COMMODORE HOLDINGS LTD
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>0003.txt
<TEXT>

                                                                    EXHIBIT 10.2



                            ALMIRA ENTERPRISES, INC.


                                     - and -


                              NORDBANKEN AB (PUBL)





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









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


<PAGE>



                                INDEX OF CONTENTS
<TABLE>
<CAPTION>

Clause            Heading                                                                              Page No.


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

</TABLE>



<PAGE>




THIS SECOND NAVAL MORTGAGE is made the 21st day of June 2000 by ALMIRA
ENTERPRISES, INC. a company incorporated under the laws of Panama with its
registered office at c/o Galindo Arias & Lopez, Scotia Plaza, No 18 Avenida
Federico Boyd & Calle 51, Pisas 9, 10 & 11, Panama, Republic of Panama ("the
Owner") in favour of NORDBANKEN AB (PUBL) a company incorporated under the laws
of Sweden acting through its office at Ostra Hamngatan 16, SE-405 09 Gothenburg,
Sweden ("the Mortgagee" which expression shall include its successors and
permitted assigns).

WHEREAS:-

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

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

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



<PAGE>


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

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

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


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

1.       DEFINITIONS

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

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

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



<PAGE>

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

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

         "person"
         includes any body of persons;

         "Requisition Compensation"
         means all moneys or other compensation whatsoever payable by reason of
         the requisition for title or other compulsory acquisition of the Vessel
         (otherwise than by requisition for hire) or the capture, seizure,
         arrest, detention or confiscation of the Vessel by any government or by
         persons acting or purporting to act on behalf of any government;

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

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

         "Total Loss"
         means:-

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

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



<PAGE>


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

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

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

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

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

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

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

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



<PAGE>


2.       OWNER'S COVENANT TO PAY

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

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

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

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

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

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

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

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

<PAGE>


3.       MORTGAGE

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



<PAGE>


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

4.       OWNER'S COVENANTS AS TO INSURANCE

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

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

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



<PAGE>


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

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

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

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

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

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

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



<PAGE>


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

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

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

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



<PAGE>


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

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

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

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

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

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

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



<PAGE>


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

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

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

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

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

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

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



<PAGE>


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

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

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

5.       OWNER'S COVENANTS AS TO OPERATION & MAINTENANCE

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

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

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



<PAGE>


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

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

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



<PAGE>


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

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

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

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

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

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

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

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

<PAGE>



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

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

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

               (1)   on demise charter for any period;

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

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

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

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



<PAGE>


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

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

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

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

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

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

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



<PAGE>


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

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

6.       EXPENSES

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


<PAGE>



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

7.       PROTECTION AND MAINTENANCE OF SECURITY

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

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

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

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

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



<PAGE>


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

8.       EVENTS OF DEFAULT

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

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

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

9.       ENFORCEMENT OF RIGHTS

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

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

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

<PAGE>



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

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

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

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



<PAGE>


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

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

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



<PAGE>


10.      APPLICATION OF MONEYS

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

11.      NO WAIVER

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

12.      POWER OF DELEGATION

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

13.      POWER OF ATTORNEY



<PAGE>


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

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

14.      FURTHER ASSURANCE

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

15.      WAIVER OF RIGHTS AS SURETY

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

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

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



<PAGE>


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

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

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

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

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

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

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

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

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

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



<PAGE>


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

16.      AMOUNT SECURED BY MORTGAGE

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

17.      NOTICES

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

18.      GOVERNING LAW, SEVERABILITY, ETC.

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

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



<PAGE>


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

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

19.      MISCELLANEOUS

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

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

20.      RECORDING OF THIS MORTGAGE

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




<PAGE>


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

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



<PAGE>



                             ACCEPTANCE OF MORTGAGE

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

Dated the 21st day of June two thousand        .


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