Greystone Business Credit II, L.L.C.
--------------------------------------------------------------------------------


                           LOAN AND SECURITY AGREEMENT


      THIS LOAN AND SECURITY AGREEMENT (as it may be amended,  this "Agreement")
is entered into on March 27, 2007,  between GREYSTONE BUSINESS CREDIT II, L.L.C.
("Lender"),  having an address at 152 West 57th St. 60th Fl., New York, New York
10019, MARINE GROWTH CANADA LTD.  ("Owner"),  a company organized under the laws
of the Province of British  Columbia,  Canada  having its  principal  address at
405-A Atlantis Road, Cape Canaveral,  Florida 32920, and MARINE GROWTH FINANCE &
CHARTER,  INC., a Delaware  corporation,  having its principal  address at 405-A
Atlantis Road,  Cape  Canaveral,  Florida 32920  ("MGFC").  Owner and MGFC being
collectively, jointly and severally, hereinafter referred to as "Borrowers".


1.    DEFINITIONS.

      As used in the Agreement, the following terms have the following meanings:


      "Affiliate"  means,  with  respect to any  Person,  a  relative,  partner,
shareholder, member, manager, director, officer, or employee of such Person, any
parent or subsidiary of such Person, or any Person controlling, controlled by or
under common control with such Person or any other Person  affiliated,  directly
or  indirectly,  by  virtue  of  family  membership,  ownership,  management  or
otherwise.


      "Bankruptcy  Code" means the United States  Bankruptcy Code (11 U.S.C. ss.
101 et seq.) or the  Bankruptcy  and  Insolvency  Act  (Canada),  the  Companies
Creditors  Arrangement  Act (Canada) or the Winding-Up Act (Canada) or any other
applicable  bankruptcy or insolvency law or any rule or regulations  promulgated
thereunder.


      "Business  Day" means a day other  than a Saturday  or Sunday or any other
day on which Lender or banks in New York are authorized to close.


      "Canadian  Plans" shall mean all the  employee  benefit,  fringe  benefit,
supplemental   unemployment   benefit,   bonus,   incentive,   profit   sharing,
termination,  change  of  control,  pension,  retirement,  stock  option,  stock
purchase, stock appreciation, health, welfare, medical, dental, disability, life
insurance and similar plans, programs, arrangements or practices relating to the
current or former employees,  officers or directors of the Borrowers maintained,
sponsored or funded by any of them, whether written or oral, funded or unfunded,
insured or self insured, registered or unregistered.


      "Collateral"  means all  property  and  interests  in  property in which a
security  interest is granted pursuant to this Agreement,  as more fully defined
in Section 4.1.


      "Currency  Exchange  Rate"  means,  with  respect to a currency,  the rate
quoted by the Reference  Bank as the spot rate for the purchase by the Reference
Bank of such currency  with another  currency at  approximately  10:30 a.m. (New
York time) on the date two (2)  Business  Days prior to the date as of which the
foreign exchange computation is made.



      "ERISA" means the Employee  Retirement Income Security Act of 1974 and all
rules, regulations and orders promulgated thereunder.


      "GAAP" means generally  accepted  accounting  principles as in effect from
time to time, consistently applied.


      "Lien" means any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the  property,  whether such interest
is based on common law,  statute or contract,  including rights of sellers under
sales contracts and leases and other encumbrances affecting property.


      "Loan Documents" means,  collectively,  this Agreement,  the Note, and all
notes,  guaranties,  mortgages  and  other  security  agreements,  certificates,
landlord's  agreements and other  agreements,  documents and  instruments now or
hereafter  executed or  delivered  by  Borrowers  (or either one of them) or any
Obligor in connection  with, or to evidence the  transactions  contemplated  by,
this Agreement.


      "Maturity Date" means the second anniversary of the date hereof.


      "Obligations"  means  all  present  and  future  Loans,  advances,  debts,
liabilities,  obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrowers (or either one of them) to Lender,  whether evidenced by
this Agreement,  the Note, any other Loan Document or otherwise,  whether direct
or indirect  (including  those acquired by assignment and any  participation  by
Lender  in  Borrowers'  indebtedness  owing  to  others),  whether  absolute  or
contingent,  whether due or to become due, and whether  arising  before or after
the  commencement  of a  proceeding  under the  Bankruptcy  Code or any  similar
statute,  including all interest,  charges, expenses, fees, attorney's fees, and
any other sums  chargeable  to  Borrowers  (or  either  one of them)  under this
Agreement or any other Loan Document.


      "Obligor"  means any  guarantor or other person liable on, or with respect
to,  the  Obligations  or who is the  owner of any  property  that  secures  the
Obligations, other than Borrowers.


      "Person" means any individual,  sole  proprietorship,  partnership,  joint
venture,   limited  liability  company,  trust,   unincorporated   organization,
association,  corporation,  government  or  any  agency  or  political  division
thereof, or any other entity.


      "Prime  Rate"  means,  at any given time,  the prime rate as quoted in The
Wall Street  Journal as the base rate on corporate  loans posted as of such time
by at least  seventy-five  percent (75%) of the nation's 30 largest banks (which
rate is not necessarily the lowest rate offered by such banks).


                                      -2-


      "Reference  Bank"  means The Bank of Nova  Scotia,  or such  other bank as
Lender may from time to time designate.


      "UCC" means, at any given time, the Uniform Commercial Code as adopted and
in effect at such time in the State of New York.


      All accounting terms used in this Agreement,  unless otherwise  indicated,
shall have the meanings  given to such terms in accordance  with GAAP. All other
terms contained in this Agreement,  unless otherwise  indicated,  shall have the
meanings provided by the UCC, to the extent such terms are defined therein.  The
term "including," whenever used in this Agreement, shall mean "including but not
limited to." The singular  form of any term shall  include the plural form,  and
vice versa,  when the context so requires.  References to Sections,  subsections
and  Schedules  are to  Sections  and  subsections  of, and  Schedules  to, this
Agreement.   All  references  to  agreements  and  statutes  shall  include  all
amendments thereto and successor statutes in the case of statutes.


2.    LOAN.

      2.1  Amount.  Subject  to the  terms  and  conditions  contained  in  this
Agreement,  Lender  will,  on the date  hereof,  make a loan to  Borrowers  (the
"Loan") in the  principal  amount of One Million Five Hundred  Thousand  Dollars
($1,500,000).  The proceeds of the Loan will be applied to the purchase price of
the vessel described in Section 1 of Schedule A attached hereto (the "Ship") and
the  payment of closing  costs  related  to the  purchase  of the Ship and those
related to this Agreement. The Loan will be evidenced by a Term Note in the form
attached hereto as Exhibit A (the "Note").

      2.2  Repayment.  Accrued  interest on, and principal of, the Loan shall be
payable as set forth in Section 2 of Schedule A. All unpaid Obligations shall be
payable in full on the Maturity Date or as otherwise provided herein.

      2.3  Reserves.  A portion of the  proceeds  of the Loan (in the amount set
forth in Section 3 of Schedule A) has been  retained  by Lender,  designated  by
Lender as a reserve  for the  payment  of  interest,  fees and  installments  of
principal, as they become due and payable. Such retained loan proceeds, together
with such amount as may be deposited  by Borrowers  with Lender for such purpose
from time to time, is hereinafter referred to as the "Reserve." Borrowers hereby
authorize Lender to, from time to time, apply the Reserve to pay interest,  fees
and  installments  of  principal  on the Loan as they  become  due and  payable.
Establishment  of  the  Reserve  shall  in no way  relieve  Borrowers  of  their
obligation  to pay  interest,  fees or  principal  when due,  whether or not the
Reserve is exhausted. The Reserve shall not be disbursed by Lender to Borrowers.
Notwithstanding  the  foregoing,  Lender shall have no  obligation  to apply any
portion of the Reserve  following the  occurrence of a default by any Obligor in
the payment or performance of any obligation of Obligor under any Loan Document;
provided,  however,  in the event that the Reserve has not been  exhausted,  the
Reserve  shall be  distributed  to the  Lender  and  applied  to the  payment of
interest,  fees and  installments  of  principal on the Loan with respect to the
final two (2) installments on the Loan. The loan proceeds comprising the Reserve
shall accrue  interest in favor of Lender as part of the Loan.  Lender shall not
be  obligated  to  compensate  Borrowers  for use of the  funds  comprising  the
Reserve.


                                      -3-


      2.4 Taxes.  All payments  made by  Borrowers  hereunder or under any other
Loan Document shall be made without setoff, compensation, counterclaim, or other
defense.  To the extent  permitted by applicable law, all payments  hereunder or
under the Loan Documents (including any payment of principal, interest, or fees)
to, or for the benefit,  of any Person shall be made by Borrowers free and clear
of and without  deduction  or  withholding  for, or account of, any taxes now or
hereinafter  imposed by any taxing  authority.  If  Borrowers  make any  payment
hereunder or under any other Loan Document in respect of which it is required by
applicable  law to deduct or withhold any taxes,  Borrowers  shall  increase the
payment  hereunder or under any such Loan Document such that after the reduction
for the amount of taxes withheld (and any taxes withheld or imposed with respect
to the additional  payments required under this Section 2.4), the amount paid to
Lender  equals  the amount  that was  payable  hereunder  or under any such Loan
Document without regard to this Section 2.4. To the extent a Borrower  withholds
any taxes on payments hereunder or under any Loan Document,  such Borrower shall
pay the full amount  deducted to the relevant taxing  authority  within the time
allowed for payment under  applicable  law and shall deliver to Lender within 30
days after such Borrower has made payment to such  authority a receipt issued by
such authority  evidencing the payment of all amounts so required to be deducted
or withheld from such payment.  Other than Lender's  income taxes,  if Lender is
required  by law to make any  payments  of any taxes on or with  respect  to any
amounts  received or receivable  hereunder or under any other Loan Document,  or
any  tax is  assessed  against  Lender  with  respect  to  amounts  received  or
receivable  hereunder or under any other Loan Document,  Borrowers will, jointly
and severally, indemnify Lender against (i) such tax (and any reasonable counsel
fees and  expenses  associated  with such tax) and (ii) any taxes  imposed  as a
result of the  receipt of the  payment  under this  Section  2.4. A  certificate
prepared in good faith as to the amount of such payment by Lender shall,  absent
manifest  error,  be  final,  conclusive,  and  binding  on all  parties  unless
Borrowers notify Lender in writing to the contrary within thirty days after such
certificate  is  rendered,  describing  the  nature  of any  alleged  errors  or
omissions.

3.    INTEREST AND FEES.

      3.1 Interest.  The Loan shall bear interest at the Interest Rate set forth
in Section 4 of Schedule A attached hereto;  provided, that after the occurrence
of an Event of Default,  the Loan shall, at Lender's option,  bear interest at a
rate per annum  equal to two  percent  (2.0 %) in  excess of the rate  otherwise
applicable thereto (the "Default Rate") until paid in full  (notwithstanding the
entry of any  judgment  against  Borrowers or the exercise of any other right or
remedy  by  Lender),   and  all  such  interest  shall  be  payable  on  demand.
Notwithstanding  anything to the contrary contained herein, the aggregate of all
interest  hereunder and charged or collected by Lender is not intended to exceed
the highest rate  permissible  under any applicable law, but if it should,  such
interest shall  automatically  be reduced to the extent necessary to comply with
applicable  law and Lender will  refund to  Borrowers  any such excess  interest
received by Lender.  Without  limiting the generality of the  foregoing,  if any
provision  of  this  Agreement  or any  of the  Loan  Documents  would  obligate
Borrowers or any Obligor to make any payment of interest or other amount payable
to Lender in an amount or  calculated at a rate which would be prohibited by law
or would  result in a  receipt  by Lender of  interest  at a  criminal  rate (as
construed  under  the  Criminal  Code  (Canada)),   then   notwithstanding  that
provision,  that  amount or rate  shall be deemed  to have  been  adjusted  with
retroactive  effect to the maximum  amount or rate of interest,  as the case may
be, as would not be so prohibited by law or result in a receipt by the Lender of
interest  at a criminal  rate,  the  adjustment  to be  effected,  to the extent
necessary, as follows:


                                      -4-


      (a)  firstly,  by reducing  the amount or rate of interest  required to be
paid to Lender under this Agreement or any other Loan Document; and

      (b)  thereafter,  by reducing  any fees,  commissions,  premiums and other
amounts  required to be paid to the Lender which would  constitute  interest for
purposes of Section 347 of the Criminal Code (Canada).

      Notwithstanding   this  Section  3.1,  and  after  giving  effect  to  all
adjustments  contemplated  thereby,  if Lender shall have  received an amount in
excess of the maximum permitted by the Criminal Code (Canada), then Borrowers or
the  relevant  Obligor  shall be  entitled,  by notice in writing to Lender,  to
obtain  reimbursement  from Lender in an amount equal to the excess, and pending
reimbursement,  the amount of the excess shall be deemed to be an amount payable
by Lender to Borrowers or the relevant Obligor.


      3.2 Fees.  Borrowers  shall pay Lender the  following  fees,  which are in
addition to all  interest  and other sums  payable by  Borrowers to Lender under
this Agreement, and are not refundable:

      (a) Closing  Commitment Fee. A closing  commitment fee (the "Closing Fee")
in the amount set forth in Section  5(a) of Schedule A, which shall be deemed to
be fully earned as of, and payable on, the date hereof.

      (b) Servicing Fee. A monthly  servicing fee (the  "Servicing  Fee") in the
amount set forth in Section 5(b) of Schedule A (expressed as a percentage of the
principal  of the Loan  then  outstanding),  in  consideration  of the  Lender's
administration  and other services pursuant to this Agreement for each month (or
part thereof), which shall be fully earned as of, and payable in advance on, the
date hereof and on the first day of each month  thereafter so long as any of the
Obligations are outstanding.

      3.3  Computation  of Interest  and Fees.  All  interest  and fees shall be
calculated daily on the principal balance of the Loan based on the actual number
of days  elapsed in a year of 360 days.  For the  purposes of the  Interest  Act
(Canada),  any amount of interest or fees calculated hereunder using 360, 365 or
366 days per year and  expressed  as an annual rate is equal to the said rate of
interest or fees  multiplied by the actual number of days  comprised  within the
calendar year, divided by 360, 365 or 366, as the case may be.


                                      -5-


4.    SECURITY INTEREST; ADMINISTRATION.

      4.1 Grant of Security Interest. To secure the full payment and performance
of all of the  Obligations,  Borrowers  hereby  grant  to  Lender  a  continuing
security  interest  in the  following  property of  Borrowers  (or either one of
them),  whether  tangible  or  intangible,  now or  hereafter  owned,  existing,
acquired or arising and wherever now or  hereafter  located (the  "Collateral"):
(i) the Ship and any other vessels; (ii) all licenses,  software, claims against
vendors  (including  the vendor of the Ship),  carriers and shippers,  contracts
rights,  rights to indemnification and other general intangibles relating to the
Ship;  (iii) all  Accounts  (as defined in the UCC) and all Goods (as defined in
the UCC) whose sale,  lease or other  disposition by Borrowers has given rise to
Accounts  and have been  returned to, or  repossessed  or stopped in transit by,
Borrowers;  (iv) all  Chattel  Paper (as  defined in the UCC),  Instruments  (as
defined in the UCC),  Documents (as defined in the UCC) and General  Intangibles
(as defined in the UCC) (including all patents, patent applications, trademarks,
trademark  applications,  trade  names,  trade  secrets,  goodwill,  copyrights,
copyright applications,  registrations, licenses, software, franchises, customer
lists,  tax refund  claims,  claims  against  carriers and  shippers,  guarantee
claims,  contracts rights,  payment  intangibles,  security interests,  security
deposits and rights to  indemnification);  (v) all  Inventory (as defined in the
UCC); (vi) all Goods (other than Inventory),  including Equipment (as defined in
the UCC),  vehicles and Fixtures (as defined in the UCC);  (vii) all  Investment
Property (as defined in the UCC); (viii) all Deposit Accounts (as defined in the
UCC),  bank accounts,  deposits and cash; (ix) all  Letter-of-Credit  Rights (as
defined in the UCC);  (x) all  Commercial  Tort  Claims (as defined in the UCC);
(xi) all  Supporting  Obligations  (as  defined  in the  UCC);  (xii)  any other
property  of  Borrowers  (or  either  one  of  them)  now  or  hereafter  in the
possession,  custody  or  control  of Lender or any  agent or  mandatary  or any
parent,  Affiliate or subsidiary of Lender or any participant with Lender in the
Loan, for any purpose (whether for safekeeping,  deposit,  collection,  custody,
pledge,  transmission  or otherwise);  (xiii) the Collateral  under any Loan and
Security  Agreement  or other  agreement  between  Lender  and an  Affiliate  of
Borrowers;  and (ix) all additions and  accessions  to,  substitutions  for, and
replacements,  products  and  proceeds  of the  foregoing  property,  including,
without  limitation,  proceeds of all insurance  policies insuring the foregoing
property,  and  all of  Borrowers'  books  and  records  relating  to any of the
foregoing  and to  Borrowers'  business.  Borrowers  shall  execute  any and all
mortgages  or other  security  documents  as Lender  may  require  to create and
perfect Lender's security interest in the Collateral.

      4.2  Preservation  of  Collateral  and  Perfection  of  Security  Interest
Therein.  Borrowers  shall,  at Lender's  request,  at any time and from time to
time,  authenticate,  execute and deliver to Lender such  financing  statements,
documents and other  agreements and  instruments  (and pay the cost of filing or
recording  the same in all public  offices  deemed  necessary  or  desirable  by
Lender)  and do such  other acts and  things or cause  third  parties to do such
other acts and  things as Lender may deem  necessary  or  desirable  in its sole
discretion  in order to establish  and maintain a valid,  attached and perfected
first priority  security interest in the Collateral in favor of Lender (free and
clear of all other  liens,  claims,  encumbrances  and  rights of third  parties
whatsoever,  whether voluntarily or involuntarily  created) to secure payment of
the  Obligations,  and in order to facilitate the collection of the  Collateral.
Borrowers  authorize Lender to file,  transmit,  or communicate,  as applicable,
financing  statements and amendments  describing the Collateral as "all personal
property  of debtor" or "all  assets of debtor" or words of similar  effect,  in
order to perfect  Lender's  security  interest in the Collateral  without either
Borrower's  signature.  Borrowers  also hereby  ratify their  authorization  for
Lender to have filed in any jurisdiction any financing statements filed prior to
the date hereof.


                                      -6-


      4.3 Lock Boxes and Blocked  Accounts.  Borrowers  will, at their  expense,
establish  (and  revise  from time to time as  Lender  may  require)  procedures
acceptable to Lender, in Lender's sole discretion, for the collection of checks,
wire transfers and other proceeds of Accounts,  including proceeds from any time
share sales or associated  sales  contracts  with respect to the Ship  ("Account
Proceeds"),  which may include (i) directing all Account  Debtors (as defined in
the UCC) to send all such proceeds  directly to a post office box  designated by
Lender  either in the name of Borrowers (or either one of them) (but as to which
Lender has exclusive  access) or, at Lender's  option,  in the name of Lender (a
"Lock Box") or (ii)  depositing all Account  Proceeds  received by Borrowers (or
either one of them) into one or more bank  accounts  maintained in Lender's name
(each, a "Blocked  Account"),  under an arrangement  acceptable to Lender with a
depository bank acceptable to Lender, pursuant to which all funds deposited into
each Blocked  Account are to be transferred  to Lender in such manner,  and with
such frequency, as Lender shall specify or (iii) a combination of the foregoing.
Borrowers agree to execute,  and to cause its depository banks to execute,  such
Lock Box and Blocked Account agreements and other  documentation as Lender shall
require from time to time in connection with the foregoing.

      4.4  Remittance  of  Proceeds.  Except as  provided  in Section  4.3,  all
proceeds  arising from the sale or other  disposition of any Collateral shall be
delivered,  in kind,  by  Borrowers  to  Lender  in the  original  form in which
received by Borrowers not later than the following Business Day after receipt by
Borrowers.  Until so delivered  to Lender,  Borrowers  shall hold such  proceeds
separate and apart from Borrowers'  other funds and property in an express trust
for  Lender.  Nothing  in this  Section  4.4  shall  limit the  restrictions  on
disposition of Collateral set forth elsewhere in this Agreement.

      4.5 Application of Payments.  Lender may, in its sole  discretion,  apply,
reverse and  re-apply  all cash and  non-cash  proceeds of  Collateral  or other
payments  received with respect to the Obligations,  in such order and manner as
Lender  shall  determine,  whether or not the  Obligations  are due, and whether
before or after the occurrence of a Default or an Event of Default. For purposes
of computing interest on the Obligations,  such items shall be deemed applied by
Lender  three (3)  Business  Days  after  Lender's  receipt of advice of deposit
thereof at Lender's Bank.

      4.6 Notification;  Verification.  Lender or its designee may, from time to
time,  whether  or not a Default or Event of Default  has  occurred:  (i) verify
directly  with the  Account  Debtors  the  validity,  amount  and other  matters
relating to the  Accounts  and Chattel  Paper,  by means of mail,  telephone  or
otherwise,  in the name of  Borrowers  (or either one of them) or Lender or such
other name as Lender may choose;  (ii) notify Account  Debtors that Lender has a
security  interest  in the  Accounts  and  that  payment  thereof  is to be made
directly  to  Lender;  and (iii)  upon an Event of  Default  demand,  collect or
enforce  payment of any Accounts  and Chattel  Paper (but without any duty to do
so).



                                      -7-


      4.7 Power of Attorney.  Borrowers  hereby  grant to Lender an  irrevocable
power of attorney,  coupled with an interest,  authorizing and permitting Lender
(acting  through  any  of  its  officers,   employees,   attorneys,   agents  or
mandataries),  at any time  (whether  or not a Default or Event of  Default  has
occurred and is continuing,  except as expressly  provided  below),  at Lender's
option, but without obligation, with or without notice to Borrowers (except that
Lender shall provide  notice to the Borrowers so long as no Event of Default has
occurred or is continuing),  and at Borrowers'  expense, to do any or all of the
following,  in  Borrowers'  name (or either  one) or  otherwise:  (i) execute on
behalf of Borrowers any documents that Lender may, in its sole discretion,  deem
advisable in order to perfect and maintain  Lender's  security  interests in the
Collateral,  to exercise a right of Borrowers or Lender,  or to fully consummate
all the transactions contemplated by this Agreement and the other Loan Documents
(including such financing statements and continuation financing statements,  and
amendments  thereto,  as Lender shall deem necessary or appropriate) and to file
as a financing  statement any copy of this Agreement or any financing  statement
signed by Borrowers;  (ii) upon the occurrence and during the  continuance of an
Event of  Default,  execute  on behalf of  Borrowers  any  document  exercising,
transferring or assigning any option to purchase,  sell or otherwise  dispose of
or lease (as lessor or lessee)  any real or personal  property  which is part of
the  Collateral  or in which Lender has an interest;  (iii) execute on behalf of
Borrowers any invoices  relating to any Accounts,  any draft against any Account
Debtor,  any proof of claim in bankruptcy,  any notice of Lien or claim, and any
assignment or  satisfaction  of mechanic's,  materialman's  or other Lien;  (iv)
execute on behalf of Borrowers any notice to any Account Debtor; (v) receive and
otherwise take control in any manner of any cash or non-cash items of payment or
proceeds of Collateral;  (vi) endorse either  Borrower's  name on all checks and
other forms of  remittances  received by Lender;  (vii) upon the  occurrence and
during the continuance of an Event of Default,  pay, contest or settle any Lien,
charge,  encumbrance,  security  interest and adverse  claim in or to any of the
Collateral,  or any judgment  based  thereon,  or  otherwise  take any action to
terminate or discharge  the same;  (viii) after the  occurrence  of a Default or
Event of Default,  grant extensions of time to pay,  compromise  claims relating
to, and settle  Accounts,  Chattel Paper and General  Intangibles  for less than
face value and execute all releases and other documents in connection therewith;
(ix) pay any sums  required  on  account  of  Borrowers'  taxes or to secure the
release of any Liens  therefor;  (x) pay any  amounts  necessary  to obtain,  or
maintain in effect,  any of the insurance  described in Section 5.10;  (xi) upon
the  occurrence and during the  continuance  of an Event of Default,  settle and
adjust,  and give  releases of, any  insurance  claim that relates to any of the
Collateral  and obtain payment  therefor;  (xii) instruct any third party having
custody or  control  of any  Collateral  or books or  records  belonging  to, or
relating to, Borrowers to give Lender the same rights of access and other rights
with  respect  thereto  as Lender  has under this  Agreement;  (xiii)  after the
occurrence of a Default or Event of Default,  change the address for delivery of
Borrowers' mail and receive and open all mail addressed to Borrowers;  and (xiv)
endorse  or assign to Lender on  Borrowers'  behalf any  portion  of  Collateral
evidenced  by  an  agreement,  Instrument  or  Document  if  an  endorsement  or
assignment  of any such items is not made by  Borrowers.  Any and all sums paid,
and  any  and all  costs,  expenses,  liabilities,  obligations  and  reasonable
attorneys' fees incurred, by Lender with respect to the foregoing shall be added
to and become  part of the  Obligations,  shall be payable on demand,  and shall
bear interest at a rate equal to the highest  interest rate applicable to any of
the Obligations.  Borrowers agree that Lender's rights under the foregoing power
of attorney or any of Lender's  other rights  under this  Agreement or the other
Loan  Documents  shall not be construed to indicate that Lender is in control of
the business, management or properties of Borrowers.



                                      -8-


      4.8 Disputes.  Borrowers  shall promptly  notify Lender of all disputes or
claims  relating to Accounts and Chattel  Paper that exceed  $10,000.  Borrowers
will not,  without  Lender's  prior  written  consent,  compromise or settle any
Account  or  Chattel  Paper for less  than the full  amount  thereof,  grant any
extension of time of payment of any Account or Chattel Paper,  release (in whole
or in part) any  Account  Debtor or other  person  liable for the payment of any
Account  or  Chattel  Paper  or  grant  any  credits,   discounts,   allowances,
deductions,  return  authorizations  or the like with  respect to any Account or
Chattel  Paper;  except  that prior to the  occurrence  of an Event of  Default,
Borrowers  may take any of such  actions  in the  ordinary  course of  business,
provided that Borrowers promptly report the same to Lender.

      4.9 Access to Collateral,  Books and Records.  At reasonable times, and on
one Business Day's notice,  prior to the occurrence of an Event of Default,  and
at any time and with or  without  notice  after  the  occurrence  of an Event of
Default, Lender or its agents or mandataries shall have the right to inspect the
Collateral,  and the right to examine and copy Borrowers' books and records with
respect  thereto.  Lender shall take reasonable  steps to keep  confidential all
information  obtained in any such  inspection or  examination,  but Lender shall
have the right to disclose  any such  information  to its  auditors,  regulatory
agencies,  attorneys  and  participants,  and  pursuant to any subpoena or other
legal process. Borrowers agree to give Lender access to any or all of Borrowers'
premises to enable Lender to conduct such  inspections  and  examinations.  Such
inspections shall be at Borrowers' expense and the charge therefor shall be $950
per person  per day (or such  higher  amount as shall  represent  Lender's  then
current standard charge), plus out-of-pocket costs and expenses.

5.    REPRESENTATIONS, WARRANTIES AND COVENANTS.

      To induce  Lender to enter  into this  Agreement,  Borrowers  jointly  and
severally represent, warrant and covenant as follows:


      5.1 Existence and Authority;  Ownership. Owner is duly organized,  validly
existing  and in good  standing  under  the  laws  of the  Province  of  British
Columbia, Canada. MGFC is duly organized,  validly existing and in good standing
under the laws of the State of Delaware.  Owner is a wholly-owned  subsidiary of
MGFC, and MGFC is a wholly-owned  subsidiary of Guarantor (as defined in Section
5.17).  Borrowers are qualified and licensed to do business in all jurisdictions
in which any failure to do so would have a material  adverse  effect on them (or
either one of them).  The  execution,  delivery and  performance by Borrowers of
this  Agreement and all of the other Loan  Documents  have been duly and validly
authorized,  do not violate Borrowers'  organizational  documents, or any law or
any agreement or  instrument or any court order which is binding upon  Borrowers
or  their  property,   do  not  constitute   grounds  for  acceleration  of  any
indebtedness  or obligation  under any agreement or instrument  which is binding
upon Borrowers or their property,  and do not require the consent of any Person.
This  Agreement  and such  other  Loan  Documents  have been duly  executed  and
delivered by, and are enforceable against, Borrowers, and all other Obligors who
have signed them, in accordance with their respective terms.



                                      -9-


      5.2  Name.  The  names  of  Borrowers  set  forth in the  heading  to this
Agreement  are their  correct and  complete  legal names as of the date  hereof.
Borrowers  shall give Lender at least thirty days' prior  written  notice before
changing names or doing business under any other name.

      5.3 Title to Collateral.  Borrowers have good and marketable  title to the
Collateral.  The Collateral now is and will remain free and clear of any and all
Liens, charges, security interests,  encumbrances and adverse claims, other than
those in favor of the  Lender.  Lender now has,  and will  continue  to have,  a
first-priority  perfected and enforceable  security  interest in the Collateral,
and  Borrowers  will at all times defend Lender and the  Collateral  against all
claims of others.

      5.4  Jurisdiction  of  Organization;  Location  of  Collateral.  Owner  is
organized under the laws of the Province of British  Columbia,  Canada.  MGFC is
organized  under the laws of the State of Delaware.  Borrowers'  chief executive
offices and their books and records  relating to the  Collateral  are located at
the  addresses  set forth in the  preamble to this  Agreement or 1818 N. Farwell
Avenue,  Milwaukee,  Wisconsin 53202. Borrowers will give Lender at least thirty
days' prior written notice before  changing  either  Borrower's  jurisdiction of
organization,  opening any  additional  place of  business,  changing  its chief
executive office or the location of its books and records,  or moving any of the
Collateral  (other than the Ship) to a location  other than as set forth  above,
and will  execute and deliver all  financing  statements  and other  agreements,
instruments  and  documents  which  Lender  shall  require as a result  thereof.
Borrowers shall keep the Ship in the waters of Canada at all times and Borrowers
shall cause,  at Borrowers'  expense,  a third party  service,  satisfactory  to
Lender,  to monitor the location of the Ship for Lender at all times.  Borrowers
shall deliver monthly statements in form and substance satisfactory to Lender of
all unpaid  expenses in connection with the Ship, the non-payment of which could
give rise to a lien upon the Ship, and, promptly upon receipt thereof, notice of
any claims for such  expenses  and  Borrowers  shall  deliver to Lender  monthly
statements  in form and  substance  satisfactory  to  Lender  of all  such  paid
expenses, together with proof of payment of such expenses.

      5.5 Financial Condition,  Statements and Reports. All financial statements
delivered  to  Lender  by or on  behalf  of  Borrowers  have  been  prepared  in
conformity  with GAAP and completely and fairly reflect the financial  condition
of Borrowers,  at the times and for the periods therein stated. Between the last
date  covered by any such  financial  statement  provided to Lender and the date
hereof there has been no material  adverse change in the financial  condition or
business of Borrowers (or either one of them). Borrowers are solvent and able to
pay their debts as they come due, and have sufficient  capital to carry on their
business  as now  conducted  and as  proposed to be  conducted.  All  schedules,
reports and other information and documentation delivered by Borrowers to Lender
with respect to the Collateral  are, or will be, when delivered,  true,  correct
and complete as of the date delivered or the date specified therein.

      5.6 Tax Returns and Payments.  Borrowers have timely filed all tax returns
and reports  required by applicable law, have timely paid all applicable  taxes,
assessments,  deposits and contributions  owing by Borrowers and will timely pay
all such  items in the  future as they  became due and  payable.  Borrowers  are
unaware of any claims or  adjustments  proposed for any of Borrowers'  prior tax
years  that  could  result in  additional  taxes  becoming  due and  payable  by
Borrowers. Borrowers have paid, and shall continue to pay, all amounts necessary
to fund all present and future  pension,  benefit,  profit  sharing and deferred
compensation  plans, if any, in accordance with their terms,  and Borrowers have
not withdrawn from  participation in, permitted partial or complete  termination
of, or  permitted  the  occurrence  of any other event with respect to, any such
plan which could result in any liability of  Borrowers,  including any liability
to any governmental agency.



                                      -10-


      5.7 Compliance with Laws. Borrowers have complied in all material respects
with all  provisions of all applicable  laws and  regulations,  including  those
relating to Borrowers'  ownership of real or personal property,  the conduct and
licensing of Borrowers'  business,  the payment and withholding of taxes, ERISA,
the  Canada  Pension  Plan  Act  (Canada),  the  Income  Tax Act  (Canada),  the
Employment  Insurance  Act  (Canada) and the Workers  Compensation  Act (British
Columbia) and other employee matters, safety and environmental matters.

      5.8  Litigation;  Indebtedness.  Section 6(a) of Schedule A discloses  all
claims,  proceedings,  litigation or  investigations  pending or (to the best of
Borrowers'  knowledge)  threatened against  Borrowers.  There is no claim, suit,
litigation,  proceeding or  investigation  pending or (to the best of Borrowers'
knowledge)  threatened  by or against  or  affecting  Borrowers  in any court or
before any governmental  agency (or any basis therefor known to Borrowers) which
may result,  either  separately  or in the  aggregate,  in any material  adverse
change in the  financial  condition or business of  Borrowers  (or either one of
them), or in any material  impairment in the ability of Borrowers (or either one
of them) to carry on their  business in  substantially  the same manner as it is
now being  conducted.  Borrowers  will promptly  inform Lender in writing of any
claim,  proceeding,  litigation  or  investigation  in the future  threatened or
instituted by or against Borrowers (or either one of them).  Except as set forth
on Section  6(b) of  Schedule A,  neither  Borrower is  obligated  (directly  or
indirectly), for any loans or other indebtedness for borrowed money.

      5.9 Use of  Proceeds.  All  proceeds  of the Loan  will be used  solely to
acquire the Ship,  and for costs  related  thereto and in  connection  with this
Agreement.

      5.10 Insurance.  Borrowers will at all times carry property, liability and
other  insurance  (including  hull and  machinery  coverage and  protection  and
indemnity  coverage),  with  insurers  acceptable  to  Lender,  in such form and
amounts,  and with such  deductibles  and  other  provisions,  as  Lender  shall
require,  and Borrowers will provide  evidence of such  insurance to Lender,  so
that Lender is satisfied that such insurance is, at all times, in full force and
effect. Each property insurance policy shall name Lender as loss payee and shall
contain a lender's loss payable  endorsement in form acceptable to Lender,  each
liability insurance policy shall name Lender as an additional insured,  and each
business interruption insurance policy shall be collaterally assigned to Lender,
all in form and  substance  satisfactory  to Lender.  All  policies of insurance
shall provide that they may not be cancelled or changed  without at least thirty
days' prior written notice to Lender, shall contain breach of warranty coverage,
and shall  otherwise  be in form and  substance  satisfactory  to  Lender.  Upon
receipt of the proceeds of any such insurance,  Lender shall apply such proceeds
in  reduction  of  the  Obligations  as  Lender  shall  determine  in  its  sole
discretion. Borrowers will promptly deliver to Lender copies of all reports made
to insurance companies.



                                      -11-


      5.11 Financial and Collateral  Reports.  Borrowers have kept and will keep
adequate records and books of account with respect to their business  activities
and the  Collateral  in which proper  entries are made in  accordance  with GAAP
reflecting  all its  financial  transactions,  and will cause to be prepared and
furnished to Lender the following  (all to be prepared in accordance  with GAAP,
unless Borrowers'  certified public accountants concur in any change therein and
such change is disclosed to Lender):

      (a) Annual Statements.  Not later than one hundred and five days after the
close  of  each  fiscal  year  of  Borrowers,  unqualified  (except  for  (i)  a
qualification  for a change in accounting  principles  and (ii) a  qualification
whereby the auditors express doubt about the Borrowers' ability to continue as a
going concern) audited financial  statements of Borrowers and their Subsidiaries
as of the end of such year, on a consolidated and consolidating basis, certified
by a firm of independent  certified  public  accountants of recognized  standing
selected by Borrowers  but  acceptable  to Lender,  together  with a copy of any
management  letter  issued  in  connection  therewith  and a  letter  from  such
accountants acknowledging that Lender is relying on such financial statements;

      (b) Monthly  Statements.  Not later than twenty-five days after the end of
each month  hereafter,  including  the last  month of  Borrowers'  fiscal  year,
unaudited interim financial  statements of Borrowers as of the end of such month
and of the portion of Borrowers' fiscal year then elapsed, on a consolidated and
consolidating  basis,  certified  by the  principal  financial  officer  of each
Borrower  as  prepared  in  accordance  with  GAAP  and  fairly  presenting  the
consolidated  financial position and results of operations of Borrowers for such
month and period subject only to changes from audit and year-end adjustments and
except that such statements need not contain notes;

      (c) Other  Information.  Such other data and  information  (financial  and
otherwise) as Lender, from time to time, may reasonably request, bearing upon or
related  to the  Collateral  or  Borrowers'  financial  condition  or results of
operations.

      5.12 Litigation Cooperation.  Should any third-party suit or proceeding be
instituted by or against  Lender with respect to any Collateral or in any manner
relating  to  Borrowers,  Borrowers  shall,  without  expense  to  Lender,  make
available Borrowers and their officers,  employees, agents and mandataries,  and
Borrowers' books and records, without charge, to the extent that Lender may deem
them  reasonably  necessary  in order to  prosecute  or defend  any such suit or
proceeding.

      5.13  Maintenance  of  Collateral.  Borrowers  will  maintain  all  of the
Collateral  in good working  condition,  ordinary  wear and tear  excepted,  and
Borrowers will not use any of the Collateral for any unlawful purpose. Borrowers
will immediately  advise Lender in writing of any material loss or damage to the
Collateral,  or any portion thereof.  Borrowers will not, without Lender's prior
written consent, sell, transfer or otherwise dispose of any of the Collateral or
any interest therein.

      5.14  Notification  of Changes.  Borrowers will promptly  notify Lender in
writing of any change in  officers  or  directors,  the  opening of any new bank
account  or other  deposit  account,  or any  material  adverse  changes  in the
business  or  financial  affairs  of  Borrowers  (or  either one of them) or the
existence of any circumstance which would make any representation or warranty of
Borrowers  untrue in any material respect or constitute a material breach of any
covenant of Borrowers.



                                      -12-


      5.15 Further  Assurances.  Borrowers agree, at their expense,  to take all
actions,  and  execute  or cause to be  executed  and  delivered  to Lender  all
promissory notes, security agreements, agreements with landlords, mortgagees and
processors and other bailees,  subordination  and  intercreditor  agreements and
other  agreements,  instruments and documents as Lender may request from time to
time, to perfect and maintain Lender's security  interests in the Collateral and
to fully effectuate the transactions contemplated by this Agreement.

      5.16  Financial  Covenants.  Borrowers  will  comply  with any  additional
financial covenants set forth in Section 7 of Schedule A.

      5.17 Broker. Except as set forth on Section 8 of Schedule A, no broker was
used,  and no broker fee was incurred,  in  connection  with the purchase of the
Ship or the  obtaining of the Loan.  Borrowers  shall pay all such broker's fees
and shall indemnify Lender against any and all claims, losses, costs and damages
(including  attorneys'  fees) incurred by Lender in connection with any claim by
any broker relating to the transactions described in this Agreement.

      5.18 Timeshares and Similar Arrangements.  Agreements with respect to time
share  sales  or  associated   arrangements  shall  be  in  form  and  substance
satisfactory to Lender,  and shall in no event affect or impair  Borrower's good
and marketable title to the Collateral,  result in any Liens, charges,  security
interests,  encumbrances and adverse claims on the Collateral,  other than those
in favor of the Lender,  or otherwise  affect or impair Lender's  first-priority
perfected and  enforceable  security  interest in the Collateral or other rights
and remedies  under this  Agreement or any Loan  Documents  (including,  without
limitation, with respect to Accounts and insurance proceeds).

      5.19  Negative  Covenants.  Borrowers  will not,  without  Lender's  prior
written consent, (i) merge,  amalgamate or consolidate with another Person, form
any new  subsidiary  or acquire any  interest in any  Person;  (ii)  acquire any
assets except in the ordinary  course of business and as otherwise  permitted by
this Agreement and the other Loan  Documents;  (iii) enter into any  transaction
outside the ordinary course of business; (iv) sell or transfer any Collateral or
other assets;  (v) make any loans to, or investments  in, any Affiliate or other
Person in the form of money or other  assets;  (vi) incur any debt  outside  the
ordinary  course of business;  (vii)  guaranty or otherwise  become  liable with
respect to the obligations of another party or entity; (viii) pay or declare any
dividends or other  distributions  on  Borrowers'  stock,  if such Borrower is a
corporation  (except  for  dividends  payable  solely in  capital  stock of such
Borrower) or with  respect to any equity  interests,  if such  Borrower is not a
corporation;  (ix) redeem,  retire,  purchase or otherwise acquire,  directly or
indirectly,  any of Borrowers' capital stock or other equity interests; (x) make
any change in Borrowers' capital structure;  (xi) dissolve or elect to dissolve;
(xii) pay any principal or interest on any  indebtedness  owing to an Affiliate,
(xiii) enter into any transaction  with an Affiliate,  including with respect to
any loans from an Affiliate,  other than unsecured  loans on  arms-length  terms
disclosed to, and  subordinate in all respects to the Loan pursuant to terms and
documentation in form and substance approved by, Lender in writing; (xiv) change
the jurisdiction of Borrowers'  organization or enter into any transaction which
has the effect of changing Borrowers' jurisdiction of organization; (xv) fail to
contribute to any Canadian Plan any amount required to be contributed thereto in
accordance  with  applicable law or the terms of such Canadian Plan or permit or
take any action  which would  result in the  aggregate  going  concern  unfunded
liability or the  aggregate  solvency  deficiency in respect of all the Canadian
Plans which are funded plans,  determined pursuant to the actuarial  assumptions
and methodology utilized in the most recent actuarial  valuations  therefor,  to
exceed U.S.$200,000; or (xvi) agree to do any of the foregoing.



                                      -13-


6.    RELEASE AND INDEMNITY.

      6.1 Release.  Borrowers hereby release Lender and its Affiliates and their
respective directors, officers, employees, attorneys, agents and mandataries and
any other Person affiliated with or representing Lender (the "Released Parties")
from any and all liability  arising from acts or omissions  under or pursuant to
this  Agreement,  whether based on errors of judgment or mistake of law or fact,
except for those arising from willful  misconduct.  However,  in no circumstance
will any of the Released  Parties be liable for lost profits or other special or
consequential damages.

      6.2 Indemnity. Borrowers hereby agree, jointly and severally, to indemnify
the Released Parties and hold them harmless from and against any and all claims,
debts, liabilities,  demands, obligations, actions, causes of action, penalties,
costs and expenses (including  attorneys' fees), of every nature,  character and
description,  which the  Released  Parties  may  sustain or incur  based upon or
arising out of the Collateral or any other security for the Loan, including with
limitation  any  use of  the  Ship  by  Borrowers,  or  any of the  transactions
contemplated  by  this  Agreement  or the  other  Loan  Documents  or any of the
Obligations,  any claim by any  broker  relating  to the Ship or the Loan or any
other matter, cause or thing whatsoever  occurred,  done, omitted or suffered to
be done by Lender  relating to  Borrowers  or the  Obligations  (except any such
amounts  sustained  or incurred as the result of the willful  misconduct  of the
Released  Parties).  Notwithstanding  any  provision  in this  Agreement  to the
contrary,  the  indemnity  agreement set forth in this Section shall survive any
termination of this Agreement.

      6.3 Currencies.

      (a) U.S. Dollars.  All advances,  charges and fees of Borrowers to Lender,
and all financial and collateral reports,  shall be in United States dollars and
all  collections  and payments of Borrowers to Lender shall be in United  States
dollars.

      (b)  Currency  Indemnity.  If, for the  purposes of obtaining or enforcing
judgment in any court in any jurisdiction  with respect to this Agreement or any
other Loan Document,  it becomes  necessary to convert into the currency of such
jurisdiction  (the  "Judgment  Currency") any amount due under this Agreement or
under any other Loan Document in any currency  other than the Judgment  Currency
(the "Currency Due"), then, to the extent permitted by law,  conversion shall be
made at the Currency  Exchange  Rate on the Business Day before the day on which
judgment is given. In the event that there is a change in the Currency  Exchange
Rate  between the Business Day before the day on which the judgment is given and
the date of  receipt by the Lender of the  amount  due,  Borrowers  shall to the
extent  permitted by law, on the date of receipt by Lender,  pay such additional
amounts, if any, or be entitled to receive  reimbursement of such amount, if any
as may be necessary to ensure that the amount received by Lender on such date is
the amount in the  Judgment  Currency  which  (when  converted  at the  currency
exchange rate on the date of receipt by Lender in accordance with normal banking
procedures  in the  relevant  jurisdiction)  is the  amount  then due under this
Agreement or such other Loan  Document in the Currency Due. If the amount of the
Currency  Due which the Lender is so able to purchase is less than the amount of
the Currency Due originally due to it,  Borrowers shall, to the extent permitted
by law,  jointly and  severally,  indemnify  and save Lender  harmless  from and
against  loss or damage  arising as a result of such  deficiency.  To the extent
permitted by law, this indemnity shall (i) constitute an obligation separate and
independent from the other obligations contained in this Agreement and the other
Loan Documents,  (ii) give rise to a separate and  independent  cause of action,
(iii) apply  irrespective of any indulgence granted by Lender from time to time,
(iv) survive the payment in full of the  Obligations and the termination of this
Agreement,  and (v)  continue  in full  force  and  effect  notwithstanding  any
judgment  or order for a  liquidated  sum in respect of an amount due under this
Agreement or any other Loan Document or under any judgment or order.



                                      -14-


7.    MATURITY DATE.

      7.1 Maturity Date. On the Maturity Date,  Borrowers  shall pay in full all
Obligations,  whether or not all or any part of such  Obligations  are otherwise
then due and payable.  This  Agreement and the other Loan Documents and Lender's
security  interests in and Liens upon the Collateral,  and all  representations,
warranties and covenants of Borrowers contained herein and therein, shall remain
in full  force and effect  after the  Maturity  Date  until all of the  monetary
Obligations are indefeasibly paid in full.

8.    EVENTS OF DEFAULT AND REMEDIES.

      8.1 Events of Default. The occurrence of any of the following events shall
constitute  an "Event of Default"  under this  Agreement:  (i) if any  warranty,
representation,  statement, report or certificate made or delivered to Lender by
Borrowers  (or either  one of them) or any of  Borrowers'  officers,  employees,
agents or mandataries or any Obligor is untrue or misleading;  (ii) if Borrowers
fail to pay when due any  principal or interest on the Loan;  (iii) if Borrowers
breach any covenant or obligation  contained in this Agreement or any other Loan
Document or fail to perform any other non-monetary Obligation; (iv) if any levy,
assessment,  attachment,  seizure,  lien or  encumbrance is made or permitted to
exist on all or any part of the  Collateral or any other  security for the Loan;
(v)  if one  or  more  judgments  aggregating  in  excess  of  $150,000,  or any
injunction or attachment,  is obtained against Borrowers (or either one of them)
or any Obligor and remains unstayed for more than ten days or is enforced;  (vi)
the occurrence of any default under any financing agreement,  security agreement
or other  agreement,  instrument  or  document  executed  and  delivered  by (A)
Borrowers  (or  either  one of them) or any  Obligor  with,  or in favor of, any
Person  other  than  Lender  or (B)  Borrowers  (or  either  one of them) or any
Affiliate  of  Borrowers  or any  Obligor  with,  or in favor of,  Lender or any
Affiliate of Lender;  (vii) the  dissolution,  termination  of existence in good
standing, insolvency, business failure or suspension or cessation of business as
usual of Borrowers (or either one of them) or any Obligor or the  appointment of
a receiver, trustee, liquidator, monitor, interim receiver, receiver and manager
or  sequestrator  (or similar  official) or custodian for all or any part of the
property of, or an  assignment  for the benefit of creditors  by,  Borrowers (or
either one of them) or any Obligor,  or the  commencement  of any  proceeding by
Borrowers  (or  either  one of them) or any  Obligor  under any  reorganization,
bankruptcy,  insolvency,  arrangement,  readjustment  of  debt,  dissolution  or
liquidation law or statute of any jurisdiction,  now or in the future in effect,
or if Borrowers (or either one of them) call a meeting of creditors;  (viii) the
commencement of any proceeding  against Borrowers (or either one of them) or any
Obligor  under  any   reorganization,   bankruptcy,   insolvency,   arrangement,
readjustment  of  debt,  dissolution  or  liquidation  law  or  statute  of  any
jurisdiction,  now or in the  future in  effect;  (ix) the  actual or  attempted
revocation or  termination  of, or limitation or denial of liability  upon,  any
guaranty of the Obligations,  or any security document securing the Obligations,
by any Obligor;  (x) an actual or threatened  indictment of Borrowers (or either
one of them) or any  Obligor  under any  criminal  statute  or  commencement  or
threatened  commencement of criminal or civil proceedings  against Borrowers (or
either one of them) or any Obligor, pursuant to which the potential penalties or
remedies sought or available include forfeiture of any property of Borrowers (or
either one of them) or such  Obligor;  (xi) if Lender  determines  in good faith
that the Collateral is  insufficient to fully secure the Obligations or that the
prospect of payment of  performance of the  Obligations  is impaired;  (xii) the
commencement  of any  proceeding  against  the  Ship,  or  (xiii) if an Event of
Default occurs under any Loan and Security  Agreement or other agreement between
Lender and an Affiliate of Borrowers.



                                      -15-


      8.2  Remedies.  Upon the  occurrence  of an Event of  Default,  Lender may
exercise from time to time any rights and remedies available to it under the UCC
and any other  applicable law in addition to, and not in lieu of, any rights and
remedies  expressly  granted  in  this  Agreement  or in any of the  other  Loan
Documents,  and all of Lender's  rights and  remedies  shall be  cumulative  and
non-exclusive to the extent  permitted by law. In particular,  but not by way of
limitation of the foregoing, upon the occurrence of any Event of Default, and at
any time thereafter,  Lender, at its option, and without notice or demand of any
kind (all of which are hereby expressly waived by Borrowers),  may do any one or
more  of the  following:  (i)  accelerate  and  declare  all or any  part of the
Obligations to be immediately due, payable and performable,  notwithstanding any
deferred or  installment  payments  allowed by the Note or any other  instrument
evidencing or relating to any of the Obligations; (ii) take possession of any or
all of the Collateral  wherever it may be found, and for that purpose  Borrowers
hereby  authorize  Lender,  without  judicial  process,  to  enter  onto  any of
Borrowers'  premises  without  interference  to search for, take  possession of,
keep,  store, or remove any of the Collateral,  and remain (or cause a custodian
to remain) on the premises in exclusive  control thereof,  without charge for so
long  as  Lender  deems  it  reasonably  necessary  in  order  to  complete  the
enforcement  of its  rights  under  this  Agreement  or any  of the  other  Loan
Documents;  provided,  that if  Lender  seeks to take  possession  of any of the
Collateral by court process, Borrowers hereby irrevocably waive (A) any bond and
any surety or security  relating  thereto required by law as an incident to such
possession,  (B) any demand for possession prior to the commencement of any suit
or action to recover  possession  thereof,  and (C) any requirement  that Lender
retain  possession of, and not dispose of, any such Collateral until after trial
or  final  judgment;  (iv)  require  Borrowers  to  assemble  any  or all of the
Collateral  and make it available to Lender at one or more places  designated by
Lender which are reasonably  convenient to Lender and  Borrowers,  and to remove
the  Collateral to such  locations as Lender may deem  advisable;  and (v) sell,
lease or  otherwise  dispose of any of the  Collateral  at one or more public or
private sales, in lots or in bulk, for cash,  exchange or other property,  or on
credit (a "Sale"), and to adjourn any such Sale from time to time without notice
other than oral  announcement at the time scheduled for Sale (and, in connection
therewith,  (A) Lender shall have the right to conduct  such Sale on  Borrowers'
premises without charge, for such times as Lender deems reasonable,  on Lender's
premises,  or elsewhere,  and the Collateral need not be located at the place of
Sale, (B) Lender may directly or through any of its Affiliates purchase or lease
any of the Collateral at any such public  disposition,  and if permissible under
applicable law, at any private disposition, and (C) any Sale of Collateral shall
not relieve  Borrowers of any liability  Borrowers may have if any Collateral is
defective as to title, physical condition or otherwise at the time of the Sale).
Borrowers recognize that if Borrowers fail to perform,  observe or discharge any
of their  Obligations  under this  Agreement  or any of the Loan  Documents,  no
remedy at law will  provide  adequate  relief to Lender,  and agree that  Lender
shall be entitled to temporary and permanent  injunctive relief in any such case
without the necessity of proving actual  damages.  Any  notification of intended
disposition  of any of the  Collateral  required  by law will be  deemed to be a
reasonable authenticated  notification of disposition if given at least ten (10)
days prior to such  disposition  and such notice shall (i)  describe  Lender and
Borrowers,  (ii)  describe  the  Collateral  that is the subject of the intended
disposition, (iii) state the method of the intended disposition, (iv) state that
Borrowers are entitled to an accounting of the Obligations and state the charge,
if any,  for an  accounting  and (v)  state  the  time and  place of any  public
disposition  or the time after which any private sale is to be made.  Lender may
disclaim any warranties that might arise in connection  with the sale,  lease or
other  disposition  of the  Collateral  and has no  obligation  to  provide  any
warranties at such time.  Exercise or partial  exercise by Lender of one or more
of its rights or  remedies  shall not be deemed an  election  or bar Lender from
subsequent  exercise or partial  exercise of any other rights or  remedies.  The
failure or delay of Lender to exercise any rights or remedies  shall not operate
as a waiver  thereof,  but all rights and remedies  shall continue in full force
and effect until all of the Obligations  have been fully paid and performed.  If
any  Collateral  is sold or  leased by  Lender  on  credit  terms or for  future
delivery, the Obligations shall not be reduced as a result thereof until payment
is collected by Lender.

      8.3 Application of Proceeds.  Subject to any application  required by law,
any  proceeds  of any  disposition  by  Lender of any of the  Collateral  may be
applied by Lender to the payment of expenses in connection  with the Collateral,
including,  without limitation,  legal expenses and reasonable  attorneys' fees,
and any balance of such  proceeds may be applied by Lender toward the payment of
such of the  Obligations,  and in such order of application,  as Lender may from
time  to time  elect  in its  sole  discretion.  Any  surplus  shall  be paid to
Borrowers or other persons legally entitled thereto;  but Borrowers shall remain
liable to Lender for any deficiency. If Lender, in its sole discretion, directly
or indirectly  enters into a deferred  payment or other credit  transaction with
any  purchaser  at any Sale,  Lender shall have the option,  exercisable  at any
time,  in its  sole  discretion,  of  either  reducing  the  Obligations  by the
principal  amount  of the  purchase  price or  deferring  the  reduction  of the
Obligations until the actual receipt by Lender of the cash therefor.


                                      -16-


9.    GENERAL PROVISIONS.

      9.1  Notices.  All  notices to be given under this  Agreement  shall be in
writing and shall be given  either  personally,  by reputable  private  delivery
service, by regular first-class mail or certified mail return receipt requested,
addressed  to Lender or Borrowers as set forth in Section 9 of Schedule A, or at
any other address (or to any other  facsimile  number)  designated in writing by
one party to the other party in the manner  prescribed  in this Section 9.1. All
notices  shall be deemed to have been given when  received  or when  delivery is
refused by the recipient.

      9.2 Severability.  If any provision of this Agreement,  or the application
thereof to any party or circumstance, is held to be void or unenforceable by any
court of competent  jurisdiction,  such defect shall not affect the remainder of
this Agreement, which shall continue in full force and effect.

      9.3 Integration. This Agreement and the other Loan Documents represent the
final,  entire and complete agreement between Borrowers and Lender and supersede
all prior and contemporaneous negotiations, oral representations and agreements,
all of which are merged and integrated  into this  Agreement.  THERE ARE NO ORAL
UNDERSTANDINGS,  REPRESENTATIONS  OR AGREEMENTS BETWEEN THE PARTIES THAT ARE NOT
SET FORTH IN THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS.

      9.4  Waivers.  The  failure  of  Lender  at any time or  times to  require
Borrowers to strictly comply with any of the provisions of this Agreement or any
other Loan  Documents  shall not waive or diminish  any right of Lender later to
demand and receive strict compliance therewith.  Any waiver of any default shall
not waive or affect any other default, whether prior or subsequent,  and whether
or not  similar.  None of the  provisions  of this  Agreement  or any other Loan
Document  shall be deemed to have been waived by any act or  knowledge of Lender
or its agents or mandataries or employees, but only by a specific written waiver
signed by an authorized officer of Lender and delivered to Borrowers.  Borrowers
waive  demand,  protest,  notice of protest  and notice of default or  dishonor,
notice of payment and nonpayment, release, compromise,  settlement, extension or
renewal  of any  commercial  paper,  Instrument,  Account,  General  Intangible,
Document,  Chattel  Paper,  Investment  Property or guaranty at any time held by
Lender  on which  Borrowers  (or  either  one of them)  are or may in any way be
liable,  and  notice of any  action  taken by Lender  and  notice of  acceptance
hereof.

      9.5 Amendment.  This Agreement may not be amended or modified  except in a
writing executed by Borrowers and a duly authorized officer of Lender.

      9.6  Time  of  Essence.  Time  is of the  essence  in the  performance  by
Borrowers of each and every  obligation  under this Agreement and the other Loan
Documents.

      9.7 Attorneys Fees and Costs.  Borrowers  shall  reimburse  Lender for all
reasonable  attorneys' and paralegals'  fees (including  in-house  attorneys and
paralegals  employed  by  Lender)  and  all  filing,  recording,  search,  title
insurance, appraisal, audit, and other costs incurred by Lender, pursuant to, in
connection  with,  or  relating  to this  Agreement,  including  all  reasonable
attorneys'  fees and costs Lender incurs to prepare and negotiate this Agreement
and the other Loan  Documents;  to obtain legal advice in  connection  with this
Agreement  and  the  other  Loan  Documents  or  Borrowers  or any  Obligor;  to
administer  this Agreement and the other Loan  Documents  (including the cost of
periodic financing statement,  tax lien and other searches conducted by Lender);
to enforce, or seek to enforce, any of its rights; to commence, intervene in, or
defend any action or proceeding;  to enforce and protect,  or to seek to enforce
and protect,  any of its rights and interests in any bankruptcy case filed by or
against Borrowers, including by initiating and prosecuting any motion for relief
from the automatic  stay and by  initiating,  prosecuting or defending any other
contested matter or adversary proceeding in bankruptcy; to file or prosecute any
probate claim, bankruptcy claim,  third-party claim, or other claim; to examine,
audit,  copy, and inspect any of the  Collateral or any of Borrowers'  books and
records;  to protect,  obtain  possession  of,  lease,  dispose of, or otherwise
enforce  Lender's  security  interests  in,  the  Collateral;  and to  otherwise
represent  Lender in any  litigation  relating to Borrowers  or any Obligor.  If
either Lender or Borrowers files any lawsuit  against the other  predicated on a
breach of this Agreement,  the prevailing party in such action shall be entitled
to recover  its  reasonable  costs and  attorneys'  fees,  including  reasonable
attorneys'  fees and costs  incurred in the  enforcement  of,  execution upon or
defense of any order, decree,  award or judgment.  All attorneys' fees and costs
to which  Lender may be entitled  pursuant  to this  Section  shall  immediately
become part of the Obligations,  shall be due on demand, and shall bear interest
at a  rate  equal  to  the  highest  interest  rate  applicable  to  any  of the
Obligations.




      9.8 Benefit of Agreement;  Assignability. The provisions of this Agreement
shall be binding  upon and inure to the  benefit of the  respective  successors,
assigns,  heirs,  beneficiaries  and  representatives  of Borrowers  and Lender;
provided,  that  Borrowers  may not assign or  transfer  any  rights  under this
Agreement  without  the prior  written  consent  of Lender,  and any  prohibited
assignment  shall be void. No consent by Lender to any assignment  shall release
Borrowers from liability for any of the Obligations. Lender shall have the right
to assign all or any of its rights and obligations under the Loan Documents, and
to sell  participating  interests  therein,  to one or more other  Persons,  and
Borrowers agree to execute all agreements,  instruments and documents  requested
by Lender in connection with each such assignment and participation.

      9.9 Headings;  Construction.  Section and subsection  headings are used in
this  Agreement  only for  convenience,  and do not affect the  meanings  of the
provisions  that they  precede.  This  Agreement  has been  fully  reviewed  and
negotiated  between the parties and no  uncertainty  or ambiguity in any term or
provision  of this  Agreement  shall be  construed  strictly  against  Lender or
Borrowers under any rule of construction or otherwise.



                                      -17-


      9.10  GOVERNING  LAW;  CONSENT  TO FORUM,  ETC.  THIS  AGREEMENT  HAS BEEN
NEGOTIATED,  EXECUTED AND  DELIVERED,  AND SHALL BE DEEMED TO HAVE BEEN MADE, IN
NEW YORK COUNTY,  NEW YORK, AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.  BORROWERS HEREBY CONSENT AND AGREE THAT
THE STATE AND FEDERAL COURTS  LOCATED IN NEW YORK COUNTY,  NEW YORK OR THE STATE
IN WHICH ANY OF THE COLLATERAL IS LOCATED SHALL HAVE NON-EXCLUSIVE  JURISDICTION
TO HEAR AND  DETERMINE  ANY  CLAIMS OR  DISPUTES  BETWEEN  BORROWERS  AND LENDER
PERTAINING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENTS OR ANY MATTER ARISING OUT
OF OR RELATED TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. BORROWERS EXPRESSLY
SUBMIT  AND  CONSENT  IN  ADVANCE  TO SUCH  JURISDICTION  IN ANY  ACTION OR SUIT
COMMENCED IN ANY SUCH COURT,  AND WAIVE ANY OBJECTION  WHICH  BORROWERS MAY HAVE
BASED  UPON  LACK  OF  PERSONAL  JURISDICTION,   IMPROPER  VENUE  OR  FORUM  NON
CONVENIENS.  BORROWERS ALSO AGREE THAT ANY CLAIM OR DISPUTE BROUGHT BY BORROWERS
AGAINST LENDER PURSUANT TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY MATTER
ARISING  OUT OF THIS  AGREEMENT  OR ANY OTHER  LOAN  DOCUMENT  SHALL BE  BROUGHT
EXCLUSIVELY  IN THE STATE AND FEDERAL  COURTS  LOCATED IN NEW YORK  COUNTY,  NEW
YORK.  BORROWERS  HEREBY WAIVE  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT AND
OTHER  PROCESS  ISSUED IN ANY SUCH ACTION OR SUIT AND AGREE THAT SERVICE OF SUCH
SUMMONS,  COMPLAINT  AND OTHER  PROCESS  MAY BE MADE IN THE  MANNER AND SHALL BE
DEEMED RECEIVED AS SET FORTH IN SECTION 9.1 FOR NOTICES, TO THE EXTENT PERMITTED
BY LAW. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT
OF LENDER TO SERVE LEGAL  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW, OR TO
PRECLUDE THE  ENFORCEMENT  BY LENDER OF ANY  JUDGMENT OR ORDER  OBTAINED IN SUCH
FORUM OR THE TAKING OF ANY ACTION  UNDER THIS  AGREEMENT  TO ENFORCE THE SAME IN
ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

      9.11 WAIVER OF JURY TRIAL, ETC.  BORROWERS WAIVE (i) THE RIGHT TO TRIAL BY
JURY (WHICH LENDER ALSO WAIVES) IN ANY ACTION, SUIT,  PROCEEDING OR COUNTERCLAIM
OF ANY  KIND  ARISING  OUT OF OR  RELATED  TO ANY  OF THE  LOAN  DOCUMENTS,  THE
OBLIGATIONS  OR THE  COLLATERAL  OR ANY CONDUCT,  ACTS OR OMISSIONS OF LENDER OR
BORROWERS OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,  ATTORNEYS,
AGENTS OR MANDATARIES OR ANY OTHER PERSONS  AFFILIATED WITH LENDER OR BORROWERS,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE; (ii) THE RIGHT TO INTERPOSE ANY
CLAIMS,  DEDUCTIONS,  SETOFFS  OR  COUNTERCLAIMS  OF ANY KIND IN ANY  ACTION  OR
PROCEEDING INSTITUTED BY LENDER WITH RESPECT TO THE LOAN DOCUMENTS OR ANY MATTER
RELATING  THERETO,  EXCEPT FOR COMPULSORY  COUNTERCLAIMS;  (iii) NOTICE PRIOR TO
LENDER'S TAKING  POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY
WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER TO EXERCISE ANY OF
LENDER'S  REMEDIES  AND (iv) THE  BENEFIT  OF ALL  VALUATION,  APPRAISEMENT  AND
EXEMPTION LAWS. BORROWERS  ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO LENDER'S  ENTERING INTO THIS  AGREEMENT AND THAT LENDER IS RELYING
UPON THE  FOREGOING  WAIVERS IN ITS FUTURE  DEALINGS WITH  BORROWERS.  BORROWERS
WARRANT AND  REPRESENT  THAT IT HAS  REVIEWED THE  FOREGOING  WAIVERS WITH LEGAL
COUNSEL AND HAVE KNOWINGLY AND  VOLUNTARILY  WAIVED JURY TRIAL RIGHTS  FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION,  THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.



                                      -18-


      9.12  Lender   Right  of  First   Refusal;   Cross-Collateralization   and
Cross-Default.  If at any time  Borrowers  receive  from a third party an offer,
terms  sheet or  commitment  or makes a proposal  accepted  by any Person  which
provides for any type of financing to or for  Borrowers  (or either one of them)
that  Borrowers  desire to accept  and  proceed  to close  with such  Person (an
"Offer"),  Borrowers shall immediately  notify such third party making the Offer
of Lender's rights hereunder and shall further  immediately notify Lender of the
Offer in writing  (including all material terms of the Offer.) Lender shall have
twenty  (20)  calendar  days after  receipt  of such  notice to agree to provide
similar financing in the place of such Person upon  substantially the same terms
and conditions (or terms more favorable to Borrowers) as set forth in the Offer.
Lender shall notify Borrowers of Lender's acceptance of the Offer, in which case
Borrowers shall obtain such financing from Lender and shall not accept the Offer
from such other Person.  If no  acceptance  notice has been received from Lender
within the twenty (20) calendar  days,  Borrowers may  consummate the Offer with
the other Person on the terms and conditions  set forth in the Offer.  If at any
time Borrowers (or either one of them) or any of its Affiliates are parties to a
Loan and Security  Agreement or other  agreement with Lender or its  Affiliates,
Borrowers  acknowledge  and agree  that such  arrangements  are  intended  to be
cross-collateralized and to cross-default.

      9.13 Joint and Several Liability.

      (a) Each of the parties  undersigned as a Borrower is accepting  joint and
several liability  hereunder and under the other Loan Documents in consideration
of the financial  accommodations  to be provided by Lender under this Agreement,
for the  mutual  benefit,  directly  and  indirectly,  of  each  of them  and in
consideration  of the  undertakings  of the  other to accept  joint and  several
liability for the Obligations.

      (b) Each of the parties undersigned as a Borrower,  jointly and severally,
hereby irrevocably and unconditionally  accepts, not merely as a surety but also
as a co-debtor,  joint and several liability with the other, with respect to the
payment and performance of all of the Obligations, it being the intention of the
parties  hereto  that  all  the  Obligations  shall  be the  joint  and  several
obligations  of  each  Person  composing  a  Borrower  without   preferences  or
distinction among them.

      (c) If and to the extent that any of the parties undersigned as a Borrower
shall fail to make any payment  with  respect to any of the  Obligations  as and
when due or to  perform  any of the  Obligations  in  accordance  with the terms
thereof, then in each such event the other Person composing a Borrower will make
such payment with respect to, or perform, such Obligation.

      (d)  The  Obligations  of each  Person  composing  a  Borrower  under  the
provisions  of this Section  constitute  the absolute  and  unconditional,  full
recourse  Obligations of each Person  composing a Borrower  enforceable  against
each  of the  parties  undersigned  as a  Borrower  to the  full  extent  of its
properties   and  assets,   irrespective   of  the   validity,   regularity   or
enforceability of this Agreement or any other circumstances whatsoever.



                                      -19-


      (e) Except as otherwise expressly provided in this Agreement,  each Person
composing a Borrower hereby waives notice of acceptance of its joint and several
liability,  notice of any advances  issued under or pursuant to this  Agreement,
notice of the occurrence of any Default,  Event of Default, or of any demand for
any  payment  under  this  Agreement,  notice of any action at any time taken or
omitted by Lender under or in respect of any of the Obligations, any requirement
of diligence or to mitigate damages and,  generally,  to the extent permitted by
applicable  law, all  demands,  notices and other  formalities  of every kind in
connection with this Agreement (except as otherwise provided in this Agreement).
Each Person  composing a Borrower  hereby  assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the  Obligations,  the acceptance of any
partial payment thereon, any waiver,  consent or other action or acquiescence by
Lender at any time or times in respect of any default by any Person  composing a
Borrower in the performance or satisfaction of any term, covenant,  condition or
provision of this Agreement,  any and all other indulgences whatsoever by Lender
in respect of any of the Obligations, and the taking, addition,  substitution or
release,  in whole or in part, at any time or times,  of any security for any of
the Obligations or the addition,  substitution or release,  in whole or in part,
of any Person  composing a Borrower.  Without  limiting  the  generality  of the
foregoing,  each of the parties  undersigned as a Borrower  assents to any other
action or delay in acting or failure to act on the part of Lender  with  respect
to the  failure by any Person  composing  a Borrower  to comply  with any of its
respective Obligations,  including,  without limitation, any failure strictly or
diligently  to assert any right or to pursue any remedy or to comply  fully with
applicable laws or regulations  thereunder,  which might, but for the provisions
of this Section  afford  grounds for  terminating,  discharging or relieving any
Person  composing a Borrower,  in whole or in part,  from any of its Obligations
under this Section,  it being the intention of each Person  composing a Borrower
that,  so long  as any of the  Obligations  hereunder  remain  unsatisfied,  the
Obligations of such Person  composing a Borrower under this Section shall not be
discharged   except  by  performance  and  then  only  to  the  extent  of  such
performance.  The  Obligations  of each Person  composing a Borrower  under this
Section  shall not be diminished  or rendered  unenforceable  by any winding up,
reorganization,  arrangement, liquidation,  reconstruction or similar proceeding
with respect to any Person composing a Borrower or Lender. The joint and several
liability of the Persons  composing a Borrower  hereunder shall continue in full
force and effect  notwithstanding  any absorption,  merger,  amalgamation or any
other change  whatsoever in the name,  constitution or place of formation of any
of the Persons composing a Borrower or Lender.

      (f) Each Person composing a Borrower represents and warrants to Lender and
Lenders that it is currently  informed of the  financial  condition of Borrowers
and of all other  circumstances  which a diligent inquiry would reveal and which
bear upon the risk of nonpayment  of the  Obligations.  Each Person  composing a
Borrower  further  represents  and  warrants  to  Lender  that it has  read  and
understands  the  terms  and  conditions  of the  Loan  Documents.  Each  Person
composing a Borrower hereby  covenants that it will continue to keep informed of
Borrowers' financial condition,  the financial condition of guarantors,  if any,
and of all  other  circumstances  which  bear  upon  the risk of  nonpayment  or
nonperformance of the Obligations.

      (g) The  provisions of this Section are made for the benefit of Lender and
its respective  successors  and assigns,  and may be enforced by it or them from
time to time against any or all of the Persons  composing a Borrower as often as
occasion  therefor  may arise and  without  requirement  on the part of  Lender,
successor  or assign  first to marshal any of its or their claims or to exercise
any of its or their rights against any of the other Persona composing a Borrower
or to exhaust  any  remedies  available  to it or them  against any of the other
Persons  composing  a  Borrower  or to resort  to any  other  source or means of
obtaining  payment  of any of the  Obligations  hereunder  or to elect any other
remedy.  The  provisions of this Section shall remain in effect until all of the
Obligations shall have been paid in full or otherwise fully satisfied. If at any
time,  any  payment,  or  any  part  thereof,  made  in  respect  of  any of the
Obligations,  is rescinded  or must  otherwise be restored or returned by Lender
upon  the  insolvency,  bankruptcy  or  reorganization  of any  of  the  Persons
composing  a  Borrower,  or  otherwise,  the  provisions  of this  Section  will
forthwith be reinstated in effect, as though such payment had not been made.



                                      -20-


      (h) Each of the Persons  composing a Borrower  hereby  agrees that it will
not enforce any of its rights of contribution  or subrogation  against the other
Persons  composing  a Borrower  with  respect to any  liability  incurred  by it
hereunder or under any of the other Loan  Documents,  any payments made by it to
Lender  with  respect  to any  of the  Obligations  or any  collateral  security
therefor  until  such time as all of the  Obligations  have been paid in full in
cash.  Any claim which any of the  parties  undersigned  as a Borrower  may have
against any other party with  respect to any  payments  to Lender  hereunder  or
under any other Loan Documents are hereby  expressly made subordinate and junior
in right of payment,  without  limitation as to any increases in the Obligations
arising  hereunder or  thereunder,  to the prior  payment in full in cash of the
Obligations  and,  in the  event of any  insolvency,  bankruptcy,  receivership,
liquidation,  reorganization  or other similar  proceeding under the laws of any
jurisdiction relating to any of the parties undersigned as a Borrower, its debts
or its assets,  whether voluntary or involuntary,  all such Obligations shall be
paid in full in cash  before  any  payment  or  distribution  of any  character,
whether in cash, securities or other property, shall be made to any other of the
parties undersigned as a Borrower therefor.

      (i) Each of the Persons composing a Borrower hereby agrees that, after the
occurrence and during the  continuance  of any Default or Event of Default,  the
payment of any amounts due with respect to the indebtedness  owing by any of the
parties  undersigned as a Borrower to any other party  undersigned as a Borrower
is hereby  subordinated to the prior payment in full in cash of the Obligations.
Each of the  parties  undersigned  as a Borrower  hereby  agrees  that after the
occurrence  and during the  continuance  of any Default or Event of Default,  it
will not demand, sue for or otherwise attempt to collect any indebtedness of any
other of the parties undersigned as a Borrower owing to it until the Obligations
shall  have  been  paid in full  in  cash.  If,  notwithstanding  the  foregoing
sentence,  it shall  collect,  enforce or receive any amounts in respect of such
indebtedness,  such amounts shall be  collected,  enforced and received by it as
trustee  for  Lender,  and it shall  deliver  any such  amounts  to  Lender  for
application to the Obligations.


                                      -21-


      IN WITNESS WHEREOF,  Borrowers and Lender have signed this Agreement as of
the date first set forth above.


Borrowers:                                 Lender:

MARINE GROWTH CANADA LTD.                  GREYSTONE BUSINESS CREDIT II, L.L.C.


By /s/ Craig Hodgkins                      By /s/ Joel Flig
   -------------------------------            -------------------------------
Print Name Craig Hodgkins                  Print Name Joel Flig
      ----------------------------                    -----------------------
Its President                              Its Executive Vice President
    ------------------------------             ------------------------------


MARINE GROWTH CHARTER & FINANCE, INC.


By /s/ Craig Hodgkins
   -------------------------------
Print Name Craig Hodgkins
           -----------------------
Its President
    ------------------------------






                                   Schedule A


                            
1.   Description of Ship:      The passenger  vessel named  "PACIFIC  AURORA",  formerly the
                               "Taverner",  IMO Ship  Identification  No. 5353983,  Official
                               Number  318341,  Port of  Registry,  Port of  Prince  Rupert,
                               British  Columbia,   Canada,   registered  under  the  Canada
                               Shipping  Act,  which  vessel  was built in 1962 by  Canadian
                               Shipbuilding  &  Engineering  Ltd. of  Collingwood,  Ontario,
                               Canada,  having a length of 53.260  metres,  a depth of 6.550
                               metres,  a breadth  of 11.580  metres,  and is of  1183.00033
                               tons  gross  and  355.00012  tons  net,   including   without
                               limitation  any  share  or  interest  therein,   all  of  the
                               vessel's  present  and  after  acquired  licenses,   permits,
                               appurtenances,  engines, motors, boilers, propellers, shafts,
                               screws, electrical systems and equipment,  mechanical systems
                               and  equipment,  plumbing  systems and  equipment,  emergency
                               systems and equipment,  communications  systems and equipment
                               (including  radio  and radar  equipment),  data  systems  and
                               equipment,  life saving gear, body suits,  skiffs,  dinghies,
                               inflatables,  outboard  motors,  winches,  including  motors,
                               lines, marine equipment,  fittings,  fuel,  machinery,  spare
                               gear  and  stores,  whether  on  board  or  ashore,  and  all
                               additions thereto and substitutions therefor.

 2.  Repayment:                Until maturity,  interest on the outstanding principal amount
                               of the Loan  shall be  payable in arrears on the first day of
                               each  calendar  month,  commencing on commencing on the first
                               month  following the date hereof (e.g.,  if this Agreement is
                               dated  March 31,  2007,  then  the  payments  shall  commence
                               April 1,   2007).   Principal   shall  be   repaid  in  equal
                               consecutive  monthly  installments  amortized over 72 months,
                               payable on the first day of each calendar  month,  commencing
                               on  commencing  on the first month  following the date hereof
                               (e.g.,  if this Agreement is dated  March 31,  2007, then the
                               payments  shall  commence  April 1,  2007),  with the  entire
                               unpaid balance due and payable on the Maturity Date.


                                    A-1



3.   Reserve:                  $67,916 of the  proceeds  of the Loan shall be held by Lender
                               as a Reserve.

4.   Interest Rate:            2.25% per annum in excess of the Prime Rate

5.   Fees:

     (a) Closing Fee:          $20,250

     (b) Servicing Fee:        0.20%

6.   Borrowers Information:

     (a) Litigation:           NONE

     (b) Indebtedness:         400,000 owing to Frank P. Crivello, based on a Revolving
                               Note, dated January 5, 2006, by and between Marine Growth
                               Ventures Inc., Marine Growth Charter, Inc., Marine Growth
                               Finance, Inc., Marine Growth Freight, Inc., Marine Growth
                               Real Estate, Inc., and Gulf Casino Cruises, Inc. and Frank
                               P. Crivello, as amended.

7.   Other Financial Covenants:NONE

8.   Broker and broker fees:   NONE

9.   Notice Information:

        Borrowers:
                               Marine Growth Finance & Charter, Inc.
                               (and Marine Growth Canada Ltd.,
                               c/o Marine Growth Finance & Charter, Inc.)
                               405-A Atlantis Road
                               Cape Canaveral, Florida 32920
                               Attn: Craig Hodgkins
                               Fax: (321) 783-7783

                               With a copy to:

                               Sichenzia Ross Friedman Ference LLP
                               61 Broadway, 32nd Floor
                               New York, New York 10006
                               Attn:  Tom Rose and Yoel Goldfeder
                               Fax: (212) 930-9725


                                      A-2


        Lender:                Greystone Business Credit II, L.L.C.
                               152 West 57th Street, 60th Floor
                               New York, NY 10019
                               Attn: David Hill
                               Fax: (212) 896-9199

                               With a copy to:

                               Goldberg Kohn
                               55 East Monroe Street, Suite 3300
                               Chicago, IL 60603
                               Attn: Richard Kohn and Vanessa Bachtell
                               Fax: (312) 332-2196



                                      A-3


      IN WITNESS WHEREOF, Borrowers and Lender have signed this Schedule A as of
the date set forth in the preamble to the Agreement.


Borrowers:                                 Lender:

MARINE GROWTH CANADA LTD.                  GREYSTONE BUSINESS CREDIT II, L.L.C.


By /s/ Craig Hodgkins                      By
   -------------------------------         ---------------------------------
Print Name Craig Hodgkins                  Print Name
           -----------------------                   -----------------------
Its President                              Its
    ------------------------------            ------------------------------


MARINE GROWTH CHARTER & FINANCE, INC.


By /s/ Craig Hodgkins
   -------------------------------
Print Name Craig Hodgkins
           -----------------------
Its President
    ------------------------------


                                      A-4


                                    Exhibit A

                                Form of Term Note

$1,500,000                                                    New York, New York
                                                                  March __, 2007


      FOR VALUE RECEIVED, the undersigned,  MARINE GROWTH CANADA LTD. ("Owner"),
a company organized under the laws of the Province of British Columbia,  Canada,
having its principal  address at 405-A Atlantic  Road,  Cap  Canaveral,  Florida
32920, and MARINE GROWTH FINANCE & CHARTER, INC., a Delaware corporation, having
its principal  address at 405-A Atlantis  Road,  Cape  Canaveral,  Florida 32920
("MGFC"; Owner and MGFC being collectively,  jointly and severally,  hereinafter
referred to as "Borrowers") hereby  unconditionally  promise to pay to the order
of GREYSTONE  BUSINESS CREDIT II, L.L.C.  ("Lender"),  at its office at 152 West
57th St., 60th Fl., New York, NY 10019,  or at such other place as the holder of
this Term Note may from time to time  designate  in writing,  in lawful money of
the United States of America and in immediately  available  funds, the principal
sum of One  Million  Five  Hundred  Thousand  Dollars  ($1,500,000).  Except  as
expressly  provided  herein,  reference  is hereby made to the Loan and Security
Agreement  between  Borrowers  and  Lender  of even  date  herewith  (the  "Loan
Agreement")  for a statement  of the terms and  conditions  under which the loan
evidenced hereby was made and is to be repaid. This Term Note evidences the Loan
described  in the Loan  Agreement.  Capitalized  terms used  herein that are not
otherwise  specifically  defined herein shall have the meanings ascribed to such
terms in the Loan Agreement.


      The  outstanding  principal  balance of this Term Note shall be payable in
equal consecutive monthly  installments  amortized over seventy-two (72) months,
payable on the first day of each calendar  month,  commencing on the first month
following the date hereof (e.g., if this Term Note is dated March 31, 2007, then
the  payments  shall  commence  April  1,  2007)  with a  final  payment  of all
outstanding principal,  together with all accrued interest thereon, being due on
the Maturity Date.


      Borrowers  further  promise to pay interest on the  outstanding  principal
amount hereof from the date hereof until payment in full hereof at the per annum
rate of two and a quarter percent (2.25%) in excess of the Prime Rate. Following
the  occurrence and during the  continuance  of an Event of Default,  the entire
outstanding  principal balance of this Term Note shall, at Lender's option, bear
interest  until  paid in full at a per annum  rate  equal to the  interest  rate
applicable  to the Term Loan from time to time in effect plus two percent  (2%).
Until  maturity,  interest on the outstanding  principal  amount hereof shall be
payable in arrears on the first day of each  calendar  month,  commencing on the
first month  following the date hereof  (e.g.,  if this Term Note is dated March
31, 2007,  then the payments shall commence April 1, 2007),  and on the Maturity
Date.  After maturity,  whether by acceleration or otherwise,  accrued  interest
shall be payable on  demand.  Interest  as  aforesaid  shall be charged  for the
actual  number of days elapsed over a year  consisting  of three  hundred  sixty
(360) days on the actual daily outstanding balance hereof.




      Notwithstanding  anything to the contrary  contained herein, the aggregate
of all interest  hereunder and charged or collected by Lender is not intended to
exceed the highest rate permissible  under any applicable law, but if it should,
such interest shall  automatically  be reduced to the extent necessary to comply
with applicable law and Lender will refund to Borrowers any such excess interest
received by Lender.


      Borrowers may prepay the outstanding  principal balance hereof in whole or
in part. Any partial  prepayment of the Term Loan shall be applied to the unpaid
installments of the Term Loan in the inverse order of their maturities.


      Upon and after the occurrence of an Event of Default,  this Term Note may,
at the option of Lender,  and  without  demand,  notice or legal  process of any
kind, be declared, and immediately shall become, due and payable.


      Payments  received  by Lender  from  Borrowers  on this Term Note shall be
applied to the Obligations as provided in the Loan Agreement.


      Presentment, demand, protest and notice of presentment, demand, nonpayment
and protest are hereby waived by Borrowers.


      The  obligations of the entities  undersigned as Borrowers  shall be joint
and several in nature.


                                      -2-


      THIS TERM NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
If any provision of this Term Note or the  application  thereof shall be held to
be void or  unenforceable  by any court of competent  jurisdiction,  such defect
shall not affect the remainder of this Term Note,  which shall  continue in full
force and  effect.  Whenever  in this Term Note  reference  is made to Lender or
Borrowers, such reference shall be deemed to include, as applicable, a reference
to their  respective  successors  and assigns.  The provisions of this Term Note
shall be binding upon  Borrowers  and their  successors  and assigns,  and shall
inure to the benefit of Lender and its successors and assigns.


                                         MARINE GROWTH CANADA LTD.


                                         By
                                           ---------------------------------
                                         Print Name
                                                   -------------------------
                                         Its
                                            --------------------------------


                                         MARINE GROWTH CHARTER & FINANCE, INC.


                                         By
                                           ---------------------------------
                                         Print Name
                                                   -------------------------
                                         Its
                                            --------------------------------


                                      -3-