Document:

Exhibit 4.17

1.       Shipbroker

2.       Place and date

         Seoul, 09/03/2006

3.       Owners/Place of business (Cl. 1)

         KOMARF HOPE 29 Shipping Company, Liberia

4.       Bareboat Charterers/Place of business

         Pylio Shipping Company Limited, Liberia

5.       Vessel's name, call sign and lag (Cl. 1 and 3)

         M/T Flawless, ELNX4, Liberia

6.       Type of Vessel

         Suez Max

7.       GT/NT

         79718/46569

8.       When/Where built

         1991 Hyundai Heavy Industries Co., Ltd., Ulsan, Korea

9.       Total DWT (abt.) In metric tons on summer freeboard

         Det Norske Veritus

10.      Classification society (C1. 3)

11.      Date of last special survey by the Vessel's classification society

12.      Further particulars of Vessel (also indicate minimum number of months'
         validity of class certificates agreed acc. To Cl. 3)

13.      Port or Place of delivery (Cl. 3)

14.      Time for delivery (Cl. 4)

         See Clause 4.

15.      Cancelling date (Cl. 5)

         April 30, 2006

16.      Port or Place of redelivery (Cl. 15)

         Not applicable.

17.      No.  of  months'  validity,  of  trading  and class  certificates  upon
         redelivery (Cl. 15)

         Six (6) months.

18.      Running days' notice if other than stated In Cl. 4

         See Clause 5.

19.      Frequency of dry-docking (Cl. 10(g))

20.      Trading limits (Cl. 6)

21.      Charter period (Cl. 2)

         Five (5) years (however, subject to Cl. 32)

22.      Charter hire (Cl. 11)

         US$750,000

23.      New class and other safety  requirements  (state percentage of Vessel's
         insurance value acc. To Box 29)(Cl. 10(a)(II))

24.      Rate of interest payable acc. To Cl. 11(f) and, if applicable,  acc. To
         PART IV

25.      Currency and method of payment (Cl. 11)

         US Dollars, In same day funds

26.      Place of payment; also slate beneficiary and bank account (Cl. 11)

         As to be notified by the owners to the Charters.

27.      Bank guarantee/bond (sum and place)((Cl. 24)(optional)

28.      Mortgage(s), if any (state whether 12(a) or (b) applies; if 12(b)
         applies state date of Financial Instrument and name of
         Mortgagee(s)/Place of business)(Cl. 12)

         12(b) applies.

         1st priority mortgage, dated on or around the date herewith in favor of
         Fortis  Bank  ("Agent")  as trustee  for the  benefit  of  itself,  the
         relevant lenders ("Lenders") and swap providers.

         2nd priority  mortgage dated on or around the date herewith in favor of
         the  Charterers  securing  the  Seller's  Credit (as  defined in Clause
         32(a)).

         3rd priority  mortgage dated on or around the date herewith in favor of
         the  shareholder  of the Owners  securing the  Shareholder's  Funds (as
         defined in the Loan Agreement defined in Clause 33)

         Financial   Instrument  to  also  include,   without  limitation,   the
         intercreditor  agreement and any other  agreements  in connection  with
         financings related to this Charter.

29.      Insurance  (hull and machinery and war  risks)(state  value acc. To Cl.
         13(f)  or,  if  applicable,  acc.  To Cl.  14(k))(also  state if Cl. 14
         applies)

         Each insurance to cover 130% of the Outstanding  Project Cost; however,
         P&I Club insurance to cover the maximum cover available on the market.

         Clause 14 is not applicable.

30.      Additional insurance cover, if any, for Owners' account limited to (Cl.
         13(b) or, if applicable, Cl. 14(g)

         Not applicable

31.      Additional insurance cover, if any, for Charterers' account limited to
        (Cl. 13(b) or, if applicable, Cl. 14(g))

         Not applicable

32.      Latent defects (only to be filled in if period other than stated in Cl.
         3)

33.      Brokerage commission and to whom payable (Cl. 14(g))

         Not applicable

34.      Grace period (state number of clear banking days)(Cl. 28)

35.      Dispute  Resolution (state 30(a), 30(b) or 30(c); if 30(c) agreed Place
         of Arbitration must be stated (Cl. 30)

         30(a)

36.      War cancellation (indicate countries agreed)(Cl. 26(f))

37.      Newbuilding  Vessel  (indicate  with  "yes" or "no":  whether  PART III
         applies)(optional)

         No

38.      Name and place of Builders (only to be filled in if PART III applies)

39.      Vessel's Yard Building No. (only to be filled in if PART III applies)

40.      Date of Building Contract (only to be filled in if PART III applies)

41.      Liquidated damages and costs shall accrue to (state party acc. To Cl.
         1)

         a)

         b)

         c)

42.      Hire/Purchase  agreement  (indicate  with "yes" or "no" whether PART IV
         applies)(optional)

         No

43.      Bareboat  Charter  Registry  (indicate  "yes"  or "no"  whether  PART V
         applies)(optional)

         No

44.      Flag and Country of the Bareboat Charter Registry (only to be filled in
         if PART V applies)

         No

45.      Country  of the  Underlying  Registry  (only to be  filled in if PART V
         applies)

         No

46.      Number of additional clauses covering special provisions, if agreed)

         32, 33, 34

PREAMBLE - It is mutually agreed that this Contract shall be performed subject
to the conditions contained in this Charter which shall include PART I and PART
II. In the event of a conflict of conditions, the provisions of PART I shall
prevail over those of PART II to the extent of such conflict but no further. It
is further mutually agreed that PART III and/or PART IV and/or PART V shall only
apply and only form part of this Charter if expressly agreed and stated in the
Boxes 37, 42 and 43. If PART III and/or PART IV and/or PART V apply, it is
further agreed that in the event of a conflict of conditions, the provisions of
PART I and PART II shall prevail over those of PART III and/or PART IV and/or
PART V to the extent of such conflict but no further.

Signature (Owners)                                     Signature (Charterers)

/s/ K. H. Kwan                                         /s/ Stamatis Tsantanis
----------------------------                           -------------------------

                                                       Attorney-in-fact
<PAGE>
                                    PART II
                    "BARCON 2001" Standard Bareboat Charter

1.       Definitions

         In this  Charter,  the following  terms shall have the meanings  hereby
         assigned to them:
         "The Owners" shall mean the party identified in Box 3;
         "The Charterers" shall mean the party identified in Box 4;
         "The Vessel" shall mean the vessel named in Box 5 and with  particulars
         as stated in Boxes 6 to 12.
         "Financial  Instrument"  means the mortgage,  deed of covenant or other
         such financial security instrument stated in Box 28.

2.       Charter Period

         In consideration of the hire detailed in Box 22, the Owners have agreed
         to let and the Charterers have agreed to hire the Vessel for the period
         stated in Box 21 ("The Charter Period").

3.       Delivery

         (not applicable when Part III applies, as indicated in Box 37)

         (a) through (c) Paragraphs deleted

         The  Vessel to be  delivered  under  this  Charter by the Owners to the
         Charterers  shall be on an as is where is basis (and,  at any rate,  as
         delivered  under the MOA (as defined in Clause 4) by the  Charterers as
         sellers to the Owners as buyers) and without any warranty by the Owner.

4.       Time for Delivery

         (not  applicable  when Part III  applies,  as  indicated in Box 37) The
         delivery of the Vessel under this Charter shall be made  simultaneously
         with the delivery under the Memorandum of Agreement entered into on the
         same date  herewith by and between  the  Charterers  as sellers and the
         Owners as buyers ("MOA").

         (a)      Should  the Vessel not be  delivered  latest by the  canceling
                  date indicated in Box 15 or the cancellation date as otherwise
                  agreed by and between the Owners and the Charterers hereunder,
                  the  Owners  shall  propose  a new date of  cancellation  that
                  reasonably takes into account the time needed for this Charter
                  and the related financing transactions to lake into effect and
                  the Owners shall accept such proposal.

         (b)      Notwithstanding   Clause  5(a)  above,   if  it  appears  with
                  reasonable  certainty  the  delivery of the Vessel  under this
                  Charter  cannot  be made  due to the  failure  in the  related
                  financing  transactions  or  otherwise,  this  Charter  may be
                  cancelled  by a mutual  agreement  between  the Owners and the
                  Charterers.

         (c)  Paragraph deleted

6.       Trading Restrictions

         The Vessel  shall be  employed  in lawful  trades for the  carriage  of
         suitable lawful  merchandise within the trading limits indicated in Box
         20.

         The Charterers  undertake not to employ the Vessel or suffer the Vessel
         to be  employed  otherwise  than in  conformity  with the  terms of the
         contracts of insurance  (including any warranties  expressed or implied
         therein)  without  first  obtaining the consent of the insurers to such
         employment and complying with such  requirements as to extra premium or
         otherwise as the insurers may prescribe.

         The  Charterers  also  undertake not to employ the Vessel or suffer her
         employment  in any trade or business  which is  forbidden by the law of
         any country to which the Vessel may sail or is otherwise  illicit or in
         carrying illicit or prohibited goods or in any manner  whatsoever which
         may  render  her  liable  to  condemnation,   destruction,  seizure  or
         confiscation.

         Notwithstanding  any other  provisions  contained in this Charter it is
         agreed  that  nuclear  fuels  or  radioactive  products  or  waste  are
         specifically  excluded from the cargo permitted to be loaded or carried
         under this Charter.  This  exclusion  does not apply to  radio-isotopes
         used  or   intended  to  be  used  for  any   industrial,   commercial,
         agricultural, medical or scientific purposes provided the Owners' prior
         approval has been obtained to loading thereof.

7.       Surveys on Delivery and Redelivery

         (not  applicable  when Part III  applies,  as  indicated in Box 37)
         The Owners and Charterers shall each appoint  surveyors for the purpose
         of  determining  and agreeing in writing the condition of the Vessel at
         the time of delivery and redelivery  hereunder.  The  Charterers  shall
         bear all expenses of the On-hire Survey including loss of time, if any,
         and the Charterers  shall also bear all expenses of the Off-hire Survey
         including loss of time, if any, at the daily  equivalent to the rate of
         hire or pro rata thereof.

8.       Inspection

         The Owners  shall have the right at any time  after  giving  reasonable
         notice to the  Charterers to inspect or survey the Vessel or instruct a
         duly authorized surveyor to carry out such survey on their behalf:

         (a)      to  ascertain   the   condition  of  the  Vessel  and  satisfy
                  themselves  that the  Vessel is being  properly  repaired  and
                  maintained.  The costs and fees for such  inspection or survey
                  shall be paid by the  Owners  unless  the  Vessel  is found to
                  require  repairs  or  maintenance  in  order  to  achieve  the
                  condition so provided;

         (b)      in  dry-dock  if  the  Charters  have  not  dry-docked  her in
                  accordance  with  Clause  10(g).  The  costs and fees for such
                  inspection of survey shall be paid by the Charters; and

         (c)      for  any  other  commercial  reason  they  consider  necessary
                  (provided  it does not unduly  interfere  with the  commercial
                  operation  of  the  Vessel).  The  costs  and  fees  for  such
                  inspection and survey shall be paid by the Owners.

          All time used in respect of inspection, survey or repairs shall be for
          the Charters' account and form part of the Charter Period.

         The  Charters  shall also permit the Owners to inspect the Vessel's log
         book  whenever  requested  and shall  whenever  required  by the Owners
         furnish them with full  information  regarding and  casualties or other
         accidents or damage to the Vessel.

9.       Inventories, Oil and Stores

         A complete inventory of the Vessel's entire equipment, outfit including
         spare part, appliances and of all consumable stores on board the Vessel
         shall  be made by the  Charters  in  conjunction  with  the  Owners  on
         redelivery  of the Vessel.  The Charters and the Owners,  respectively,
         shall  at the time of  redelivery  take  over and pay for all  bunkers,
         lubricating  oil,  unbroached  provisions,   paints,  ropes  and  other
         consumable  stores  (excluding  spare  parts) in the said Vessel at the
         then current market prices at the ports of delivery,  respectively. The
         Charters  shall ensure that all spare parts listed in the inventory and
         used during the Charter  Period are replaced at their  expense prior to
         redelivery of the Vessel.

10.      Maintenance and Operation

         (a)      (i)  Maintenance  and Repairs -- During the Charter Period the
                  Vessel  shall be in the full  possession  and at the  absolute
                  disposal  for all  purposes  of the  Charters  and under their
                  complete control in every respect. The Charters shall maintain
                  the Vessel,  her machinery,  boilers,  appurtenances and spare
                  parts  in a good  state  of  repair,  in  efficient  operating
                  condition and in accordance with good  commercial  maintenance
                  practice and at their own expense they shall at all times keep
                  the  Vessel's  Class fully up to date with the  Classification
                  Society  indicated in Box 10 and maintain all other  necessary
                  certificates in force at all times.

                  (ii) New Class and Other Safety  Requirements  -- In the event
                  of  any  improvement,  structural  changes  or  new  equipment
                  becoming  necessary for the continued  operation of the Vessel
                  by  reason  of  new  class   requirements   or  by  compulsory
                  legislation  costing  (excluding  the Charters'  loss of time)
                  more  than the  percentage  stated  in Box 23, or if Box 23 is
                  left  blank,  5 per cent of the  Vessel's  insurance  value as
                  stated in Box 29,  then the  Charterers  at their own  expense
                  shall bear the cost of compliance.

                  (iii)  Financial   Security  -  The  Charters  shall  maintain
                  financial security or responsibility in respect of third party
                  liabilities as required by any government,  including federal,
                  state of municipal or other division or authority thereof,  to
                  enable the  Vessel,  without  penalty or charge,  lawfully  to
                  enter,  remain  at or leave  any port,  place  territorial  or
                  contiguous  waters of any country,  state or  municipality  in
                  performance of this Charter without any delay. This obligation
                  shall  apply  whether  or  not  such  requirements  have  been
                  lawfully  imposed by such  government or division or authority
                  thereof.

                  The Charters  shall make and maintain all  arrangement by bond
                  or otherwise as may be necessary to satisfy such  requirements
                  at the Charters' sole expense and the Charters shall indemnify
                  the Owners against all consequences whatsoever (including loss
                  of time) for any failure or inability to do so.

         (b)      Operation  for the  Vessel - The  Charters  shall at their own
                  expense and by their own procurement man,  victual,  navigate,
                  operate,  supply,  fuel and,  whenever  required,  repair  the
                  Vessel  during  the  Charter  Period  and they  shall  pay all
                  charges  and  expenses  of every  kind and  nature  whatsoever
                  incidental to their use and operation of the Vessel under this
                  Charter; provided,  however, that, all tonnage taxes and other
                  ownership  related  expenses shall be paid by the Owners.  The
                  Master,  shall  be the  servants  of the  Charterers  for  all
                  purposes  whatsoever,  even if for any reason appointed by the
                  Owners.

                  Charterers   shall  comply  with  the  regulations   regarding
                  officers and crew in force in the country of the Vessel's flag
                  or any other applicable law.

         (c)      The  Charterers  shall keep the  Owners  and the  mortgagee(s)
                  advised of the intended  employment,  planned  dry-docking and
                  major repairs of the Vessel, as reasonably required.

         (d)      Flag and  Name of  Vessel - During  the  Charter  Period,  the
                  Charters  shall have the  liberty to paint the Vessel in their
                  own colours, install and display their funnel insignia and fly
                  their  own  house  flag.  The  Charters  shall  also  have the
                  liberty,  with  the  Owners'  consent,   which  shall  not  be
                  unreasonably  withheld,  to change the flag and/or the name of
                  the  Vessel   during  the   Charter   Period.   Painting   and
                  re-painting,  instalment and  re-instalment,  registration and
                  re-registration,  if required  by the Owners,  shall be at the
                  Charters' expense and time.

         (e)      Changes  to the  Vessel -  Subject  to Clause  10(a)(ii),  the
                  Charters  shall  make no  structural  changes in the Vessel or
                  changes  in the  machinery,  boilers,  appurtenances  or spare
                  parts  thereof  without in each  instance  first  securing the
                  Owners' approval thereof. If the Owners so agree, the Charters
                  shall,  if the Owners so  require,  restore  the Vessel to its
                  former condition before the termination of this Charter.

         (f)      Use of the Vessel's  Outfit,  Equipment  and  Appliances - The
                  Charters  shall  have the use of all  outfit,  equipment,  and
                  appliances  on  board  the  Vessel  at the  time of  delivery,
                  provide  the same or  their  substantial  equivalent  shall be
                  returned  to the Owners on  redelivery  in the same good order
                  and  condition  as  when  received,  ordinary  wear  and  tear
                  excepted.  The  Charterers  shall from time to time during the
                  Charter  Period replace such items of equipment as shall be so
                  damaged or worn as to be unfit for use. The  Charterers are to
                  procure  that all repairs to or  replacement  of any  damaged,
                  worn or lost parts or  equipment  be  effected  in such manner
                  (both as regards  workmanship and quality of materials) as not
                  to diminish the value of the Vessel.  The Charterers  have the
                  right to fit  additional  equipment at their  expense and risk
                  but the  Charterers  shall remove such equipment at the end of
                  the period if requested by the Owners. Any equipment including
                  radio  equipment  on hire on the  Vessel  at time of  delivery
                  shall  be  kept  and  maintained  by the  Charterers  and  the
                  Charterers shall assume the obligations and liabilities of the
                  Owners under any lease  contacts in  connection  therewith and
                  shall  reimburse  the  Owners  for all  expenses  incurred  in
                  connection  therewith,  also for any new equipment required in
                  order to comply with radio regulations.

(g)                Periodical Dry-Docking - The Charters shall dry-dock the
                   Vessel and clean and paint her underwater parts whenever the
                   same may be necessary, but not less than once during the
                   period stated in Box 19 or, if Box 19 has been left blank,
                   every sixty (60) calendar months after delivery or such other
                   period as may be required by the Classification Society or
                   flag State.

         (h)      Management  --  Commercial,   technical   and/or   operational
                  management  of  the  Vessels  to be  executed  by  Top  Tanker
                  Management  Inc. or any other company  acceptable to the Agent
                  and KOMARF for the Charter Period.

         (j)      Compliance  - The  Charterers  shall  comply  with any and all
                  requirements  under the International  Management Code for the
                  Safe Operation of Ships and for Pollution  Prevention  adopted
                  by the International Maritime Organisation and applicable law.

         (k)      Financial  Statements  - The  Charterers  shall  submit to the
                  Owners the audited annual accounts within 180 days of the year
                  end and semi-annual  management accounts within 90 days of the
                  half- year end.

         (l)      Survey  Reports - The  Charterers  shall supply the Owners the
                  class survey reports regularly including annual survey and the
                  follow-up reports showing the recommendation, if any, has been
                  cleared at the Charterer's  expense.  The Charterers shall put
                  its best  efforts  to keep the  condition  of the  Vessels  in
                  compliance  with all class  certificates  during  the  Charter
                  Period.

11.      Hire

         (a)      The Charterers shall pay hire due to the Owners  punctually in
                  accordance  with the terms of this Charter in respect of which
                  time shall be of the essence.

         (b)      The Charterers  shall on a monthly basis pay to the Owners for
                  the hire of the Vessel a lump sum in the amount  indicated  in
                  Box 22 which shall be payable not later than every thirty (30)
                  running days in advance,  the first lump sum being  payable on
                  the date and hour of the Vessel's  delivery to the Charterers.
                  Hire shall be paid continuously throughout the Charter Period.
                  Each  hire  shall  be made  free  and  clear  of any  right of
                  set-off, reduction or delay whatsoever.

         (c)      Payment of hire shall be made in cash without  discount in the
                  currency  and in  the  manner  indicated  in Box 25 and at the
                  place mentioned in Box 26.

         (d)      Final  payment  of hire,  if for a period of less than  thirty
                  (30)  running  days,   shall  be   calculated   proportionally
                  according  to the  number of days and hours  remaining  before
                  redelivery and advance payment to be effected accordingly.

         (e)      Notwithstanding  whether  the Vessel be lost or  missing,  the
                  hire shall be paid by the Charterers to the Owners as provided
                  for hereunder.

         (f)      Any delay in  payment  of hire  shall  entitle  the  Owners to
                  interest  at the rate per annum as agreed in Box 24. If Box 24
                  has not been  filled in, the three  months  interbank  offered
                  rate in  London  (LIBOR  or its  successor)  for the  currency
                  stated  in  Box  25,  as  quoted  by  the   British   Bankers'
                  Association  (BBA)  on  the  date  when  the  hire  fell  due,
                  increased by 2 per cent., shall apply:

         (g)      Payment of interest due under  sub-clause  11(f) shall be made
                  immediately,  whether  or not the Owners  have  given  invoice
                  therefor to the Charterers.

12.      Mortgage
         (only to apply if Box 28 has been appropriately filled in)

         (a)  Paragraph deleted

         (b)      The Vessel  chartered  under this  Charter  is  financed  by a
                  mortgage according to the Financial Instrument. The Charterers
                  undertake  to  comply,   and  provide  such   information  and
                  documents  to  enable  the  Owners  to  comply,  with all such
                  instructions  or  directions  in  regard  to  the  employment,
                  insurances,  operation,  repairs and maintenance of the Vessel
                  as laid down in the Financial Instrument or as may be directed
                  from time to time  during the  currency  of the Charter by the
                  mortgage(s) in conformity with the Financial  Instrument.  The
                  Charterers   confirm  that,   for  this  purpose,   they  have
                  acquainted themselves with all relevant terms,  conditions and
                  provisions   of  the   Financial   Instrument   and  agree  to
                  acknowledge  this in writing in any form that may be  required
                  by the  motgagee(s).  The  Owners  warrant  that they have not
                  effected any mortgage(s)  other than stated in Box 28 and that
                  they  shall  not  agree to any  amendment  of the  mortgage(s)
                  referred to in Box 28 or effect any other mortgage(s)  without
                  the  prior  consent  of  the  Charterers  which  shall  not be
                  unreasonably withheld.

         (optional,   Clauses  12(a)  and  12(b)  are   alternatives;   indicate
         alternative agreed in Box 28).

13.      Insurance and Repairs

         (a)      During the Charter  Period the Vessel shall be kept insured by
                  the  Charterers at their expense  against hull and  machinery,
                  war and Protection and Indemnity  risks (and any risks against
                  which it is  compulsory  to insure  for the  operation  of the
                  Vessel, including maintaining financial security in accordance
                  with  sub-clause  10(a)(iii)) in such form as the Owners shall
                  in writing approve,  which approval shall not be un-reasonably
                  withheld.  Further during the Charter  Period,  the Charterers
                  shall  at  their  expense  take our  effect  MU,  MAP and COFR
                  insuring the Vessel and other  insurances  as the Agent or the
                  shareholder  of the Owners may reasonably  require.  Insurance
                  policies for each insurance  above shall name the Owners,  the
                  Lenders  and the  Charterers  as  beneficiaries.  and shall be
                  assigned in favor of them.  Subject to the  provisions  of the
                  Financial  Instrument,  if any, and the approval of the Owners
                  and the  insurers,  the  Charterers  shall  effect all insured
                  repairs and shall undertake  settlement and reimbursement from
                  the insurers of all costs in  connection  with such repairs as
                  well as  insured  charges,  expenses  and  liabilities  to the
                  extent of coverage under the insurances  herein  provided for.
                  The  insurances   shall  not  be  subject  to  any  deduction,
                  franchise or any other  restrictions  of similar  effect.  The
                  Charterers  also  to  remain  responsible  for  and to  effect
                  repairs and settlement of costs and expenses  incurred thereby
                  in respect of all other repairs not covered by the  insurances
                  and/or not exceeding any possible  franchise(s) or deductibles
                  provided  for in the  insurances.  All time  used for  repairs
                  under the  provisions of  sub-clause  13(a) and for repairs of
                  latent defects  according to Clause 3(c) above,  including any
                  deviation, shall be for the Charterers' account.

         (b)      Paragraph deleted

         (c)      The Charterers  shall upon the request of the Owners,  provide
                  information  and  promptly  execute  such  documents as may be
                  required  to enable  the Owners to comply  with the  insurance
                  provisions of the Financial Instrument.

         (d)      Subject to the provisions of the Financial Instrument, if any,
                  should the Vessel become and actual, constructive, compromised
                  or agreed  total  loss  under the  insurances  required  under
                  sub-clause  13(a), all insurance  payments for such loss shall
                  be paid to the  Agent  who  shall  distribute  the  moneys  in
                  accordance  with  the  Financial  Instrument.  The  Charterers
                  undertake to notify the Owners and the  mortgagee(s),  if any,
                  of any  occurrences  in  consequence  of which  the  Vessel is
                  likely to become a total loss as  defined  in this  Clause and
                  all  other   occurrence   as  required   under  the  Financial
                  Instrument.

         (e)      Subject to the Financial Instrument, the Owners shall upon the
                  request of the Charterers,  promptly execute such documents as
                  may be required to enable the Charterers to abandon the Vessel
                  to insurers and claim a constructive total loss.

         (f)      For the  purpose  of  insurance  coverages  of each  insurance
                  mentioned  the  provisions of  sub-clause  13(a),  the insured
                  amount shall be the sum indicated in Box 29.

14.      Paragraphs deleted

15.      Redelivery

         At the expiration of the Charter Period or, if earlier,  on the date of
         sale of the Vessel as provided for under Clause 32, the Vessel shall be
         redelivered by the Charterers to the Owners at a safe and ice-free port
         in such ready safe berth as the Owners may direct. The Charterers shall
         give the Owners not less than thirty  (30)  running  days'  preliminary
         notice of expected date,  range of ports of redelivery or port or place
         of  redelivery  (which  shall  include the port or place of delivery as
         directed by the Owners) and not less than  fourteen  (14) running days'
         definite notice of expected date and port or place of redelivery (which
         shall be the port or place of delivery as directed by the Owners).  Any
         changes   thereafter  in  the  Vessel's   position  shall  be  notified
         immediately to the Owners.

         The Charterers warrant that they will not permit the Vessel to commence
         a  voyage   (including  any  preceding  ballast  voyage)  which  cannot
         reasonably  be expected to be completed in time to allow  redelivery of
         the  Vessel  within  the  Charter  Period or on the date of sale of the
         Vessel as provided  for under Clause 32 at the place as directed by the
         Owners.  Notwithstanding  the  above,  should  the  Charterers  fail to
         redeliver the Vessel  within the Charter  Period or on the date of sale
         of the Vessel as provided  for under Clause 32 at the place as directed
         by the Owners,  the  Charterers  shall pay the daily  equivalent to the
         rate of hire stated in Box 22 plus 10  percent,  for the number of days
         by which the Charter Period or the date of sale is exceeded.  All other
         terms,  conditions  and  provisions of this Charter  shall  continue to
         apply.

         Subject to the provisions of Clause 10, the Vessel shall be redelivered
         to the Owners in the same or as good  structure,  state,  condition and
         class   as   that  in   which   she  was   delivered   free  of   class
         conditions/recommendations,  fair  wear and tear  not  affecting  class
         excepted. On re-delivery,  The Vessel shall have been dry docked as per
         class requirement.

         The Vessel upon redelivery  shall have her survey cycles up to date and
         the trading and the national and international class certificates valid
         for at least the number of months agreed in Box 17.

16.      Non-Lien

         The Charterers will not suffer, nor permit to be continued, any lien or
         encumbrance incurred by them or their agents, which might have priority
         over the title and interest of the Owners in the Vessel. The Charterers
         further  agree to fasten to the  Vessel in a  conspicuous  place and to
         keep so fasten during the Charter Period a notice reading to the effect
         of the following:

         "This Vessel is the property of (name of Owners).  It is under  charter
         to (name of  Charterers)  and by the terms of the Charter Party neither
         the  Charterers  nor the Master have any right,  power or  authority to
         create,  incur or permit to be imposed on the Vessel any lien whatever.
         Further, the Vessel is subject to the first priority mortgage dated [o]
         in favor of Fortis Bank as trustee acting for itself and the mortgagees
         thereunder, the second priority mortgage dated [o] in favor of [specify
         the  Charterers  name],  and the third  priority  mortgage dated [o] in
         favor of (specify the shareholder of the Owners name]"

17.      Indemnity

         (a)      The Charterers  shall indemnify the Owners,  Korea Marine Fund
                  Corporation (a Korean corporation:  "KOMARF"). the Owners, the
                  Agent  and  the  Lenders  and  their  respective   successors,
                  assigns,   agents.   directors,   shareholders   and  officers
                  (collectively,  "Indemnified  Parties")  from and  against any
                  loss,  damage,  claim, cost and et---expense  incurred by them
                  arising out of or in relation to the  operation  of the Vessel
                  by the Charterers  (including,  without  limitation,  costs of
                  operating  and  maintaining   the  Vessels   (whether  by  the
                  time-charterers  or the subcharterers or by whomsoever leased,
                  used or  operated),  environmental  claim  or  those  based on
                  environmental laws), and against any lien of whatsoever nature
                  arising out of an event  occurring  during the Charter Period.
                  If the Vessel be arrested or  otherwise  detained by reason of
                  claims or liens arising out of her operation  hereunder by the
                  Charterers, the Charterers shall at their own expense take all
                  reasonable  steps to secure that within a reasonable  time the
                  Vessel is released, including the provision of bail.

                  Without  prejudice  to the  generally  of the  foregoing,  the
                  Charterers agree to indemnify the Indemnified  Parties against
                  all  consequences  or  liabilities  arising  from the  Master,
                  officers or agents signing Bills of Lading or other documents.

         (b)      If the Vessel be arrested or otherwise detained by reason of a
                  claim or claims against the Owners,  the Owners shall at their
                  own expense take all reasonable  steps to secure that within a
                  reasonable   time  the  Vessel  is  released,   including  the
                  provision  of bail.  In such  circumstances  the Owners  shall
                  indemnify the Charterers  against any loss,  damage or expense
                  incurred  by the  Charterers  (including  hire paid under this
                  Charter) as a direct consequence of such arrest or detention.

18.      Lien

         The Owners to have a lien upon all cargoes,  sub-hires and sub-freights
         belonging or due to the Charterers or any  sub-charterers  and any Bill
         of Lading freight for all claims under this Charter.

19.      Salvage

         All  Salvage  and  towage  performed  by the  Vessel  shall  be for the
         Charterers' benefit and the cost of repairing damage occasioned thereby
         shall be borne by the Charterers.

20.      Wreck Removal

         In the  event  of  the  Vessel  becoming  a  wreck  or  obstruction  to
         navigation  the  Charterers  shall  indemnify the  Indemnified  Parties
         against any sums whatsoever which the Indemnified  Parties shall become
         liable to pay and shall pay in  consequence  of the  Vessel  becoming a
         wreck or obstruction in navigation.

21.      General Average

         The Owner shall not contribute to General Average.

22.      Assignment, Sub-Charter and Sale

         (a)      The Charterers  shall not assign this Charter nor  sub-charter
                  the Vessel on a bareboat  basis except in accordance  with the
                  Financial Instrument.

         (b)      The Owners  shall not sell the Vessel  during the  currency of
                  this Charter except as provided in Clause 32.

23.      Contacts of Carriage

         (a)      The Charterers are to procure that all documents issued during
                  the Charter Period  evidencing the terms and conditions agreed
                  in respect of  carriage  of goods  shall  contain a  paramount
                  clause  incorporating  any  legislation  relating to carrier's
                  liability for cargo  compulsorily  applicable in the trade; if
                  no such legislation  exists,  the documents shall  incorporate
                  the  Hague-Visby  Rules,  The documents shall also contain the
                  New Jason Clause and the Both to Blame Collision Clause.

         (b)      The  Charterers  are to  procure  that all  passenger  tickets
                  issued   during  the  Charter   Period  for  the  carriage  of
                  passengers  and their luggage under this Charter shall contain
                  a paramount clause  incorporating any legislation  relating to
                  carrier's   liability   for   passengers   and  their  luggage
                  compulsorily  applicable in the trade; if no such  legislation
                  exists,  the passenger  tickets shall  incorporate  the Athens
                  Convention  Relating to the Carriage of  Passengers  and their
                  Luggage by Sea,  1974,  and any  protocol  thereto.  Delete as
                  applicable

24.      Paragraph deleted

25.      Requisition/Acquisition

         (a)      In the event of the Requisition for Hire for the Vessel by any
                  governmental   or  other  competent   authority   (hereinafter
                  referred to as  "Requisition  for Hire")  irrespective  of the
                  date during the Charter Period when "Requisition for Hire" may
                  occur and  irrespective  of the length  thereof and whether or
                  not it be for an indefinite or a limited  period of time,  and
                  irrespective of whether it may or will remain in force for the
                  remainder of the Charter  Period,  this  Charter  shall not be
                  deemed  thereby or  thereupon  to be  frustrated  or otherwise
                  terminated  and  the  Charcters  shall  continue  to  pay  the
                  stipulated  hire in the manner  provided by this Charter until
                  the time when the Charter would have  terminated  pursuant to
                  any of the provisions hereof.

         (b)      In the event of the Owners being  deprived of their  ownership
                  in the Vessel by any  Compulsory  Acquisition of the Vessel or
                  requisition  for title by any  governmental or other competent
                  authority    (hereinafter    referred   to   as    "Compulsory
                  Acquisition"),  then,  irrespective  of the  date  during  the
                  Charter Period when "Compulsory  Acquisition" may occur,  this
                  Charter  shall  not  he  deemed  thereby  or  thereupon  to be
                  frustrated or otherwise  terminated  and the  Charcters  shall
                  continue to pay the stipulated  hire in the manner provided by
                  this  Charter  until  the time  when the  Charter  would  have
                  terminated pursuant to any of provisions hereof.

26.      War

         (a)      For the purpose of this  Clause,  the words "War Risks"  shall
                  include any war (whether  actual or  threatened),  act of war,
                  civil   war,   hostilities,   revolution,   rebellion,   civil
                  commotion,  warlike  operations,  the laying of mines (whether
                  actual or reported). Acts of piracy, acts of terrorists,  acts
                  of hostility of malicious damage,  blockades  (whether imposed
                  against  vessels  of  certain  flags or  ownership  or against
                  certain  cargoes  or crews  or  otherwise  howsoever),  by any
                  person,  body, terrorist or political group, or the Government
                  of any state whatsoever,  which may be dangerous or are likely
                  to be or to become dangerous to the Vessel, her cargo, crew or
                  other persons on board the Vessel.

         (b)      The Vessel,  unless the written consent of the Owners be first
                  obtained, shall not continue to or go through any port, place,
                  area or zone  (whether  of land or sea),  or any  waterway  or
                  canal, where it reasonably appears that the Vessel, her cargo,
                  crew or other persons on board the Vessel,  in the  reasonable
                  judgment of the Owners,  may be, or are likely to be,  exposed
                  to War Risks.  Should the Vessel,  be within any such place as
                  aforesaid, which only becomes dangerous, or is likely to be or
                  to become dangerous, after her entry into it, the Owners shall
                  have the right to require the Vessel to leave such area.

         (c)      The Vessel shall not load contraband cargo, or to pass through
                  any blockade, whether such blockade be imposed on all vessels,
                  or is  imposed  selectively  in  any  way  whatsoever  against
                  vessels  of certain  flags or  ownership,  or against  certain
                  cargoes or crews or otherwise  howsoever,  or to proceed to an
                  area where she shall be subject, or is likely to be subject to
                  a belligerent's right of search and/or confiscation.

         (d)      If the insurers of the war risks insurance,  when Clause 14 is
                  applicable,  should requires payment of premiums and /or calls
                  because,  pursuant  to the  Charterers'orders,  the  Vessel is
                  within,  or is due to enter  and  remain  within,  any area or
                  areas which are specified by such insurers as being subject to
                  additional  premiums because of War Risks,  then such premiums
                  and/or  calls shall be  reimbursed  by the  Charterers  to the
                  Owners at the same time as the next payment of hire is due.

         (e)      The Charterers shall have the liberty.

                  (i)      to    comply    with    all    orders,    directions,
                           recommendations or advise as to departures,  arrival,
                           routes,  sailing in convoy, ports of call, stoppages,
                           destinations, discharge of cargo, delivery, or in any
                           other  way   whatsoever,   which  are  given  by  the
                           Government  of the Nation under whose flag the Vessel
                           sails,  or  any  other  Government,   body  or  group
                           whatsoever acting with the power to compel compliance
                           with their orders or directions;

                  (ii)     to   comply   with   the   orders,    directions   or
                           recommendations  of any war  risks  underwriters  who
                           have the  authority  to five the same under the terms
                           of the war risks insurance;

                  (iii)    to  comply  with the terms of any  resolution  of the
                           Security of the  European  Community,  the  effective
                           orders of any other  Supranational body which has the
                           right to issue and give the same,  and with  national
                           laws aimed at enforcing  the same to which the Owners
                           are subject, and to obey the orders and directions of
                           those who are charged with their enforcement.

         (f)      In any and all events of outbreak of war  (whether  there be a
                  declaration of war or not), the hire shall continue to be paid
                  in accordance with Clause 11.

27.      Paragraph deleted

28.      Termination

         (a)      Charterers' Default

                  Subject  to the  Financial  instrument,  the  Owners  shall be
                  entitled  to  withdraw  the  Vessel  from the  service  of the
                  Charterers and terminate the Charter with immediate  effect by
                  written notice to the Charterers if:

                  (i)      the  Charterers  fail to pay hire in accordance  with
                           Clause 11. However,  where there is a failure to make
                           punctual   payment   of   hire   due  to   oversight,
                           negligence,  errors or  omissions  on the part of the
                           Charterers  or their  bankers,  the Owners shall give
                           the Charterers  written notice of the number of clear
                           banking days stated in Box 34 (as  recognized  at the
                           agreed  place of  payment)  in which to  rectify  the
                           failure,  and when so rectified within such number of
                           days following the Owners' notice,  the payment shall
                           stand  as  regular  and  punctual.   Failure  by  the
                           Charterers  to pay hire  within  the  number  of days
                           stated  in  Box 34 of  their  receiving  the  Owners'
                           notice as provided  herein,  shall entitle the Owners
                           to  withdraw  the  Vessel  from  the  service  of the
                           Charterers and terminate the Charter  without further
                           notice;

                  (ii)     the Charters fail to comply with the requirements of:

                           (1)      Clause 6 (Trading Restrictions)

                           (2)      Clause 13(a) (Insurance and Repairs)
                            Provided that the Owners shall have the option, by
                            written notice to the Charterers, to give the
                            Charterers a specified number of days grace within
                            which to rectify the failure without prejudice to
                            the Owners' right to withdraw and terminate under
                            this Clause if the Charterers fail to comply with
                            such notice;

                   (iii)    The Charterers fail to rectify any failure to comply
                            with the requirements of sub-clause 10(a)(i)
                            (Maintenance and Repairs) as soon as practically
                            possible after the Owners have requested them in
                            writing so to do and in any event so that the
                            Vessel's insurance cover is not prejudiced.

         (b)      Owners' Default

                    If the Owners shall by any act or omission be in breach of
                    their obligations under this Charter to the extent that the
                    Charterers are deprived of the use of the Vessel and such
                    breach continues for a period of fourteen (14) running days
                    after written notice thereof has been given by the
                    Charterers to the Owners, the Charterers shall be entitled
                    to terminate this Charter with immediate effect by written
                    notice to the Owners.

         (c)      Loss of Vessel covered by insurance

                  Despite  the Vessel  becoming a total loss or is declared as a
                  constructive or compromised or arranged total loss, so long as
                  it  is  fully  covered  by  insurance.  the  Charterers  shall
                  continue  to pay the  hire at the time  and in the  manner  as
                  provided  herein  for a maximum  period of forty  (40) days or
                  until the insurance  proceeds shall be paid,  whichever occurs
                  first:, and- any money paid by the Charterers to the Owners as
                  hire will be returned  to the  Charterers  once the  insurance
                  proceeds  are paid.  For the purpose of this  sub-clause,  the
                  Vessel  shall not be deemed to be lost  unless  she has either
                  become an actual total loss or agreement has been reached with
                  her  underwriters is not reached it is adjudged by a competent
                  tribunal that a constructive loss of the Vessel has occurred.

         (d)      Subject to the Agent's prior approval,  either party shall be
                  entitled to terminate  this Charter with  immediate  effect by
                  written  notice  to the  other  party in the event of an order
                  being  made  or   resolution   passed  for  the   winding  up,
                  dissolution,  liquidation  or  bankruptcy  of the other  party
                  (otherwise   than  for  the  purpose  of   reconstruction   or
                  amalgamation) or if a receiver is appointed, or if it suspends
                  payment,  ceases to carry on  business  or makes  any  special
                  arrangement or composition with its creditors.

         (e)      The termination of this Charter shall be without  prejudice to
                  all rights  accrued due between the parties  prior to the date
                  of termination and to any claim that either party might have.

29.      Repossession

         In the event of the  termination of this Charter in accordance with the
         applicable  provisions of Clause 28, the Owners shall have the right to
         repossess the Vessel

         from the  Charterers  at her current or next port of call, or at a port
         or place  convenient to them without  hindrance or  interference by the
         Charterers, courts or local authorities.  Pending physical repossession
         of the Vessel in accordance  with this Clause 29, the Charterers  shall
         hold the Vessel as  gratuitous  bailee only to the  Owners.  The Owners
         shall arrange for an authorized  representative  to board the Vessel as
         soon  as  reasonably  practicable  following  the  termination  of  the
         Charter.  The Vessel  shall be deemed to be  repossessed  by the Owners
         from the  Charterers  upon the  boarding  of the Vessel by the  Owners'
         representative.  All arrangements and expenses relating to the settling
         of wages,  disembarkation  and repatriation of the Charterers'  Master,
         officers and crew shall be the sole responsibility of the Charterers.

30.      Dispute Resolution

         (a)      This Contract shall be governed by and construed in accordance
                  with  English  law  and  any  dispute  arising  out  of  or in
                  connection with this Contract shall be referred to arbitration
                  in London in accordance  with the  Arbitration Act 1996 or any
                  statutory  modification  or  re-enactment  thereof save to the
                  extent  necessary  to give  effect to the  provisions  of this
                  Clause.

                  The  arbitration  shall be  conducted in  accordance  with the
                  London Maritime  Arbitrators  Association (LMAA) Terms current
                  at the time when the arbitration proceedings are commenced.

                  The reference shall be to three  arbitrators.  A party wishing
                  to refer a dispute to arbitration shall appoint its arbitrator
                  and send  notice of such  appointment  in writing to the other
                  party  requiring the other party to appoint its own arbitrator
                  within 14 calendar  days of that  notice and  stating  that it
                  will  appoint its  arbitrator  as sole  arbitrator  unless the
                  other party  appoints its own arbitrator and gives notice that
                  it has done so  within  the 14 days  specified.  If the  other
                  party does not appoint its own arbitrator and give notice that
                  it has  done  so  within  the 14  days  specified,  the  party
                  referring   a  dispute  to   arbitration   may,   without  the
                  requirement  of any further  prior  notice to the other party,
                  appoint its arbitrator as sole arbitrator and shall advise the
                  other party accordingly.  The award of a sole arbitrator shall
                  be binding  on both  parties  as if he had been  appointed  by
                  agreement.

                  Nothing  herein shall prevent the parties  agreeing in writing
                  to vary these  provisions to provide for the  appointment of a
                  sole  arbitrator.  In cases  where  neither  the claim nor any
                  counterclaim  exceeds the sum of US$50,000  (or such other sum
                  as the parties may agree) the  arbitration  shall be conducted
                  in accordance with the LMAA Small Claims Procedure  current at
                  the time when the arbitration proceedings are commenced.

         (b)      Paragraph deleted

         (c)      Paragraph deleted

         (d)      Nothwithstanding  (a), (b) or (c) above, the parties may agree
                  at any  time to  refer  to  mediation  any  difference  and/or
                  dispute arising out of or in connection with this Contract.

                  In the case of a dispute in respect of which  arbitration  has
                  been  commenced  under (a),  (b) or (c) above,  the  following
                  shall apply:

                  (i)      Either  party  may at any time and from  time to time
                           elect to refer the  dispute or part of the dispute to
                           mediation  by service on the other party of a written
                           notice (the "Mediation  Notice") calling on the other
                           party to agree to mediation.

                  (ii)     The other  party shall  thereupon  within 14 calendar
                           days of receipt of the Mediation  Notice confirm that
                           they agree to  mediation,  in which case the  parties
                           shall thereafter agree a mediator within a further 14
                           calendar  days,  failing which on the  application of
                           either party a mediator will be appointed promptly by
                           the  Arbitration  Tribunal  ("the  Tribunal") or such
                           person  as  the  Tribunal  may   designate  for  that
                           purpose.  The  mediation  shall be  conducted in such
                           place and in  accordance  with such  procedure and on
                           such terms as the  parties may agree or, in the event
                           of disagreement, as may be set by the mediator.

                   (iii)   If the other party does not agree to mediate, that
                            fact may be brought to the attention of the Tribunal
                            and may be taken into account by the Tribunal when
                            allocating the costs of the arbitration as between
                            the parties.

                  (iv)     The  mediation  shall not  affect the right of either
                           party to seek such  relief  or take such  steps as it
                           considers necessary to protect its interest.

                  (v)      Either party may advise the  Tribunal  that they have
                           agreed to mediation.  The arbitration procedure shall
                           continue  during the conduct of the mediation but the
                           Tribunal  may  take  the  mediation   timetable  into
                           account when setting the  timetable  for steps in the
                           arbitration.

                  (vi)     Unless otherwise agreed or specified in the mediation
                           terms,  each party shall bear its own costs  incurred
                           in the  mediation and the parties shall share equally
                           the mediator's cost and expenses.

                  (vii)    The mediation  process shall be without prejudice and
                           confidential   and  no   information   or   documents
                           disclosed during it shall be revealed to the Tribunal
                           except to the extent that they are disclosable  under
                           the law and procedure governing arbitration.

         (Note : The parties should be aware that the mediation  process may not
         necessarily interrupt time limits)

         (e)      If Box 35 in Part I is not appropriately filled in, sub-clause
                  30(a) of this Clause shall apply. Sub-clause 30(d) shall apply
                  in all  cases.  *)  Sub-clauses  30(a),  30(b)  and  30(c) are
                  alternatives; indicate alternative agreed in Box 35.

31.      Notices

         (a)      Any  notice  to be given by either  party to the  other  party
                  shall be in writing and may be sent by fax, telex,  registered
                  or recorded mail or by personal service.

         (b)      The address of the  Parties for service of such  communication
                  shall be as stated in Boxes 3 and 4 respectively.

32.      Special Provisions

         (a)      Sellers' Credit:  The sellers' credit (in the amount of 10% of
                  the Purchase Price under the MOA,  "Sellers' Credit") shall be
                  paid to the  Charterers in a lump sum payment upon the sale of
                  the Vessels and receipt of the full amount of sales  proceeds,
                  but not later than  three (3)  months  after the expiry of the
                  Charter Period.  For the avoidance of doubt. no interest shall
                  accrue on the Sellers' Credit.

                  In the event that the BBC is  terminated  before the scheduled
                  expiry of the Charter  Period due to reasons  attributable  to
                  the  Charterer.  the Owner shall be  entitled  to forfeit.  an
                  amount of the Seller's Credit up to a maximum of the aggregate
                  remaining monthly payments under the BBC after the termination
                  without  prejudice to its claims for damages .and other rights
                  under applicable law or in equity.

                  The  Sellers'  Credit  shall be secured  by a second  priority
                  mortgage  over the Vessel  ranking  behind the first  priority
                  mortgages granted to the Agent and the Swap Parties.

         (b)      Guarantee:   Top  Tankers  Inc.  shall   unconditionally   and
                  irrevocably  guarantee the performance of the Charterers under
                  this Charter as a primary obligor and not merely as a surety.

                  Each of the  Charterers  and the  charterers to KOMARF HOPE 27
                  Shipping  Company,  KOMARF HOPE 28 Shipping Company and KOMARF
                  HOPE  30   Shipping   Company   (each  a   Liberian   company;
                  collectively,  "Other  Charterers")  shall  also  jointly  and
                  severally  guarantee  the  performance  of the charters by the
                  other Charterers.

         (c)      Sale  of  Vessel  during  the  Six-Month  Sales  Period:   The
                  "Six-Months  Sales Period" shall mean the period from the date
                  falling three months prior to the expiry of the Charter Period
                  to the date  falling  three  months  after  the  expiry of the
                  Charter Period..

                  The "Outstanding Project Cost" shall mean,  collectively,  (i)
                  all sums outstanding  under the Main Financing  Documentation,
                  (ii) the principal  amount of the  investment  into the SIC by
                  its investors, and (iii) the Seller's Credit.

                  The following is applicable when the Vessel is sold during the
                  Six-Month Sales Period:

                  If the net sale proceeds of the Vessel ("Net Sales  Proceeds")
                  is lower than the  Outstanding  Project Cost,  such  shortfall
                  shall be first  covered by the  Charterers up to the amount of
                  USD two (2)  million.  and the Owners  will deduct such amount
                  from the Sellers'  Credit payable to the Charterers in respect
                  of that Vessel. 1.1 the Net Sales Proceeds are higher than the
                  Outstanding  Project Cost,  as to such surplus,  the first USD
                  two (2) million shall belong to the  Charterers and the Owners
                  will pay such  amount to the  Charterers  in  respect  of that
                  Vessel upon sale of that Vessel,  and any excess thereof shall
                  belong to the Owners.

         (d)      Sale of the Vessel.  after the Six Months  Sales  Period:  The
                  evaluation value  ("Evaluation  Value") of the Vessel shall he
                  the average of the quote obtained from the Selected Evaluation
                  Firms, with each quote referring to the Vessel price as of the
                  expiry date of the Charter Period.

                  The Selected Evaluation Finns shall he two of the (.)following
                  firms  selected by a mutual  agreement  between the Charterers
                  and the Owners:  One from  Clarksons or Simpson Spence & Young
                  and the other from Platou or Fearnleys.

                  The following is applicable  when the Vessel is not sold prior
                  to the expiry of Six-Month Sales Period:

                  If in respect of any Vessel.  the  Evaluation  'Value for that
                  Vessel is lower than the Outstanding  Project Cost relating to
                  that  Vessel as of the end of the  Charter  Period,  the Owner
                  will deduct :such amount up to USD 2 million from the Sellers'
                  Credit payable to the Charterers in respect of that Vessel. if
                  in respect of any Vessel the Evaluation  Value for that Vessel
                  is higher than the  Outstanding  Project Cost relating to that
                  Vessel, the Owners will pay such amount up to USD 2 million to
                  the  Charterers  in  respect  of that  Vessel  on the  date of
                  expiration of the Six-Month Sales Period.

                  The foregoing  mechanism  shall not be affected even where the
                  actual  sales  price  of the  Vessel  is  different  from  the
                  Evaluation Value.

         (f)      Sale of the Vessel  before the Six Months  Sales  Period:  The
                  Owners may sell the  Vessels at any time after three (3) years
                  from the commencement of the Charter Period, subject, however,
                  to an approval  thereof by the  relevant  subcharterer(s).  if
                  any.

                  If the Net  Sales  Proceeds  is  lower  than  the  Outstanding
                  Project  Cost,  the  Sellers'  Credit  will be  payable to the
                  Charterers in respect of that Vessel in full. If the Net Sales
                  Proceeds are higher than the  Outstanding  Project  Cost.  the
                  Owners will pay the Charterers the Seller's  Credit in respect
                  of that Vessel in full, and an additional amount up to:

                  o        USD 4 million if the sale is concluded during the 4th
                           year of the Charter.

                  o        USD 3 million if the sale is concluded during the 5th
                           year of the Charter (however, excluding the Six-Month
                           Sales Period).

         Any excess thereof shall belong to the Owners.

         All of the above amounts shall be payable immediately upon the delivery
         of the Vessels to the new owners. and, simultaneously therewith, this
         Charter will be terminated.

         Further, at any time after three (3) years from the commencement of the
         Charter Period, the Vessel,  subject to the Charterers' approval (which
         shall not be  unreasonably  withheld),  may be sold by the Owners  with
         this Charter  maintained by the new owners.  hi such cases of sale, the
         following paragraph shall he applicable:

         If the Net Sales Proceeds is lower than the  Outstanding  Project Cost,
         the  Sellers'  Credit will be payable to the  Charterers  in respect of
         that  Vessel in full.  If the Net Sales  Proceeds  are higher  than the
         Outstanding  Project  Cost.  the  Owners  will pay the  Charterers  the
         Sellers'  Credit in  respect  of that  Vessel in full,  and,  as to any
         surplus. the first USD two (2) million shall belong to Top Tankers Inc.
         (each of such Sellers'  Credit and such first USD two (2) million to be
         payable at the time of the sale of the Vessel),  and any excess thereof
         shall belong to the Owner.

         (g)      Sales Mechanism:  Whether the Vessel is sold during,  after or
                  before the  Six-Month  Sales  Period,  as to the  Vessel,  the
                  Owners will give the Charterers the right of first refusal.

                  Subject to the  Charterers'  right of first refusal  specified
                  above  (i.e.,  such  right of first  refusal  shall be  deemed
                  waived when a waiver by the Charterers is obtained or when the
                  Charterers fail to exercise such right after a prior notice of
                  one (I )  week  by the  Owners),  the  Owners  shall  have  no
                  obligation to give the  Charterers an  opportunity to bid when
                  it  plans  to sell  the  Vessels.  The  Owners  shall  have an
                  absolute and free  discretion  in  selecting  the buyer of the
                  Vessel and in  determining  the mechanisms for the sale of the
                  Vessel.  The Vessel and the other  vessels  owned by the Other
                  Charterers  (collectively,  "Vessels") may be sold at one time
                  or at different times through separate sales  transactions and
                  varying mechanisms.

         (h)      Extension.  of Charter  Period:  For the effective sale of the
                  Vessels after the Charter  Period,  the Charter  Period may be
                  extended  by a period of not  longer  than three (3) months at
                  the option of the Owners,  in which case the hire shall be USD
                  5,000 per day during  such  extended  three (3) month  Charter
                  Period.

                  Further.  the  Owners  shall  have the  right to  require  the
                  Charterers  to manage the Vessel for a period of up to one (1)
                  year after  expiration of the Charter  Period  pursuant to the
                  ship management  agreement between the Owner and the Charterer
                  (or any other company  nominated by the Charterer),  providing
                  that (i) as to the costs incurred for the technical management
                  of the  Vessel  shall be borne  by the  Owners  on an net cost
                  amount  basis:  and  (ii)  as to the  income  from  commercial
                  operation  of the  Vessel  shall he  distributed  between  the
                  Charterers and the Owners on a 40% to 60o basis.

                  The  Charterers  shall make  their best  efforts to assist the
                  Owners in the sale of the Vessels.

         (i)      Time Charter Assignment: As to the time-charter or sub-charter
                  by the  Charterers  of the Vessel  during the Charter  Period,
                  such  time-charter  or  sub-charter  shall be  assigned to the
                  Owners and the Agent and other relevant parties under the main
                  financing and investment documentation for security.

         (j)      Compliance with the Financial instrument: The Charterers shall
                  comply with the Financial  Instrument as required by the Agent
                  (including.  without limitation. its requirement to maintain a
                  minimum  consolidated  cash  balance  of USD 50 million at all
                  times with the Agent).

33.      Compliance with the Owners' requests

         The Charterers  shall,  throughout the Charter Period,  comply with the
         Owners'  requests  which may he made from time to time for the  Owners'
         compliance  with the  provisions  of the loan  and  guarantee  facility
         agreement entered into on. or to be entered into around,  the even date
         herewith by and among, inter alios, the Buyers as borrower. Fortis Bank
         (Nederland)  N.V.  as agent  and  arranger  and the  lenders  specified
         therein (the "Loan Agreement").

34.      Hell & High Water Clause

         This  Charter  is  a  "hell  and  high  water"  bareboat  charter  and,
         notwithstanding  anything  in this  Charter to the  contrary  (however,
         excluding clause 28(c) of this Charter), the Charterer's obligation for
         payments  hereunder shall be absolute and  unconditional  under any and
         all circumstances and shall not be affected by any circumstances of any
         character  (including,  for the  avoidance  of  doubt.  any loss of the
         Vessel  as  provided  in  clause  28(c) of this  Charter  or any  other
         termination of this Charter pursuant to clause 28(b) of this Charter or
         for any other  reason  whatsoever  (other than clause  28(a) and (d) of
         this Charter)  whether provided for in this Charter or available to the
         Charterer  by  operation  of law or  otherwise).  .1f  for  any  reason
         whatsoever this Charter shall be terminated in whole or in part for any
         of the reasons  specifically  provided herein or by operation of law or
         otherwise,  the Charterer  nonetheless agrees to pay to the Owner or to
         the person entitled  thereto an amount equal to each payment of hire at
         the time such payment  would have become due and payable in  accordance
         with the terms hereof had this Charter not been  terminated in whole or
         in part;  Each payment of hire made by the  Charterer  shall be final,,
         and the  Charterer  will  not seek to  recover  all or any part of such
         payment from the Owner for any reason  whatsoever,  except for manifest
         error.
                               PART III - PART V
                               Paragraphs deletedExhibit 4.18

Private & Confidential

                              Dated 15 March 2006

                        KOMARF HOPE 29 SHIPPING COMPANY

                                  as Owner                      (1)

                             PYLIO SHIPPING CO. LTD.
                                as Charterer                    (2)

                                TOP TANKERS INC.
                            as Charter Guarantor                (3)

                                       and

                        FORTIS BANK (NEDERLAND) N.V.            (4)

                       QUADRIPARTITE DEED relating to m.v.
                                   "Flawless"

                                                                   NORTON ROSE
<PAGE>

                                    Contents

Clause                                                                    Page

1       Definitions .......................................................2

2       Representations and warranties.....................................9

3       Assignment........................................................12

4       Owner's Assignment................................................13

5       Continuing security and other matters.............................14

6       Charterers undertakings...........................................16

7       General Undertakings..............................................18

8       Covenants concerning insurance and operational matters............23

9       Powers of Mortgagee to protect security and remedy defaults ......30

10      Powers of Mortgagee on Event of Default...........................30

11      Application of moneys.............................................31

12      Remedies cumulative and other provisions..........................32

13      Costs and indemnity...............................................32

14      Attorney..........................................................33

15      Further assurance.................................................33

16      Sale of Ship......................................................33

17      Continuation of Charter Period....................................35

18      Notices...........................................................35

19      Counterparts......................................................36

20      Severability of provisions........................................36

21      Law and jurisdiction .............................................36

Schedule 1 Forms of Loss Payable Clauses..................................38

Schedule 2 Forms of Notices of Assignment of Insurances...................39
<PAGE>

THIS QUADRIPARTITE DEED is 15 March 2006

BETWEEN:

(1)     KOMARF HOPE 29 SHIPPING COMPANY a company incorporated under the laws of
        the Republic of Liberia whose  registered  office is at 80 Broad Street,
        Monrovia, Republic of Liberia (the "Owner");

(2)     PYLIO  SHIPPING  CO.  LTD.,  a company  incorporated  in the Republic of
        Liberia  whose  registered  office  is at  80  Broad  Street,  Monrovia,
        Republic of Liberia (the "Charterer");

(3)     TOP TANKERS INC., a company  incorporated in the Marshall  Islands whose
        registered office is at Trust Company Complex,  Ajeltake Road,  Ajeltake
        Island, Majuro, Marshall Islands MH96960 (the "Charter Guarantor"); and

(4)     FORTIS BANK (NEDERLAND) N.V., a company  incorporated  under the laws of
        The Netherlands  acting for the purposes of this Deed through its office
        at Coolsingel 93, 3012 AE Rotterdam, The Netherlands (the "Mortgagee").

WHEREAS:

(A)     the Owner is the sole,  absolute and unencumbered,  legal and beneficial
        owner of sixty-four  sixty-fourth shares in the Ship described in clause
        1.2;

(B)     by a loan and  guarantee  facility  agreement  (the "Loan and  Guarantee
        Facility  Agreement")  dated 9 March 2006 and made between (1) the Owner
        (therein  referred to as the  "Borrower"),  (2) the banks and  financial
        institutions  whose  names are set out at  Schedule 1 thereto as lenders
        (the  "Banks"),  (3) the Mortgagee as agent,  security agent and trustee
        (the "Agent"),  (4) Fortis Bank  (Nederland) N.V. as guarantee bank (the
        "Guarantee  Bank "), (5) Fortis Bank  (Nederland)  N.V. as arranger (the
        "Arranger)  and (6) Fortis Bank  (Nederland)  N.V. as swap provider (the
        "Swap  Provide?'  and  together  with the Agent,  the  Arranger  and the
        Account Bank (as defined in the Loan and Guarantee Facility  Agreement),
        the Guarantee  Bank and the Banks,  the  "Creditors"),  the Banks agreed
        (inter alia) to advance by way of loan to the Owner,  upon the terms and
        conditions  therein,  a maximum  aggregate  amount of up to thirty three
        million and six hundred thousand Dollars ($33,600,000) and the Guarantee
        Bank agreed to issue and/or  maintain the  Guarantee  (as defined in the
        Loan and Guarantee Facility Agreement (the "Guarantee") in favour of the
        Beneficiary (as defined in the Loan and Guarantee Facility Agreement);

(C)     by a 1992 ISDA Master  Agreement  dated 9 March 2006 (the  "Master  Swap
        Agreement")  made between (1) the Owner and (2) the Swap  Provider,  the
        Swap Provider  agreed the terms and conditions upon which it would enter
        into (inter  alia)  interest  rate swap  transactions  with the Owner in
        respect of the Loan (whether in whole or in part as the case may be from
        time to time);

(D)     pursuant to clause 16.1 of the Loan and  Guarantee  Facility  Agreement,
        each of the Creditors has appointed the Mortgagee as its agent, security
        agent and  trustee  and  pursuant  to a deed of trust dated 9 March 2006
        executed by the Mortgagee (as trustee) in favour of the  Creditors,  the
        Mortgagee agreed to hold, receive,  administer and enforce this Deed for
        and on behalf of itself and the Creditors;

(E)     pursuant to the Loan and  Guarantee  Facility  Agreement  and the Master
        Swap Agreement there has been or will be executed by the Owner in favour
        of the Mortgagee (as security agent and trustee for and on behalf of the
        Creditors) a first preferred ship mortgage (the  "Mortgage") on the Ship
        and the Mortgage of even date  herewith  has been or will be  registered
        under the  provisions  of Chapter 3 of title 21 of the Liberian  Code of
        Laws of 1956 as amended as security  for the payment by the Owner of the
        Outstanding  Indebtedness  (as  those  expressions  are  defined  in the
        Mortgage);

(F)     by a "Barecon 2001" bareboat  charter (the "Charter") dated 9 March 2006
        made  between the Owner and the  Charterer,  the Owner has agreed to let
        and the  Charterer  has agreed to take the Ship on demise  charter for a
        period of sixty (60) months from the date of delivery of the Ship to the
        Charterer  thereunder upon the terms and conditions  therein  mentioned;
        (G) as security for the  obligations of the Charterer under the Charter,
        the  Charter  Guarantor  has or,  as the case  may be,  will  execute  a
        guarantee in favour of the Owner (the "Charter Guarantee"); (H) the Loan
        and  Guarantee  Facility  Agreement  provided  (inter  alia)  that  as a
        condition  precedent to the advance of the Loan the Owner, the Charterer
        and the Charter  Guarantor should enter into a deed  supplemental to the
        Mortgage  substantially in the form of this Deed, to secure (inter alia)
        all sums of money  from time to time owing to the  Mortgagee  and/or the
        Creditors under the Loan and Guarantee  Facility  Agreement,  the Master
        Swap  Agreement and the other Security  Documents;  and (I) this Deed is
        supplemental  to the  Loan  and  Guarantee  Facility  Agreement  and the
        Mortgage and to the security  thereby  created and is the  Quadripartite
        Deed referred to in the Loan and Guarantee  Facility Agreement but shall
        nonetheless  continue  in full  force  and  effect  notwithstanding  any
        discharge of the Mortgage.

NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED as follows:

1       Definitions

1.1     Definitions

        In this Deed, unless the context otherwise requires:

        "Approved  Brokers" means such firm of insurance  brokers,  appointed by
        the  Charterer  during the Charter  Period,  as may from time to time be
        approved in writing by the Mortgagee for the purposes of this Deed;

        "Casualty Amount" means five hundred thousand Dollars ($500,000) (or the
        equivalent in any other currency);

        "Charter"  means the "Barecon  2001" demise  charter  entered or (as the
        context may require) to be entered  into by the Owner and the  Charterer
        referred to in recital (F);

        "Charterer"  includes the successors in title and permitted assignees of
        the  Charterer;   "Charterer's  Assigned  Property"  means  all  of  the
        Charterers rights, title and interest in and to:

        (a)     the Insurances; and

        (b)     any Requisition Compensation;

        "Charter Earnings" means all moneys whatsoever from time to time payable
        by the  Charterer  to the Owner under or pursuant to the Charter  and/or
        any  moneys  payable  to the  Owner  under or  pursuant  to the  Charter
        Guarantee and/or any guarantee, security or other assurance given to the
        Owner at any time in respect  of the  Charterer's  obligations  under or
        pursuant to the Charter;

        "Charter  Guarantee" means the guarantee executed or (as the context may
        require) to be executed by the Charter  Guarantor in favour of the Owner
        pursuant to the Charterer;

        "Charter  Guarantor"  includes  the  successors  in title and  permitted
        assignees of the Charter Guarantor;

        "Charter  Guarantor's Account" means the interest bearing Dollar account
        of the Charter  Guarantor  opened or (as the context mad  require) to be
        opened  with  the  Mortgagee  (acting  as  Account  Bank)  with  account
        number 024075615017407192 and includes any sub-accounts thereof and any
        other  account  designated in writing by the Mortgagee to be the Charter
        Guarantor's Account for the purposes of this Deed;

        "Charter  Period"  means such part of the period of the Charter as falls
        within  the  Security   Period  or,  in  the  event  of   expiration  or
        determination  of the period of the Charter  prior to the  expiration of
        the Security Period,  the period down to the expiration or determination
        of the period of the Charter;

        "Charter  Rights" means all of the rights of the Owner under or pursuant
        to the Charter, the Charter Guarantee and any other guarantee,  security
        or other  assurance  given to the  Owner at any time in  respect  of the
        Charterer's  obligations  under or  pursuant  to the  Charter  including
        (without limitation) the right to receive the Charter Earnings;

        "Classification"  means the  classification  +1 Al tanker for oil ESP E0
        PP3 with the Classification  Society or such other classification as the
        Agent shall,  at the request of the Owner,  have agreed in writing shall
        be  treated  as the  Classification  in  relation  to the  Ship  for the
        purposes of the Security Documents;

        "Classification   Society"  means  Det  Norske  Veritas  or  such  other
        classification  society  which the Agent  shall,  at the  request of the
        Owner,  have  agreed in writing  shall be treated as the  Classification
        Society  in  relation  to the  Ship  for the  purposes  of the  Security
        Documents;

        "Collateral Instruments" means notes, bills of exchange, certificates of
        deposit and other negotiable and non-negotiable instruments, guarantees,
        indemnities and other  assurances  against  financial loss and any other
        documents or instruments  which contain or evidence an obligation  (with
        or without  security) to pay,  discharge or be  responsible  directly or
        indirectly  for, any  indebtedness  or  liabilities  of the Owner or any
        other person liable and includes any documents or  instruments  creating
        or evidencing a mortgage,  charge  (whether fixed or floating),  pledge,
        lien, hypothecation,  assignment, trust arrangement or security interest
        of any kind;

        "Commercial  Management  Agreement"  means the agreement made or (as the
        context may require) to be made between the Charterer and the Commercial
        Manager in a form previously  approved in writing by the Agent providing
        (inter alia) for the Commercial Manager to commercially manage the Ship;

        "Commercial  Manager" means Top Tanker  Management Inc. of Trust Company
        Complex,  Ajeltake Road,  Ajeltake Island,  Majuro,  Marshall Islands MH
        96960 or any other  person  appointed  by the  Charterer  with the prior
        written  consent  of the  Agent as  commercial  manager  of the Ship and
        includes its successors in title;

        "Compulsory Acquisition" means requisition for title or other compulsory
        acquisition,  requisition,  appropriation,  expropriation,  deprivation,
        forfeiture or confiscation  for any reason of the Ship by any Government
        Entity or other competent  authority,  whether de jure or de facto,  but
        shall exclude  requisition for use or hire not involving  requisition of
        title;

        "Default" means any Event of Default or any event or circumstance  which
        with the  giving of notice or lapse of time or the  satisfaction  of any
        other condition (or any combination  thereof) would  constitute an Event
        of Default;

        "Delivery"  means  the  delivery  of the  Ship  by the  Owner,  and  the
        acceptance of the Ship by the Charterer, pursuant to the Charter;

        "Delivery Date" means the date on which Delivery occurs;

        "DOC" means a document of compliance issued to an Operator in accordance
        with rule 13 of the Code;

        "Encumbrance"  means any mortgage,  charge  (whether fixed or floating),
        pledge, lien, hypothecation,  assignment,  trust arrangement or security
        interest or other encumbrance of any kind securing any obligation of any
        person  or any  type  of  preferential  arrangement  (including  without
        limitation title transfer and/or retention arrangements having a similar
        effect);

        "Environmental  Affiliate"  means any agent or employee of the Charterer
        or  any  other  Relevant  Party  or  any  person  having  a  contractual
        relationship   with  the  Charterer  or  any  other  Relevant  Party  in
        connection  with any Relevant  Ship or its  operation or the carriage of
        cargo and/or  passengers  thereon  and/or the  provision of goods and/or
        services on or from the Relevant Ship;

        "Environmental  Approval" means any consent,  authorisation,  licence or
        approval of any  governmental  or public body or  authorities  or courts
        applicable  to any  Relevant  Ship or its  operation  or the carriage of
        cargo and/or  passengers  thereon  and/or the  provision of goods and/or
        services on or from such Relevant Ship required under any  Environmental
        Law;

        "Environmental Claim" means any and all enforcement,  clean-up,  removal
        or other  governmental  or  regulatory  actions or orders  instituted or
        completed  pursuant  to  any  Environmental  Law  or  any  Environmental
        Approval  together  with  claims  made by any third  party  relating  to
        damage,  contribution,  loss or  injury,  resulting  from any  actual or
        threatened emission, spill, release or discharge of a Pollutant from any
        Relevant Ship;

        "Environmental  Laws" means all national,  international and state laws,
        rules, regulations,  treaties and conventions applicable to any Relevant
        Ship  pertaining  to the  pollution or protection of human health or the
        environment  including,  without limitation,  the carriage of Pollutants
        and actual or threatened  emissions,  spills,  releases or discharges of
        Pollutants;

        "Event of Default" means any of the events or circumstances described in
        clause 10.1 of the Loan and Guarantee Facility Agreement;

        "Expenses"  means the aggregate at any relevant time (to the extent that
        the same have not been received or recovered by the Mortgagee) of:

        (a)     all losses,  liabilities,  costs, charges, expenses, damages and
                outgoings of whatever  nature  (including,  without  limitation,
                Taxes,  registration  fees  and  insurance  premiums)  suffered,
                incurred  or  paid  by the  Mortgagee  in  connection  with  the
                exercise of the powers referred to in or granted by this Deed or
                otherwise payable by the Owner in accordance with clause 13; and

        (b)     interest  on  all  such  losses,  liabilities,  costs,  charges,
                expenses,  damages and outgoings from the date on which the same
                were suffered,  incurred or paid by the Mortgagee until the date
                of  receipt  or  recovery   thereof  (whether  before  or  after
                judgment)  at a rate per annum  calculated  in  accordance  with
                clause  3.4 of the Loan and  Guarantee  Facility  Agreement  (as
                conclusively certified by the Mortgagee);

        "Flag  State"  means the  Republic  of Liberia  or such  other  state or
        territory  acceptable  to the Agent  designated  in writing by the Agent
        (acting on the  instructions of the Majority  Banks),  at the request of
        the Owner, as being the "Flag State" of the Ship for the purposes of the
        Security Documents;

        "Guarantee" means the guarantee described in recital (B) above;

        "Guarantee  Amount" means any amount owing by the Guarantee  Bank to the
        Beneficiary  under  or  pursuant  to  the  Guarantee,  which  amount  is
        indemnified  by the  Owner in  accordance  with  the Loan and  Guarantee
        Facility Agreement;

        "Government  Entity" means and includes (whether having a distinct legal
        personality or not) any national or local government  authority,  board,
        commission,  department,  division,  organ,  instrumentality,  court  or
        agency and any association,  organisation or institution of which any of
        the foregoing is a member or to whose  jurisdiction any of the foregoing
        is subject or in whose activities any of the foregoing is a participant;

        "Incapacity"  means,  in  relation to a person,  the death,  bankruptcy,
        unsoundness of mind, insolvency, liquidation,  dissolution,  winding-up,
        administration,  receivership,  amalgamation,  reconstruction  or  other
        incapacity of that person whatsoever (and, in the case of a partnership,
        includes  the   termination   or  change  in  the   composition  of  the
        partnership);

        "Insurances"  means all  policies  and  contracts  of  insurance  (which
        expression  includes  all  entries  of  the  Ship  in a  protection  and
        indemnity or war risks  association)  which are from time to time during
        the Security  Period in place or taken out or entered into by or for the
        benefit of, among others, the Owner and/or the Charterer (whether in the
        sole  name  of the  Owner,  or in the  joint  names  of the  Owner,  the
        Charterer  and the  Mortgagee or  otherwise) in respect of the Ship (but
        not loss of earnings) or otherwise howsoever in connection with the Ship
        and all benefits  thereof  (including  claims of  whatsoever  nature and
        return of premiums);

        "ISM  Code"  means  the  International  Management  Code  for  the  Safe
        Operation of Ships and for Pollution Prevention  constituted pursuant to
        Resolution A. 741 (18) of the  International  Maritime  Organisation and
        incorporated into the International  Convention on Safety of Life at Sea
        1974 (as amended) and includes any amendment or  extensions  thereto and
        any regulation issued pursuant thereto;

        "ISPS Code" means the International Ship and Port Facility Security Code
        constituted  pursuant  to  resolution  A.924(22)  of  the  International
        Maritime  Organization now set out in Chapter XI-2 of the  International
        Convention for the Safety of Life at Sea 1974 (as amended) as adopted by
        a Diplomatic  Conference of the International  Maritime  Organisation on
        Maritime  Security in  December  2002 and  includes  any  amendments  or
        extensions thereto and any regulation issued pursuant thereto;

        "ISSC"  means an  International  Ship  Security  Certificate  issued  in
        respect of the Ship pursuant to the ISPC Code;

        "Loan" means the aggregate principal amount owing to the Banks or any of
        them  pursuant  to the  Loan and  Guarantee  Facility  Agreement  at any
        relevant time;

        "Loan and Guarantee Facility  Agreement" means the agreement referred to
        in recital (B) hereto as the same may from time to time be  supplemented
        and/or amended;

        "Loss Payable  Clauses"  means the  provisions  regulating the manner of
        payment  of  sums  receivable  under  the  Insurances  which  are  to be
        incorporated  in the  relevant  insurance  documents,  such Loss Payable
        Clauses  to be in the forms set out in  Schedule  1 during  the  Charter
        Period (which  shall,  during the Charter  Period,  replace the forms of
        Loss Payable  Clauses  specified in the General  Assignment)  or in such
        other forms as may from time to time be required or agreed in writing by
        the Mortgagee;

        "Management  Agreements" means the Commercial  Management  Agreement and
        the Technical  Management  Agreement and  "Management  Agreement"  means
        either of them;

        "Managers"  means the Commercial  Manager and the Technical  Manager and
        "Manager means either of them;

        "Master  Swap  Agreement"  means the 1992  ISDA  Master  Agreement  made
        between the Swap  Provider and the Owner dated9 March 2006  mentioned in
        recital  (C) hereto,  comprising  a 1992 ISDA  Master  Agreement  (and a
        Schedule thereto),  together with any Confirmations (as defined therein)
        supplemental thereto;

        "Master Swap  Agreement  Liabilities"  means at any relevant  time,  all
        liabilities actual or contingent,  present or future,  owing to the Swap
        Provider under the Master Swap Agreement;

        "Mortgage" means the first preferred  mortgage  mentioned in recital (E)
        hereto;  "Mortgagee"  includes the  successors in title and assignees of
        the Mortgagee;

        "Notice of Assignment of Insurances" means a notice of assignment in the
        form set out in  Schedule  2 during the  Charter  Period  (which  shall,
        during the Charter  Period,  replace the form of Notice of Assignment of
        Insurances specified in the General  Assignment),  or in such other form
        as may  from  time to time be  required  or  agreed  in  writing  by the
        Mortgagee;

        "Operating  Account"  means the interest  bearing  Dollar account of the
        Owner  opened or (as the  context  may  require)  to be opened  with the
        Account Bank and includes any sub-accounts thereof and any other account
        designated in writing by the Agent to be the  Operating  Account for the
        purposes of this Agreement;

        "Operator" means any person who is from time to time during the Security
        Period  concerned  in the  operation  of the Ship and falls  within  the
        definition of "Company" set out in rule 1.1.2 of the Code;

        "Outstanding  Indebtedness"  means  the  aggregate  of the  Loan and the
        Guarantee  Amount the Master Swap  Agreement  Liabilities,  and interest
        accrued and accruing  thereon,  the Expenses and all other sums of money
        from time to time owing by the Owner to the Mortgagee  and/or any of the
        other Creditors,  whether  actually or contingently,  present or future,
        under or  pursuant to the Loan and  Guarantee  Facility  Agreement,  the
        Master Swap Agreement, the Security Documents or any of them;

        "Owner" includes the successors in title and permitted  assignees of the
        Owner;  "Owner's  Assigned  Property"  means:

        (a)     the Charter;

        (b)     the Charter Guarantee;

        (c)     the Charter Earnings; and

        (d)     all other Charter Rights;

        "Pollutant"   means  and  includes   pollutants,   contaminants,   toxic
        substances,  oil as defined in the United  States Oil  Pollution  Act of
        1990 and all  hazardous  substances  as  defined  in the  United  States
        Comprehensive  Environmental  Response,  Compensation  and Liability Act
        1980;

        "Related  Company" of a person means any Subsidiary of such person,  any
        company or other  entity of which such  person is a  Subsidiary  and any
        Subsidiary of any such company or entity;

        "Relevant  Jurisdiction"  means any  jurisdiction  in which or where any
        Security Party is  incorporated,  resident,  domiciled,  has a permanent
        establishment,  carries on, or has a place of  business or is  otherwise
        effectively connected;

        "Relevant  Party" means the Owner,  the Owner's Related  Companies,  any
        other Security Party and any other Security Party's Related Companies;

        "Relevant  Ship"  means the Ship and any other  vessel from time to time
        (whether before or after the date of this Deed) owned, managed or crewed
        by, or chartered to, any Relevant Party;

        "Requisition Compensation" means all sums of money or other compensation
        from time to time payable  during the  Security  Period by reason of the
        Compulsory Acquisition of the Ship;

        "Security  Documents" means the Loan and Guarantee  Facility  Agreement,
        this Deed,  the  Mortgage,  the  General  Assignment,  the  Master  Swap
        Agreement,  the Share Pledge,  the Charter  Guarantee and any other such
        document as is defined in the Loan and Guarantee Facility Agreement as a
        Security  Document or as may have been or may  hereafter  be executed to
        guarantee  and/or  secure  all or any part of the  Loan,  the  Guarantee
        Amount, any interest thereon,  and the moneys from time to time owing by
        the Owner pursuant to the Loan and Guarantee  Facility  Agreement and/or
        the Master Swap Agreement  Liabilities  (whether or not such  documents,
        also  secure  moneys  from  time to time  owing  pursuant  to any  other
        document or agreement);

        "Security  Parties" means,  collectively,  the Owner, the Managers,  the
        Charterer,  or any other person who may at any time be a party to any of
        the  Security  Documents  (other  than  the  Creditors  and the  Charter
        Guarantor) and "Security Party" means any one of them;

        "Security  Period"  means the period  commencing  on the date hereof and
        terminating  upon  discharge  of the  security  created by the  Security
        Documents by payment of all moneys payable thereunder;

        "Shareholder" means Dongbuka No. 29 Ship Investment Company of
        Mora-dong 795-22 ,Sasang-gu,Pusan , Republic of Korea;

        "Share  Pledge" means the pledge made or (as the context may require) to
        be made between the  Shareholder  and the Agent (as  security  agent and
        trustee on behalf of the Creditors) in substantially the form set out in
        Schedule 17, of its rights,  title and interest in and to all the shares
        in the Owner;

        "Ship" means the vessel m.v.  "Flawless  registered  as a Liberian  ship
        under  Official  Number 9475 and includes any share or interest  therein
        and her engines,  machinery,  boats, tackle,  outfit,  equipment,  spare
        gear,  fuel,  consumable or other stores,  belongings and  appurtenances
        whether on board or ashore and whether now owned or  hereafter  acquired
        and also any and all additions,  improvements and replacements hereafter
        made in or to such vessel or any part thereof or in or to her  equipment
        and appurtenances aforesaid; and

        "SMC" means a safety management  certificate issued in respect of a Ship
        in accordance with rule 13 of the ISM Code;

        "Subsidiary"  of a person  means  any  company  or  entity  directly  or
        indirectly  controlled  by such person,  and for this purpose  "control"
        means either the  ownership of more than 50% of the voting share capital
        (or  equivalent  rights of  ownership)  of such company or entity or the
        power to direct its  policies  and  management,  whether by  contract or
        otherwise;

        "Technical Manager's Undertaking" means an undertaking and assignment in
        relation to the Ship  executed  or (as the  context  may  require) to be
        executed by the  Technical  Manager in favour of the Agent (as  security
        agent and trustee on behalf of the Creditors);

        "Technical  Manager" means Hanseatic Shipping Co. Ltd. of P.0 Box 50127,
        3601  Limassol,  Cyprus or any other person  appointed by the Commercial
        Manager with the prior written consent of the Agent as technical manager
        of the Ship and includes its successors in title and assignees;

        "Total Loss" means:

        (a)     the actual, constructive,  compromised or arranged total loss of
                the Ship; or

        (b)     the  Compulsory  Acquisition  of the Ship; or (c) the hijacking,
                theft,  condemnation,  capture,  seizure,  arrest,  detention or
                confiscation  of the Ship (other than where the same  amounts to
                the  Compulsory  Acquisition  of the  Ship)  by  any  Government
                Entity,  or by persons  acting or purporting to act on behalf of
                any Government Entity,  unless the Ship be released and restored
                to the Owner or (during the Charter  Period) the  Charterer  (as
                the case  may be)  from  such  hijacking,  theft,  condemnation,
                capture,  seizure,  arrest,  detention  or  confiscation  within
                thirty (30) days after the occurrence thereof.

1.2     Insurance terms In clause 8.1.1:

        1.2.1   "excess  risks"  means the  proportion  (if any) of  claims  for
                general  average,  salvage  and  salvage  charges  and under the
                ordinary  collision clause not recoverable in consequence of the
                value at which  the Ship is  assessed  for the  purpose  of such
                claims exceeding her insured value;

        1.2.2   "protection   and   indemnity   risks"  means  the  usual  risks
                (including  oil  pollution  and freight,  demurrage  and defence
                cover)  covered by a United  Kingdom  protection  and  indemnity
                association or a protection and indemnity  association  which is
                managed in London (including, without limitation, the proportion
                (if any) of any sums  payable to any other  person or persons in
                case of collision which are not  recoverable  under the hull and
                machinery  policies  by  reasons  of the  incorporation  in such
                policies  of  clause 8 of the  Institute  Time  Clauses  (Hulls)
                (1/11/95) or the Institute Amended Running Down Clause (1/10/71)
                or any equivalent provision); and

        1.2.3   "war risks" includes those risks covered by the standard form of
                English  marine policy with  Institute  War and Strikes  Clauses
                Hulls - Time (1/11/95) attached or similar cover.

1.3     Headings

        Clause  headings and the table of contents are inserted for  convenience
        of  reference  only and shall be ignored in the  interpretation  of this
        Deed.

1.4     Construction of certain terms

        In this Deed, unless the context otherwise requires:

        1.4.1   references  to clauses  and  Schedules  are to be  construed  as
                references  to  clauses  of,  and  Schedules  to,  this Deed and
                references to this Deed include its Schedules;

        1.4.2   references  to (or to any  specified  provision of) this Deed or
                any other  document  shall be  construed as  references  to this
                Deed,  that  provision or that document as in force for the time
                being and as amended in accordance  with the terms thereof,  or,
                as the case may be, with the agreement of the relevant parties;

        1.4.3   words  importing  the plural shall include the singular and vice
                versa;

        1.4.4   references  to a person shall be construed as  references  to an
                individual, firm, company,  corporation,  unincorporated body of
                persons or any Government Entity;

        1.4.5   references  to a  "guarantee"  shall  include  references  to an
                indemnity or other assurance  against  financial loss including,
                without limitation, an obligation to purchase assets or services
                as a  consequence  of a default  by any other  person to pay any
                Indebtedness  and "guaranteed"  shall be construed  accordingly;
                and

        1.4.6   references  to  statutory   provisions  shall  be  construed  as
                references  to  those  provisions  as  replaced  or  amended  or
                re-enacted from time to time.

1.5     Conflict with Loan and Guarantee Facility Agreement

        As between the Owner and the Mortgagee, this Deed shall be read together
        with  the  Loan  and  Guarantee  Facility  Agreement  but in case of any
        conflict  between the two  instruments,  the  provisions of the Loan and
        Guarantee Facility Agreement shall prevail.

1.6     Conflict with Charter

        If and to the extent that any of the covenants and undertakings given by
        the  Charterer in this Deed may conflict  with any of the  provisions of
        the  Charter,  such  covenants  and  undertakings  shall (as between the
        Mortgagee  on the one hand and the Owner and the  Charterer on the other
        hand but not otherwise) prevail over such provisions.
<PAGE>

2       Representations and warranties

2.1     Charterer's Continuing representations and warranties

        The  Charterer  represents  and warrants to the  Mortgagee  (as security
        agent and  trustee  for and on behalf  of the  Creditors)  and the Owner
        that:

        2.1.1   Due incorporation

                it is duly  incorporated  and validly  existing in good standing
                under the laws of the Republic of Liberia as a  corporation  and
                has power to carry on its business as it is now being  conducted
                and to own its property and other assets;

        2.1.2   Corporate power

                it has power to execute,  deliver  and  perform its  obligations
                under the Charter and such of the Security Documents to which it
                is, or is to be, a party and has power to  execute  and  deliver
                and perform its obligations  under the Charter Guarantee and the
                Security Documents, and all necessary corporate, shareholder and
                other action has been taken to authorise the execution, delivery
                and performance of the same;

        2.1.3   Binding obligations

                the Charter and the Security  Documents to which it is, or is to
                be, a party  constitute or will,  when executed,  constitute its
                valid and legally binding obligations  enforceable in accordance
                with their respective terms;

        2.1.4   No conflict with other obligations

                the   execution  and  delivery  of,  the   performance   of  its
                obligations  under,  and  compliance  with the provisions of the
                Charter and the Security  Documents to which it is, or is to be,
                a party by it will not (a) contravene,  any existing  applicable
                law,  statute,  rule or regulation  or any  judgment,  decree or
                permit to which it is  subject,  or (b)  contravene  or conflict
                with any  provision of its articles of  incorporation,  by-laws,
                statutes or other constitutional documents;

        2.1.5   No filings required

                it  is  not   necessary  to  ensure  the   legality,   validity,
                enforceability  or  admissibility  in evidence of the Charter or
                any of the  Security  Documents  to which it is,  or is to be, a
                party that they or any other  instrument  be  notarised,  filed,
                recorded,  registered or enrolled in any court, public office or
                elsewhere  in any  Relevant  Jurisdiction  or  that  any  stamp,
                registration  or similar  tax or charge be paid in any  Relevant
                Jurisdiction  on or in  relation  to the  Charter or any of such
                Security  Documents  and the Charter  and each of such  Security
                Documents are in proper form for its  enforcement  in the courts
                of each Relevant Jurisdiction;

        2.1.6   Choice of law

                the choice of English law to govern the Charter and the Security
                Documents  to  which  it  is,  or is to  be,  a  party  and  the
                submission by the Charterer to the non-exclusive jurisdiction of
                the English courts are valid and binding;

        2.1.7   No immunity

                neither it nor any of its assets is  entitled to immunity on the
                grounds of  sovereignty  or  otherwise  from any legal action or
                proceeding  (which  shall  include,  without  limitation,  suit,
                attachment prior to judgment,  execution or other  enforcement);
                and

        2.1.8   Consents obtained

                every  consent,  authorisation,   licence  or  approval  of,  or
                registration  with or  declaration  to,  governmental  or public
                bodies or authorities or courts required by it to authorise,  or
                required by it in  connection  with,  the  execution,  delivery,
                validity,  enforceability  or  admissibility  in evidence of the
                Charter and the Security  Documents to which it is, or is to be,
                a party or the  performance by it of its  obligations  under the
                Charter and such Security  Documents  have been obtained or made
                and are in full  force and  effect and there has been no default
                in the observance of any of the conditions or  restrictions  (if
                any) imposed in, or in connection with, any of the same.

2.2     Charter Guarantor's Continuing representations and warranties

        The Charter  Guarantor  represents  and  warrants to the  Mortgagee  (as
        security  agent and trustee for and on behalf of the  Creditors) and the
        Owner that:

        2.2.1   Due incorporation

                it is duly  incorporated  and validly  existing in good standing
                under the laws of the Republic of Liberia as a  corporation  and
                has power to carry on its business as it is now being  conducted
                and to own its property and other assets;

        2.2.2   Corporate power

                it has power to execute,  deliver  and  perform its  obligations
                under  the  Charter  Guarantee  and this  Deed and has  power to
                execute  and  deliver  and  perform  its  obligations  under the
                Charter  Guarantee and this Deed,  and all necessary  corporate,
                shareholder  and other  action has been taken to  authorise  the
                execution,   delivery  and   performance  of  the  same  and  no
                limitation  on the  powers  of the  Charter  Guarantor  to  give
                guarantees  or  security  will be  exceeded  as a result  of the
                execution,   delivery   and   performance   of  the   Charterers
                obligations under this Deed;

        2.2.3   Binding obligations

                the Charter  Guarantee and this Deed  constitute  or will,  when
                executed,  constitute its valid and legally binding  obligations
                enforceable in accordance with their respective terms;

        2.2.4   No conflict with other obligations

                the   execution  and  delivery  of,  the   performance   of  its
                obligations  under,  and  compliance  with the provisions of the
                Charter  Guarantee and this Deed by it will not (a)  contravene,
                any existing applicable law, statute,  rule or regulation or any
                judgment,  decree  or  permit  to  which  it is  subject  or (b)
                contravene  or conflict  with any  provision  of its articles of
                incorporation,   by-laws,   statutes  or  other   constitutional
                documents;

        2.2.5   No filings required

                it  is  not   necessary  to  ensure  the   legality,   validity,
                enforceability or admissibility in evidence of Charter Guarantee
                or this Deed that they or any  other  instrument  be  notarised,
                filed,  recorded,  registered  or enrolled in any court,  public
                office or  elsewhere in any  Relevant  Jurisdiction  or that any
                stamp,  registration  or  similar  tax or  charge be paid in any
                Relevant Jurisdiction on or in relation to the Charter Guarantee
                or this Deed and each of the Charter Guarantee and this Deed are
                in  proper  form  for  its  enforcement  in the  courts  of each
                Relevant Jurisdiction;

        2.2.6   Choice of law

                the choice of English law to govern  Charter  Guarantee and this
                Deed  and  the  submission  by  the  Charter  Guarantor  to  the
                non-exclusive  jurisdiction  of the English courts are valid and
                binding;

        2.2.7   No immunity

                neither it nor any of its assets is  entitled to immunity on the
                grounds of  sovereignty  or  otherwise  from any legal action or
                proceeding  (which  shall  include,  without  limitation,  suit,
                attachment prior to judgement,  execution or other enforcement);
                and

        2.2.8   Consents obtained

                every  consent,  authorisation,   licence  or  approval  of,  or
                registration  with or  declaration  to,  governmental  or public
                bodies or authorities or courts required by it to authorise,  or
                required by it in  connection  with,  the  execution,  delivery,
                validity,  enforceability  or  admissibility  in evidence of the
                Charter  Guarantee and this Deed or the performance by it of its
                obligations  under the Charter  Guarantee and this Deed has been
                obtained  or made and is in full  force and effect and there has
                been no default in the  observance  of any of the  conditions or
                restrictions  (if any) imposed in, or in connection with, any of
                the same.

2.3     Charterer's Initial representations and warranties

        The  Charterer  represents  and warrants to the  Mortgagee  (as security
        agent and  trustee  for and on behalf  of the  Creditors)  and the Owner
        that:

        2.3.1   No withholding Taxes

                no Taxes are imposed by  withholding or otherwise on any payment
                to be made by it under the Charter or the Security  Documents to
                which it is, or is to be, a party or are imposed on or by virtue
                of its  execution  or  delivery  of the  Charter  or any of such
                Security  Documents or any other  document or  instrument  to be
                executed or delivered  under the Charter or any of such Security
                Documents;

        2.3.2   Ship's employment

                (save  for the  Charter)  the  Ship is not and  will  not on the
                Delivery  Date be subject to any  charter or  contract or to any
                agreement to enter into any charter or contract  entered into by
                the  Charterer  which,  if entered  into by it after the date of
                this Deed, would have required the consent of the Mortgagee;

        2.3.3   Freedom from Encumbrances

                the  Charterer is the sole,  legal and  beneficial  owner of the
                whole of the  Charterer's  Assigned  Property  and  neither  the
                Charterer's  Assigned  Property nor any part thereof are or will
                be on the Delivery Date subject to any Encumbrance created by it
                or arising due to its act or omission or its use or operation of
                the Ship and it has not (save as  disclosed  in  writing  to the
                Mortgagee)  received  notice  of  any  Encumbrance  (other  than
                pursuant to this Deed) in respect  thereof  created by any other
                person;

        2.3.4   Commissions etc.

                there are no commissions, rebates, premiums or other payments in
                connection  with the  Charter  other  than as  disclosed  to the
                Mortgagee in writing prior to the date hereof;

        2.3.5   Compliance with Environmental Laws and Approvals

                except as may already  have been  disclosed by it in writing to,
                and acknowledged in writing by, the Mortgagee:

                (a)     the  Charterer  and to the  best  of its  knowledge  and
                        belief  (having  made  due  enquiry)  its  Environmental
                        Affiliates  have  complied  with the  provisions  of all
                        Environmental Laws;

                (b)     the  Charterer  and to the  best  of its  knowledge  and
                        belief  (having  made  due  enquiry)  its  Environmental
                        Affiliates have obtained all Environmental Approvals and
                        are in compliance with all such Environmental Approvals;
                        and

                (c)     neither the  Charterer  nor to the best of its knowledge
                        and  belief   (having  made  due  enquiry)  any  of  its
                        Environmental  Affiliates  has  received  notice  of any
                        Environmental  Claim  that  the  Charterer  or any  such
                        Environmental  Affiliate is not in  compliance  with any
                        Environmental Law or any Environmental Approval;

        2.3.6   No Environmental Claims

                except as may already  have been  disclosed by it in writing to,
                and  acknowledged  in  writing  by, the  Mortgagee,  there is no
                Environmental Claim pending or, to the best of its knowledge and
                belief  (having  made  due  enquiry),   threatened  against  the
                Charterer or the Ship or any other ship owned, managed or crewed
                by,  or  chartered  to,  the  Charterer  or,  to the best of its
                knowledge  and  belief  (having  made  due  enquiry)  any of its
                Environmental Affiliates; and

        2.3.7   No potential Environmental Claims

                except as may already  have been  disclosed by it in writing to,
                and acknowledged in writing by, the Mortgagee, there has been no
                emission,  spill,  release or discharge of a Pollutant  from the
                Ship or any other  ship  owned  by,  managed  or  crewed  by, or
                chartered to, the Charterer nor to the best of its knowledge and
                belief  (having made due enquiry)  from any other ship owned by,
                managed or crewed by, or chartered to, the Charterer which could
                give rise to an Environmental Claim.

2.4     Charter Guarantor's Initial representations and warranties

        The Charter  Guarantor  represents  and  warrants to the  Mortgagee  (as
        security  agent and trustee for and on behalf of the  Creditors) and the
        Owner that:

2.5     No withholding Taxes

        no Taxes are imposed by  withholding  or  otherwise on any payment to be
        made by it under the Charter Guarantee or are imposed on or by virtue of
        its  execution or delivery of the Charter  Guarantee or this Deed or any
        other  document or  instrument  to be executed  or  delivered  under the
        Charter Guarantee or this Deed;

2.6     Repetition of representations and warranties

        On  and  as of  the  Delivery  Date  and  (except  in  relation  to  the
        representations  and warranties in clauses 2.3, 2.4 and 5) each Interest
        Payment Date during the Charter  Period,  the  Charterer and the Charter
        Guarantor shall be deemed to repeat the  representations  and warranties
        in clauses 2.1, 2.2, 2.3 and 2.4 as if made with  reference to the facts
        and circumstances existing on such day.

3       Assignment

3.1     Charterer's Assignment

        By way of security for the Outstanding Indebtedness,  the Charterer with
        full  title  guarantee  hereby  assigns  and  agrees  to  assign  to the
        Mortgagee  absolutely  all its rights,  title and interest in and to the
        Charterer's Assigned Property and all its benefits and interests present
        and future  therein.  Provided  however  that unless and until a Default
        shall occur  (whereupon all insurance  recoveries shall be receivable by
        the Mortgagee and applied in accordance  with clause 11.1 or clause 11.3
        (as the case may be)):

        3.1.1   any moneys  payable  under the  Insurances,  shall be payable in
                accordance  with the terms of the relevant  Loss Payable  Clause
                and the Mortgagee will not in the meantime give any notification
                to the  contrary  to the  insurers as  contemplated  by the Loss
                Payable Clauses; and

        3.1.2   any insurance moneys received by the Mortgagee in respect of any
                major  casualty  (as  specified  in the  relevant  Loss  Payable
                Clause) shall, unless prior to receipt or whilst such moneys are
                in the  hands of the  Mortgagee  there  shall  have  occurred  a
                Default  (whereupon  such  insurance  monies shall be applied in
                accordance  with  clause  11.1 or  clause  11.3 (as the case may
                be)),  be  paid  over  to  the  Charterer   upon  the  Charterer
                furnishing evidence  satisfactory to the Mortgagee that all loss
                and damage  resulting  from such casualty has been properly made
                good and  repaired,  and  that all  repair  accounts  and  other
                liabilities whatsoever in connection with the casualty have been
                fully paid and  discharged by the  Charterer,  provided  however
                that the  insurers  with  whom the fire and usual  marine  risks
                insurances  are effected  may, in the case of a major  casualty,
                and with the previous consent in writing of the Mortgagee,  make
                payment on account of repairs in the course of being effected.

3.2     Use of Charterer's name

        The  Charterer  covenants  and  undertakes  with the  Mortgagee to do or
        permit to be done each and every act or thing  which the  Mortgagee  may
        from time to time  require to be done for the purpose of  enforcing  the
        Mortgagee's  rights  under this Deed and to allow its name to be used as
        and when required by the Mortgagee for that purpose.

3.3     Reassignment

        Upon payment and discharge in full to the  satisfaction of the Mortgagee
        of the Outstanding Indebtedness, the Mortgagee shall, at the request and
        cost of the Charterer,  re-assign the Charterer's  Assigned  Property to
        the Charterer or as it may direct.

3.4     Liability of Charterer

        The Charterer shall remain liable to perform all the obligations assumed
        by it in relation to the Assigned  Property and the  Mortgagee  shall be
        under no  obligation  of any kind  whatsoever  in respect  thereof or be
        under  any  liability  whatsoever  in the  event of any  failure  by the
        Charterer to perform its obligations in respect thereof.

4       Owner's Assignment

4.1     By way of security  for  payment of the  Outstanding  Indebtedness,  the
        Owner with full title  guarantee  hereby assigns and agrees to assign to
        the Mortgagee (as security agent and trustee on behalf of the Creditors)
        absolutely  all its  rights,  title and  interest  in and to the Owner's
        Assigned  Property  and all  benefits  accruing to the Owner  thereunder
        Provided  however  that the  Charter  Earnings  shall be  payable to the
        Operating  Account  until  such  time as a Default  shall  occur and the
        Mortgagee  shall  direct  to the  contrary  whereupon  the  Owner  shall
        forthwith,  and the Mortgagee may at any time  thereafter,  instruct the
        persons from whom the Charter  Earnings are then payable to pay the same
        to the  Mortgagee  (as  security  agent  and  trustee  on  behalf of the
        Creditors)  or as it may direct  and any  Charter  Earnings  then in the
        hands of the  Owner's  brokers or other  agents  shall be deemed to have
        been received by them for the use and on behalf of the Agent.

4.2     Use of Owner's name

        The Owner covenants and undertakes with the Mortgagee to do or permit to
        be done each and every act or thing which the Mortgagee may from time to
        time  require to be done for the purpose of  enforcing  the  Mortgagee's
        rights  under  this  Deed and to  allow  its name to be used as and when
        required by the Mortgagee for that purpose.

4.3     Reassignment

        Upon payment and discharge in full to the  satisfaction of the Mortgagee
        of the Outstanding Indebtedness, the Mortgagee shall, at the request and
        cost of the Owner,  re-assign the Owner's Assigned Property to the Owner
        or as it may direct.

4.4     Liability of Owner

        The Owner shall remain liable to perform all the obligations  assumed by
        it in relation to the  Mortgaged  Property  and the  Mortgagee  shall be
        under no  obligation  of any kind  whatsoever  in respect  thereof or be
        under any liability  whatsoever in the event of any failure by the Owner
        to perform its obligations in respect thereof.

4.5     Acknowledgement by Charterer

        By its  execution of this Deed,  each of the  Charterer  and the Charter
        Guarantor  has  received   written  notice  of,  and  consents  to,  the
        assignment to the Mortgagee of the Charter, the Charter Earnings and the
        other Charter Rights and the Charter Guarantee.

5       Continuing security and other matters

5.1     Continuing security

        The security created by this Deed shall:

        5.1.1   be held by the Mortgagee (as security  agent and trustee for and
                on behalf of the  Creditors)  as a  continuing  security for the
                payment of the Outstanding  Indebtedness and the performance and
                observance of and compliance  with all of the  covenants,  terms
                and conditions  contained in the Security Documents,  express or
                implied, and that the security so created shall not be satisfied
                by any  intermediate  payment or satisfaction of any part of the
                amount  hereby and  thereby  secured  (or by any  settlement  of
                accounts between the Owner or any other person who may be liable
                to the  Mortgagee  and/or the other  Creditors in respect of the
                Outstanding  Indebtedness  or any part thereof and the Mortgagee
                and/or the other  Creditors)  and shall remain in full force and
                effect until the Outstanding Indebtedness has been discharged in
                full (which  expression  shall not embrace payment or a dividend
                in liquidation or bankruptcy of less than 100%);

        5.1.2   be in addition to, and shall not in any way prejudice or affect,
                and may be enforced by the Mortgagee  without prior recourse to,
                the security  created by any other of the Security  Documents or
                by any present or future Collateral Instruments, right or remedy
                held by or available to the Mortgagee and/or the other Creditors
                or any of them any right or remedy of the  Mortgagee  and/or the
                other  Creditors  or any of them or any  right or  remedy of the
                Mortgagee thereunder;

        5.1.3   not be in any way prejudiced or affected by the existence of any
                of  the  other  Security   Documents  or  any  such   Collateral
                Instrument, rights or remedies or by the same becoming wholly or
                in part void, voidable or unenforceable on any ground whatsoever
                or by the  Mortgagee  and/or the other  Creditors or any of them
                dealing  with,  exchanging,  varying  or  failing  to perfect or
                enforce  any  of  the  same,  or  giving  time  for  payment  or
                performance or indulgence or  compounding  with any other person
                liable; and

        5.1.4   not in any way be  prejudiced  or  affected by any change in the
                constitution  of, or any amalgamation or  reconstruction  of the
                Owner,  the  Mortgagee  or any  other  person  or by  any  legal
                limitation,   disability,   incapacity  or  other  circumstances
                relating to the Owner or any other person,  whether or not known
                to the Mortgagee and/or the other  Creditors,  by any invalidity
                in or irregularity or unenforceability of the obligations of the
                Owner or any other person under the Loan and Guarantee  Facility
                Agreement  or any of the other  Security  Documents or otherwise
                and so  that in the  event  that  any  obligation  or  purported
                obligation  of  the  Owner  or  any  other  person   which,   if
                enforceable  or valid or  continuing,  would be  secured by this
                Deed is or becomes wholly or in part unenforceable or invalid or
                terminated  for any reason  whatsoever,  the Owner will keep the
                Mortgagee and the other Creditors fully indemnified  against any
                loss  suffered by the  Mortgagee  and the other  Creditors  as a
                result  of any  failure  by the  Owner  or such  other  party to
                perform any such obligation or purported obligation.

5.2     Rights additional

        All the rights, remedies and powers vested in the Mortgagee (as security
        agent and  trustee  on behalf of the  Creditors)  hereunder  shall be in
        addition to and not a limitation of any and every other right,  power or
        remedy vested in the Mortgagee and/or the other Creditors or any of them
        under the Loan and Guarantee Facility  Agreement,  this Deed, the Master
        Swap  Agreement,  the other  Security  Documents or any such  Collateral
        Instrument  or at law and that all the powers so vested in the Mortgagee
        and/or the other  Creditors or any of them may be exercised from time to
        time and as often as the Mortgagee  and/or the other Creditors or any of
        them may deem expedient.

        5.2.1   No enquiry

        The Mortgagee  shall not be obliged to make any enquiry as to the nature
        or sufficiency of any payment  received by it under this Deed or to make
        any claim or take any action to collect any moneys hereby assigned or to
        enforce any rights or benefits  hereby  assigned to the  Mortgagee or to
        which the  Mortgagee  (as  security  agent and  trustee on behalf of the
        Creditors) may at any time be entitled under this Deed.

5.3     Obligations of Owner, Charterer and Mortgagee

        The Owner and the Charterer  shall each remain liable to perform all the
        obligations  assumed by it in relation to the Owner's Assigned  Property
        and the Charterer's  Assigned  Property and the Mortgagee shall be under
        no obligation of any kind  whatsoever in respect thereof or be under any
        liability  whatsoever  in the event of any  failure  by the Owner or the
        Charterer to perform its obligations in respect thereof.

5.4     Discharge of Mortgage

        This Deed shall continue in full force and effect after any discharge of
        the  Mortgage.  5.5  Liability  unconditional  The rights,  remedies and
        powers vested in the Mortgagee under this Deed shall not be affected nor
        shall this Deed be discharged or reduced by reason of:

        5.5.1   the Incapacity or any change in the name,  style or constitution
                of the Owner or any other person liable;

        5.5.2   the Mortgagee granting any time, indulgence or concession to, or
                compounding   with,   discharging,   releasing  or  varying  the
                liability of the Owner or any other  person  liable or renewing,
                determining,  varying or increasing any accommodation,  facility
                or transaction or otherwise  dealing with the same in any manner
                whatsoever   or   concurring   in,   accepting  or  varying  any
                compromise,  arrangement  or  settlement or omitting to claim or
                enforce payment from the Owner or any other person liable; or

        5.5.3   any act or omission which would not have  discharged or affected
                the security constituted by the Charterer under this Deed had it
                been a principal  debtor  instead of a guarantor  or by anything
                done or omitted  which but for this  provision  might operate to
                exonerate such security.

5.6     Waiver of Charterer's rights

        Until  the  Outstanding   Indebtedness  has  been  paid,  discharged  or
        satisfied  in full (and  notwithstanding  payment of a  dividend  in any
        liquidation or under any compromise or arrangement) and  notwithstanding
        that the security created by this Deed and the other Security  Documents
        may have been  realised,  the Charterer  agrees that,  without the prior
        written consent of the Mortgagee, it will not:

        5.6.1   exercise its rights of subrogation,  reimbursement and indemnity
                against the Owner or any other person liable;

        5.6.2   demand  or  accept   repayment  in  whole  or  in  part  of  any
                indebtedness  now or  hereafter  due to the  Charterer  from the
                Owner or from any other  person  liable or demand or accept  any
                Collateral  Instrument  in respect of the same or dispose of the
                same;

        5.6.3   take any step to  enforce  any  right  against  the Owner or any
                other person liable in respect of any  Outstanding  Indebtedness
                and/or the Master Swap Agreement Liability; or

        5.6.4   claim any set-off or counterclaim against the Owner or any other
                person  liable  or  claim  or  prove  in  competition  with  the
                Mortgagee  and/or  the  other  Creditors  or any of  them in the
                liquidation  of the Owner or any other person liable or have the
                benefit of, or share in, any payment from or  composition  with,
                the Owner or any  other  person  liable or any other  Collateral
                Instrument  now or hereafter  held by the  Mortgagee  and/or the
                other Creditors or any of them for the Outstanding  Indebtedness
                or for the obligations or liabilities of any other person liable
                but so that, if so directed by the Mortgagee,  it will prove for
                the  whole or any part of its  claim in the  liquidation  of the
                Owner on terms  that the  benefit of such proof and of all money
                received by it in respect thereof shall be paid to the Mortgagee
                for  application  in or  towards  discharge  of the  Outstanding
                Indebtedness   in  such  manner  as  the  Mortgagee  shall  deem
                appropriate.

5.7     Suspense account

        Any money received in connection with this Deed (whether before or after
        any Incapacity of the Owner or the Charterer)  which would (but for this
        Deed) have been payable to the Charterer may, if an Event of Default has
        happened,  be placed to the credit of a suspense  account with a view to
        preserving the rights of the Mortgagee to prove for the whole of its and
        the other Creditors' claims against the Owner or any other person liable
        or  may  be  applied  in or  towards  satisfaction  of  the  Outstanding
        Indebtedness.

5.8     Settlements conditional

        Any  release,  discharge or  settlement  between the  Charterer  and the
        Mortgagee shall be conditional upon no security,  disposition or payment
        to the Mortgagee  and/or the other Creditors or any of them by the Owner
        or any other  person  liable  being  void,  set aside or  ordered  to be
        refunded  pursuant  to any  enactment  or law  relating  to  bankruptcy,
        liquidation,  administration  or  insolvency  or for  any  other  reason
        whatsoever  and if such  condition  shall not be fulfilled the Mortgagee
        shall be entitled to enforce this Deed  subsequently as if such release,
        discharge  or  settlement  had not occurred and any such payment had not
        been made.

5.9     Delivery of certain property

        If,  contrary to the  provisions of this Deed,  the  Charterer  takes or
        receives  the benefit of any  security or receives or recovers any money
        or other property, such security,  money or other property shall be held
        on trust for the Mortgagee  (as security  agent and trustee on behalf of
        the Creditors) and shall be delivered to the Mortgagee on demand.

5.10    Certificates conclusive

        Any  certificate  submitted by the  Mortgagee to the Charterer as to the
        amount or any part  thereof  hereby  secured  shall,  in the  absence of
        manifest error, be conclusive and binding on the Charterer.

5.11    Collateral Instruments

        The  Mortgagee  shall not be  obliged to make any claim or demand on the
        Owner or to  resort  to any  Collateral  Instrument  or  other  means of
        payment now or hereafter  held by or  available  to it before  enforcing
        this Deed and no action taken or omitted by the  Mortgagee in connection
        with any such  Collateral  Instrument  or other  means of payment  shall
        discharge,  reduce,  prejudice  or affect  the  security  created by the
        Charterer  under this Deed nor shall the  Mortgagee  be obliged to apply
        any money or other property  received or recovered in consequence of any
        enforcement or realisation  of any such  Collateral  Instrument or other
        means of payment in reduction of the Outstanding Indebtedness.

6       Charterer's undertakings

        The Charterer hereby covenants with the Mortgagee (as security agent and
        trustee  for  and  on  behalf  of the  Creditors)  and  undertakes  that
        throughout the Charter Period:

        6.1.1   Notice

        it will from time to time upon the request of the Mortgagee give written
        notice (in such form and to such persons as the Mortgagee may reasonably
        require) of the  assignment  contained  in clause 3.1 to any person from
        whom any part of the Charterer's  Assigned Property is or may be due and
        will procure that the interest of the Mortgagee in the Insurances  shall
        be endorsed on the  instruments of insurance from time to time issued in
        connection  with the Insurances as are placed with the Approved  Brokers
        by  reason  of a Notice  of  Assignment  of  Insurances  (signed  by the
        Charterer,  the Owner and by any other  assured who shall have  assigned
        its interest in the Insurances to the Mortgagee);

        6.1.2   Negative undertakings relating to Charter

        it will not without the prior written consent of the Mortgagee:

        (a)     Assignments

                assign  or  otherwise  dispose  of the  Charterer's  rights  and
                obligations under the Charter;

        (b)     Variations

                agree to any variation of the Charter;

        6.1.3   Performance of Charter obligations

                it will perform its obligations under the Charter;

        6.1.4   Sub-chartering

                it will not without the prior  written  consent of the Mortgagee
                sub-let the Ship on demise charter for any period;

        6.1.5   Total Loss recovery

                it will, in the event that,  upon a Total Loss of the Ship,  the
                Mortgagee is disabled from  recovering  under the  Insurances or
                any  of  them  or  the  amount  of the  recovery  thereunder  is
                diminished and such  disablement or diminution  results from any
                breach by the  Charterer  of any of its  obligations  under this
                Deed and/or the  Charter,  pay to the  Mortgagee on demand a sum
                (which shall be applied in accordance with clause 12.1 as if the
                same had been a recovery under the Insurances in respect of such
                Total  Loss)  equal  to the  amount  which  would  but for  such
                disablement  have been  recoverable  under the Insurances or (as
                the case may be) a sum equal to the amount  hereby the insurance
                recovery has been diminished;

        6.1.6   Sister ship arrest

                it will,  in the event of the Ship at any time  being  arrested,
                seized,  detained  or  subjected  to  distress or levied upon by
                reason of any process, claim or Encumbrance of whatsoever nature
                arising out of the use or operation of the Ship by the Charterer
                or any of its agents,  employees or  sub-charterers or any other
                vessel  owned or  operated  or  managed by or  chartered  to the
                Charterer  or any  of its  affiliates  or its or  their  agents,
                employees or  charterers or  sub-charterers,  at its own expense
                take  prompt  action to secure  the  release  of the Ship and be
                responsible  for   discharging   each  and  every  liability  in
                connection with any such process, claim or Encumbrance;

        6.13    Sister ship indemnity

                it will  indemnify  the  Owner and the  Mortgagee  and the other
                Creditors and hold each of them harmless against all liabilities
                of whatsoever nature (including  penalties claims demands orders
                or judgments)  which the Owner or the Mortgagee and/or the other
                Creditors  or any of them may  suffer or incur in respect of the
                Ship and which arise out of the use or  operation of the Ship or
                of any other vessel owned or operated or managed by or chartered
                to  the  Charterer  or any of  its  affiliates  or its or  their
                agents, employees or charterers or sub-charterers;

        6.1.8   Compliance with Environmental Laws

                it will  comply  with,  and procure  that all its  Environmental
                Affiliates  comply  with,  all  Environmental   Laws  including,
                without  limitation,   requirements   relating  to  manning  and
                establishment  of financial  responsibility  and will obtain and
                comply with, and procure that all its  Environmental  Affiliates
                obtain and comply with, all Environmental Approvals;

        6.1.9   Ship's name and registration

                (a)     it will not change the name of the Ship;

                (b)     it will not do or suffer to be done anything, or omit to
                        do  anything,  the doing or  omission  of which could or
                        might  result  in  the  Ship  not  being   eligible  for
                        registration  under the laws and flag of the Flag  State
                        on and after  Delivery  or  result in such  registration
                        being  forfeited or  imperilled  or which could or might
                        result  in the  Ship  being  required  to be  registered
                        otherwise  than  under  the  laws  and  flag of the Flag
                        State;

        6.1.10  Abandonment

                it will not without the prior  written  consent of the Mortgagee
                (and then only  subject  to any  conditions  the  Mortgagee  may
                impose) abandon the Ship;

        6.1.11  Charterer's Manager

                it will not without the prior  written  consent of the Mortgagee
                (and then only on and subject to such terms as the Mortgagee may
                agree)  appoint a commercial  or  technical  manager of the Ship
                other  than the  Managers  or  terminate  or amend  the terms of
                either of the Management Agreements;

        6.1.12  Encumbrances

                it will not without the prior  written  consent of the Mortgagee
                (and then only subject to such  conditions  as the Mortgagee may
                impose)  create or purport or agree to create or permit to arise
                or subsist any Encumbrance over or in respect of any part of the
                Charterer's  Assigned Property otherwise than to or in favour of
                the Mortgagee; and

        6.1.13  Notification of certain events

                it will notify the  Mortgagee  forthwith  by telex  confirmed by
                letter of:

                (a)     any  petition  or  notice of  meeting  to  consider  any
                        resolution  to  wind  up the  Charterer  (or  any  event
                        analogous  thereto  under  the laws of the  place of its
                        incorporation);

                (b)     the  occurrence of any Default of which it is aware;  or
                        (c) the  occurrence of any  Environmental  Claim against
                        the Charterer, the Ship, any other Relevant Party or any
                        other   Relevant   Ship  or  any   incident,   event  or
                        circumstances   which   may   give   rise  to  any  such
                        Environmental Claim.

7       General Undertakings

7.1     The Charter  Guarantor hereby agrees and undertakes to the Mortgagee (as
        security  agent and trustee for and on behalf of the Secured  Creditors)
        that it will at all times throughout the Security Period:

        7.1.1   deliver  to the  Mortgagee  sufficient  copies  of  each  of the
                following documents:

                (a)     not later than one hundred  and eighty  (180) days after
                        the end of each  financial  year,  the  audited  balance
                        sheet  and  profit  and  loss  account  of  the  Charter
                        Guarantor and the audited consolidated balance sheet and
                        the  consolidated  profit and loss  account of the Group
                        for such  financial  year and a cash flow  statement for
                        the  Group for such  financial  year  together  with the
                        report of the auditors  thereon,  the notes  thereto and
                        the directors' report thereon, if any;

                (b)     at the time of issue  thereof  every  report,  circular,
                        notice or like document issued by the Charter  Guarantor
                        to its shareholders or creditors generally;

                (c)     at the  time  of the  delivery  of  the  annual  audited
                        financial  statements,  a  statement  from  the  Charter
                        Guarantor's  auditors stating the respective  amounts of
                        the Net Asset Value, Book Equity, the Total Debt and the
                        Total Market Value Adjusted Assets, in respect of or, as
                        the case may be, as at the end of the financial  year to
                        which such financial  statements  relate  indicating the
                        manner  in  which  the same  have  been  calculated  and
                        whether  or not the limits  imposed  by  clauses  7.2.1,
                        7.2.2, 7.2.6 and 7.2.7 have or have not been exceeded at
                        such time and so that each such statement  shall (in the
                        absence  of  manifest  error  or in the  absence  of the
                        Mortgagee reaching a different determination pursuant to
                        clause 1.2.10) be conclusive evidence of such amounts or
                        facts for the purposes of this Deed; and

        7.1.2   comply with its obligations under the Charter Guarantee.

7.2     Financial Undertakings

        The Charter  Guarantor hereby agrees and undertakes to the Mortgagee (as
        security  agent and trustee for and on behalf of the Secured  Creditors)
        that it will at all times throughout the Security Period:

        7.2.1   ensure  that,  for the first nine (9) months  after the Drawdown
                Date, a minimum amount of twenty million  Dollars  ($20,000,000)
                shall be  standing  to the  credit  of the  Charter  Guarantor's
                Account and that for the period commencing nine months after the
                Drawdown  Date and  ending  on the  final  date of the  Security
                Period,   a  minimum  amount  of  twenty  five  million  dollars
                ($25,000,000)  shall be  standing  to the credit of the  Charter
                Guarantor's  Account and  further  ensure that at any time there
                are no Encumbrances  whatsoever  existing over or in relation to
                such minimum amounts;

        7.2.2   ensure that an aggregate minimum amount of fifty million Dollars
                shall at all times during the Security Period be standing to the
                credit of  accounts  of the  Charter  Guarantor  (including  the
                Charter  Guarantor's  Account) and the Charter  Guarantor  shall
                evidence  compliance  with the terms of this  clause at no later
                than three (3) monthly intervals  throughout the Security Period
                or  otherwise   promptly  upon  the  Mortgagee's  first  written
                request;

        7.2.3   endeavour that any Excess Cash Flow in relation to the Ship will
                be paid into the Charter Guarantor's Account;

        7.2.4   provide  details  to the  Agent at three (3)  monthly  intervals
                evidencing the operating expenses and the Earnings of the Ship;

        7.2.5   ensure that on the Drawdown Date, the minimum  average length of
                time that Fleet  Vessels  are  employed  on time  charter for is
                eighteen months;

        7.2.6   ensure   that  its  Net  Asset   Value  at  all  times   exceeds
                $125,000,000; and

        7.2.7   ensure  that  its  Book  Equity   shall  at  all  times   exceed
                $75,000,000.

        7.2.8   For the purpose of this clause 7.2 and clause 7.3, the following
                expressions shall have the following meanings:

        "Applicable   Accounting   Principles"   means  accounting   principles,
        concepts,  bases and  policies  generally  adopted  and  accepted in the
        United States of America consistently applied;

        "Book Equity" means the aggregate of the amounts  paid-up or credited as
        paid-up on the Charter  Guarantor's  issued share capital and the amount
        of the consolidated capital and revenue reserves of the Group (including
        any share  premium  account,  capital  redemption  reserve  fund and any
        credit balance on the consolidated profit and loss account of the Group)
        all as shown by the latest audited consolidated balance sheet and profit
        and loss account of the Group delivered under this Deed but after:

        (a)     deducting any debit balance on such consolidated profit and loss
                account;

        (b)     deducting any amount shown in such consolidated balance sheet in
                respect   of   goodwill    (including    goodwill   arising   on
                consolidation) and other intangible assets;

        (c)     deducting (so far as not otherwise  excluded as  attributable to
                minority  interests) a sum equal to the  aggregate of the amount
                by which the book value of any fixed assets of any member of the
                Group has been  written up after 31  December  2005 (or,  in the
                case of a company  becoming a  subsidiary  after that date,  the
                date on  which  that  company  became  a  subsidiary)  by way of
                revaluation  not being,  in any such case, a revaluation  of all
                the Group's fixed assets in accordance  with a valuation  report
                from  independent  valuers  approved by the Mortgagee so long as
                any such  revaluation  is carried out not more  frequently  than
                once every five years.  For the purposes of this  paragraph  (c)
                any increase in the book value of any fixed asset resulting from
                its transfer by one member of the Group to another member of the
                Group  shall be deemed to result  from a writing  up of its book
                value by way of revaluation;

        (d)     excluding  amounts set aside for taxation as at the date of such
                balance sheet and making such  adjustments as may be appropriate
                in respect of any significant  additional  taxation  expected to
                result from transactions  carried out by any member of the Group
                after such date and not reflected in that balance sheet;

        (e)     deducting  all amounts  attributable  to minority  interests  in
                Subsidiaries;

        (f)     making such  adjustments as may be appropriate in respect of any
                variation  in the  amount of such paid up share  capital  or any
                such reserves after the date of the relevant  balance sheet (but
                so that no  such  adjustment  shall  be made in  respect  of any
                variation in profit and loss account except to the extent of any
                profit or loss,  calculated on a cumulative  basis,  recorded in
                the consolidated  profit and loss account of the Group delivered
                to the  Mortgagee  before the date of this Deed, or under clause
                7.1.1 in respect of any subsequent period);

        (g)     making such  adjustments as may be appropriate in respect of any
                distribution declared,  recommended or made by any member of the
                Group (otherwise than attributable directly or indirectly to the
                Charter Guarantor) out of profits earned up to and including the
                date of the latest  audited  balance sheet of that member of the
                Group to the extent that such  distribution  is not provided for
                in that balance sheet;

        (h)     making such  adjustments as may be appropriate in respect of any
                variation  in the  interests  of the  Charter  Guarantor  in its
                Subsidiaries  since  the date of the  latest  published  audited
                consolidated balance sheet of the Group;

        (i)     if  the  calculation  is  required  for  the  purpose  of  or in
                connection with a transaction  under or in connection with which
                any  company  is to  become or cease to be a  Subsidiary  of the
                Charter  Guarantor,  making  all  such  adjustments  as would be
                appropriate  if that  transaction  had been carried into effect;
                and

        (j)     making such  adjustments as may be appropriate in the opinion of
                the Mortgagee in order that the above amounts are  calculated in
                accordance with the Original Accounting Principles;

        "Earnings"  means all earnings of the Ship payable  under or pursuant to
        any Time  Charters  entered  into in relation  to the ship,  or else any
        other  charters  entered  into  by  the  Charterer  in  respect  of  the
        employment of the Ship;

        "Encumbrance"  means any mortgage,  charge  (whether fixed or floating),
        pledge, lien, hypothecation,  assignment,  trust arrangement or security
        interest or other encumbrance of any kind securing any obligation of any
        person  or any  type  of  preferential  arrangement  (including  without
        limitation title transfer and/or retention arrangements having a similar
        effect);

        "Excess Cash Flow" means any Earnings of the Ship minus the aggregate of
        the Charter Earnings and the operating expenses in relation to the Ship;

        "Finance Lease" means a lease treated as a finance lease pursuant to the
        Applicable Accounting Principles.

        "Fleet  Vessels"  means any vessels  owned,  or  chartered  on long-term
        demise charter to any member of the Group;

        "Group" means,  together, the Charter Guarantor and its Subsidiaries and
        "member of the Group" means any of them;

        "Net Asset Value"  means,  at any relevant  time,  the amount in Dollars
        resulting  after  deducting  the Total Debt from the Total  Market Value
        Adjusted Assets, in either case at such time;

        "Original  Accounting  Principles"  means those  accounting  principles,
        standards  and  practices  which  were  used in the  preparation  of the
        consolidated audited financial statements of the Group as at 31 December
        2005,  and for the year then ended and,  to the extent  that they do not
        conflict  with those  principles,  standards and  practices,  such other
        accounting  principles,   standards  and  practices  as  were  generally
        acceptable in the United States of America on 31 December 2005;

        "Total Debt" means the aggregate  principal amount  (including any fixed
        or minimum premium payable on final repayment) of:

        (a)     moneys  borrowed  or raised  by the  Charter  Guarantor  and its
                Subsidiaries;

        (b)     bonds, notes, loan stock, debentures,  commercial paper or other
                debt  securities  issued by the Charter  Guarantor or any of its
                Subsidiaries  not for the time being  beneficially  owned by the
                Charter Guarantor or any of its Subsidiaries;

        (c)     sums outstanding  under  acceptances by the Charter Guarantor or
                any of its Subsidiaries or by any bank or acceptance house under
                acceptance  credits opened on behalf of the Charter Guarantor or
                any Subsidiary;

        (d)     deferred  indebtedness  of the Charter  Guarantor  or any of its
                Subsidiaries  for  payment of the  acquisition  or  construction
                price for assets or services acquired or constructed;

        (e)     rental payments under Finance Leases;

        (f)     receivables  sold or discounted  with a right of recourse to the
                Charter Guarantor or any of its Subsidiaries;

        (g)     the  nominal  amount  of any  issued  and paid up share  capital
                (other  than  equity  share   capital)  of  any  Subsidiary  not
                beneficially   owned  by  the  Charter   Guarantor   or  another
                Subsidiary;

        (h)     preference share capital redeemable prior to the last day of the
                period of the Charter;

        (i)     indebtedness  secured by any Encumbrance over all or any part of
                the  undertaking,  property,  assets,  rights or revenues of the
                Charter  Guarantor or any of its  Subsidiaries  irrespective  of
                whether  or not such  indebtedness  is  supported  by a personal
                covenant  on the  part of the  Charter  Guarantor  or any of its
                Subsidiaries;

        (j)     indebtedness  incurred  in  respect of swaps,  forward  exchange
                contracts, futures or other derivatives;

        (k)     any  other  liability  arising  from a  transaction  having  the
                commercial effect of a borrowing or the raising of money;

        (l)     obligations  under  guarantees in respect of the  obligations of
                any  other  person  which,  if  such  person  were  the  Charter
                Guarantor or a Subsidiary,  would fall within  paragraphs (a) to
                (k) above,

        PROVIDED THAT

        (i)     moneys owing by the Charter  Guarantor  to a Subsidiary  or by a
                Subsidiary  to the Charter  Guarantor  or to another  Subsidiary
                shall not be taken into account;

        (ii)    the principal  amount of Total Debt deemed to be  outstanding in
                relation to Finance Leases or hire purchase  agreements shall be
                the  present  value  of  the  minimum  lease  or  hire  payments
                discounted at the interest  rate implicit in the relevant  lease
                or hire purchase agreement; and

        "Total Market Value Adjusted Assets" means the aggregate of:

        (a)     the  value  (less  depreciation   computed  in  accordance  with
                generally   accepted    international    accounting   principles
                consistently  applied) on a  consolidated  basis of all tangible
                fixed   assets  of  the  Group,   as  stated  in  the   relevant
                consolidated  financial  statements of the Group,  but excluding
                any ships at the  relevant  time  owned by  members of the Group
                which,   for  the  purposes  of  such   consolidated   financial
                statements,  are  included in the  consolidated  tangible  fixed
                assets of the Group (for the  purposes  of clauses  7.2 and 7.3,
                the "Relevant Ships"); and

        (b)     the aggregate of the market value of the Relevant Ships, as such
                market value shall have been most recently determined (as of the
                date of the relevant  calculation) pursuant to the provisions of
                clause 7.3 of this Deed by means of  valuations  obtained by the
                Mortgagee in  accordance  with the  provisions  of clause 7.3 of
                this Deed (and not the value of the Relevant  Ships as stated in
                the relevant consolidated financial statements of the Group).

        7.2.9   All the terms  defined in this  clause 7.2 and used in this Deed
                are to be determined on a  consolidated  basis in respect of the
                Group and (except as items are expressly included or excluded in
                the  relevant  definition  or  clause)  are  used  and  shall be
                construed in accordance  with Applicable  Accounting  Principles
                and  as  determined  from  the  latest  consolidated   financial
                statements of the Group  delivered to the Mortgagee  pursuant to
                clause 7.1.1.

        7.2.10  The  compliance of the Charter  Guarantor with the covenants set
                out in clauses 7.2.1, 7.2.2, 7.2.6 and 7.2.7 shall be determined
                on the basis of  calculations  made by the Mortgagee at any time
                by reference to then latest consolidated financial statements of
                the Group  delivered to the Mortgagee  pursuant to clause 7.1.1.
                For the  avoidance  of  doubt,  it is  hereby  agreed  that  the
                Mortgagee shall be entitled to make such  determinations  and/or
                calculations  at any time when, and in relation to any period in
                relation  to which,  the Charter  Guarantor  shall be obliged to
                comply with each of the  covenants out in clauses  7.2.1,  7.2.2
                and 7.2.7 without regard to when any such  financial  statements
                are due to be delivered or have been  actually  delivered to the
                Mortgagee pursuant to clause 7.1.

        7.2.11  For the purposes of this clause 7.2:

                (a)     no item shall be deducted or credited  more than once in
                        any calculation; and

                (b)     any amount  expressed  in a currency  other than Dollars
                        shall be  converted  into  Dollars  in  accordance  with
                        Applicable Accounting Principles.

7.3     Valuation of Relevant Ships

        7.3.1   Valuations

                Each of the  Relevant  Ships  shall,  for the  purposes  of this
                clause 7, be valued in Dollars as and when the  Mortgagee  shall
                require. Each such valuation of a Relevant Ship shall be made by
                an independent  firm of shipbrokers  appointed by the Mortgagee.
                Such  valuation  shall be made without,  unless  required by the
                Mortgagee,  physical inspection,  and on the basis of a sale for
                prompt delivery for cash at arm's length,  on normal  commercial
                terms as  between a  willing  buyer  and a  willing  seller  and
                without taking into account the benefit of any  charterparty  or
                other employment of such Relevant Ship. The value of each of the
                Relevant Ships  determined in accordance  with the provisions of
                this clause 7.3 shall be binding upon the parties hereto for the
                purposes of calculating  the Total Market Value Adjusted  Assets
                until  such  time  as  any  further  such  valuations  shall  be
                obtained.

        7.3.2   Information

                The Charter  Guarantor  undertakes to the Mortgagee to supply to
                the  Mortgagee  and  to any  such  shipbroker  such  information
                concerning   any  Relevant   Ship  and  its  condition  as  such
                shipbrokers may reasonably require for the purpose of making any
                such valuation.

        7.3.3   Costs

                All  costs  in  connection  with  the  Mortgagee  obtaining  any
                valuation  of each of the Relevant  Ships  referred to in clause
                7.3.1 shall be borne by the Owner.

8       Covenants concerning insurance and operational matters

8.1     Covenants

        The Charterer hereby covenants with the Mortgagee (as security agent and
        trustee for and on behalf of the Creditors)  and  undertakes  throughout
        the Charter Period:

        8.1.1   Insurance

                (a)     Insured risks,  amounts and terms to insure and keep the
                        Ship insured  free of cost and expense to the  Mortgagee
                        and  in the  joint  names  only  of the  Owner  and  the
                        Charterer  or, if so required by the  Mortgagee,  in the
                        joint  names  of the  Owner  and the  Mortgagee  and the
                        Charterer  (but  without  liability  on the  part of the
                        Mortgagee for premiums or calls):

                        (i)     against fire and usual  marine risks  (including
                                excess risks) and war risks,  on an agreed value
                                basis,  in such  amounts  and upon such terms as
                                shall  from  time to time be  acceptable  to the
                                Mortgagee.  For  the  avoidance  of  doubt,  the
                                Charterer  hereby  covenants  with the Mortgagee
                                and undertakes throughout the Security Period to
                                ensure  that the Ship  will be  insured  for not
                                less than the  greater  of:

                                (A)     the value of the Ship for the time being
                                        (as determined by the Mortgagee pursuant
                                        to   clause   8.2.2   of  the  Loan  and
                                        Guarantee Facility  Agreement);  and

                                (B)     such amount as will be at least equal to
                                        one  hundred  and thirty per cent (130%)
                                        of the  aggregate  of the  Loan  and the
                                        Guarantee Amount;

                        (ii)    and upon such terms as should  from time to time
                                be approved in writing by the Mortgagee;

                        (iii)   against    protection   and   indemnity    risks
                                (including   pollution  risks  for  the  highest
                                amount  in  respect  of  which  cover  is or may
                                become  available  for  ships of the same  type,
                                size,  age and flag as the  Ship and a  freight,
                                demurrage and defence  cover) for the full value
                                and tonnage of the Ship (as  approved in writing
                                by the  Mortgagee)  and upon such terms as shall
                                from time to time be  approved in writing by the
                                Mortgagee;

                        (iv)    in respect of such other  matters of  whatsoever
                                nature and howsoever arising in respect of which
                                insurance would be maintained by a prudent owner
                                of the Ship.

                        and to pay to the  Mortgagee  the cost (as  conclusively
                        certified  by  the  Mortgagee)  of (A)  any  mortgagee's
                        interest insurance (including, if the Mortgagee shall so
                        require,  mortgagee's  additional  perils (including all
                        P&I risks)  coverage)  which the Mortgagee may from time
                        to time effect in respect of the Ship upon such terms in
                        such  amounts  as it shall  deem  desirable  and (B) any
                        other  insurance cover which the Mortgagee may from time
                        to time  effect in respect of the Ship and/or in respect
                        of its  interest or potential  third party  liability as
                        mortgagee  of the  Ship  as  the  Mortgagee  shall  deem
                        desirable having regard to any limitations in respect of
                        amount or extent of cover which may from time to time be
                        applicable to any of the other insurances referred to in
                        this clause 5.1.1(a);

                (b)     Approved  brokers,  insurers and  associations

                        to effect the  insurances  aforesaid in such currency as
                        the  Mortgagee  may approve  and  through  the  Approved
                        Brokers  and  with  such  insurance   companies   and/or
                        underwriters  as shall from time to time be  approved in
                        writing  by the  Mortgagee;  provided  however  that the
                        insurances   against  war  risks  and   protection   and
                        indemnity risks may be effected by the entry of the Ship
                        with  such  war  risks  and   protection  and  indemnity
                        associations  as shall from time to time be  approved in
                        writing by the Mortgagee;

                (c)     Fleet  liens,  set-off  and  cancellation

                        if any of the insurances  referred to in clause (a) form
                        part of a fleet  cover,  to  procure  that the  Approved
                        Brokers shall undertake to the Mortgagee that they shall
                        neither  set off  against  any  claims in respect of the
                        Ship any premiums due in respect of other  vessels under
                        such  fleet  cover  or  any   premiums   due  for  other
                        insurances,  nor  cancel  the  insurance  for  reason of
                        non-payment  of premiums  for other  vessels  under such
                        fleet  cover or of premiums  for such other  insurances,
                        and  shall  undertake  to  issue a  separate  policy  in
                        respect  of the  Ship if and  when so  requested  by the
                        Mortgagee;

                (d)     Payment of premiums and calls

                        punctually to pay all premiums, calls,  contributions or
                        other sums payable in respect of all such insurances and
                        to produce all  relevant  receipts or other  evidence of
                        payment when so required by the Mortgagee;

                (e)     Renewal

                        at least 14 days before the relevant policies, contracts
                        or entries expire,  to notify the Mortgagee of the names
                        of the brokers  and/or the war risks and  protection and
                        indemnity  associations  proposed  to be employed by the
                        Charterer  or any other  party for the  purposes  of the
                        renewal of such  insurances  and of the amounts in which
                        such insurances are proposed to be renewed and the risks
                        to be  covered  and,  subject  to  compliance  with  any
                        requirements  of the  Mortgagee  pursuant to this clause
                        8.1.1, to procure that appropriate  instructions for the
                        renewal of such insurances on the terms so specified are
                        given to the Approved Brokers and/or to the approved war
                        risks and protection and indemnity associations at least
                        10 days  before  the  relevant  policies,  contracts  or
                        entries expire, and that the Approved Brokers and/or the
                        approved  war  risks  and   protection   and   indemnity
                        associations will at least 7 days before such expiry (or
                        within such  shorter  period as the  Mortgagee  may from
                        time to time agree)  confirm in writing to the Mortgagee
                        as  and  when  such   renewals  have  been  effected  in
                        accordance with the instructions so given;

                (f)     Guarantees

                        to  arrange  for  the  execution  and  delivery  of such
                        guarantees  or  indemnities  as may from time to time be
                        required by any  protection  and  indemnity or war risks
                        association;

                (g)     Hull policy documents, notices, loss payable clauses and
                        brokers' undertakings

                        to deposit  with the  Approved  Brokers  (or procure the
                        deposit   of)  all   slips,   cover   notes,   policies,
                        certificates of entry or other  instruments of insurance
                        from time to time issued in connection  with such of the
                        insurances  referred  to in clause  (a) as are  effected
                        through  the  Approved  Brokers  and  procure  that  the
                        interest of the Mortgagee  shall be endorsed  thereon by
                        incorporation  of the relevant Loss Payable  Clause and,
                        where  the   Insurances   have  been   assigned  to  the
                        Mortgagee,  by  means  of  a  Notice  of  Assignment  of
                        Insurances (signed by the Owner and the Charterer and by
                        any other  assured who shall have  assigned its interest
                        in  the  Insurances  to  the  Mortgagee)  and  that  the
                        Mortgagee  shall  be  furnished  with pro  forma  copies
                        thereof and a letter or letters of undertaking  from the
                        Approved Brokers in such form as shall from time to time
                        be required by the  Mortgagee;

                (h)     Associations'  loss payable  clauses,  undertakings  and
                        certificates

                        to procure that any protection and indemnity  and/or war
                        risks  associations  in  which  the Ship is for the time
                        being  entered  shall  endorse the relevant Loss Payable
                        Clause on the - relevant  certificate of entry or policy
                        and  shall  furnish  the  Mortgagee  with a copy of such
                        certificate  of entry or policy  and a letter or letters
                        of  undertaking  in such form as shall from time to time
                        be required by the Mortgagee;

                (i)     Extent of cover and exclusions

                        to  take  all  necessary  action  and  comply  with  all
                        requirements  which may from time to time be  applicable
                        to the Insurances  (including,  without limitation,  the
                        making  of  all   requisite   declarations   within  any
                        prescribed time limits and the payment of any additional
                        premiums or calls) so as to ensure  that the  Insurances
                        are not made subject to any exclusions or qualifications
                        to which the  Mortgagee  has not given its prior written
                        consent  and  are  otherwise  maintained  on  terms  and
                        conditions  from time to time approved in writing by the
                        Mortgagee;

                (j)     Correspondence with brokers and associations

                        to  provide to the  Mortgagee,  at the time of each such
                        communication,  copies  of  all  written  communications
                        between  the  Charterer  and the  Approved  Brokers  and
                        approved  war  risks  and   protection   and   indemnity
                        associations    which   relate   to   compliance    with
                        requirements   from  time  to  time  applicable  to  the
                        Insurances including,  without limitation, all requisite
                        declarations  and  payments  of  additional  premiums or
                        calls referred to in clause (i);

                (k)     Collection of claims

                        to do all things  necessary  and provide all  documents,
                        evidence  and  information  to enable the  Mortgagee  to
                        collect or recover  any moneys  which  shall at any time
                        become due in respect of the Insurances;

                (l)     Employment of Ship

                        not to employ the Ship or suffer the Ship to be employed
                        otherwise  than in  conformity  with  the  terms  of the
                        Insurances  (including any warranties express or implied
                        therein)  without  first  obtaining  the  consent of the
                        insurers  to such  employment  and  complying  with such
                        requirements  as to extra  premium or  otherwise  as the
                        insurers may prescribe;

                (m)     Application of recoveries

                        to apply all sums receivable  under the Insurances which
                        are  paid to it in  accordance  with  the  Loss  Payable
                        Clauses in repairing  all damage  and/or in  discharging
                        the  liability  in respect of which such sums shall have
                        been received;

        8.1.2   Ship's registration

                not to do or suffer to be done anything,  or omit to do anything
                the  doing or  omission  of which  could or might  result in one
                registration  of Ship as a  Liberian  ship  being  forfeited  or
                imperilled  or which  could or might  result  in the Ship  being
                required to be registered under any other flag than the Liberian
                flag and not to  register  the Ship or permit  its  registration
                under any other flag  without the prior  written  consent of the
                Mortgagee;

        8.1.3   Repair

                to keep the Ship in a good and  efficient  state of  repair  and
                procure that all repairs to or replacement of any damaged,  worn
                or lost parts or equipment  are effected in such manner (both as
                regards workmanship and quality of materials) as not to diminish
                the value of the Ship;

        8.1.4   Modification; removal of parts; equipment owned by third parties

                not without the prior  written  consent of the  Mortgagee to, or
                suffer any other  person to:  (a) make any  modification  to the
                Ship in consequence of which her structure,  type or performance
                characteristics  could  or might be  materially  altered  or her
                value materially reduced; or (b) remove any material part of the
                Ship or any  equipment  the  value  of  which  is such  that its
                removal from the Ship would  materially  reduce the value of the
                Ship  without  replacing  the  same  with  equivalent  parts  or
                equipment  which are owned by the Owner free from  Encumbrances;
                or (c) install on the Ship any equipment  owned by a third party
                which cannot be removed  without causing damage to the structure
                or fabric of the Ship;

        8.1.5   Maintenance of class; compliance with regulations

                to maintain the  Classification  as the class of the Ship and to
                comply with and ensure that the Ship at all times  complies with
                the provisions of the Merchant Shipping Acts and all regulations
                and  requirements  (statutory  or  otherwise)  from time to time
                applicable to vessels  registered under the laws and flag of the
                Flag State or otherwise applicable to the Ship;

        8.1.6   Surveys

                to submit the Ship to continuous  surveys and such periodical or
                other surveys as may be required for classification purposes and
                to supply to the Mortgagee  copies of all survey  reports issued
                in respect thereof;

        8.1.7   Inspection

                to ensure that the  Mortgagee,  by  surveyors  or other  persons
                appointed  by it for such  purpose,  may  board  the Ship at all
                reasonable times for the purpose of inspecting her and to afford
                all proper  facilities for such inspections and for this purpose
                to give the Mortgagee  reasonable advance notice of any intended
                drydocking   of  the   Ship   (whether   for  the   purpose   of
                classification, survey or otherwise);

        8.1.8   Prevention of and release from arrest

                promptly to pay and  discharge all debts,  damages,  liabilities
                and  outgoings  whatsoever  which have given or may give rise to
                maritime,   statutory   or   possessory   liens  on,  or  claims
                enforceable  against,  the  Ship,  her  Insurances  or any  part
                thereof and, in the event of a writ or libel being filed against
                the Ship, her  Insurances or any part thereof,  or of any of the
                same being  arrested,  attached or levied upon pursuant to legal
                process or purported  legal process or in the event of detention
                of the Ship in exercise or  purported  exercise of any such lien
                or claim as aforesaid,  to procure the release of the Ship,  her
                Insurances from such arrest, detention attachment or levy or, as
                the case may be, the  discharge  of the writ or libel  forthwith
                upon receiving notice thereof by providing bail or procuring the
                provision  of security or  otherwise  as the  circumstances  may
                require;

        8.1.9   Employment

                not to employ the Ship or permit her  employment  in any manner,
                trade or business  which is forbidden by Liberian  law, or which
                is   unlawful  or  illicit   under  the  law  of  any   relevant
                jurisdiction,  or in carrying illicit or prohibited goods, or in
                any   manner   whatsoever   which  may   render  her  liable  to
                condemnation  in a  prize  court,  or to  destruction,  seizure,
                confiscation,   penalty  or  sanctions  and,  in  the  event  of
                hostilities in any part of the world (whether war be declared or
                not),  not to  employ  the  Ship or  permit  her  employment  in
                carrying  any  contraband  goods,  or  enter  or  trade to or to
                continue to trade in any zone which has been declared a war zone
                by any  Government  Entity or by the Ship's  war risks  insurers
                unless the prior  written  consent of the  Mortgagee is obtained
                and such special  insurance  cover as the  Mortgagee may require
                shall have been  effected by the Charterer and at the expense of
                the Charterer;

        8.1.10  Information

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

        8.1.11  Notification of certain events

                to notify the Mortgagee forthwith by telex thereafter  confirmed
                by letter of:

                (a)     any  damage to the Ship  requiring  repairs  the cost of
                        which will or might exceed the Casualty Amount;

                (b)     any  occurrence in  consequence of which the Ship has or
                        may become a Total Loss;

                (c)     any requisition of the Ship for hire;

                (d)     any requirement or recommendation made by any insurer or
                        the Classification Society or by any competent authority
                        which is not, or cannot be,  complied with in accordance
                        with its terms; or

                (e)     any arrest or  detention  of the Ship or any exercise or
                        purported  exercise of a lien or other claim on the Ship
                        or the Insurances or any part thereof;

                (f)     any  petition  or  notice of  meeting  to  consider  any
                        resolution  to  wind-up  the  Charterer  (or  any  event
                        analogous  thereto  under  the laws of the  place of its
                        incorporation); or

                (g)     the occurrence of any Default;

        8.1.12  Payment of outgoings and evidence of payments

                promptly to pay all tolls,  dues and other outgoings  whatsoever
                in  respect of the Ship and the  Ship's  Insurances  and to keep
                proper  books of account in respect of the Ship and, as and when
                the Mortgagee may so require,  to make such books  available for
                inspection   on  behalf  of  the   Mortgagee,   and  to  furnish
                satisfactory  evidence  that the  wages and  allotments  and the
                insurance and pension  contributions  of the Master and crew are
                being promptly and regularly  paid and that all deductions  from
                crew's  wages in respect of any  applicable  tax  liability  are
                being  properly  accounted  for and that the Master has no claim
                for  disbursements  other  than  those  incurred  by  him in the
                ordinary course of trading on the voyage then in progress;

        8.1.13  Repairers' liens

                not without the prior  written  consent of the  Mortgagee to put
                the Ship into the  possession  of any person for the  purpose of
                work  being  done upon her in an amount  exceeding  or likely to
                exceed the Casualty  Amount  unless such person shall first have
                given to the  Mortgagee in terms  satisfactory  to it, a written
                undertaking not to exercise any lien on the Ship for the cost of
                such work or otherwise;

        8.1.14  Chartering

                save for any Time Charter, not without the prior written consent
                of the Mortgagee (which the Mortgagee shall have full liberty to
                withhold)  and, if such  consent is given,  only subject to such
                conditions as the Mortgagee may impose, to let the Ship:

        (a)     on demise charter for any period;

        (b)     by any  time or  consecutive  voyage  charter  for a term  which
                exceeds or which by virtue of any  optional  extensions  therein
                contained might exceed twelve (12) months' duration;

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

        (d)     below the market  rate  prevailing  at the time when the Ship is
                fixed or other than on arms' length terms;

        8.1.15  Sharing of Earnings

                not without the prior written consent of the Mortgagee (and then
                only subject to such  conditions as the Mortgagee may impose) to
                enter into any agreement or arrangement whereby the Earnings may
                be shared with any other person;

        8.1.16  Manager

                not  without  the prior  written  consent  of the  Mortgagee  to
                appoint a manager of the Ship other than the Commercial  Manager
                or the Technical Manager, or terminate or amend the terms of the
                Management Agreements;

        8.1.17  Notice of Mortgage

                to place  and at all  times  and  places  to  retain a  properly
                certified  copy of the  Mortgage  (which  shall form part of the
                Ship's  documents)  on board the Ship with her  papers and cause
                such  certified  copy of the Mortgage to be exhibited to any and
                all persons having  business with the Ship which might create or
                imply any commitment or encumbrance  whatsoever on or in respect
                of the Ship (other than a lien for crew's wages and salvage) and
                to any  representative  of the  Mortgagee  and to place and keep
                prominently displayed in the navigation room and in the Master's
                cabin of the Ship a framed  printed notice in plain type reading
                as follows:

                              "NOTICE OF MORTGAGE"

                This Ship is subject to a first preferred  mortgage in favour of
                [here  insert  name of  Mortgagee]  of [here  insert  address of
                Mortgagee].  Under the said mortgage,  neither the Owner nor any
                charterer  nor the Master of this Ship has any  right,  power or
                authority  to create,  incur or permit to be  imposed  upon this
                Ship any commitments or encumbrances  whatsoever  other than for
                crew's  wages and salvage" and in terms of the said notice it is
                hereby  agreed  that  save  and  subject  as  otherwise   herein
                provided,  neither  the  Owner nor the  Charterer  nor any other
                charterer  nor the  Master of the Ship nor any other  person has
                any right,  power or authority to create,  incur or permit to be
                imposed upon the Ship any lien whatsoever  other than for crew's
                wages and salvage;

        8.1.18  Anti-drug abuse

                without  prejudice to clause  8.1.9,  to take all  necessary and
                proper precautions to prevent any infringements of the Anti-Drug
                Abuse Act of 1986 of the United States of America or any similar
                legislation  applicable to the Ship in any jurisdiction in or to
                which the Ship  shall be  employed  or located or trade or which
                may  otherwise be applicable to the Ship and/or the Owner and/or
                the Charterer and, if the Mortgagee  shall so require,  to enter
                into a "Carrier  Initiative  Agreement"  with the United  States
                Customs  Service and to procure that the same  agreement (or any
                similar agreement hereafter  introduced by any Government Entity
                of the United States of America) is maintained in full force and
                effect and performed by the Charterer;

        8.1.19  Compliance with environmental laws

                to comply with, and procure that all Environmental Affiliates of
                the Charterer  comply with, all  Environmental  Laws  including,
                without limitation,  requirements relating to manning submission
                of oil response plans, designations of qualified individuals and
                establishment  of  financial  responsibility  and to obtain  and
                comply with,  and procure that all  Environmental  Affiliates of
                the  Charterer   obtain  and  comply  with,  all   Environmental
                Approvals; and

        8.1.20  Compliance with ISM Code

                comply and will procure  that any Operator  will comply with and
                ensure  that the  Ship and any  Operator  will  comply  with the
                requirements of the ISM Code, including (but not limited to) the
                maintenance and renewal of valid  certificates  pursuant thereto
                throughout the Security Period;

        8.1.21  Withdrawal of DOC and SMC

                procure that any Operator will, immediately inform the Mortgagee
                if there is any  threatened  or actual  withdrawal of its DOC or
                the SMC in respect of the Ship;

        8.1.22  Issuance of DOC and SMC

                procure that any Operator  will,  promptly  inform the Mortgagee
                upon the issue to the Owner or any  Operator of a DOC and to the
                Ship of an SMC or the  receipt by the Owner or any  Operator  of
                notification that its application for the same has been refused;

        8.1.23  ISPS Code compliance

                and will procure that any Operator of the Ship will:

                (a)     maintain  at all  times  a  valid  and  current  ISSC in
                        respect of such Ship;

                (b)     immediately  notify  the  Mortgagee  in  writing  of any
                        actual    or    threatened    withdrawal,    suspension,
                        cancellation  or  modification of the ISSC in respect of
                        the Ship;

                (c)     procure  that the Ship will comply at all times with the
                        ISPS Code; and

        8.1.24  Substitute performance of Mortgage

                To the extent  that,  pursuant to the Charter or this Deed,  the
                Charterer   duly  performs  and   discharges  (or  procures  the
                performance   and  discharge  of)  the  duties  and  liabilities
                undertaking by the Owner in the Mortgage,  then such performance
                and  discharge  of  the  said  duties  and  liabilities  by  the
                Charterer shall, to that extent,  be deemed to be proper and due
                performance  and discharge of the Owner's duties and liabilities
                under the Mortgage.

9       Powers of Mortgagee to protect security and remedy defaults

9.1     Protective action

        The Mortgagee (as security agent and trustee on behalf of the Creditors)
        shall, without prejudice to its other rights,  powers and remedies under
        any of the Security Documents,  be entitled (but not bound) at any time,
        and as often as may be  necessary,  to take any such action as it may in
        its  discretion  think fit for the purpose of protecting or  maintaining
        the security created by this Deed and the other Security Documents,  and
        all  Expenses  attributable  thereto  shall be  payable  by the Owner on
        demand.

9.2     Remedy of defaults

        Without prejudice to the generality of the provisions of clause 9.1:

9.2.1   if the  Charterer  fails to comply with any of the  provisions of clause
        8.1.1 the  Mortgagee  shall be  entitled  (but not  bound) to effect and
        thereafter  to  maintain  all  such  insurances  upon the Ship as in its
        discretion it may think fit in order to procure the compliance with such
        provisions  or  alternatively,  to require the Ship (at the  Charterer's
        risk) to remain in, or to proceed to and remain in a port  designated by
        the Mortgagee until such provisions are fully complied with;

9.2.2   if the Charterer  fails to comply with any of the  provisions of clauses
        8.1.3,  8.1.5 or 8.1.6,  the Mortgagee shall be entitled (but not bound)
        to arrange for the carrying out of such  repairs,  changes or surveys as
        it may deem  expedient or  necessary in order to procure the  compliance
        with such provisions; and

9.2.3   if the  Charterer  fails to comply with any of the  provisions of clause
        8.1.8  the  Mortgagee  shall  be  entitled  (but not  bound)  to pay and
        discharge  all such debts,  damages,  liabilities  and  outgoings as are
        therein  mentioned  and/or  to take  any  such  measures  as it may deem
        expedient  or  necessary  for the purpose of securing the release of the
        Ship in order to procure the compliance  with such  provisions,  and the
        Expenses  attributable  to the  exercise  by the  Mortgagee  of any such
        powers shall be payable by the Owner to the Mortgagee on demand.

10      Powers of Mortgagee on Event of Default

10.1    Powers

        Upon the  happening of any Event of Default,  the Mortgagee (as security
        agent  and  trustee  for and on behalf of the  Creditors)  shall  become
        forthwith  entitled by notice given to the Owner in accordance  with the
        provisions of clause 10.2 of the Loan and Guarantee Facility  Agreement,
        or, as  regards  the  Master  Swap  Agreement,  in  accordance  with the
        relevant terms of the Master Swap Agreement,  to declare the Outstanding
        Indebtedness  to be due and payable  immediately  or in accordance  with
        such notice,  whereupon the Outstanding Indebtedness shall become so due
        and payable and (whether or not the Mortgagee  shall have given any such
        notice) the Mortgagee shall become  forthwith  entitled,  as and when it
        may see fit,  to put into force and  exercise in relation to the Owner's
        Assigned  Property and/or the Charterer's  Assigned Property or any part
        thereof all or any of the rights, powers and remedies possessed by it as
        mortgagee  and/or assignee of the Owner's  Assigned  Property and/or the
        Charterer's Assigned Property (whether at law, by virtue of the Mortgage
        and this Deed or  otherwise)  and in  particular  (without  limiting the
        generality of the foregoing):

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

        10.1.2  to collect,  recover,  compromise and give a good discharge for,
                all claims then  outstanding  or  thereafter  arising  under the
                Insurances or any of them or in respect of any other part of the
                Owner's  Assigned  Property  and/or  the  Charterer's   Assigned
                Property,  and to take over or institute (if necessary using the
                name of the  Owner or, as the case may be,  the  Charterer)  all
                such proceedings in connection therewith as the Mortgagee in its
                absolute  discretion  thinks  fit,  and,  in  the  case  of  the
                Insurances,  to permit the brokers  through whom  collection  or
                recovery is effected to charge the usual brokerage therefore;

        10.1.3  to discharge,  compound, release or compromise claims in respect
                of the Ship or any other part of the Owner's  Assigned  Property
                and/or the Charterer's Assigned Property which have given or may
                give rise to any  charge  or lien or other  claim on the Ship or
                any other  part of the  Owner's  Assigned  Property  and/or  the
                Charterer's Assigned Property or which are or may be enforceable
                by proceedings against the Ship or any other part of the Owner's
                Assigned Property and/or the Charterer's Assigned Property; and

        10.1.4  to recover  from the Owner on demand all  Expenses  incurred  or
                paid by the  Mortgagee  in  connection  with the exercise of the
                powers (or any of them) referred to in this clause 10.1.

10.2    Liability of Mortgagee

        The Mortgagee  shall not be liable as mortgagee in possession in respect
        of all or any of the Owner's  Assigned  Property  and/or the Charterer's
        Assigned  Property to account or be liable for any loss upon realisation
        or for any  neglect or default of any nature  whatsoever  in  connection
        therewith for which a mortgagee in possession may be liable as such.

11      Application of moneys

11.1    Application

        All moneys  received by the Mortgagee (as security agent and trustee for
        and on behalf of the Creditors) in respect of:

        11.1.1  recovery  under the  Insurances  (other  than  under any loss of
                earnings  insurance  and any such  sum or sums as may have  been
                received by the Mortgagee (as security agent and trustee for and
                on behalf of the Creditors) in accordance with the relevant Loss
                Payable Clause in respect of a major casualty as therein defined
                and paid over to the  Charterer  as provided in clause  3.1.2 or
                which fall to be otherwise applied under clause 11.3);

        11.1.2  Requisition Compensation; and

        11.1.3  the Owner's Assigned Property,

                shall be held by it upon trust in the first place to pay or make
                good the Expenses and the balance shall be applied in the manner
                specified  in  clause  13.1 of the Loan and  Guarantee  Facility
                Agreement  and the  surplus (if any) shall be paid to the Owner,
                the  Charterer or such other person as may for the time being be
                entitled thereto.

11.2    Shortfalls

        In the event that the balance referred to in clause 11.1 is insufficient
        to pay in full the whole of the Outstanding Indebtedness,  the Mortgagee
        shall be entitled to collect the  shortfall  from the Owner or any other
        person liable for the time being therefore.

11.3    Application of Insurances received by Mortgagee

        Any moneys received by the Mortgagee in respect of the Insurances (other
        than in respect of recovery  under any loss of earnings  insurance or in
        respect of a Total Loss) pursuant to the Mortgage and/or the assignments
        by the Charterer contained in clause 3.1 and 5.2 shall:

        11.3.1  if received by the  Mortgagee,  or in the hands of the Mortgagee
                after the occurrence of a Default but prior to the occurrence of
                an Event of Default,  be retained by the  Mortgagee and shall be
                paid over by the Mortgagee to the Charterer  (during the Charter
                Period) at such times,  in such  amounts  and for such  purposes
                and/or  shall  be  applied  by  the   Mortgagee  in  or  towards
                satisfaction  of any sums  from  time to time  accruing  due and
                payable by the Owner under the Security Documents or any of them
                or by virtue of payment  demanded  thereunder,  in each case the
                Mortgagee may in its absolute discretion determine; and

        11.3.2  if received by the Mortgagee,  or in the hands of the Mortgagee,
                after the  occurrence of an Event of Default,  be applied by the
                Mortgagee in the manner  specified in clause 11.1 and/or  clause
                11.3, as the Mortgagee may in its absolute discretion determine.

12      Remedies cumulative and other provisions

12.1    No implied waivers; remedies cumulative

        No failure or delay on the part of the Mortgagee and/or the Creditors or
        any of them to exercise  any right,  power or remedy  vested in it under
        any of the Security  Documents  shall operate as a waiver  thereof,  nor
        shall  any  single or  partial  exercise  by the  Mortgagee  and/or  the
        Creditors  or  any of  them  of any  right,  power  or  remedy  nor  the
        discontinuance,  abandonment or adverse determination of any proceedings
        taken by the  Mortgagee  and/or the  Creditors or any of them to enforce
        any  right,  power or  remedy  preclude  any other or  further  exercise
        thereof or  proceedings to enforce the same or the exercise of any other
        right,  power or remedy  nor shall the  giving by the  Mortgagee  of any
        consent to any act which by the terms of this Deed requires such consent
        prejudice  the right of the Mortgagee to withhold or give consent to the
        doing of any other  similar act.  The remedies  provided in the Security
        Documents are cumulative and are not exclusive of any remedies  provided
        by law.

12.2    Delegation

        The  Mortgagee  shall  be  entitled,  at any time and as often as may be
        expedient,  to delegate all or any of the powers and discretions  vested
        in it by the Mortgage and this Deed (including the power vested in it by
        virtue of  clause  14) or any of the other  Security  Documents  in such
        manner,  upon such terms,  and to such  persons as the  Mortgagee in its
        absolute discretion may think fit.

13      Costs and indemnity

13.1    Costs

        The Owner shall pay to the Mortgagee  and/or any of the other  Creditors
        (as security  agent and trustee for and on behalf of the  Creditors)  on
        demand on a full indemnity basis all reasonable  expenses or liabilities
        of whatsoever nature (including legal fees, fees of insurance  advisers,
        printing,  out-of-pocket expenses,  stamp duties,  registration fees and
        other  duties or charges)  together  with any value added tax or similar
        tax payable in respect thereof,  incurred by the Mortgagee and/or any of
        the  other   Creditors  in  connection   with  the  enforcement  of,  or
        preservation  of any rights under,  this Deed or otherwise in respect of
        the Outstanding  Indebtedness and the security therefor or in connection
        with the  preparation,  completion,  execution or  registration  of this
        Deed.

13.2    Mortgagee's indemnity

        The Owner hereby  agrees and  undertakes  to indemnify the Mortgagee and
        each  of the  other  Creditors  against  all  losses,  actions,  claims,
        expenses,  demands,  obligations and  liabilities  whatever and whenever
        arising which may now or hereafter be incurred by the  Mortgagee  and/or
        any  of the  other  Creditors,  or by any  manager,  agent,  officer  or
        employee  for  whose  liability,  act  or  omission  it  or  he  may  be
        answerable,  in  respect  of,  in  relation  to, or in  connection  with
        anything  done or omitted in the exercise or  purported  exercise of the
        powers  contained  this Deed or otherwise in  connection  therewith  and
        herewith or with any part of the Owner and the Owner's Assigned Property
        or the Charterer's  Assigned Property or otherwise howsoever in relation
        to, or in connection with, any of the matters dealt with in this Deed.

14      Attorney

14.1    Power

        By way of security,  the Owner and the Charterer each hereby irrevocably
        appoints the Mortgagee (as security  agent and trustee for and on behalf
        of the  Creditors) to be its attorney  generally for and in its name and
        on its behalf and as its act and deed or otherwise to execute,  seal and
        deliver  and  otherwise  perfect  and do  all  such  deeds,  assurances,
        agreements,  instruments,  acts and things which may be required for the
        full exercise of all or any of the rights,  powers or remedies conferred
        by this Deed or which may be deemed proper in or in connection  with all
        or any of the purposes aforesaid.  The power hereby conferred shall be a
        general power of attorney under the Powers of Attorney Act 1971, and the
        Owner and the Charterer ratifies and confirms,  and agrees to ratify and
        confirm, any deed, assurance, agreement,  instrument, act or thing which
        the Mortgagee may execute or do pursuant  thereto.  Provided always that
        such power  shall not be  exercisable  by or on behalf of the  Mortgagee
        until the happening of an Event of Default.

14.2    Exercise of power

        The  exercise of such power by or on behalf of the  Mortgagee  shall not
        put any person dealing with the Mortgagee upon any enquiry as to whether
        any Event of Default has  happened,  nor shall such person be in any way
        affected by notice that no such Event of Default has  happened,  and the
        exercise by the Mortgagee of such power shall be conclusive  evidence of
        the Mortgagee's right to exercise the same.

14.3    Filings

        The  Owner  and the  Charterer  each  hereby  irrevocably  appoints  the
        Mortgagee  (as  security  agent  and  trustee  for and on  behalf of the
        Creditors)  to be its  attorney in its name and on its behalf and as its
        act and deed or otherwise of it, to agree the form of and to execute and
        do all deeds,  instruments,  acts and  things in order to file,  record,
        register or enrol the  Mortgage  and/or  this Deed in any court,  public
        office or elsewhere  which the Mortgagee may in its discretion  consider
        necessary or  advisable,  now or in the future,  to ensure the legality,
        validity,  enforceability  or  admissibility in evidence thereof and any
        other assurance,  document,  act or thing required to be executed by the
        Owner and the Charterer pursuant to clause 15.

15      Further assurance

        The Charterer hereby further  undertakes at its own expense from time to
        time to execute, sign, perfect, do and (if required) register every such
        further  assurance,  document,  act or  thing as in the  opinion  of the
        Mortgagee  may be  necessary  or  desirable  for  the  purpose  of  more
        effectually mortgaging and charging the Charterer's Assigned Property or
        perfecting  the security  constituted  or intended to be  constituted by
        this Deed.

16      Sale of Ship

16.1    Termination of Charter

        Notwithstanding  anything  contained  in the  Charter,  if and  when the
        Mortgagee becomes entitled to put into force and exercise all the powers
        possessed by it as  mortgagee  of the Ship or otherwise  pursuant to the
        Mortgage or at any time thereafter, the Mortgagee shall be entitled (but
        not bound) to determine  the Charter at any time by notice in writing to
        the Owner and the Charterer  which notice shall operate to determine the
        Charter  forthwith  if the  Ship is then in port  and  free of  cargo or
        otherwise upon completion of the voyage (including discharge of cargo if
        any) upon which the Ship was engaged at the time when the said notice to
        determine was given. Upon  determination of the Charter pursuant to this
        clause 16.1 hereof all  liabilities  whatsoever of the Owner  thereunder
        shall be absolutely discharged and extinguished.

16.2    Preservation of Owner's rights

        If the  circumstances  in which the  Mortgagee  becomes  entitled  under
        clause 16.1 to determine the Charter shall constitute or include grounds
        on which the Owner was entitled to determine the same, any determination
        by the Mortgagee shall (as between the Owner and the Charterer)  operate
        as an  acceptance  by the Owner of the  Charterer's  repudiation  of the
        Charter  and the  Owner's  right to  recover  damages in respect of such
        repudiation shall be fully preserved.

16.3    Remedy of Owner's breach

        Notwithstanding anything herein contained, the Owner shall remain liable
        to perform all the  obligations  assumed by it under the Charter and the
        Mortgagee  shall have no obligations  whatsoever  thereunder or be under
        any liability whatsoever to the Charterer in event of any failure by the
        Owner to  perform  its  obligations  thereunder  or  hereunder  provided
        however that:

        16.3.1  a notice in writing (which shall set out full particulars of the
                matters  complained  of and  which  is  hereinafter  called  the
                "notice  of  complaint")  shall  be  immediately  given  by  the
                Charterer  to the  Mortgagee  in event of any  breach or alleged
                breach of the  Charter  by the Owner by  reason  whatsoever  the
                Charterer claims to be entitled to determine the Charter;

        16.3.2  within  fifteen (15) days after  receipt by the Mortgagee of any
                notice of complaint by the Mortgagee  shall be entitled (but not
                bound) to notify the  Charterer  in writing of its  intention to
                remedy the matters complained of by such notice of complaint and
                any remedial measures thereafter taken by the Mortgagee shall be
                without  prejudice to the Charterer's right to claim against the
                Owner  in  respect  of  any  loss  and  damage  suffered  by the
                Charterer by reason of such breach but in no circumstances shall
                the Mortgagee be under any  liability  therefore or for any loss
                or  damage  suffered  by the  Charterer  arising  from  delay or
                otherwise in effecting  such remedial  measures as the Mortgagee
                (whose decision shall be final) deems appropriate; and

        16.3.3  all expenses  whatsoever  incurred by the  Mortgagee in or about
                such  remedial  measures  as may  be  undertaken  on its  behalf
                pursuant to clause 16.3.2 shall be  recoverable by the Mortgagee
                from  the  Owner  on  demand  but  payment  by the  Owner to the
                Mortgagee pursuant to such demand shall not as between the Owner
                and the  Charterer  operate  as an  admission  by the  Owner  of
                liability for the matters  complained of in the relevant  notice
                of complaint.

16.4    Sale free of or subject to Charter

        Notwithstanding anything herein contained, in the event of a sale of the
        Ship  during the  Charter  Period  pursuant  to the power in that behalf
        vested in the Mortgagee by virtue of the Security  Documents,  such sale
        shall  be  free  of or  subject  to the  Charter  at the  option  of the
        Mortgagee.

16.5    Sale subject to Charter

        If the Ship is sold subject to the Charter (which  expression means that
        the purchaser of the Ship or any other person  chartering  the Ship from
        the purchaser  shall as from the date on which the Ship is registered in
        the name of the purchaser assume all future  obligations and acquire all
        future  rights and  benefits  under the  Charter),  the Owner and/or the
        Charterer  shall enter into such form of agreement with the purchaser as
        the  Mortgagee  may require to the intent that such  purchaser  or other
        person shall be  substituted in place of the Owner as owner or disponent
        owner of the Ship for the purposes of the Charter.

16.6    Sale free of Charter

        Without  prejudice  to  clause  16.1,  if the  Ship is sold  free of the
        Charter,  the  Owner and the  Charterer  shall  enter  into such form of
        agreement or agreements  as the Mortgagee may require for  determination
        of the Charter by mutual consent.

17      Continuation of Charter Period

        The Charterer shall continue to pay charterhire under the Charter on the
        days and in the amounts required under the Charter  notwithstanding that
        the Ship  shall  become  a Total  Loss or that  the  Charterer  shall be
        permanently deprived of her use for any other reason prior to the end of
        the Charter Period,  provided that no further instalments of charterhire
        shall become due and payable on any date after the earlier of the expiry
        of the period for the  prepayment of the Loan specified in clause 4.3 of
        the Loan and  Guarantee  Facility  Agreement  or the date upon which the
        Loan is prepaid in full in  accordance  with  clauses 4.3 and 4.5 of the
        Loan and Guarantee Facility Agreement.

18      Notices

18.1    Every notice,  request,  demand or other  communication  under this Deed
        shall:

        18.1.1  be in writing  delivered  personally or by  first-class  prepaid
                letter (airmail if available) or telex or facsimile transmission
                or other means of telecommunication in permanent written form;

        18.1.2  be deemed to have been  received  in the case of a letter,  when
                delivered  personally or three (3) days after it has been put in
                to  the  post  and,  in  the  case  of  a  telex  or   facsimile
                transmission  or other means of  telecommunication  in permanent
                written form, at the time of despatch (provided that if the date
                of  despatch  is  not a  business  day  in  the  country  of the
                addressee  or if the  time of  despatch  is after  the  close of
                business in the country of the  addressee  it shall be deemed to
                have been  received  at the opening of business on the next such
                business day); and

        18.1.3  be sent:

                (a)     to the Owner at:

                        c/o Korea Marine Fund Corporation
                        22F, Kyobo Bidg., 1, Jongno 1-ga
                        Jongno-gu, Seoul, Korea

                        Fax no. :   +(822) 3210-0100
                        Attention:  Kyung-Hwan Cho

                (b)     to the Charterer at:

                        c/o Top Tanker Management Inc.
                        109-111 Messogion Avenue
                        155 26 Greece

                        Fax no:  + 30 210 69 78107-8
                        Attention: Stamatis Tsantanis

                (c)     to the Mortgagee at:

                        Fortis Bank (Nederland) N.V.
                        Coolsingel 93
                        3012 AE Rotterdam
                        The Netherlands

                        Fax no:      00 3110 401 5323
                        Attention:   Cees Kamphof

                (d)     to the Charter Guarantor at:

                        c/o Top Tanker Management Inc.
                        109-111  Messogion Avenue
                        155 26 Greece
                        Fax no: +30  210  69  78107-8
                        Attention:  Stamatis Tsantanis

                or to such other  address  and/or  numbers as is notified by one
                party to the other parties under this Deed.

19      Counterparts

        This Deed may be entered  into in the form of two or more  counterparts,
        each  executed  by one or more of the  parties,  and,  provided  all the
        parties shall so execute this Deed,  each of the executed  counterparts,
        when duly exchanged or delivered, shall be deemed to be an original but,
        taken together, they shall constitute one instrument.

20      Severability of provisions

        Each of the  provisions in this Deed are severable and distinct from the
        others,  and if at any time one or more such  provisions  is or  becomes
        invalid,   illegal  or   enforceable,   the   validity,   legality   and
        enforceability of the remaining provisions of this Deed shall not in any
        way be affected or impaired thereby.

21      Law and jurisdiction

21.1    Law

        This Deed is governed  by, and shall be construed  in  accordance  with,
        English law.

21.2    Submission to jurisdiction

        For the benefit of the Mortgagee,  the parties hereto  irrevocably agree
        that any legal action or proceedings in connection with this Deed may be
        brought in the  English  courts,  or in the courts of any other  country
        chosen by the Mortgagee, each of which shall have jurisdiction to settle
        any disputes arising out of or in connection with this Deed. Each of the
        Owner  the  Charterer  and  the  Charter   Guarantor   irrevocably   and
        unconditionally  submits to the jurisdiction of the English courts,  and
        the courts of any country  chosen by the  Mortgagee  and the Owner,  the
        Charterer and the Charter Guarantor irrevocably  designate,  appoint and
        empower DLA Piper Rudnick Gray Cary UK LLP at present of 3 Noble Street,
        London EC2V 7EE (in the case of the Owner) and Top Tankers  (UK) Limited
        at  present  of 50 Park  Street,  W1K  2JJ  London  (in the  case of the
        Charterer  and the  Charter  Guarantor)  to  receive,  for it and on its
        behalf, service of process issued out of the English courts in any legal
        action or  proceedings  arising out of or in connection  with this Deed.
        The  submission  to  such  jurisdiction  shall  not  (and  shall  not be
        construed so as to) limit the right of the Mortgagee to take proceedings
        against the Owner and/or the Charterer  and/or the Charter  Guarantor in
        any other  court of  competent  jurisdiction  nor  shall  the  taking of
        proceedings  in any one or more  jurisdictions  preclude  the  taking of
        proceedings in any other jurisdiction,  whether concurrently or not. The
        parties  further  agree that only the courts of England and not those of
        any other State shall have jurisdiction to determine any claim which the
        Owner or the  Charterer  or the Charter  Guarantor  may have against the
        Mortgagee arising out of or in connection with this Deed.

21.3    Contracts (Rights of Third Parties) Act 1999

        No term of this Deed  shall be  enforceable  pursuant  to the  Contracts
        (Rights  of Third  Parties)  Act 1999 by a person  who is not a party to
        this Deed.

IN WITNESS  whereof this Deed has been duly  executed as a deed the day and year
first above written
<PAGE>

                                   Schedule 1
                          Forms of Loss Payable Clauses

(1)     Hull and machinery (marine and war risks)

        By a General Assignment dated ____________ 2006, KOMARF HOPE 29 Shipping
        Company  Limited  (the  "Owner")  and  by  a  Quadripartite  Deed  dated
        __________ 2006,  PYLIO SHIPPING CO. LTD. of 80 Broad Street,  Monrovia,
        Republic of Liberia (the  "Charterer") have each assigned to FORTIS BANK
        (NEDERLAND)  N.V. of Coolsingel 93, 3012 AE Rotterdam,  The  Netherlands
        (the  "Mortgagee")  (as security  agent and trustee for and on behalf of
        the Creditors as herein defined (the  "Creditors"))  all the Owner's and
        the  Charterer's  rights,  title and interest in and to all policies and
        contracts of insurance from time to time taken out or entered into by or
        for the  benefit of the Owner  and/or the  Charterer  in respect of m.v.
        "Flawless" and  accordingly:

        (a)     all claims  hereunder in respect of an actual or constructive or
                compromised or arranged total loss, and all claims in respect of
                a major  casualty  (that  is to say any  casualty  the  claim in
                respect  of  which   exceeds  five  hundred   thousand   Dollars
                ($500,000) (or the equivalent in any other  currency)  inclusive
                of any  deductible  shall be paid in full to the  Mortgagee  (as
                security  agent and trustee for and on behalf of the  Creditors)
                or to its order;  and

        (b)     all  other  claims  hereunder  shall  be  paid  in  full  to the
                Charterer or to its order,  unless and until the Mortgagee shall
                have notified insurers hereunder to the contrary,  whereupon all
                such claims shall be paid to the  Mortgagee  (as security  agent
                and trustee for and on behalf of the Creditors) or to its order.

(2)     Protection and indemnity

        Payment of any recovery which KOMARF HOPE 29 Shipping Company Limited of
        80 Broad Street,  Monrovia,  Liberia (the "Owner") or PYLIO SHIPPING CO.
        LTD.  (the  "Charterer")  is  entitled  to make out of the  funds of the
        Association in respect of any liability,  costs or expenses  incurred by
        the Owner or the Charterer,  shall be made to the Owner or the Charterer
        or to its order, unless and until the Association receives notice to the
        contrary from FORTIS BANK  (NEDERLAND)  N.V. of  Coolsingel  93, 3012 AE
        Rotterdam,   The  Netherlands  (the  "Mortgagee")  in  which  event  all
        recoveries  shall  thereafter  be paid to the  Mortgagee or their order;
        provided that no liability  whatsoever  shall attach to the Association,
        its  Managers  or their  agents for  failure  to comply  with the latter
        obligation  until the expiry of two clear business days from the receipt
        of such notice.
<PAGE>

                                   Schedule 2
                  Forms of Notices of Assignment of Insurances

                              Notice of Assignment
              (For attachment by way of endorsement to the Policy)

KOMARF HOPE 29 SHIPPING of 80 Broad Street, Monrovia,  Liberia (the "Owner") and
PYLIO SHIPPING CO. LTD. (the "Charterer") of 80 Broad Street, Monrovia, Republic
of Liberia the owners and demise charterers  respectively of the m.v. "Flawless"
HEREBY GIVE NOTICE that by a General  Assignment  dated 2006 and entered into by
the Owner with FORTIS BANK (NEDERLAND) N.V. (the "Mortgagee") (as security agent
and  trustee  for  and on  behalf  of  the  Creditors  as  herein  defined  (the
"Creditors"))  and by a  Quadripartite  Deed dated 2006 and entered  into by the
Charterer and the Owner with the  Mortgagee  (as security  agent and trustee for
and on behalf of the Creditors),  there has been assigned by us to the Mortgagee
(as security agent and trustee for and on behalf of the Creditors) as mortgagees
of the said vessel all insurances in respect  thereof,  including the insurances
constituted by the policy whereon this notice is endorsed.

Signed

For and on behalf of

KOMARF HOPE 29 Shipping Company Limited

Dated           2006

Signed

For and on behalf of

PYLIO SHIPPING CO. LTD.

Dated           2006
<PAGE>

SIGNED, SEALED and DELIVERED as a
DEED by Jun Hyung Jon                         /s/ Jun Hyung Jon
for and on behalf of                          --------------------
KOMARF HOPE 29 SHIPPING COMPANY               Authorised Signatory
pursuant to a unanimous Written
Consent of Board of Directors
and Sole Shareholder
dated 9 March 2006
in the presence of:

Witness:     /s/ Byung Young Yu
Name:        Byung Young Yu
Address:     22F, Kyobo Bldg., 1, Jongno 1-ga,
             Jongno-gu, Seoul, 110-714 Korea
Occupation:  Deputy General Manager, KOMARF

SIGNED, SEALED and DELIVERED as a
DEED by
for and on behalf of
PYLIO SHIPPING CO. LTD.
pursuant to a power of attorney
dated                   2006                  -------------------------
                                              Attorney-in-Fact
in the presence of:

Witness:
Name:
Address:
Occupation:

SIGNED,  SEALED and  DELIVERED as a DEED by
for and on behalf of KOMARF HOPE 29
SHIPPING COMPANY
pursuant to a power of attorney
dated                   2006

in the presence of:

Witness:
Name:
Address:
Occupation:

SIGNED, SEALED and DELIVERED as a
DEED by Stamatis N. Tsantanis                 /s/ C. Kamphof
for and on behalf of                          -------------------
PYLIO SHIPPING CO. LTD.                       Attorney-in-Fact
pursuant to a power of attorney
dated 8 March 2006

Witness:  /s/ Andreas Louca
Name:     Andreas Louca
Address:  Top Tanker Management Inc.
          109-111 Messogion Av, 15526, Greece
Occupation: Advocate

SIGNED, SEALED and DELIVERED as a
DEED by Stamatis N. Tsantanis                 /s/ C. Kamphof
for and on behalf of                          -------------------
TOP TANKERS INC.                              Attorney-in-Fact
pursuant to a power of attorney
dated 8 March 2006
in the presence of:

Witness:  /s/ Andreas Louca
Name:     Andreas Louca
Address:  Top Tanker Management Inc.
          109-111 Messogion Av, 15526, Greece
Occupation: Advocate

SIGNED, SEALED and DELIVERED as a
DEED by
for and on behalf of
FORTIS BANK (NEDERLAND) N.V.
pursuant to a power of attorney
dated                   2006
in the presence of:

Witness:
Name:
Address:
Occupation:

SIGNED, SEALED and DELIVERED as a
DEED by
for and on behalf of
TOP TANKERS INC.
pursuant to a power of attorney
dated                 2006
in the presence of:

Witness:
Name:
Address:
Occupation:

SIGNED, SEALED and DELIVERED as a
DEED by Cees Kamphof                          /s/ C. Kamphof
for and on behalf of                          -------------------
FORTIS BANK (NEDERLAND) N.V.                  Attorney-in-Fact
pursuant to a power of attorney
dated 8 March 2006
in the presence of:

Witness:  /s/ G. J. Meyee
Name:     G. J. Meyee
Address:  Coolsingel 93
          3012 AE Rotterdam
          The Netherlands
Occupation:  Secretary

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