a manner not inconsistent  with this Section) shall be paid to the
Indemnified Party, as incurred,  within ten (10) Business Days of written notice
thereof to the Indemnifying Party.

         No right of indemnification  under this Section 8 shall be available as
to a particular  Indemnified  Party if there is a non-appealable  final judicial
determination  that such Losses arise solely out of the  negligence or bad faith
of such  Indemnified  Party in performing the  obligations  of such  Indemnified
Party  under  this  Agreement  or a  breach  by such  Indemnified  Party  of its
obligations under this Agreement.

8.3 If a claim for  indemnification  under this Section 8 is  unavailable  to an
Indemnified Party or is insufficient to hold such Indemnified Party harmless for
any Losses in respect of which this  Section 8 would  apply by its terms  (other
than  by  reason  of  exceptions  provided  in  this  Section  8.3),  then  each
Indemnifying  Party,  in lieu of  indemnifying  such  Indemnified  Party,  shall
contribute to the amount paid or payable by such  Indemnified  Party as a result
of such Losses in such  proportion  as is  appropriate  to reflect the  relative
benefits received by the Indemnifying  Party on the one hand and the Indemnified
Party  on the  other  and the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection  with the actions or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such  Indemnifying  Party and Indemnified  Party shall be determined by
reference  to, among other things,  whether  there was a judicial  determination
that  such  Losses  arise  in part  out of the  negligence  or bad  faith of the
Indemnified  Party in performing the obligations of such Indemnified Party under
this Agreement or the Indemnified  Party's breach of its obligations  under this
Agreement. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any  attorneys' or other fees or expenses  incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified  for such fees or expenses if the  indemnification  provided  for in
this Section was available to such party.

8.4 The indemnity and contribution  agreements  contained in this Section are in
addition to any obligation or liability that the  Indemnifying  Parties may have
to the Indemnified Parties.
<PAGE>

SECTION 9.  EVENTS OF DEFAULT; REMEDIES

9.1  An event of default shall be deemed to have occurred upon the occurrence of
     any of the following events:

         (a)      any  amount  payable  on the  Loan  shall  not be  paid on the
                  Maturity Date and shall not have been cured within thirty (30)
                  days from the Maturity Date; or

         (b)      except  with  respect to Section  6A.5,  a material  breach or
                  failure  of  performance  by the  Borrower  of  any  covenant,
                  condition or agreement on its part to be observed or performed
                  contained in this  Agreement or the Notes which shall not have
                  been cured within five (5) business  days after receipt by the
                  Borrower of notice thereof given by the Lenders; or

         (c)      any material breach or failure of performance by the Borrower
                  under Section 6A.5.

         (d)      any material  representation  or warranty made by the Borrower
                  herein  shall  prove to have  been  false or  breached  in any
                  material respect on and as of the date on which made; or

         (e)      the  Borrower  shall be adjudged to be  insolvent or unable to
                  pay  its  debts  as  they  mature  or any  receiver,  trustee,
                  liquidator,  custodian  or like  officer be  appointed to take
                  custody,   possession  or  control  of  any  property  of  the
                  Borrower; or

         (f)      there shall be in effect any statute,  rule, law or regulation
                  that  prohibits  the  disbursement  of  the  Loan  or  if  the
                  disbursement  of the Loan  would  violate  any  non-appealable
                  final  judgment,  order,  decree,  ruling or injunction of any
                  court   of  or   governmental   authority   having   competent
                  jurisdiction; or

         (g)      the Borrower's Common Stock is not registered under Section 12
                  of the Exchange Act; or

         (h)      except as set forth in Schedule 5.11, the Borrower is not
                  current in its reporting  obligations  under  Section 13 or
                  15(d) of the Exchange Act; or

         (i)      an  event  occurs  prior  to  the  disbursement  of  the  Loan
                  requiring the Borrower to report such event to the SEC on Form
                  8-K and not  otherwise  set forth in Schedule  9.1,  provided,
                  however,  such event shall only  include the  following  items
                  under Form 8-K: Item 1, Item 2 to the extent that any event is
                  reported  under Item 2 that involves a change in the nature of
                  the Borrower's business;  Item 3; or Item 4 (provided further,
                  that as to Item 4, only if the event requires disclosure under
                  Item 304(a)(1)(iv) under Regulation S-B); or

         (j)      trading in the Common Stock has been suspended,  delisted,  or
                  otherwise  ceased  by the  Commission  or the  NASD  or  other
                  exchange  or  the  Nasdaq  (whether  the  National  Market  or
                  otherwise),  except for any  suspension  of trading of limited
                  duration   solely  to   permit   dissemination   of   material
                  information regarding the Borrower,  and not reinstated within
                  ten (10) business days; or
<PAGE>

         (k)      the  transfer  agent for the  Common  Stock  fails to  deliver
                  certificates  for the  Conversion  Shares  and/or the  Warrant
                  Shares as required by this Agreement.

9.2      If an event of default shall have occurred and be continuing:

         (a)      The Lenders may (by written notice delivered to the Borrower)
                  declare all or any portion of the Loan immediately due and
                  payable.

         (b)      The Bauer resignation shall become effective.

         (c)      The  Lenders  shall also be  entitled  to  exercise  all their
                  rights  and  remedies  as may  exist at law or as set forth in
                  this Agreement and/or the Notes.

SECTION 10.  MISCELLANEOUS

10.1  Except as set forth in this  Agreement,  each party shall pay the fees and
expenses of its advisers,  counsel,  accountants and other experts,  if any, and
all  other  expenses  incurred  by  such  party  incident  to  the  negotiation,
preparation, execution, delivery and performance of this Agreement. The Borrower
shall pay the fees of the Escrow  Agent and all stamp and other taxes and duties
levied in connection with the issuance of the Conversion Shares and the Warrants
and, upon exercise  thereof,  the Warrant Shares,  pursuant hereto.  The Lenders
shall be  responsible  for any taxes  payable by the Lenders that may arise as a
result of the  investment  hereunder or the  transactions  contemplated  by this
Agreement or any other Transaction Document.

10.2 All  covenants and  agreements in this  Agreement by or on behalf of any of
the parties shall bind and inure to the benefit of their  respective  successors
and assigns,  including any subsequent  holder of the Notes.  This Agreement may
not be  assigned  by the  Borrower  unless the  Lenders  shall have given  prior
written consent thereto.

10.3 Whenever possible, each provision of this Agreement shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Agreement is held to be invalid,  illegal or  unenforceable in
any  respect  under  applicable  law,  then  such   invalidity,   illegality  or
unenforceability shall not affect the other provisions of this Agreement.

10.4 This  Agreement may be executed in separate  counterparts  and delivered by
facsimile  transmission,  each of which when so executed and delivered  shall be
deemed to be an  original  hereof,  and all of which when taken  together  shall
constitute one and the same agreement.

10.5  Descriptive  headings in this  Agreement are inserted for  convenience  of
reference  only and are not  intended  to be part of or affect  the  meaning  or
interpretation of this Agreement.

10.6 The parties hereto  acknowledge that the transactions  contemplated by this
Agreement and the exhibits hereto bear a reasonable relation to the state of New
York.  This  Agreement  shall be enforced in accordance  with, and all questions
regarding  the  construction,  validity,  interpretation  and  purpose  of  this
agreement  shall be  governed  by, the  internal  laws of the state of New York,
without  giving effect to provisions  thereof  regarding  conflict of laws.  Any
action to enforce the terms of this  Agreement or any of its  exhibits  shall be
brought exclusively in the state and/or federal courts situate in the county and
state of New York. Service of process in any action by either Lenders to enforce
the terms of this  Agreement  may be made by serving a copy of the  summons  and
complaint,  in addition to any other relevant documents, by commercial overnight
courier to the Borrower at its principal address set forth in this Agreement.
<PAGE>

10.7 Any notice  provided for in this  Agreement  must be in writing and must be
either (a) hand  delivered,  (b) mailed by registered  or certified  first class
mail,  postage  prepaid  with return  receipt  requested,  (c) sent by reputable
overnight  courier service for next business  morning  delivery,  or (d) sent by
telecopy to the recipient at the address/telecopy number below indicated:

         If to Ocean:               Ocean Strategic Holdings Ltd.
                                    11 Bath Street
                                    St. Helier JE4 OYZ  Jersey
                                    Attn.:
                                    Telephone:
                                    Facsimile:

         With a copy to:            Kaplan Gottbetter & Levenson, LLP
                                    630 Third Avenue
                                    New York, NY 10017-6705
                                    Attn.: Adam S. Gottbetter, Esq.
                                    Telephone:     (212) 983-6900
                                    Facsimile:     (212) 983-9210

         If to Turbo:               Turbo International Ltd.
                                    Shirley House
                                    50 Shirley Street
                                    P.O. Box N-7755
                                    Nassau, Bahamas
                                    Attn.:
                                    Telephone:
                                    Facsimile:

         With a copy to:            Kaplan Gottbetter & Levenson, LLP
                                    630 Third Avenue
                                    New York, NY 10017-6705
                                    Attn.:  Adam S. Gottbetter, Esq.
                                    Telephone:     (212) 983-6900
                                    Facsimile:     (212) 983-9210
<PAGE>

         If to the Borrower:        The Bauer Partnership Inc.
                                    8 Queen Street
                                    Mayfair, London W1J 5PD
                                    United Kingdom
                                    Attn.:
                                    Telephone:
                                    Facsimile:

         With a copy to:            Vanderkam & Sanders
                                    440 Louisiana, Suite 475
                                    Houston, Texas 77002
                                    Attn.:  David Loev, Esq.
                                    Telephone:     (713) 547-8900
                                    Facsimile:     (713) 547-8910

or such other  address/telecopy  number or to the attention of such other person
as the  recipient  party shall have  specified  by prior  written  notice to the
sending party.

Any notice  under this  Agreement  shall be deemed to have been given (i) on the
date  such  notice is hand  delivered,  (ii)  three  (3) days  after the date of
mailing if mailed by certified  or  registered  mail,  (iii) on the business day
next following the day notice is sent via overnight courier service,  or (iv) as
of the beginning of the next day if such notice is sent by telecopy.

10.8 This  Agreement and all exhibits and  schedules  hereto embody the complete
agreement  and  understanding  between the parties  with  respect to the subject
matter hereof and thereof and supersedes and preempts any prior  understandings,
agreements and/or  representations  by or between the parties,  written or oral,
related to the subject matter hereof in any way.

10.9  Notwithstanding  any rule of law or custom to the  contrary,  neither this
Agreement  nor any  other  agreement  or  document  collateral  to or  otherwise
relating to this Agreement  shall be interpreted or construed  against any party
merely by reason of the fact that such  agreement or document was prepared by or
at the  direction of such party or that such party  caused this  Agreement to be
drafted.

                           [Signature page to Follow]

<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  and  delivered  this
Agreement as of the date first above written.

                                             The Bauer Partnership Inc.

                                             By:
                                                  ------------------------------
                                             Name:
                                             Title:

                                             Ocean Strategic Holdings Ltd.

                                             By:
                                                  ------------------------------
                                             Name:
                                             Title:

                                            Turbo International Ltd.

                                             By:
                                                  ------------------------------
                                             Name:
                                             Title:

<PAGE>

                                   Schedule 1

(a)  $150,000 upon execution and delivery of this agreement,  less $10,000 to be
     paid to KGL pursuant to Section 6A.14;

(b)  $50,000  upon the  Lender's  and/or  the  Borrower's  receipt of all of the
     Transaction   Documents  duly  executed  and  delivered  pursuant  to  this
     Agreement, less $5,000 to be paid to KGL pursuant to Section 6A.14;

(c)  100,000 upon the  Borrower's  filing of its (i) annual  report on Form 10-K
     for the year ended December 31, 2001 and amendment to its current report on
     Form 8-K dated December 5, 2001 containing all of the financial  statements
     to be filed in connection  there with,  less any expenses to be paid to KGL
     pursuant to Section 6A.14; and

(d)  $200,000 upon the Lenders receipt of a copy of a written loan commitment to
     the Borrower from a reputable lending institution  approved by the Lenders,
     which  approval  shall  not be  unreasonably  withheld,  for no  less  than
     $18,000,000, less $5,000 to be paid to KGL pursuant to Section 6A.14.
<PAGE>

                                  Schedule 3.2

Ocean Strategic Holdings Ltd.       27 certificates each for 100,000 shares

Turbo International Ltd.            6 certificates each for 50,000 shares

<PAGE>
                                  Schedule 4.5

<PAGE>

                                 Schedule 4.6
<PAGE>

                                  Schedule 5.1

                                  Subsidiaries

<PAGE>
                                  Schedule 5.3

                                 Capitalization

<PAGE>

                                  Schedule 5.6

                             Consents and Approvals

<PAGE>

                                  Schedule 5.7

                              Litigation and Claims

<PAGE>

                                  Schedule 5.8

                             Defaults and Violations

<PAGE>
                                  Schedule 5.11

                               Delinquent Reports
<PAGE>

                                 Schedule 6A.17

                                Conversion Shares

(a)           First option to loan $500,000 - The secured convertible promissory
              note shall be convertible  into 20,000,000  shares of Common Stock
              and the  Warrants  shall  entitle the holder to acquire  2,000,000
              shares at an exercise price of $.30 per share

(b)           Second  option  to  loan   $500,000  -  The  secured   convertible
              promissory note shall be convertible into 15,000,000 for shares of
              Common Stock and the Warrants  shall entitle the holder to acquire
              1,500,000 shares at an exercise price of $.35 per share.

(c)           Third option to loan $500,000 - The secured convertible promissory
              note shall be  convertible  into  10,000,000  for shares of Common
              Stock  and the  Warrants  shall  entitle  the  holder  to  acquire
              1,000,000 shares at an exercise price of $.40 per share.

(d)           Fourth  option  to  loan   $500,000  -  The  secured   convertible
              promissory note shall be convertible  into 5,000,000 for shares of
              Common Stock and the Warrants  shall entitle the holder to acquire
              500,000 shares at an exercise price of $.45 per share.

<PAGE>

                                  Schedule 9.1

                         Form 8-K Disclosure Obligations

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