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                                                                    EXHIBIT 10.1
                                                                  EXECUTION COPY


                               FACILITY AGREEMENT
                                      FOR A
                            U.S.$600,000,000 FACILITY
                                       TO
                            STENA INTERNATIONAL B.V.
                                   PROVIDED BY

                               JPMORGAN CHASE BANK
                          NORDEA BANK SVERIGE AB (PUBL)
                         SVENSKA HANDELSBANKEN AB (PUBL)
                                  HSBC BANK PLC
                   LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE
                THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
                               DEN NORSKE BANK ASA
                              SCOTIABANK EUROPE PLC
                     SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
                               ABN AMRO BANK N.V.
                                NEDSHIP BANK N.V.
                                 CITIBANK, N.A.
                           DEUTSCHE BANK AG IN HAMBURG

                                   ARRANGED BY
                                J. P. MORGAN PLC
                          NORDEA BANK SVERIGE AB (PUBL)
                         SVENSKA HANDELSBANKEN AB (PUBL)

                                      AGENT
                         SVENSKA HANDELSBANKEN AB (PUBL)

                                 SECURITY AGENT
                         SVENSKA HANDELSBANKEN AB (PUBL)

                              DOCUMENTATION AGENTS
                          NORDEA BANK SVERIGE AB (PUBL)
                         SVENSKA HANDELSBANKEN AB (PUBL)

                                  GUARANTEED BY
                                STENA AB (PUBL.)




                               STEPHENSON HARWOOD
                           ONE, ST. PAUL'S CHURCHYARD
                                 LONDON EC4M 8SH
                               TEL: 020 7329 4422
                               FAX: 020 7606 0822
                              REF: 1250/01-41-23903

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                                    CONTENTS


CLAUSE            CONTENTS                                                  PAGE

1        Purpose and Definitions...............................................1

2        The Commitments......................................................49

3        Advances.............................................................50

4        Issue of Bank Guarantees.............................................52

5        Reduction and Extension of Bank Guarantees...........................53

6        Payments under Bank Guarantees.......................................54

7        The Standby Facility.................................................56

8        Interest on Advances.................................................59

9        Repayment, Reduction and Cancellation................................62

10       Fees, Commission, Margin and Expenses................................76

11       Payments and Taxes; Accounts and Calculations........................80

12       Guarantee and Indemnity..............................................84

13       Representations and Warranties.......................................87

14       Undertakings.........................................................91

15       Ship and Linkspan Covenants : Insurance.............................111

16       Ship and Linkspan Covenants : Operation and Maintenance.............118

17       Covenants in respect of the Ports...................................123

18       Conditions..........................................................128

19       Default.............................................................129

20       Indemnities.........................................................133

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21       Unlawfulness and Increased Costs....................................134

22       Set-Off and Pro-Rata Payments.......................................138

23       Security............................................................140

24       Assignment, Transfer and Lending Office.............................148

25       Reference Banks, Co-Arrangers, Agent and Security Agent.............152

26       Notices and Other Matters...........................................163

27       Governing Law and Jurisdiction......................................166

Schedule 1...................................................................167
            The Banks and their Commitments..................................167

Schedule 2...................................................................169
            The Ships - Part A...............................................169
            The Ships - Part B...............................................171

Schedule 3...................................................................173
            Commercial Documents.............................................173

Schedule 4...................................................................177
            Prior Securities.................................................177

Schedule 5...................................................................181
            Existing Bank Guarantees.........................................181

Schedule 6...................................................................183
            Form of Drawdown Notice..........................................183

Schedule 7...................................................................185
            Form of Bank Guarantee Request...................................185

Schedule 8...................................................................187
            Conditions Precedent/Stena Tay Requirements......................187

Schedule 9...................................................................197
            Form of Transfer Certificate.....................................197

Schedule 10..................................................................203
            Specimen Charter Covenants and Loss Payable Clauses..............203

Schedule 11..................................................................205
            Form of Free Net Worth Compliance Certificate....................205

Schedule 12..................................................................207
            Form of Quiet Enjoyment Undertaking..............................207
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THIS AGREEMENT is dated 6 November 2002 and is made BETWEEN:-

(1)      STENA INTERNATIONAL B.V. as Borrower;

(2)      J. P. MORGAN PLC, NORDEA BANK SVERIGE AB (PUBL) and SVENSKA
         HANDELSBANKEN AB (PUBL) as Co-Arrangers (for whom Nordea Bank Sverige
         AB (publ) and Svenska Handelsbanken AB (publ) act as Documentation
         Agents);

(3)      the banks and financial institutions whose names and addresses are set
         out in Schedule 1 as Banks;

(4)      NORDEA BANK SVERIGE AB (PUBL) and JPMORGAN CHASE BANK as Issuing Banks;

(5)      SVENSKA HANDELSBANKEN AB (PUBL) as Standby Lender;

(6)      SVENSKA HANDELSBANKEN AB (PUBL) as Agent;

(7)      SVENSKA HANDELSBANKEN AB (PUBL) as Security Agent; and

(8)      STENA AB (PUBL.) as guarantor.

IT IS AGREED as follows:-

1        PURPOSE AND DEFINITIONS

1.1      PURPOSE

         This Agreement sets out the terms and conditions upon and subject to
         which the Banks and the Standby Lender agree, according to their
         several obligations, to make available to the Borrower a multipurpose
         corporate facility of up to $600,000,000 to be used for the purpose of
         enabling the Borrower:-

         (A)  to refinance certain existing indebtedness of the Stena
              International Group (including the SIBV $500m Facility);

         (B)  to provide finance for general corporate purposes of members of
              the Stena International Group; and

         (C)  to provide for the issuance of new guarantees and the maintenance
              of existing guarantees

         and to provide a $30,000,000 standby facility to the Borrower for use
         in connection with the business carried on by members of the Stena
         International Group.

1.2      DEFINITIONS

         In this Agreement, unless the context otherwise requires:-

         "ACCEPTABLE BANK GUARANTEE"
         means a Bank Guarantee which (save and to the extent otherwise agreed
         by the New Guarantee Provider and the Agent):-

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         (A)  is a guarantee, a standby letter of credit, an indemnity, a
              performance bond or other assurance in respect of the obligations
              to third parties of any:-

              (i)    of the Borrower or its Subsidiaries; or

              (ii)   any other member of the Stena AB Group for which Bank
                     Guarantee the Majority Banks consider the Security
                     Documents provide effective counter-security;

         (B)  states that no amount may be demanded from the New Guarantee
              Provider thereunder after a specified date (but without prejudice
              to any previous demand thereunder) which is not later than thirty
              (30) days before the Termination Date;

         (C)  is for a liability or Indebtedness in Dollars or any other freely
              convertible Eurocurrency;

         (D)  will have an Outstanding Guarantee Amount:-

              (i)    of not less than $500,000 (or the equivalent in any other
                     currency in which the relevant Bank Guarantee is to be
                     issued) (or such lower amount as may be agreed by the New
                     Guarantee Provider) upon issue of the Bank Guarantee; and

              (ii)   which remains at the same amount for the duration of the
                     Bank Guarantee or reduces after the date of its issue or
                     commences at an initial amount but increases by reference
                     to a rate of interest accruing at rates and at times stated
                     in the Bank Guarantee;

         (E)  unless otherwise agreed by the New Guarantee Provider, states the
              maximum amount of the liability of the New Guarantee Provider
              thereunder in respect of principal or capital amounts; and

         (F)  is otherwise in a form approved by the New Guarantee Provider
              (such approval not to be unreasonably withheld);

         "ADVANCE"
         means each borrowing of a proportion of the Commitments by the Borrower
         under Clause 3 or (as the context may require) the principal amount of
         such borrowing for the time being outstanding;

         "AFFILIATE"
         of any specified person means any other person directly or indirectly
         controlling or controlled by or under direct or indirect common control
         with any specified person and "AFFILIATES" of Stena AB or any of its
         Subsidiaries includes, without limitation, any Subsidiary of Stena AB
         (other than a Wholly Owned Subsidiary of Stena AB) and any Unrestricted
         Subsidiary so that neither Stena AB nor any Wholly Owned Subsidiary of
         Stena AB shall be deemed an "AFFILIATE" of Stena AB or any Wholly Owned
         Subsidiary of Stena AB;

         "AGENT"
         means Svenska Handelsbanken AB (publ) or such other person as may be
         appointed agent for the Banks, the Issuing Banks, the Co-Arrangers, the
         Standby Lender and the Security Agent pursuant to this Agreement;

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         "AGREED FORM CERTIFICATE"
         means the certificate dated of even date herewith executed by the
         Borrower and the Agent attaching the agreed forms of the various
         Security Documents and other relevant documents referred to in this
         Agreement;

         "APPROVED BROKERS"
         means, in relation to a Ship or Linkspan, such firm of insurance
         brokers (if any), appointed by the relevant Shipowner as may from time
         to time be approved in writing by the Agent for the purposes of this
         Agreement (such approval not to be unreasonably withheld or delayed);

         "APPROVED FLAG STATE"
         has the meaning attributed thereto in Clause 23.12(I);

         "APPROVED MANAGER"
         means, in relation to a Ship or Linkspan, Northern Marine Management
         Limited and/or any other member of the Stena AB Group or such other
         manager as may be approved by the Agent (such approval not to be
         unreasonably withheld or delayed) and includes any manager or
         sub-manager to whom Northern Marine Management Limited or other
         applicable member of the Stena AB Group or other manager so approved
         may delegate all or part of its management functions on terms, inter
         alia, that the manager so delegating such functions remains wholly
         responsible as principal to the relevant Shipowner or demise charterer
         in respect of the Ship or Linkspan for the purposes of the relevant
         management functions;

         "ASSET DISPOSITION"
         by any person means any transfer, conveyance, sale (including any
         instalment sale or similar arrangement but excluding any sale pursuant
         to a Sale and Leaseback Transaction), lease (other than pursuant to a
         charter or operating lease of a Vessel in the ordinary course of
         business) or other disposition by such person or any of its
         Subsidiaries (including a consolidation or merger or other sale of any
         such Subsidiary with, into or to another person in a transaction in
         which such Subsidiary ceases to be a Subsidiary, but excluding a
         disposition by a Subsidiary of such person to such person or a
         Subsidiary of such person or by such person to a Subsidiary of such
         person) (collectively, a "TRANSFER") of:-

         (A)    shares of Capital Stock (other than directors' qualifying shares
                and other than pledges permitted under Clause 14.6) or other
                ownership interests of a Subsidiary of such person;

         (B)    all or substantially all of the assets representing a division
                or line of business of such person or any of its Subsidiaries;

         (C)    a Vessel; or

         (D)    other assets or rights of such person or any of its Subsidiaries
                outside of the ordinary course of business

         but solely for the purposes of Clause 14.7, the term "ASSET
         DISPOSITION" shall not include:-

         (i)    any transfers of properties or assets which in the aggregate do
                not exceed $5,000,000 in any fiscal year of Stena AB;

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         (ii)   any transfer of any properties or assets to an Unrestricted
                Subsidiary permitted to be made under Clause 14.11 and Section
                10.22 (LIMITATION ON UNRESTRICTED SUBSIDIARIES) of each of the
                Indentures or any corresponding provision in documentation
                evidencing the terms of any Successor Financing;

         (iii)  the exchange of Capital Stock of a person for Capital Stock of a
                different class of such person ranking at least pari passu with
                the Capital Stock being so exchanged as to the payment of
                dividends or as to the distribution of assets upon any voluntary
                or involuntary liquidation, dissolution or winding up of such
                person, provided that the Fair Market Value of the shares
                received in such exchange is not less than that of the Capital
                Stock to be surrendered in such exchange; and

         (iv)   any sale or transfer pursuant to an arrangement with any lessor,
                lender, obligee or investor or to which such lessor, lender,
                obligee or investor is a party providing for the leasing or
                renting by such person of any property or asset of such person
                which has been or is being sold or transferred by such person
                two hundred and seventy (270) days or less after the acquisition
                thereof, to such lessor, lender, obligee or investor or to any
                person to whom funds have been or are to be advanced by such
                lessor, lender, obligee or investor on the security of such
                property or asset;

         "AUDITED STENA AB FINANCIAL STATEMENTS"
         means the consolidated audited annual financial statements of the Stena
         AB Group and any other entities required to be consolidated in such
         statements in accordance with any applicable laws;

         "AUDITED STENA INTERNATIONAL FINANCIAL STATEMENTS"
         means the consolidated audited annual financial statements of the Stena
         International Group and any other entities required to be consolidated
         in such statements in accordance with any applicable laws;

         "AVAILABILITY DATE"
         means the first date upon which the Agent, or its duly authorised
         representative, shall have received all the documents and evidence
         specified in Part 1 of Schedule 8 in form and substance satisfactory to
         the Agent and upon which the conditions referred to in Clause 18.2.
         shall have been fulfilled;

         "AVAILABILITY PERIOD"
         means the period from the Availability Date and ending on the
         Termination Date or the period ending on such earlier date (if any) (i)
         on which the Borrower cancels all of the Commitments under Clause 9.10
         or (ii) on which the Commitments of all the Banks are reduced to zero
         pursuant to Clauses 9.4, 9.7, 9.8, 19.2 or 21.1;

         "AVAILABLE COMMITMENT"
         means, in relation to a Bank, the amount of its Commitment less the
         amount of its Outstandings;

         "AVAILABLE STANDBY COMMITMENT"
         means, as at any date, the amount of the Standby Commitment less the
         amount of the Standby Outstandings as at such date;

                                       4
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         "AVERAGE LIFE"
         means as of the date of determination with respect to any Debt or other
         securities or like instruments, the quotient obtained by dividing (i)
         the sum of the products of the number of years from the date of
         determination to the dates of each successive scheduled principal
         payment of each such Debt, securities or instruments multiplied by the
         amount of such principal payment by (ii) the sum of all such principal
         payments;

         "BANK GUARANTEE"
         means any Existing Bank Guarantee issued by the Existing Guarantee
         Provider and any guarantee issued by the New Guarantee Provider
         pursuant to this Agreement;

         "BANK GUARANTEE REQUEST"
         means a notice substantially in the terms of Schedule 7;

         "BANKING DAY"
         means a day on which dealings in deposits in Dollars are carried on in
         the London Interbank Eurocurrency Market and (other than Saturday or
         Sunday) on which banks are open for business in London, Gothenburg and
         New York City (or any other relevant place of payment under Clause 11);

         "BANKS"
         means the banks and financial institutions listed in Schedule 1 and
         includes their successors in title and assignees and transferees (but,
         except for the purposes of Clause 10.9, excludes the Standby Lender);

         "BENEFICIARY"
         means any person in whose favour a Bank Guarantee has been issued;

         "BOARD OF DIRECTORS"
         means either the board of directors of Stena AB (or its relevant
         Subsidiary) or any duly authorised committee of that board;

         "BOARD RESOLUTION"
         means a copy of a resolution certified by Stena AB (or its relevant
         Subsidiary) to have been duly adopted by its Board of Directors and to
         be in full force and effect on the date of such certification, and
         delivered to the Agent;

         "BORROWER"
         means Stena International B.V. a company incorporated under the laws of
         The Netherlands acting through its branch office at Aegeristrasse 52,
         CH-6300 Zug, Switzerland;

         "CAPITALISED LEASE OBLIGATION"
         of any person means:-

         (A)    the obligation to pay rent or other payment amounts under a
                lease of (or other Debt arrangements conveying the right to use)
                real or personal property of such person which is, or is
                required to be, classified and accounted for as a capitalised
                lease or a liability on the face of a balance sheet of such
                person in accordance with Swedish GAAP; or

         (B)    the obligation to pay interest, principal, rent or other payment
                amounts under a financing arrangement pursuant to a Sale and
                Leaseback Transaction of real or

                                       5
<PAGE>

                personal property of such person which is, or is required to be,
                classified and accounted for as a "financing" or "financing
                obligation - sale leaseback" or other liability on the face of a
                balance sheet of such person in accordance with Swedish GAAP

         and the Stated Maturity of any such obligation or arrangement shall be
         the date of the last scheduled payment of rent or any other amount due
         under such lease or financing arrangement prior to the first date upon
         which such lease or financing arrangement may be terminated by the
         lessee or obligor without payment of a penalty;

         "CAPITAL STOCK"
         of any person means any and all shares, interests, participations or
         other equivalents (however designated) or corporate stock of such
         person;

         "CASH ASSETS"
         means cash and/or Cash Equivalents, except to the extent that such cash
         or Cash Equivalents are used to cash collateralise or otherwise secure
         any Capitalised Lease Obligation;

         "CASH COLLATERAL ACCOUNT"
         means each account in the name of the Borrower (including any
         sub-account thereof) in the books of the Agent designated as a Cash
         Collateral Account for the purposes of this Agreement opened or, as the
         case may be, to be opened pursuant to Clause 23;

         "CASH COLLATERAL ACCOUNT PLEDGE"
         means in respect of each Cash Collateral Account, the first priority
         Swedish law pledge of account to be executed over such account in
         favour of the Security Agent substantially in the form of Schedule 22
         to the Agreed Form Certificate (or in such other form as the Agent
         shall reasonably require if the relevant Cash Collateral Account is
         held outside Sweden);

         "CASH EQUIVALENTS"
         means:-

         (A)    any security issued directly or fully guaranteed or insured by
                the United States, the Kingdom of Sweden or any OECD government
                whose securities are readily marketable in London, Frankfurt,
                Paris or New York City, or any agency or instrumentality
                thereof;

         (B)    other readily marketable securities having a rating of at least
                A from Standard & Poor's Ratings Group or Moody's Investors
                Service, Inc.;

         (C)    any Eurodollar time deposit, overnight deposit, certificate of
                deposit or bankers' acceptance, issued by, or time deposit of, a
                commercial banking institution which has, on a combined basis,
                capital, surplus and undivided profits of not less than
                $250,000,000 and has a Moody's Bank Credit Service rating for
                short-term bank deposits of at least P-2 (or such similar
                equivalent rating by a nationally recognised statistical rating
                organisation as defined in Rule 436 under the Securities Act);

         (D)    repurchase obligations with a term of not more than ninety (90)
                days for underlying securities of the types described in
                paragraph (A) above entered into

                                       6
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                with any commercial banking institution meeting the
                qualifications specified in paragraph (C) above;

         (E)    short-term commercial paper issued by any person, having one of
                the top two investment ratings from either Standard & Poor's
                Ratings Group or Moody's Investors Service, Inc.;

         (F)    investments in money market funds substantially all of whose
                assets are comprised of securities of the types described in
                paragraph (A) through (E) above; and

         (G)    deposits which are unrestricted as to withdrawal with commercial
                banking institutions meeting the criteria set forth in paragraph
                (C) above;

         "CASUALTY AMOUNT"
         means $5,000,000 (or the equivalent in any other currency) unless the
         Agent on the direction of the Majority Banks shall have given notice to
         the Borrower that a Default shall have occurred and be continuing or
         that in its opinion there shall have been a material adverse change in
         the financial condition of the Stena AB Group which may impair the
         ability of the Borrower or any Security Party to comply with their
         obligations under any Security Document in which case the Casualty
         Amount shall be such amount, not however less than $2,000,000, as the
         Agent shall signify in its notice to the Borrower;

         "CHARTERER'S INSURANCE ASSIGNMENT"
         means:-

         (A)    in relation to a Mortgaged Ship (other than m.v. "Stena
                Germanica" as long as she remains owned by Scandlines subject to
                the Stena Germanica Mortgage) and in relation to a Mortgaged
                Linkspan, any assignment by a Stena Charterer which charters the
                relevant Ship or Linkspan under a demise or bareboat charter
                executed or (as the context may require) to be executed by such
                Stena Charterer in favour of the Security Agent pursuant to
                Clause 15.1 in substantially the form set out in Schedule 12 to
                the Agreed Form Certificate; and

         (B)    in relation to m.v. "Stena Germanica" (as long as she remains
                owned by Scandlines subject to the Stena Germanica Mortgage),
                the Stena Germanica Charterer's Insurance Assignment and any
                other Charterer's Insurance Assignment (as defined in the Stena
                Germanica Deed of Covenant) as may be executed from time to time
                in relation thereto;

         "CHARTERER'S SUBORDINATION UNDERTAKING"
         means:-

         (A)    in relation to a Mortgaged Ship (other than m.v. "Stena
                Germanica" as long as she remains owned by Scandlines subject to
                the Stena Germanica Mortgage) and in relation to a Mortgaged
                Linkspan, an undertaking by a Stena Charterer which charters the
                relevant Ship or Linkspan under a time charter or a demise or
                bareboat charter executed or (as the context may require) to be
                executed by such Stena Charterer pursuant to Clause 15.1 in
                substantially the form set out in Schedule 13 to the Agreed Form
                Certificate in favour of the Security Agent; and

         (B)    in relation to m.v. "Stena Germanica" (as long as she remains
                owned by Scandlines subject to the Stena Germanica Mortgage),
                the Stena Germanica

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                Charterer's Subordination Undertaking and any other Charterer's
                Subordination Undertaking (as defined in the Stena Germanica
                Deed of Covenant) as may be executed from time to time in
                relation thereto;

         "CLASSIFICATION"
         means, in relation to each Ship, the classification set forth against
         the name of such Ship in Schedule 2 with its Classification Society or
         other highest classification available for Vessels of the same age and
         type as the Ship with its Classification Society or such other
         classification as the Agent shall, at the request of the Borrower, have
         agreed in writing shall be treated as the Classification of such Ship
         for the purposes of this Agreement (such agreement not to be
         unreasonably withheld or delayed);

         "CLASSIFICATION SOCIETY"
         means, in relation to any Ship, the classification society set forth
         against the name of such Ship in Schedule 2 or Lloyds Register of
         Shipping or Det norske Veritas or Germanischer Lloyd or Bureau Veritas
         or American Bureau of Shipping or such other classification society
         which the Agent shall, at the request of the Borrower, have agreed in
         writing shall be treated as its Classification Society for the purposes
         of this Agreement (such agreement not to be unreasonably withheld or
         delayed);

         "CO-ARRANGERS"
         means J. P. Morgan plc, Nordea Bank Sverige AB (publ) and Svenska
         Handelsbanken AB (publ) and includes their respective successors in
         title and assignees (and all references to the Co-Arrangers shall
         include Nordea Bank Sverige AB (publ) and Svenska Handelsbanken AB
         (publ) in their capacities as Documentation Agents);

         "COMMERCIAL DOCUMENTS"
         means each bareboat charter in relation to a Mortgaged Ship to which a
         member of the Stena AB Group is a party from time to time as bareboat
         charterer (being, at the Execution Date, those bareboat charters whose
         details are set out in Schedule 3) and each Sale Agreement entered into
         from time to time in relation to a Ship;

         "COMMITMENT"
         means, in relation to a Bank, the amount set out opposite its name in
         Schedule 1 or, as the case may be, in any relevant Transfer
         Certificate, as reduced by any relevant term of this Agreement (but,
         except for the purposes of Clause 10.9, excludes the Standby
         Commitment);

         "COMMON STOCK"
         of any person means Capital Stock of such person that does not rank
         prior, as to the payment of dividends or as to the distribution of
         assets upon any voluntary or involuntary liquidation, dissolution or
         winding up of such person, to shares of Capital Stock of any other
         class of such person;

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

         "CONSOLIDATED CASH FLOW"
         of any person means for any period:-

                                       8
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         (A)    (i)    the Consolidated Operating Income for such period
                       increased by the sum of (without duplication):-

                       (x)    dividends or other distributions actually paid in
                              cash or Cash Equivalents to such person by any
                              other person who is not a Subsidiary of such
                              person but only to the extent that such dividends
                              or other distributions are paid in respect of
                              securities classified under "investments in
                              affiliated companies" on the balance sheet of such
                              person; plus

                       (y)    consolidated interest income earned by such person
                              during such period; plus

                       (z)    to the extent deducted from consolidated revenues
                              in determining Consolidated Operating Income for
                              such period and without duplication, consolidated
                              depreciation and amortisation expense included in
                              the income statement of such person for such
                              period and other consolidated non-cash charges
                              included in the income statement of such person
                              for such period

                minus

                (ii)   the aggregate gain on the disposition of a Vessel or
                       Vessels included in Consolidated Operating Income for
                       such period

                plus

         (B)    the aggregate gain on the disposition of a Vessel or Vessels
                included in Consolidated Operating Income for such period, but
                only to the extent such amount does not exceed twenty five per
                cent (25%) of the amount calculated pursuant to paragraph (A) of
                this definition;

         "CONSOLIDATED INTEREST COVERAGE RATIO"
         of any person means for any period the ratio of:-

         (A)    Consolidated Cash Flow of such person for such period

                to

         (B)    the sum of:-

                (i)    Consolidated Interest Expense of such person for such
                       period, plus

                (ii)   the annual interest expense (including the amortisation
                       of debt discount) with respect to any Debt proposed to be
                       Incurred by such person or its Subsidiaries, plus

                (iii)  the annual interest expense (including the amortisation
                       of debt discount) with respect to any other Debt Incurred
                       by such person or its Subsidiaries since the end of such
                       period to the extent not included in paragraph (B)(i)
                       minus

                (iv)   Consolidated Interest Expense of such person to the
                       extent included in paragraph (B)(i) with respect to any
                       Debt that will no longer be

                                       9
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                       outstanding as a result of the Incurrence of the Debt
                       proposed to be Incurred;

                provided that:-

                (X)    in making such computation, the Consolidated Interest
                       Expense of such person attributable to interest on any
                       Debt bearing a floating interest rate shall be computed
                       on a pro forma basis as if the rate in effect on the date
                       of computation had been the applicable rate for the
                       entire period; and

                (Y)    in the event such person or its Subsidiaries has made
                       Asset Dispositions or acquisitions of assets not in the
                       ordinary course of business or of any Vessel (including
                       acquisitions of other persons or Vessels by merger,
                       consolidation or purchase of Capital Stock) during or
                       after such period, such computation shall be made on a
                       pro forma basis as if the Asset Dispositions or
                       acquisitions had taken place on the first day of such
                       period

                and in the case of the Post-Delivery Financing of a Vessel or
                Vessels (or the financing of the acquisition of a Single-Purpose
                Vessel-Owning Subsidiary) by Stena AB or any of its
                Subsidiaries, the computation of Consolidated Cash Flow for
                purposes of calculating the Consolidated Interest Coverage Ratio
                shall be increased by:-

                (a)    the pro forma annual earnings (losses) for such period
                       pursuant to any binding charter, lease or like
                       arrangement which will be applicable to any such Vessel
                       (including a Vessel owned by any such Single-Purpose
                       Vessel-Owning Subsidiary) for at least one year after the
                       date of delivery of such Vessel to Stena AB or any of its
                       Subsidiaries; or

                (b)    with respect to any such Vessel not subject to such an
                       arrangement, the earnings (losses) for such period of the
                       most comparable Vessel of Stena AB or any of its
                       Subsidiaries (as determined in the reasonable judgment of
                       the Board of Directors of Stena AB), or, if Stena AB or
                       any of its Subsidiaries do not have a comparable Vessel,
                       based on industry average earnings for comparable Vessels
                       (as determined in the reasonable judgement of the Board
                       of Directors of Stena AB) during such period;

         "CONSOLIDATED INTEREST EXPENSE"
         for any person means for any period the consolidated interest expense
         included in the consolidated income statement (without deduction of
         interest income) of such person for such period calculated on a
         consolidated basis in accordance with Swedish GAAP, including, without
         limitation or duplication (or, to the extent not so included, with the
         addition of):-

         (A)    the amortisation of Debt discounts;

         (B)    any commissions, discounts and other fees and charges with
                respect to letters of credit, bankers' acceptances, payment
                guarantees or similar facilities;

         (C)    fees with respect to interest rate swap or similar agreements or
                foreign currency hedge, exchange or similar agreements;

         (D)    Preferred Stock dividends declared and payable in cash;

                                       10
<PAGE>

         (E)    the interest portion of Capitalised Lease Obligations and other
                deferred payment obligations;

         (F)    interest actually paid in respect of any guarantee of Debt or
                other obligation of any person (other than a consolidated
                Subsidiary of such person); and

         (G)    all non-cash interest payments;

         "CONSOLIDATED NET INCOME"
         of any person means for any period the consolidated net income (or
         loss) of such person for such period determined on a consolidated basis
         in accordance with Swedish GAAP, adjusted to the extent included in
         such consolidated net income by excluding (without duplication):-

         (A)    the net income (or loss) of any person acquired by such person
                or a Subsidiary of such person in a pooling-of-interests
                transaction for any period prior to the date of such
                transaction;

         (B)    the portion of net income (or loss) of any Consolidated
                Subsidiary allocable to minority interests;

         (C)    the net income (but not net loss) of any Subsidiary of such
                person which is subject to restrictions which prevent the
                payment of dividends or the making of distributions to such
                person to the extent of such restrictions;

         (D)    the net income (or loss) of any person that is not a Subsidiary
                of such person except to the extent of the amount of dividends
                or other distributions actually paid to such person by such
                other person during such period;

         (E)    gains or losses on Asset Dispositions by such person or its
                Subsidiaries provided that gains or losses on the disposition of
                a Vessel or Vessels shall be included:-

                (i)    in the case of a sale for cash, Cash Equivalents and/or
                       the assumption of Debt in accordance with paragraph
                       (ii)(z) of Clause 14.7(A), to the full extent of such
                       gain or loss; and

                (ii)   in the case of a sale pursuant to a deferred payment
                       obligation (whether by way of a promissory note or
                       instalment receivable or otherwise), only to the extent
                       of the portion of such gain or loss allocable to such
                       period (based on the life of such deferred payment
                       obligation) and (with respect to gains only) only to the
                       extent payments in respect of such deferred payment
                       obligation are actually received by such person during
                       such period;

         (F)    the amount by which the aggregate gain on the disposition of a
                Vessel or Vessels exceeds the amounts calculated pursuant to
                paragraph (B) of the definition of "Consolidated Cash Flow" for
                such period; and

         (G)    all extraordinary gains and extraordinary losses;

         "CONSOLIDATED OPERATING INCOME"
         of any person means for any period the income from operations of such
         person for such period determined on a consolidated basis in accordance
         with Swedish GAAP, less gains

                                       11
<PAGE>

         on the disposition of a Vessel or Vessels pursuant to a deferred
         payment obligation (whether by way of a promissory note or instalment
         receivable or otherwise), plus the portion of such gain allocable to
         such period (based on the life of such deferred payment obligation) to
         the extent payments in respect of such deferred payment obligation are
         actually received by such person during such period;

         "CONSOLIDATED TANGIBLE ASSETS"
         of any person means the sum of the Tangible Assets of such person after
         eliminating intercompany items, determined on a consolidated basis in
         accordance with Swedish GAAP, including appropriate deductions for any
         minority interest in Tangible Assets of such person's Subsidiaries;

         "CONSOLIDATION" or "CONSOLIDATION"
         means, with respect to any person, the consolidation of the accounts of
         such person and each of its Subsidiaries if and to the extent the
         accounts of such person and each of its Subsidiaries would normally be
         consolidated with those of such person, all in accordance with Swedish
         GAAP (in the case of Stena AB) or Dutch GAAP (in the case of the
         Borrower) and the terms "CONSOLIDATED" and "CONSOLIDATED" shall be
         construed accordingly provided that, in the computation of the
         Consolidated Net Income, Consolidated Interest Coverage Ratio,
         Consolidated Cash Flow, Consolidated Interest Expense, Consolidated
         Operating Income, Consolidated Tangible Assets and Tangible Assets of
         Stena AB or any other person, the accounts of any Unrestricted
         Subsidiary of Stena AB or such other person shall not be included in
         any such consolidation even if the inclusion of such accounts would be
         required by Swedish GAAP as in effect at 1 October 1997 and the
         accounts of no other person shall be included in such consolidation if
         not required to be so consolidated by Swedish GAAP as in effect on 1
         October 1997;

         "CONSTRUCTION FINANCING"
         means Debt Incurred by Stena AB or any Subsidiary of Stena AB to
         finance any progress or other similar payments required prior to the
         delivery of the subject Vessel or Vessels under any Vessel Construction
         Contract;

         "CONTRIBUTION"
         means, in relation to a Bank, the principal amount of the Advances
         owing to such Bank at any relevant time;

         "CONTROL"
         when used with respect to any person means the power to direct the
         management and policies of such person, directly or indirectly, whether
         through the ownership of voting securities, by contract or otherwise,
         and the terms "CONTROLLING" and "CONTROLLED" shall be construed
         accordingly;

         "CREDIT TERMS"
         means, in relation to an Asset Disposition, terms whereby the whole or
         part of the consideration for the Asset Disposition is to be paid or
         provided after the date on which the ownership or possession of the
         relevant asset is transferred to a person which is not a Subsidiary of
         Stena AB;

         "DEBT"
         means (without duplication), with respect to any person, whether
         recourse is to all or a portion of the assets of such person and
         whether or not contingent:-

         (A)    every obligation of such person for money borrowed;

                                       12
<PAGE>

         (B)    every obligation of such person evidenced by bonds, debentures,
                notes or other similar instruments, including obligations
                Incurred in connection with the acquisition of property, assets
                or businesses;

         (C)    every reimbursement obligation of such person with respect to
                letters of credit, bankers' acceptances, payment guarantees or
                similar facilities issued for the account of such person, other
                than bonds, letters of credit, payment guarantees or other
                similar obligations required by governmental or regulatory
                agencies in connection with Vessels owned by or businesses
                conducted by Stena AB or any of its Subsidiaries;

         (D)    every obligation of such person issued or assumed as the
                deferred purchase price of property or services (but excluding
                trade accounts payable or accrued liabilities arising in the
                ordinary course of business which are not overdue or which are
                not being contested in good faith);

         (E)    the maximum fixed redemption or repurchase price of Redeemable
                Stock of such persons at the time of determination;

         (F)    every Capitalised Lease Obligation of such person;

         (G)    every net obligation under interest rate swap, foreign currency
                hedge, exchange or similar agreements of such person; and

         (H)    every obligation of the type referred to in paragraphs (A) to
                (G) above of another person and all dividends of another person
                the payment of which, in either case, such person has guaranteed
                or is responsible or liable, directly or indirectly, as obligor,
                guarantor or otherwise,

                provided that:-

                (i)    guarantees made by any person shall not be deemed "Debt"
                       to the extent that (a) the Debt so guaranteed would be
                       classified and accounted for as Debt on the consolidated
                       balance sheet of such person or (b) both such person and
                       the person whose obligation is being guaranteed are
                       Subsidiaries of Stena AB; and

                (ii)   payment obligations of a person pursuant to a charter or
                       operating lease which does not constitute a Capitalised
                       Lease Obligation shall not be deemed "Debt";

                (iii)  reimbursement obligations of any person with respect to
                       facilities in respect of letters of credit, bankers'
                       acceptances or payment guarantees issued for the account
                       of such person, or obligations of such person in respect
                       of loan facilities the proceeds of which are used as cash
                       collateral, shall not be deemed "Debt" to the extent that
                       any such facility (or the proceeds thereof) is used to
                       fully and irrevocably secure, guarantee or defease the
                       payment of Debt of such person or any of its Subsidiaries

                       (including, without limitation, Debt under a Capitalised
                       Lease Obligation) which is Incurred in connection with
                       the financing of a Vessel or group of Vessels and which
                       is otherwise permitted to be Incurred under this
                       Agreement;

                                       13
<PAGE>

         "DEED OF COVENANT"
         means:-

         (A)    in relation to a Designated Ship (other than m.v. "Stena
                Germanica" as long as she remains owned by Scandlines subject to
                the Stena Germanica Mortgage), the deed of covenant collateral
                to the Ship Mortgage over that Ship (or, in the case of a
                Linkspan, the Linkspan Mortgage) and entered or (as the context
                may require) to be entered into between the relevant Shipowner
                and the Security Agent in the form set out in Schedule 7 to the
                Agreed Form Certificate (in relation to a Mortgaged Ship or
                Mortgaged Linkspan which at the time of execution is subject to
                a Ship Mortgage or Linkspan Mortgage ranking with first
                priority) or in the form set out in Schedule 8 to the Agreed
                Form Certificate (in relation to a Mortgaged Ship or Mortgaged
                Linkspan which at the time of execution is subject to a Ship
                Mortgage or Linkspan Mortgage ranking with second priority) or
                in relation to m.v. "Stena Carisma" and her related Linkspans,
                in the form set out in Schedule 9 to the Agreed Form
                Certificate; and

         (B)    in relation to m.v. "Stena Germanica" (as long as she remains
                owned by Scandlines subject to the Stena Germanica Mortgage),
                the Stena Germanica Deed of Covenant;

         and "DEEDS OF COVENANT" means all of such deeds of covenant;

         "DEFAULT"
         means any Event of Default or any event or circumstance which with the
         giving of notice or lapse of time or both would constitute an Event of
         Default;

         "DESIGNATED SHIP"
         means each Mortgaged Ship or Mortgaged Linkspan as may from time to
         time be registered under British or Swedish or Bahamas flag or any flag
         of any other jurisdiction which requires the registration of a ship
         mortgage by means of a statutory form and where the Agent determines
         that a separate Deed of Covenant is required to protect the interest in
         the Mortgaged Ship or Mortgaged Linkspan (as the case may be) of the
         Security Agent;

         "DISPOSAL REDUCTION AMOUNT"
         has the meaning ascribed to it in Clause 9.4;

         "DISPOSAL REDUCTION DATE"
         means:-

         (A)    in the case of a Total Loss of a Mortgaged Ship, the date which
                is the earlier of:-

                (i)    the date one hundred and eighty (180) days after such
                       Ship became a Total Loss or such later date as may be
                       agreed by the Agent on the direction of the Majority
                       Banks from time to time if they are satisfied that the
                       relevant Ship was insured at the time of the loss and
                       that the proceeds of the Insurances will be received and
                       applied in accordance with the Security Documents and, if
                       relevant, the relevant bareboat charter or any Sale
                       Agreement relating thereto within such further period as
                       may be acceptable to the Majority Banks; and

                                       14
<PAGE>

                (ii)   the date upon which insurance proceeds or Requisition
                       Compensation in respect of such Total Loss are received
                       by the Security Agent, the Shipowner or the Stena
                       Charterer in respect of such Ship or a charterer of such
                       Ship by demise which is not a Stena Charterer pursuant to
                       the relevant Security Documents or relevant bareboat
                       charter or relevant Sale Agreement (as the case may be)
                       in relation to the relevant Ship;

         (B)    in the case of a Total Loss of a Transferred Ship sold on Credit
                Terms, the date on which the Total Loss insurance proceeds are
                received by the seller of the relevant Ship or the Security
                Agent under the relevant Sale Agreement or, if earlier, the date
                on which the owner of the relevant Transferred Ship repays in
                full to the Shipowner the deferred consideration for the
                relevant Ship;

         (C)    in the case of a sale of a Mortgaged Ship or any share therein,
                and except where the sale is effected on Credit Terms, the date
                on which the sale of such Ship or share is completed;

         (D)    in the case of any Transferred Ship which is transferred on
                terms whereby the relevant Shipowner transfers title to the Ship
                whilst any part of the deferred consideration therefore remains
                outstanding (other than in the case of a Total Loss), each of
                the following:-

                (i)    each date falling at six (6) monthly intervals from the
                       date of completion of the transfer of title until the
                       deferred purchase price of the relevant Ship has been
                       paid in full;

                (ii)   the date of the final payment of the deferred purchase
                       price;

                (iii)  in the case of an enforcement of security given for the
                       purchaser's obligations by way of sale of the Ship, the
                       date or dates on which consideration for the sale of the
                       Ship is paid to the Shipowner or the Security Agent; and

                (iv)   if any such Ship is sold by the buyer thereof before the
                       deferred consideration payable to the Shipowner has been
                       paid in full, the date on which the Shipowner receives
                       payment of the balance of the deferred consideration
                       following such sale;

         (E)    in the case of a Transferred Ship which is disposed of on terms
                whereby the relevant Shipowner retains title to the Ship until
                the full amount of the deferred consideration has been paid
                (other than in the case of a Total Loss), each of the
                following:-

                (i)    each date falling at six (6) monthly intervals from the
                       date of completion of the disposal until the deferred
                       consideration for the acquisition of the Ship has been
                       settled in full; and

                (ii)   the date of such final settlement;

                (iii)  in case of an enforcement of security for the purchaser's
                       obligations by way of sale of the Ship, the date or dates
                       on which the consideration for the sale of the Ship is
                       paid to the Shipowner or the Security Agent;

                                       15
<PAGE>

                (iv)   if the purchaser or lessee of the Ship defaults under the
                       sale or hire agreement relating to the Ship and the owner
                       thereof withdraws the Ship from such purchaser or lessee
                       and the agreement is validly terminated by the owner or
                       the agreement is terminated by agreement between the
                       parties thereto and the Ship returned to the owner's
                       possession, each date, prior to that on which such Ship
                       again falls to be treated as a Mortgaged Ship for the
                       purposes of this Agreement following repossession by the
                       relevant owner, on which the owner receives any amount by
                       way of damages or payment for the compromise of any legal
                       action relating to the agreement or agreed compensation
                       for termination of the agreement;

         (F)    in the case of a sale of a Mortgaged Port or any part thereof
                (other than the sale of any part of a Mortgaged Port for a
                consideration of less than $25,000 or the equivalent thereof in
                any other currency) the date on which the sale of such Mortgaged
                Port or part thereof is completed;

         (G)    in the case of a sale of the shares in the capital of any Port
                Owner, the date on which the sale of such shares is completed;

         "DISQUALIFIED STOCK"
         of any person means any Capital Stock of such person which, by its
         terms (or by the terms of any security into which it is convertible or
         for which it is exchangeable), or upon the happening of any event:-

         (A)    matures or is mandatorily redeemable, pursuant to a sinking fund
                obligation or otherwise; or

         (B)    is convertible or exchangeable for Debt or Disqualified Stock;
                or

         (C)    is redeemable at the option of Stena AB, any Subsidiary of Stena
                AB or the holder thereof, in whole or in part, on or prior to
                the Termination Date;

         "DOCUMENTATION AGENTS"
         means Nordea Bank Sverige AB (publ) and Svenska Handelsbanken AB (publ)
         in their capacities as Co-Arrangers responsible for the negotiation and
         production of this Agreement and the other Security Documents;

         "DOLLARS" and "$"
         mean the lawful currency of the United States of America and in respect
         of all payments to be made under any of the Security Documents mean
         funds which are for same day settlement in the New York Clearing House
         Interbank Payments System (or such other U.S. dollar funds as may at
         the relevant time be customary for the settlement of international
         banking transactions denominated in U.S. dollars);

         "DRAWDOWN NOTICE"
         means a notice substantially in the terms of Schedule 6;

         "DUTCH GAAP"
         means generally accepted accounting principles in the Kingdom of the
         Netherlands, consistently applied;

                                       16
<PAGE>

         "EARNINGS"
         of a person means, in relation to any Ship, all earnings whatsoever due
         or to become due to such person including, without limitation, all
         moneys receivable by such person and arising, in relation to such Ship,
         out of its hire, compensation for requisition for hire, remuneration
         for salvage and towage services, demurrage and detention moneys,
         damages for breach of any charterparty or other contract for employment
         or amounts payable in consideration of the termination or variation of
         any such charterparty or contract;

         "EVENT OF DEFAULT"
         means any of the events or circumstances described in Clause 19.1;

         "EXECUTION DATE"
         means the date of execution of this Agreement by the parties hereto;

         "EXISTING BANK GUARANTEES"
         means those bank guarantees listed in Schedule 5 which have been issued
         by the Existing Guarantee Provider as "Issuing Bank" under the SIBV
         $500m Facility Agreement and which, with effect from the Availability
         Date, are to be treated as Bank Guarantees issued by the Existing
         Guarantee Provider under this Agreement;

         "EXISTING DEBT"
         of any person means Debt incurred prior to the date of this Agreement
         which remains outstanding and shall include, without limitation, the
         aggregate amount of Debt available to be borrowed under committed
         credit or lease facilities existing on the date of this Agreement
         less:-

         (A)    principal payments actually made by or on behalf of such person
                on any term Debt or lease facility under any agreement governing
                such Existing Debt (other than principal payments made in
                connection with or pursuant to a refinancing of such Existing
                Debt agreement); and

         (B)    any amounts by which any revolving credit facility commitment
                under any Existing Debt agreement is permanently reduced (so
                long as and to the extent that any required payments in
                connection therewith are actually made);

         "EXISTING GUARANTEE PROVIDER"
         means JPMorgan Chase Bank acting through its office at 125 London Wall,
         London EC2Y 5AJ;

         "EXPIRY DATE"
         means, in relation to any Bank Guarantee, the date (if any) upon which
         it is provided by such Bank Guarantee that the relevant Issuing Bank
         shall be under no further liability under such Bank Guarantee (but
         without prejudice to any demand made thereunder by the relevant
         Beneficiary on or before such date) or the date to which the validity
         of any such Bank Guarantee (other than an Existing Bank Guarantee) is
         extended pursuant to Clause 5;

         "FAIR MARKET VALUE"
         means, with respect to any asset or property, the sale value that would
         be obtained in an arm's-length transaction between an informed and
         willing seller under no compulsion to sell and an informed and willing
         buyer under no compulsion to buy;

                                       17
<PAGE>

         "FLAG STATE"
         means, in relation to any Ship or Linkspan, such state or territory as
         the Banks may approve pursuant to Clause 23.12, at the request of the
         Borrower, as being the "Flag State" of such Ship or Linkspan for the
         purposes of the Security Documents;

         "FREE NET WORTH"
         has the meaning ascribed to it in Clause 14.21(C);

         "FREE NET WORTH COMPLIANCE CERTIFICATE"
         means the Officer's Certificate to be delivered by Stena AB pursuant to
         Clause 14.2(F);

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

         "GUARANTEE"
         by any person means any obligation, contingent or otherwise, of such
         person guaranteeing any Debt of any other person (the "PRIMARY
         OBLIGOR") in any manner, whether directly or indirectly, and including,
         without limitation, any obligation of such person:-

         (A)    to purchase or pay (or advance or supply funds for the purchase
                or payment of) such Debt or to purchase (or to advance or supply
                funds for the purchase of) any security for the payment of such
                Debt;

         (B)    to purchase property, securities or services for the purpose of
                assuring the holder of such Debt of the payment of such Debt; or

         (C)    to maintain working capital, equity capital or other financial
                statement condition or liquidity of the primary obligor so as to
                enable the primary obligor to pay such Debt

         (and "GUARANTEED", "GUARANTEEING" and "GUARANTOR" shall be construed
         accordingly provided that the guarantee by any person shall not include
         endorsements by such person for collection or deposit, in either case,
         in the ordinary course of business);

         "HOLYHEAD CHARGE"
         means the English law second fixed legal charge in respect of Holyhead
         Port to be executed and delivered by Stena Line Ports in favour of the
         Security Agent in substantially the form set out in Schedule 20 to the
         Agreed Form Certificate;

         "HOLYHEAD PORT"
         means all of the freehold and leasehold property belonging to Stena
         Line Ports at the port of Holyhead, Isle of Anglesey, Gwynedd as is
         more particularly described in the Holyhead Charge;

         "INCUR"
         means, with respect to any Debt or other obligation of any person, to
         create, issue, incur (by conversion, exchange or otherwise), assume,
         guarantee or otherwise become liable in respect of such Debt or other
         obligation or the recording, as required pursuant to Swedish GAAP or
         otherwise, of any such Debt or other obligation on the balance sheet of
         such

                                       18
<PAGE>

         person (and "INCURRENCE", "INCURRED", "INCURRABLE" and "INCURRING"
         shall be construed accordingly) provided that a change in Swedish GAAP
         that results in an obligation of such person that exists at such time
         becoming Debt shall not be deemed an Incurrence of such Debt and
         provided that:-

         (A)    Debt of Stena AB or any Subsidiary of Stena AB in respect of the
                Post-Delivery Financing of Vessels shall be deemed to have been
                "Incurred" in the full amount of such Post-Delivery Financing
                only on the date Stena AB (or such Subsidiary) enters into a
                binding credit or lease commitment in good faith with a lender
                (or group of lenders) or lessor with respect to such financing;

         (B)    no Debt shall be deemed to have been "Incurred" solely by reason
                of Stena AB or any Subsidiary of Stena AB entering into a Vessel
                Construction Contract;

         (C)    no Debt shall be deemed to have been "Incurred" solely by reason
                of the transfer (including, without limitation, by way of
                novation or assignment and assumption) of Debt secured by a
                Vessel from a Subsidiary of Stena AB to another Subsidiary of
                Stena AB in connection with the transfer of such Vessel from the
                former to the latter (including, without limitation, a transfer
                effected for the purpose of reflagging such Vessel) provided
                that such transfer is permitted pursuant to the provisions of
                paragraph (H) of the definition of "Permitted Liens";

         "INDEBTEDNESS"
         means any obligation for the payment or repayment of money, whether as
         principal or as surety and whether present or future, actual or
         contingent;

         "2005 INDENTURE"
         means the indenture dated as of 20 December 1995 made between Stena AB
         and JPMorgan Chase Bank (then called Chemical Bank) as trustee in
         relation to the issue of the 2005 Notes as referred to in the 2005
         Prospectus;

         "2007 INDENTURE"
         means the indenture dated as of 1 October 1997 made between Stena AB
         and JPMorgan Chase Bank (then called The Chase Manhattan Bank) as
         trustee in relation to the issue of the 2007 Notes as referred to in
         the 2007 Prospectus;

         "INDENTURES"
         means the 2005 Indenture and the 2007 Indenture or, where the context
         so requires, means either of them;

         "INSURANCES"
         means, in relation to any Ship or Linkspan, all policies and contracts
         of insurance (which expression includes all entries of such Ship or
         Linkspan in a protection and indemnity or war risks association) which
         are from time to time during the Security Period in place or taken out
         or entered into by or for the benefit of the owner and/or any relevant
         charterer (or in the joint names of the owner and/or any relevant
         charterer or other person)(but not any insurances taken out for the
         sole benefit of a charterer which is not a member of the Stena AB
         Group) in respect of such Ship or Linkspan or otherwise howsoever in
         connection with such Ship or Linkspan and all benefits thereof
         (including claims of whatsoever nature and return of premiums);

                                       19
<PAGE>

         "INSURANCE ASSIGNMENT"
         means, in relation to each Owned Ship or Linkspan which is not a
         Designated Ship, the first priority assignment of all the right, title
         and interest of the relevant Shipowner in the Insurances and
         Requisition Compensation thereof executed or (as the context may
         require) to be executed in favour of the Security Agent in the form set
         out in Schedule 10 to the Agreed Form Certificate (in relation to an
         Owned Ship or Linkspan which at the time of execution is subject to a
         Ship Mortgage or Linkspan Mortgage ranking with first priority) or in
         substantially the form set out in Schedule 11 to the Agreed Form
         Certificate (in relation to an Owned Ship or Linkspan which at the time
         of execution is subject to a Ship Mortgage or Linkspan Mortgage ranking
         with second priority) and "INSURANCE ASSIGNMENTS" means all of such
         assignments;

         "INVESTMENT"
         by any person means any direct or indirect loan, advance or other
         extension of credit (including by way of guarantee or similar
         arrangement) or capital contribution to (by means of transfers of cash
         or other property to others or payments for property or services for
         the account or use of others, or otherwise), or purchase or acquisition
         of Capital Stock, bonds, notes, debentures or other securities or
         evidence of Debt issued by any other person (other than through the
         exchange or conversion of other securities of such other person
         pursuant to the terms of such other securities or pursuant to a bona
         fide plan of liquidation or reorganisation of such other person in
         satisfaction of trade payable obligations owed from such other person)
         save that notwithstanding anything to the contrary set forth above:-

         (A)    the receipt by Stena AB or any of its Subsidiaries of a
                promissory note or like evidence of indebtedness pursuant to an
                Asset Disposition otherwise permitted under Clause 14.7 (insofar
                as the receipt of such evidence of indebtedness is deemed to be
                a loan made by Stena AB or such Subsidiary) shall be deemed not
                to be an "Investment"; and

         (B)    one or more investments by Stena AB or any of its Subsidiaries
                in persons whose only assets are a Vessel and property directly
                related thereto shall be deemed not to be an "Investment";

         "ISM CODE"
         means the International Safety Management Code for the Safe Operation
         of Ships and for Pollution Prevention adopted by the International
         Maritime Organisation;

         "ISSUING BANK"
         means, in respect of the Existing Bank Guarantees, the Existing
         Guarantee Provider and, in respect of all other Bank Guarantees, the
         New Guarantee Provider;

         "LEGAL OPINIONS"
         means the legal opinions delivered or, as the case may be, to be
         delivered to the Agent pursuant to Clause 18.1;

         "LIBOR"
         means, in relation to a particular period, the rate per annum for
         deposits of Dollars for a period equivalent to such period at or about
         11.00 a.m. on the second London Banking Day before the first day of
         such period as displayed on Reuter page LIBOR 01 (British Bankers'
         Association Interest Settlement Rates) (or such other page as may
         replace such page LIBOR 01 on such system or on any other system of the
         information vendor for the time being designated by the British
         Bankers' Association to calculate the BBA Interest

                                       20
<PAGE>

         Settlement Rate (as defined in the British Bankers' Association's
         Recommended Terms and Conditions ("BBAIRS" terms) dated August, 1985)),
         provided that if on such date no such rate is so displayed, LIBOR for
         such period shall be the arithmetic mean (rounded upward if necessary
         to four decimal places) of the rates respectively quoted to the Agent
         by each of the Reference Banks at the request of the Agent as such
         Reference Bank's offered rate for deposits of Dollars in an amount
         approximately equal to the amount in relation to which LIBOR is to be
         determined for a period equivalent to such period to prime banks in the
         London Interbank Market at or about 11.00 a.m. on the second London
         Banking Day before the first day of such period;

         "LIEN"
         means, with respect to any property or assets, any mortgage or deed of
         trust, pledge, hypothecation, assignment, security deposit arrangement,
         security interest, lien, charge, easement (other than any easement not
         materially impairing usefulness or marketability), encumbrance,
         preference, priority or other security agreement or preferential
         arrangement (other than the subordination of inter-Subsidiary Debt to
         the extent required by a lender or lessor of Stena AB or any of its
         Subsidiaries) of any kind or nature whatsoever on or with respect to
         such property or assets (including, without limitation, any conditional
         sale or other title retention agreement having substantially the same
         economic effect as any of the foregoing);

         "LINKSPAN MORTGAGE"
         means:-

         (A)    in the case of the two Linkspans named "Linkspan I" and
                "Linkspan II" with call signs SFNH and SFNL respectively
                registered in the Swedish Register of Shipping, the second
                priority pledge of mortgage of such Linkspan to be executed by
                Stena Line Scandinavia in the form or substantially in the form
                set out in Schedule 6 to the Agreed Form Certificate together
                also with the deed of covenant collateral thereto to be executed
                by Stena Line Scandinavia in the form or substantially in the
                form set out in Schedule 9 to the Agreed Form Certificate;

         (B)    in the case of any other Linkspan over which a first priority
                mortgage is to be executed and, if appropriate, registered by
                the relevant Shipowner, a mortgage in form and substance
                acceptable to the Agent but in any event substantially similar
                to the mortgages and collateral deeds of covenant described in
                paragraph (A) above;

         "LINKSPANS"
         means:-

         (A)    the linkspan named "Linkspan I" having call sign SFNH registered
                in the Swedish Register of Shipping in the ownership of Stena
                Line Scandinavia, which linkspan is at the date of this
                Agreement located at Gothenburg and used in connection with the
                operation of m.v. "Stena Carisma";

         (B)    the linkspan named "Linkspan II" having call sign SFNL
                registered in the Swedish Register of Shipping in the ownership
                of Stena Line Scandinavia, which linkspan is at the date of this
                Agreement located at Frederikshavn and used in connection with
                the operation of m.v. "Stena Carisma"; and

         (C)    any other linkspan owned by a member of the Stena AB Group in
                relation to which a Linkspan Mortgage or other Lien may be
                granted to the Security Agent

                                       21
<PAGE>

                during the Security Period directly or indirectly as security
                for the obligations of the Borrower under this Agreement

         and "LINKSPAN" means any of them;

         "LONDON BANKING DAY"
         means a day on which dealings and deposits in Dollars are carried on in
         the London Interbank Eurocurrency Market and (other than Saturday or
         Sunday) a day on which banks are open for business in London;

         "LOSS PAYABLE CLAUSES"
         means the provisions regulating the manner of payment of sums
         receivable under the Insurances of an Owned Ship or a Linkspan which
         are to be incorporated in the relevant insurance documents, such Loss
         Payable Clauses to be in the forms set out in the Schedules to the Deed
         of Covenant and/or Insurance Assignment and/or Charterer's Insurance
         Assignment and/or Stena Germanica Assignment in relation to the
         relevant Ship or Linkspan, in the form set out in Schedule 10 or in
         such other forms as may from time to time be agreed in writing by the
         Agent;

         "MAJOR CASUALTY"
         means an incident or occurrence whereby a Mortgaged Ship sustains
         damage or is the subject of a claim in excess of the Casualty Amount;

         "MAJORITY BANKS"
         means Banks (including for this purpose the Standby Lender) the
         aggregate of whose Commitments and/or Standby Commitment exceed
         two-thirds (2/3rds) of the aggregate of (i) the total of the
         Commitments of all the Banks and (ii) the Standby Commitment;

         "MANAGER'S SUBORDINATION UNDERTAKINGS"
         means the undertakings in the form of Schedule 14 to the Agreed Form
         Certificate to be given by each Approved Manager which is a member of
         the Stena AB Group on or before the Availability Date or at the time
         such Approved Manager is appointed as manager of a Ship or Linkspan
         after such date;

         "MARGIN"
         means one per cent (1.00%) (subject to adjustment under Clause 10.9);

         "MATURITY DATE"
         in relation to an Advance means, subject to Clause 11.4, the last day
         of its Term;

         "MINOR CASUALTY"
         means an incident or occurrence whereby a Mortgaged Ship sustains
         damage or is the subject of a claim of the Casualty Amount or less;

         "MONTH"
         means a period beginning in one calendar month and ending in the next
         calendar month on the day numerically corresponding to the day of the
         calendar month on which it started, provided that (i) if the period
         started on the last Banking Day in a calendar month or if there is no
         such numerically corresponding day, it shall end on the last Banking
         Day in such next calendar month and (ii) if such numerically
         corresponding day is not a Banking Day, the period shall end on the
         next following Banking Day in the same calendar month but if there is
         no such Banking Day it shall end on the preceding Banking Day and
         "MONTHS" and "MONTHLY" shall be construed accordingly;

                                       22
<PAGE>

         "MORTGAGED LINKSPAN"
         means, at any relevant time, any Linkspan which is at such time subject
         to a Linkspan Mortgage;

         "MORTGAGED PORT"
         means, at any relevant time, any Port which is at such time subject to
         a Port Mortgage;

         "MORTGAGED SHIP"
         means, at any relevant time, any Owned Ship which is at such time
         subject to a Ship Mortgage and/or the Insurances and Requisition
         Compensation of which or sale proceeds or right to receive a rebate of
         rentals in respect whereof are subject to a Lien pursuant to the
         relevant Ship Mortgage and Deed of Covenant or any relevant Insurance
         Assignment or other Security Documents but not including a Transferred
         Ship (except that, for the purposes of Clauses 15 and 16, the term
         "MORTGAGED Ship" shall include any Transferred Ship where the ownership
         of such Transferred Ship is retained by the relevant Shipowner) and an
         Owned Ship shall for the purposes of this Agreement be deemed to be a
         Mortgaged Ship as from the date that the Lien in respect of that Ship
         or rights relating thereto shall have been executed and registered in
         accordance with this Agreement until whichever shall be the earlier of
         (i) the release of the Ship Mortgage in respect of such Ship or Total
         Loss of such Ship and (ii) the end of the Security Period;

         "NET AVAILABLE PROCEEDS"
         from any Asset Disposition or Sale and Leaseback Transaction by any
         person means cash or Cash Equivalents (including, when received,
         payments (including any related interest payments) in respect of
         deferred payment obligations pursuant to a promissory note or
         instalment receivable or otherwise) received (including by way of sale
         or discounting of a note, instalment receivable or other receivable,
         but excluding any other consideration received in the form of
         assumption by the acquirer of Debt or other obligations relating to
         such properties or assets or received in any other non-cash form)
         therefrom by such person net of:-

         (A)    all legal, title and recording tax expenses, commissions and
                other fees and expenses incurred and all federal, state, foreign
                and local taxes required to be accrued as a liability as a
                consequence of such Asset Disposition or Sale and Leaseback
                Transaction;

         (B)    all payments made by such person or its Subsidiaries on any Debt
                outstanding immediately prior to such Asset Disposition or Sale
                and Leaseback Transaction which is secured by such assets in
                accordance with the terms of any Lien upon or with respect to
                such assets or which must by the terms of such Lien, or in order
                to obtain a necessary consent to such Asset Disposition or by
                applicable law, be repaid out of the proceeds from such Asset
                Disposition or Sale and Leaseback Transaction or by applicable
                laws, be repaid out of the proceeds from such Asset Disposition
                or Sale and Leaseback Transaction; and

         (C)    all distributions and other payments required to be made to any
                person (other than Stena AB or any Subsidiary of Stena AB)
                owning a beneficial interest in the assets subject to such Asset
                Disposition or Sale and Leaseback Transaction;

         "NET CASH SALE PROCEEDS"
         means:-

         (A)    in relation to a Mortgaged Ship and (if relevant) its related
                Linkspans or share

                                       23
<PAGE>

                thereof which is sold (otherwise than on Credit Terms), the sale
                price of such Ship and (if relevant) Linkspans or share received
                by or on behalf of the relevant Shipowner (after deducting the
                relevant Shipowner's reasonable costs and out-of-pocket expenses
                incurred in connection with such sale including reasonable and
                proper costs of drydocking the relevant vessel and carrying out
                any repairs on the vessel for the purposes of complying with its
                obligations under the relevant sale agreement except insofar as
                the costs of such repairs are covered by insurance for the
                benefit of the relevant Shipowner);

         (B)    in relation to a Transferred Ship which is sold pursuant to a
                power conferred on the mortgagee or lessor thereof, or an
                obligation on the lessor thereof, following a default by the
                purchaser or lessee, the net sale proceeds of the Ship received
                by the mortgagee or lessor (after deducting the costs and
                out-of-pocket expenses incurred in connection with the sale)
                less any part thereof due to, or belonging to, or by reference
                to which a payment is to be made to, the purchaser or lessee (as
                the case may be); and

         (C)    in relation to a Mortgaged Port or any part thereof, the sale
                price thereof received by or on behalf of the relevant Port
                Owner (after deducting the relevant Port Owner's reasonable
                costs and out-of-pocket expenses incurred in connection with
                such sale);

         "NET TOTAL LOSS PROCEEDS"
         means:-

         (A)    in relation to a Mortgaged Ship which has become a Total Loss,
                the minimum amount for which such Ship was required to have been
                insured under the Security Documents less any applicable
                deductible, collection commissions and any other expenses
                incurred by the relevant Shipowner or Stena Charterer or third
                party demise charterer in recovering under the Insurances of the
                Ship in respect of such Total Loss and/or recovering any
                Requisition Compensation in respect thereof; and

         (B)    in relation to a Transferred Ship which has become a Total Loss,
                the amount which the seller or lessor of the Ship is
                contractually entitled as against the relevant purchaser or
                lessee (as the case may be) to receive, and has received, from
                the Insurances of the Ship less any part thereof due to, or
                belonging to, or by reference to which a payment is to be made
                to, the purchaser or lessee (as the case may be);

         "NEW GUARANTEE PROVIDER"
         means Nordea Bank Sverige AB (publ) acting through its office at Ostra
         Hamngatan 16, SE-405 09 Goteborg, Sweden;

         "NON-RECOURSE DEBT"
         means Debt or that portion of Debt of any person:-

         (A)    as to which neither Stena AB nor any of its Subsidiaries:-

                (i)    provides credit support (including any undertaking,
                       agreement or instrument which would constitute Debt); or

                                       24
<PAGE>

                (ii)   is directly or indirectly liable (whether pursuant to a
                       guarantee or otherwise) for such Debt; and

         (B)    no default with respect to such Debt (including any rights which
                the holders thereof may have to take enforcement action against
                such an Unrestricted Subsidiary) would permit (upon notice,
                lapse of time or both) any holder of any other Debt of Stena AB
                or any Subsidiary of Stena AB to declare a default on such other
                Debt or cause the payment thereof to be accelerated or payable
                prior to its Stated Maturity;

         "2005 NOTEHOLDERS"
         means the holders from time to time of the 2005 Notes;

         "2007 NOTEHOLDERS"
         means the holders from time to time of the 2007 Notes;

         "2005 NOTES"
         means the Senior Notes due 2005 issued by Stena AB in an amount of
         $175,000,000 pursuant to the 2005 Indenture;

         "2007 NOTES"
         means the Senior Notes due 2007 issued by Stena AB in an amount of
         $175,000,000 pursuant to the 2007 Indenture;

         "NOTES"
         means the 2005 Notes and the 2007 Notes or, where the context so
         requires, means either of them;

         "NOTICE OF ASSIGNMENT OF INSURANCES"
         means, in respect of a Mortgaged Ship or Mortgaged Linkspan, a notice
         of assignment in the form set out in Schedule 1 to the relevant Deed of
         Covenant or Schedule 1 to the relevant Insurance Assignment or Schedule
         1 to the relevant Charterer's Insurance Assignment or Schedule 5 to the
         Stena Germanica Assignment (as the case may be), or in such other form
         as may from time to time be required or agreed in writing by the Agent;

         "OFFICER'S CERTIFICATE"
         means a certificate of Stena AB signed by the Chairman of the Board,
         the Chief Executive Officer, the President or the Chief Financial
         Officer (or any other officer identified by any of the foregoing
         officers in an Officer's Certificate to be an executive officer of
         Stena AB), the Secretary, any Assistant Secretary, the Treasurer, the
         Financial Manager, any Assistant Treasurer or the Controller of Stena
         AB;

         "OPINION OF COUNSEL"
         means an opinion in writing signed by legal counsel, who may be an
         employee of or counsel to Stena AB, and who shall be counsel reasonably
         satisfactory to the relevant trustee under each Indenture (or any
         applicable Successor Financing);

         "OUTSTANDING GUARANTEE AMOUNT"
         means, in relation to a Bank Guarantee at any relevant time, the
         maximum amount in Dollars for which such Bank Guarantee was issued or,
         if a Bank Guarantee does not contain an express provision limiting the
         total amount payable by the relevant Issuing Bank thereunder to a
         stated maximum amount, such amount as the relevant Issuing Bank shall
         from time to time certify to be the amount which it then reasonably
         considers to be

                                       25
<PAGE>

         the maximum aggregate amount (whether of principal, interest or
         otherwise) which, during the remaining duration of such Bank Guarantee,
         it may be required to pay to the relevant Beneficiary under such Bank
         Guarantee (and for such purpose the relevant Issuing Bank may make such
         estimate of its potential liability under such Bank Guarantee as it
         reasonably considers appropriate provided however that where the amount
         for which a Bank Guarantee was issued increases by reference to a rate
         of interest the relevant Issuing Bank may only, as at any relevant date
         upon which the Outstanding Guarantee Amount of a Bank Guarantee falls
         to be determined, include amounts so calculated by reference to a rate
         of interest to the extent that such amounts have accrued up to such
         date and in calculating the Outstanding Guarantee Amount for a Bank
         Guarantee in a currency other than Dollars the Agent shall calculate
         the Outstanding Guarantee Amount in such currency and then convert such
         amount into Dollars at the Agent's ordinary spot rate of exchange for
         the purchase of such currency with Dollars as at 11.00 a.m. the date
         such Outstanding Guarantee Amount falls to be determined or if such
         date is not a Banking Day 11.00 a.m. on the preceding Banking Day)
         less, in either case, the aggregate amount of all reductions thereof
         which have been made in accordance with the provisions of Clause 5.1;

         "OUTSTANDING INDEBTEDNESS"
         means all sums of any kind arising at any time for any reason payable
         actually or contingently by the Borrower to the Banks, the Issuing
         Banks, the Standby Lender, the Co-Arrangers, the Agent, the Security
         Agent or any of them under this Agreement or any other of the Security
         Documents (whether by way of repayment of principal, payment of
         interest or default interest, payment upon any indemnity or
         counter-indemnity, reimbursement for costs or otherwise howsoever);

         "OUTSTANDINGS"
         in relation to a Bank means the aggregate of:-

         (A)    its Percentage (expressed as an amount) of the Outstanding
                Guarantee Amounts of the Bank Guarantees;

         (B)    the principal amount of each outstanding loan to the Borrower by
                that Bank pursuant to Clause 6.2; and

         (C)    its Contribution

         (but, except for the purposes of Clause 10.9, excludes the Standby
         Outstandings);

         "OWNED SHIPS"
         means the Ships specified in Parts A and B of Schedule 2 and such other
         Ships owned by a member of the Stena AB Group as may from time to time
         be mortgaged to the Security Agent as security for the Borrower's
         obligations under this Agreement;

         "PERCENTAGE"
         as at any date means, in relation to a Bank and in respect of any Bank
         Guarantee, the proportion, expressed as a percentage, which the amount
         of the Commitment of such Bank bears to the total amount of the
         Commitments of all of the Banks (including such Bank) as at such date
         and being in relation to each Bank, on the date of this Agreement, the
         percentage set out against its name in Schedule 1;

         "PERMITTED INVESTMENTS"
         means:-

                                       26
<PAGE>

         (A)    any Investment in any Cash Equivalent provided that the Average
                Life of the aggregate of all Cash Equivalents held by Stena AB
                and its Subsidiaries may not exceed one year at any time;

         (B)    any Related Business Investment in an amount not in excess of
                the amount of Restricted Payments that Stena AB and its
                Subsidiaries will be permitted to make under Clause 14.14
                immediately prior to the making of such Investment;

         (C)    Investments made after 1 October 1997 in Unrestricted
                Subsidiaries and Related Business Investments in an aggregate
                amount not to exceed:-

                (i)    ten per cent (10%) of Consolidated Tangible Assets plus

                (ii)   the aggregate amount of all moneys from time to time
                       actually received by Stena AB or any of its Subsidiaries
                       in respect of Investments made from time to time pursuant
                       to this paragraph (C) or (in respect of Investments made
                       after 1 October 1997 but before the Execution Date)
                       paragraph (iii) of the definition of "Permitted
                       Investments" in the 2007 Indenture, whether such moneys
                       are received as interest or principal payments (in the
                       case of Investments made in the form of loans or other
                       debt instruments or other extensions of credit), as
                       dividends or redemption payments or return of capital (in
                       the case of Investments made in the form of the purchase
                       of Capital Stock or capital contributions) or otherwise,
                       provided that the aggregate amount permitted to be
                       invested pursuant to this sub-paragraph (ii) shall not
                       exceed the aggregate amount of Investments from time to
                       time actually made by Stena AB and its Subsidiaries
                       pursuant to this paragraph (C) or (in respect of
                       Investments made after 1 October 1997 but before the
                       Execution Date) paragraph (iii) of the definition of
                       "Permitted Investments" in the 2007 Indenture; plus

                (iii)  the aggregate amount of all Investments made in any
                       person pursuant to this paragraph (C) or (in respect of
                       Investments made after 1 October 1997 but before the
                       Execution Date) paragraph (iii) of the definition of
                       "Permitted Investments" in the 2007 Indenture if (and for
                       so long as) any such person becomes a Subsidiary of Stena
                       AB and provided further, that upon giving effect to such
                       Investment, Stena AB could incur at least $1 of
                       additional Debt pursuant to Clause 10.8(A); and

         (D)    other Investments not otherwise permitted to be made pursuant to
                paragraphs (A) to (C) above, which, together with the then
                outstanding amount of other Investments made pursuant to this
                paragraph (D) or (in respect of Investments made after 1 October
                1997 but before the Execution Date) paragraph (iv) of the
                definition of "Permitted Investments" in the 2007 Indenture,
                shall not exceed five per cent (5%) of Consolidated Tangible
                Assets in aggregate at the time the Investment is made;

         "PERMITTED LIENS"
         means:-

         (A)    Liens securing only the Notes granted pursuant to Section 10.14
                of any Indenture where equivalent Liens are granted to the
                Security Agent on a pari passu basis as security for the
                Outstanding Indebtedness;

                                       27
<PAGE>

         (B)    Liens in favour of Stena AB or, with respect to Liens granted by
                any Subsidiary of Stena AB, in favour of Stena AB or any Wholly
                Owned Subsidiary of Stena AB;

         (C)    Liens on property existing immediately prior to the time of
                acquisition thereof (and not created in anticipation of such
                acquisition);

         (D)    (x) Liens to secure Debt Incurred for the purpose of financing
                all or any part of the purchase price or the cost of
                construction or lease (pursuant to a Capitalised Lease
                Obligation) of a Vessel or other property, or the cost of
                improvements of a Vessel or other property used in the business
                of Stena AB and its Subsidiaries and (y) Liens on any Vessel or
                other property (including, without limitation, the Related
                Collateral) owned or leased (pursuant to a Capitalised Lease
                Obligation) by a Subsidiary of Stena AB prior to the time it
                becomes a Subsidiary of Stena AB to secure Debt Incurred by
                Stena AB (or any Subsidiary of Stena AB), in an amount not to
                exceed the Fair Market Value of such Vessel or other property or
                such Subsidiary, for the purpose of financing (or refinancing)
                all or part of the acquisition cost of such Subsidiary, but only
                if such Debt is Incurred within 180 days after the acquisition
                of such Subsidiary; provided that, with respect to clauses (x)
                and (y) above:-

                (i)    in the case of a Vessel or Vessels, the principal amount
                       of any Debt secured by such a Lien does not exceed 80% of
                       the Ready for Sea Cost of a Vessel (or, with respect to
                       Debt Incurred under a single financing facility to
                       finance all or part of the purchase price or construction
                       cost of two or more Vessels, the aggregate Ready for Sea
                       Cost of such group of Vessels) or such Fair Market Value
                       (as the case may be) of such Vessel or other property;
                       and provided further that the principal amount of Debt
                       secured by such a Lien may be up to 100% of the Ready for
                       Sea Cost of such Vessel or Vessels if such Debt financing
                       consists of Capitalised Lease Obligations; and provided
                       further that, with respect to any Debt Incurred to
                       finance the replacement of a Vessel as described in
                       Clause 14.8(B)(iii) or 14.9(A), the principal amount of
                       such Debt secured by such Lien may be up to 100% of the
                       Ready for Sea Cost of such replacement Vessel less all
                       compensation, damages or other such payments (including
                       insurance proceeds other than in respect of business
                       interruption insurance, protection and indemnity
                       insurance or other third-party liability insurance)
                       received in connection with a Total Loss in excess of
                       amounts actually used to repay Debt secured by the Vessel
                       subject to the Total Loss;

                (ii)   such Liens do not extend to or cover any property other
                       than such Vessel or other property and Related Collateral
                       and any such improvements;

                (iii)  the Incurrence of such Debt is permitted by the
                       provisions of Clause 14.8 and, if applicable, Clause
                       14.9; and

                (iv)   any such Liens (other than Liens of the type described in
                       paragraph (D) of the definition of "Related Collateral")
                       attach within 180 days after the date of the acquisition
                       or delivery (or completion of such improvements) of such
                       Vessel or group of Vessels or person or other property;

                                       28
<PAGE>

         (E)    Liens on property of a person existing at the time such person
                is merged into or consolidated with or acquired by Stena AB or
                any Subsidiary of Stena AB that were not created in anticipation
                of the acquisition of such person;

         (F)    Permitted Ship Liens and any other Liens in respect of Vessels
                and Related Collateral arising in the ordinary course of
                business which, individually or in the aggregate do not
                materially and adversely affect such Vessel or materially impair
                the use and operation thereof or the business of Stena AB and
                its Subsidiaries;

         (G)    Liens to secure obligations under workmen's compensation laws or
                similar legislation, including Liens with respect to judgments
                which are not currently dischargeable;

         (H)    Liens to secure Debt Incurred to refinance, in whole or in part,
                (i) any secured Debt existing on the date of this Agreement or
                (ii) any Debt secured by Liens referred to in paragraphs (A) to
                (G) above and paragraphs (J) and (M) below, so long as in each
                such case the Liens do not extend to any other property (except
                for the Related Collateral, or other property and Related
                Collateral secured by Debt which is being concurrently
                refinanced on a cross-collateralised basis) and the aggregate
                principal amount of Debt so secured (which amount shall be
                deemed to include the amount of any undrawn or available amounts
                under any credit or lease facility to be so refinanced) is not
                increased (other than as permitted pursuant to Clause
                14.8(B)(v)(a)(y) or Clause 14.9(F)(i)(b)) by an amount greater
                than the amount of any premium required to be paid in connection
                with such refinancing pursuant to the terms of the Debt
                refinanced or the amount of any premium reasonably determined by
                Stena AB as necessary to accomplish such refinancing by means of
                a tender offer or privately negotiated repurchase, plus the
                expenses of Stena AB or any of its Subsidiaries incurred in
                connection with such refinancing;

         (I)    any Liens securing Debt owing by Stena AB to one or more Wholly
                Owned Subsidiaries of Stena AB;

         (J)    subject to compliance with sections (i), (iii) and (iv) of
                paragraph (D) above, a pledge of, or other Lien in respect of,
                the Capital Stock of a Single-Purpose Vessel-Owning Subsidiary
                made to secure (i) Debt Incurred by such Single-Purpose
                Vessel-Owning Subsidiary to finance or refinance the
                acquisition, construction or improvement of a Vessel by such
                Subsidiary or (ii) Debt Incurred by Stena AB or any Subsidiary
                of Stena AB to finance or refinance the acquisition of any or
                all of the Capital Stock of such Single-Purpose Vessel-Owning
                Subsidiary;

         (K)    Liens in respect of Vessels and Related Collateral otherwise
                permitted hereunder and incurred solely by reason of the
                substitution of a new mortgage or other security agreements for
                an existing agreement (or the novation or assignment of such
                existing agreement), the effect of which new agreement, novation
                or assignment is to effect the reflagging of the Vessel or
                Vessels to which such existing agreement relates;

         (L)    Liens created by this Agreement and the Security Documents and
                Liens incurred to secure any other Revolving Credit Facilities
                as required by the terms thereof;

                                       29
<PAGE>

         (M)    a pledge or assignment of a promissory note (or other evidence
                of indebtedness), or the assignment of a mortgage or other
                security interest, or guarantee received by or granted to Stena
                AB or any of its Subsidiaries pursuant to an Asset Disposition
                to secure the unpaid portion of any Debt of Stena AB or any of
                its Subsidiaries attributable to the property sold in such Asset
                Disposition;

         (N)    subject to the limit imposed by Clause 14.6, Liens in respect of
                Related Collateral and/or other property required to be granted
                under the terms of an agreement governing Debt of Stena AB or
                any Subsidiary of Stena AB to provide additional security to the
                lenders under such agreement in the event the value of the
                Vessel or Vessels and other property securing such Debt falls
                below the level specified in such agreement; and

         (O)    Liens on a Vessel, Related Collateral (and/or the contract for
                the acquisition of such Vessel and/or Related Collateral)
                existing only during the construction of such Vessel and granted
                to secure the builder's obligations in respect of construction
                financing for such Vessel obtained by such builder;

         "PERMITTED SHIP LIENS"
         means:-

         (A)    any ship repairer's or outfitter's possessory lien for a sum not
                (except with the prior written consent of the Agent or where the
                cost of the relevant work is covered by the vessel's insurances
                or is required for the purpose of maintaining the vessel's
                classification) exceeding the Casualty Amount;

         (B)    any lien on a vessel for master's, officer's or crew's wages
                outstanding in the ordinary course of trading;

         (C)    any lien for salvage;

         (D)    liens arising in the ordinary course of trading by statute or by
                operation of law in respect of obligations which are not overdue
                or which are being contested in good faith by appropriate
                proceedings (and for the payment of which adequate reserves have
                been provided) so long as any such proceedings or the continued
                existence of such lien do not involve any likelihood of the
                sale, forfeiture or loss of, or of any interest in, any vessel
                owned by or chartered to a Security Party or any other member of
                Stena AB Group;

         (E)    liens securing liabilities for Taxes against which adequate
                reserves have been provided;

         (F)    liens arising in respect of a Ship or Linkspan by reason of an
                act or omission of a charterer (other than a Stena Charterer) of
                the Ship or Linkspan, in relation to which the relevant
                Shipowner or Stena Charterer demonstrates to the reasonable
                satisfaction of the Agent that it is taking all reasonable steps
                available to it with due dispatch to procure the lifting of the
                lien;

         "PLANNING ACTS"
         means, in the case of Holyhead Port or any other Port situated in
         England and Wales, the Town and Country Planning Acts 1990 and, in the
         case of Stranraer Port or any other Port situated in Scotland, the Town
         and Country Planning (Scotland) Act 1972 (including in each case any
         Act or Acts for the time being amending or replacing such Acts and any

                                       30
<PAGE>

         orders, regulations and direction issued under or by virtue of such
         Acts or such amending or replacing Acts for the time being in force);

         "PORT"
         means each of Holyhead Port and Stranraer Port and includes any other
         port which is or may become owned by a member of the Stena AB Group;

         "PORT MORTGAGE"
         means:-

         (A)    in the case of Holyhead Port, the Holyhead Charge; and

         (B)    in the case of Stranraer Port, the Stranraer Charge;

         "PORT OWNER"
         means, in relation to a Mortgaged Port, the owner thereof being, at the
         date of this Agreement, Stena Line Ports in respect of both Holyhead
         Port and Stranraer Port;

         "PORT OWNER'S GUARANTEE"
         means, in respect of each Port Owner, the deed of guarantee and
         indemnity to be executed and delivered by that Port Owner in favour of
         the Security Agent in substantially the form set out in Schedule 2 to
         the Agreed Form Certificate;

         "PORT OF REGISTRY"
         means in relation to a Mortgaged Ship the port of registry approved in
         writing by the Banks at which such Ship is, or is to be registered on,
         or at any relevant time after, the Execution Date;

         "POST COMPLETION REGISTRATIONS"
         means registration of the Liens created by any of the Security
         Documents and the restriction contained in Clause 14.6 which require to
         be completed within a period after execution thereof and/or hereof
         under the laws of any relevant jurisdiction;

         "POST-DELIVERY FINANCING"
         means Debt Incurred by Stena AB or any Subsidiary of Stena AB to
         finance the total Ready for Sea Cost of a Vessel or group of Vessels
         and "Post-Delivery Financing" shall include the amount of any
         Construction Financing with respect to any Vessel or group of Vessels,
         but only to the extent that fully committed Post-Delivery Financing for
         such Vessel or group of Vessels has been arranged at such time;

         "PREFERRED STOCK"
         as applied to the Capital Stock of any person, means Capital Stock of
         such person of any class or classes (however designated) that ranks
         prior, as to the payment of dividends or as to the distribution of
         assets upon any voluntary or involuntary liquidation, dissolution or
         winding up of such person, to shares of Capital Stock of any other
         class of such person;

         "PRIOR CHARTERER'S INSURANCE ASSIGNMENTS"
         means those assignments of Insurances executed by Stena Charterers as
         security for the SIBV $275m Facility further particulars of which are
         set out in Part C of Schedule 4 (and shall include any such assignments
         executed after the Execution Date as required by the SIBV $275m
         Facility Agreement in respect of any of the Ships and Linkspans subject
         to a Prior Mortgage);

                                       31
<PAGE>

         "PRIOR DEEDS OF COVENANT"
         means:-

         (A)    in respect of each of the Ships listed in Part B of Schedule 2
                and "LINKSPAN I" and LINKSPAN II", the first priority deed of
                covenant collateral to the Prior Mortgage thereon further
                particulars of which are set out in Part B of Schedule 4;

         (B)    in respect of any Designated Ship over which a second priority
                mortgage or charge is granted pursuant to Clause 9.4(E), the
                first priority deed of covenant collateral to the Prior Mortgage
                thereon granted as security for payment of the SIBV $275m
                Facility; and

         (C)    in respect of any of the foregoing Mortgaged Ships and Mortgaged
                Linkspans which is reflagged in accordance with Clause 23.12 and
                which after such reflagging is a Designated Ship, the first
                priority deed of covenant collateral to the substitute Prior
                Mortgage thereon granted as security for payment of the SIBV
                $275m Facility;

         "PRIOR INSURANCE ASSIGNMENT"
         means, in respect of any non-Designated Ship over which a Prior
         Mortgage is at any time granted, the first priority assignment of the
         Insurances thereof granted as security for payment of the SIBV $275m
         Facility;

         "PRIOR MORTGAGES"
         means:-

         (A)    in respect of each of the Ships listed in Part B of Schedule 2,
                the first priority statutory mortgage or, in the case of any
                such Ship registered in Sweden, the first priority mortgage and
                pledge of mortgage thereon further particulars of which are set
                out in Part A of Schedule 4;

         (B)    in respect of each of "LINKSPAN I" and "LINKSPAN II", the first
                priority mortgage and pledge of mortgage thereon further
                particulars of which are set out in Part A of Schedule 4;

         (C)    in respect of Holyhead Port, the first priority legal charge in
                respect thereof further particulars of which are set out in Part
                A of Schedule 4;

         (D)    in respect of Stranraer Port, the first priority standard
                security in respect thereof further particulars of which are set
                out in Part A of Schedule 4;

         (E)    in respect of any Ship or Linkspan or Port over which a second
                priority mortgage or charge is granted pursuant to Clause 9.4
                (E), the first priority mortgage or charge thereon granted as
                security for payment of the SIBV $275m Facility; and

         (F)    in respect of any of the foregoing Mortgaged Ships and Mortgaged
                Linkspans which is reflagged in accordance with Clause 23.12,
                the first priority mortgage thereon executed in substitution for
                the existing first priority mortgage;

         "PRIOR SECURITY DOCUMENTS"
         means the Prior Charterer's Insurance Assignments, the Prior Deeds of
         Covenant, the Prior Insurance Assignments (if any), the Prior
         Mortgages, the Prior Stena Germanica

                                       32
<PAGE>

         Assignment and any other first priority security document from time to
         time securing payment of the SIBV $275m Facility.

         "PRIOR STENA GERMANICA ASSIGNMENT"
         means the first priority assignment of all the right, title and
         interest of the Borrower in the Stena Germanica Loan Documents dated 28
         September 2001 made by (1) the Borrower in favour of (2) Svenska
         Handelsbanken AB (publ);

         "2005 PROSPECTUS"
         means the final prospectus of Stena AB relating to the initial public
         offering of the 2005 Notes, such prospectus having been filed with the
         Securities and Exchange Commission in Washington, D.C. with
         registration number 33-99284;

         "2007 PROSPECTUS"
         means the final prospectus of Stena AB relating to the initial public
         offering of the 2007 Notes, such prospectus having been filed with the
         Securities and Exchange Commission in Washington, D.C. with
         registration number 333-7486;

         "READY FOR SEA COST"
         means, with respect to a Vessel or Vessels to be acquired or leased
         (pursuant to a Capitalised Lease Obligation) by Stena AB or any
         Subsidiary of Stena AB, the aggregate amount of all expenditures
         incurred to acquire or construct and bring such Vessel or Vessels to
         the condition and location necessary for its intended use which would
         be classified and accounted for as "property, plant and equipment" in
         accordance with Swedish GAAP;

         "RECEIVABLES ASSIGNMENT"
         means the assignment to be granted in favour of the Security Agent in
         accordance with Clause 9.4(L) in respect of the deferred purchase
         consideration and Insurances and other security granted in relation to
         a Transferred Ship substantially in the form set out in:-

         (A)    Schedule 15 to the Agreed Form Certificate in relation to a Ship
                sold on terms set out in paragraph (A) of the definition of
                Transferred Ship if immediately prior to such sale such Ship is
                subject to a Ship Mortgage ranking with first priority;

         (B)    Schedule 16 to the Agreed Form Certificate in relation to a Ship
                sold on terms set out in paragraph (A) of the definition of
                Transferred Ship if immediately prior to such sale such Ship is
                subject to a Ship Mortgage ranking with second priority;

         (C)    Schedule 17 to the Agreed Form Certificate in relation to a Ship
                sold on terms set out in paragraph (B) of the definition of
                Transferred Ship if immediately prior to such sale such Ship is
                subject to a Ship Mortgage ranking with first priority;

         (D)    Schedule 18 to the Agreed Form Certificate in relation to a Ship
                sold on terms set out in paragraph (B) of the definition of
                Transferred Ship if immediately prior to such sale such Ship is
                subject to a Ship Mortgage ranking with second priority;

         "REDEEMABLE STOCK"
         of any person means any equity security of such person that by its
         terms or otherwise is required to be redeemed prior to the Termination
         Date or is redeemable at the option of the holder thereof at any time
         prior to the Termination Date;

                                       33
<PAGE>

         "REFERENCE BANKS"
         means the principal London offices of Svenska Handelsbanken AB (publ),
         JPMorgan Chase Bank and Nordea Bank Finland Plc and/or any other Bank
         appointed as such pursuant to this Agreement;

         "REFERENCE DATE"
         has the meaning ascribed to it in Clause 14.21(B);

         "REFINANCE"
         has the meaning ascribed to it in Clause 14.8(B)(v) and shall be deemed
         to include successive refinancings;

         "RELATED BUSINESS INVESTMENT"
         means an Investment made in a person engaged in the same or a similar
         line of business as Stena AB and its Subsidiaries or made for the
         purpose of maintaining, enhancing the productivity of or expanding the
         capabilities of Stena AB and its Subsidiaries in any business activity
         permitted under Clause 14.12 (as determined, with respect to any such
         Investment or series of related Investments in an aggregate amount of
         $5,000,000 or more, in good faith by the Board of Directors of the
         person making such Investment);

         "RELATED COLLATERAL"
         means, with respect to a Vessel:-

         (A)    any insurance policies on such Vessel;

         (B)    any requisition compensation payable in respect of any
                compulsory acquisition thereof;

         (C)    any earnings derived from the use or operation thereof and/or
                any earnings account with respect to such earnings, provided
                that any assignment with respect thereto may only permit the
                assignee thereof to apply such earnings to the repayment of Debt
                held by such assignee:-

                (i)    upon the occurrence and during the continuation of a
                       payment default with respect to such Debt or upon the
                       acceleration of such Debt (unless such acceleration has
                       been rescinded); or

                (ii)   in the case of any other default with respect to such
                       Debt which would allow for the acceleration of such Debt
                       at such time, but only until the earliest of:-

                       (a)    180 days after the initial occurrence of such
                              default;

                       (b)    the date such default is cured or waived; and

                       (c)    the date such Debt is repaid in full;

         (D)    any charters, operating leases, licences and related agreements
                entered into in respect of the Vessel and any security or
                guarantee in respect of the relevant charterer's or lessee's
                obligations under any relevant charter, operating lease, licence
                or related agreement;

         (E)    any cash collateral account established with respect to such
                Vessel pursuant to the financing arrangements with respect
                thereto;

                                       34
<PAGE>

         (F)    any inter-company loan or facility agreements relating to the
                financing of the acquisition of, and/or the leasing
                arrangements, pursuant to Capitalised Lease Obligations) with
                respect to, such Vessel;

         (G)    any building or conversion contracts relating to such Vessel and
                any security or guarantee in respect of the builder's
                obligations under such contracts;

         (H)    any interest rate swap, foreign currency hedge, exchange or
                similar agreement incurred in connection with the financing of
                such Vessel and required to be assigned by the lender; and

         (I)    any security interest in, or agreement or assignment relating
                to, any of the foregoing or any mortgage in respect of such
                Vessel;

         "RELATED PERSON"
         of any person means any other person directly or indirectly owning:-

         (A)    five per cent (5%) or more of the outstanding Common Stock of
                such person (or, in the case of a person that is not a
                corporation, five per cent (5%) or more of the equity interest
                in such person); or

         (B)    five per cent (5%) or more of the combined voting power of
                Voting Stock of such person;

         "REQUISITION COMPENSATION"
         means, in relation to a Ship or Linkspan, all sums of money or other
         compensation from time to time payable during the Security Period by
         reason of the Compulsory Acquisition of such Ship or Linkspan;

         "REVOLVING CREDIT FACILITIES"
         means the facilities granted to the Borrower under this Agreement and
         any one or more other revolving or other credit facilities to which
         Stena AB and/or one or more Subsidiaries of Stena AB may become parties
         (as obligor or guarantor) after the Execution Date in an aggregate
         principal amount not to exceed $600,000,000 at any time outstanding
         (but, for the avoidance of doubt, excludes the SIBV $275m Facility);

         "SALE AGREEMENT"
         means each document regulating the sale of a Ship on Credit Terms
         entered into by a Shipowner after the Execution Date;

         "SALE AND LEASEBACK TRANSACTION"
         of any person means an arrangement with any lessor, lender, obligee or
         investor or to which such lessor, lender, obligee or investor is a
         party providing for the leasing or renting by such person of any
         property or asset of such person which has been or is being sold or
         transferred by such person more than two hundred and seventy (270) days
         after the acquisition thereof or, if later, the delivery or
         commencement of operation thereof, to such lessor, lender, obligee or
         investor or to any person to whom funds have been or are to be advanced
         by such lessor, lender, obligee or investor on the security of such
         property or asset and the Stated Maturity of such arrangement shall be
         the date of the last scheduled payment of rent or any other amount due
         under such arrangement prior to the first date on which such
         arrangement may be terminated by the lessee without payment of a
         penalty;

                                       35
<PAGE>

         "SCANDLINES"
         means Scandlines AB, a company incorporated under the laws of the
         Kingdom of Sweden with registration number 556206-4575 in the Swedish
         Companies Register and having its registered office at Knutpunkten 43,
         SE-252 78 Helsingborg, Sweden;

         "SECURITIES ACT"
         refers to the Securities Act of 1933 of the United States of America as
         it may be amended and any successor act thereto;

         "SECURITY AGENT"
         means Svenska Handelsbanken AB (publ) or such other person as may be
         appointed security agent for the Banks, the Issuing Banks, the
         Co-Arrangers, the Standby Lender and the Agent pursuant to this
         Agreement;

         "SECURITY DOCUMENTS"
         means this Agreement, the Ship Mortgages, the Deeds of Covenant, the
         Insurance Assignments, the Shipowner's Guarantees, the Linkspan
         Mortgages, the Charterer's Insurance Assignments, the Charterer's
         Subordination Undertakings, the Manager's Subordination Undertakings,
         the Stena Germanica Assignment, each Receivables Assignment, the Port
         Owner's Guarantees, the Port Mortgages, the Cash Collateral Account
         Pledges and any other documents as may have been or shall from time to
         time after the date of this Agreement be executed to guarantee and/or
         secure all or any part of any moneys from time to time owing by the
         Borrower pursuant to this Agreement (whether or not any such document
         also secures moneys from time to time owing pursuant to any other
         document or agreement);

         "SECURITY PARTY"
         means any person who may at any time be a party to any of the Security
         Documents (other than the Banks, the Standby Lender, the Issuing Banks,
         the Co-Arrangers, the Agent and the Security Agent) but does not
         include either any such party as and when it has ceased to be under any
         continuing obligation under the Security Documents and its property has
         ceased to be (or was never) subject to any Lien pursuant to any of the
         Security Documents or any party which is not a member of the Stena AB
         Group;

         "SECURITY PERIOD"
         means the period commencing on the Execution Date and terminating upon
         the later of (i) the end of the Availability Period (ii) the end of the
         Standby Availability Period and (iii) the discharge of the security
         created by the Security Documents by payment of moneys payable
         thereunder and the discharge and release, to the satisfaction of the
         Issuing Banks and the Agent, of all Bank Guarantees;

         "SHIP MORTGAGE"
         means, in relation to an Owned Ship:-

         (A)    in the case of a Designated Ship referred to in Part A of
                Schedule 2 (other than a Ship registered in Sweden), the first
                priority statutory mortgage of the Ship executed (or as the
                context may require) to be executed and registered by the
                relevant Shipowner in favour of the Security Agent including the
                appropriate narrative text set out in Schedule 3 to the Agreed
                Form Certificate (being Schedule 3.2 in respect of Stena Rederi
                AB and Stena Line Scandinavia and Schedule 3.1 in respect of
                each other Shipowner);

                                       36
<PAGE>

         (B)    in the case of a Designated Ship referred to in Part B of
                Schedule 2 (other than a Ship registered in Sweden), the second
                priority statutory mortgage of the Ship executed (or as the
                context may require) to be executed and registered by the
                relevant Shipowner in favour of the Security Agent including the
                appropriate narrative text set out in Schedule 4 to the Agreed
                Form Certificate (being Schedule 4.2 in respect of Stena Rederi
                AB and Stena Line Scandinavia and Schedule 4.1 in respect of
                each other Shipowner);

         (C)    in the case of a Ship referred to in Part A of Schedule 2 which
                is registered in Sweden, the first priority pledge of mortgage
                of the Ship to be executed by the relevant Shipowner in the form
                or substantially in the form set out in Schedule 5 to the Agreed
                Form Certificate (being Schedule 5.2 in respect of Stena Rederi
                AB and Stena Line Scandinavia and Schedule 5.1 in respect of
                each other Shipowner);

         (D)    in the case of a Ship referred to in Part B of Schedule 2 which
                is registered in Sweden, the second priority pledge of mortgage
                of the Ship executed or to be executed by the relevant Shipowner
                in the form or substantially in the form set out in Schedule 6
                to the Agreed Form Certificate (being Schedule 6.2 in respect of
                Stena Rederi AB and Stena Line Scandinavia and Schedule 6.1 in
                respect of each other Shipowner), which mortgage and pledge of
                mortgage in the case of m.v. "Stena Germanica" (the Stena
                Germanica Mortgage) has been executed and assigned to the
                Borrower (as assignee from Stena Line Scandinavia (as assignee
                from Stena Line)) and is to be on-assigned by the Borrower to
                the Security Agent under the Stena Germanica Assignment as
                security for the Outstanding Indebtedness;

         (E)    in the case of any other Owned Ship over which, after the
                Availability Date, a first priority mortgage is to be executed
                and registered by the relevant Shipowner, a mortgage in a form
                and substance acceptable to the Agent but in any event
                substantially similar to the mortgages described in paragraphs
                (A) and (C) above and including, where appropriate, mortgage
                covenants substantially similar to those contained in the pro
                forma Deed of Covenants set out in Schedule 7 to the Agreed Form
                Certificate;

         (F)    in the case of any other Owned Ship over which, after the
                Availability Date, a second priority mortgage is to be executed
                and registered by the relevant Shipowner, a mortgage in a form
                and substance acceptable to the Agent but in any event
                substantially similar to the mortgages described in paragraphs
                (B) and (D) above and including, where appropriate, mortgage
                covenants substantially similar to those contained in the pro
                forma Deed of Covenants set out in Schedule 8 to the Agreed Form
                Certificate;

         and "SHIP MORTGAGES" means all of such mortgages;

         "SHIPOWNER"
         means, in relation to a Ship or Linkspan, the registered owner or
         owners thereof and being at the date of this Agreement, in relation to
         a Ship identified in Schedule 2, the company whose name is set forth
         opposite the name of such Ship in Schedule 2;

                                       37
<PAGE>

         "SHIPOWNER'S GUARANTEE"
         means, in respect of each Shipowner and each member of the Stena
         International Group which at any time during the Security Period owns a
         Ship or Linkspan or sells a Mortgaged Ship on Credit Terms (other than,
         in either case, Stena Rederi AB or Stena Line Scandinavia), the deed of
         guarantee and indemnity to be executed and delivered by that Shipowner
         or other member of the Stena International Group in favour of the
         Security Agent in substantially the form set out in Schedule 1 to the
         Agreed Form Certificate (provided that no Shipowner's Guarantee shall
         be required from Scandlines by reason of its registered ownership of
         m.v. "Stena Germanica" as long as the Stena Germanica Loan Documents
         remain in place in favour of the Borrower and are assigned to the
         Security Agent under the Stena Germanica Assignment);

         "SHIPS"
         means each of the ships listed in Schedule 2 and includes any other
         Vessel in relation to which a Ship Mortgage, or in relation to rights
         to the sale proceeds, Insurances or rebate of rentals of which a Lien,
         may be granted to the Security Agent during the Security Period
         directly or indirectly as security for the obligations of the Borrower
         under this Agreement and "SHIP" means any of them;

         "SIBV $275M FACILITY"
         means the secured multipurpose corporate facility in the amount of up
         two hundred and seventy five million Dollars ($275,000,000) made
         available to the Borrower pursuant to the SIBV $275m Facility Agreement
         or, as the context may require, the maximum amount of such facility as
         it may be cancelled or otherwise reduced from time to time;

         "SIBV $275M FACILITY AGREEMENT"
         means the facility agreement dated 25 September 2001 as amended by an
         amendment dated of even date herewith made between (1) the Borrower as
         borrower, (2) J.P. Morgan plc, Nordbanken AB (publ) and Svenska
         Handelsbanken AB (publ) as co-arrangers, (3) the banks and financial
         institutions defined therein as "Banks" as lenders, (4) Svenska
         Handelsbanken AB (publ) as agent, (5) Svenska Handelsbanken AB (publ)
         as security agent and (6) Stena AB as guarantor pursuant to which such
         lenders agreed to make available to the Borrower a secured multipurpose
         corporate facility in the amount of up to two hundred and seventy five
         million Dollars ($275,000,000);

         "SIBV $275M FACILITY INTERCREDITOR AGREEMENT"
         means the intercreditor agreement in respect of the Ships listed in
         Part B of Schedule 2 and the Ports executed or (as the context may
         require) to be executed between (1) Svenska Handelsbanken AB (publ) and
         (2) the Security Agent in the form set out in Schedule 23 to the Agreed
         Form Certificate;

         "SIBV $500M FACILITY"
         means the secured multipurpose corporate facility in the amount of up
         to five hundred million Dollars ($500,000,000) made available to the
         Borrower pursuant to the SIBV $500m Facility Agreement;

         "SIBV $500M FACILITY AGREEMENT"
         means the facility agreement dated 11 December 1995 (as amended,
         novated and restated from time to time) made between (1) the Borrower
         as borrower, (2) JPMorgan Chase Bank (then called The Chase Manhattan
         Bank), Nordea Bank Sverige AB (publ) (then called Nordbanken AB
         (publ)), Svenska Handelsbanken AB (publ) and ABN Amro Bank N.V. as
         co-arrangers, (3) the banks and financial institutions defined therein
         as "Banks" as lenders, (4) JPMorgan Chase Bank (then called The Chase
         Manhattan Bank) as issuing

                                       38
<PAGE>

         bank, (5) Svenska Handelsbanken AB (publ) as standby lender, (6)
         Svenska Handelsbanken AB (publ) as agent, (7) Svenska Handelsbanken AB
         (publ) as security agent and (8) Stena AB as guarantor pursuant to
         which such lenders agreed to make available to the Borrower a secured
         multipurpose corporate facility in the amount of up to five hundred
         million Dollars ($500,000,000);

         "SINGLE-PURPOSE VESSEL-OWNING SUBSIDIARY"
         means a Subsidiary of Stena AB the sole purpose of which is to own or
         lease (pursuant to a Capitalised Lease Obligation) one (but not more
         than one) Vessel;

         "STANDBY AVAILABILITY PERIOD"
         means the period from the Availability Date and ending on the
         Termination Date or the period ending on such earlier date (if any) (i)
         on which the Borrower cancels the Standby Commitment under Clause 7.10
         or (ii) on which the Standby Commitment is reduced to zero pursuant to
         any provision of this Agreement or (iii) on which the Borrower cancels
         the Commitments in full or (iv) on which the Commitments are reduced to
         zero pursuant to any provision of this Agreement;

         "STANDBY COMMITMENT"
         means the sum of $30,000,000 which the Standby Lender has agreed to
         make available to the Borrower under Clause 7;

         "STANDBY FACILITY"
         means the facility made available to the Borrower pursuant to Clause 7;

         "STANDBY LENDER"
         means Svenska Handelsbanken AB (publ) acting through its London branch;

         "STANDBY OUTSTANDINGS"
         means the aggregate of the principal amounts outstanding from the
         Borrower in relation to the Standby Facility pursuant to Clause 7;

         "STANDBY RATE"
         means:-

         (A)    in relation to a drawing for a particular period, the Standby
                Lender's per annum offered rate in the London Interbank Market
                at or about 11.00 a.m. on the second London Banking Day before
                the first day of such period for deposits in an amount
                approximately equal to the amount of such drawing for a period
                equivalent to such period; or

         (B)    in relation to drawings on a call basis, the Standby Lender's
                base rate for Dollar currency accounts;

         "STATED MATURITY"
         means:-

         (A)    with respect to any debt security, the date specified in such
                debt security as the fixed date on which the final instalment of
                principal of such debt security is due and payable; or

                                       39
<PAGE>

         (B)    with respect to any specified scheduled instalment of principal
                or interest on any debt security, the date specified in such
                debt security as the fixed date on which such instalment is due
                and payable;

         "STENA AB"
         means Stena AB (publ.) a company incorporated under the laws of the
         Kingdom of Sweden with registration number 556001-0802 in the Swedish
         Companies Register and having its registered office at Masthuggskajen,
         SE-405 19 Gothenburg, Sweden;

         "STENA AB GROUP"
         means Stena AB and its Subsidiaries and "MEMBER OF THE STENA AB GROUP"
         means Stena AB or any of its Subsidiaries;

         "STENA CHARTERER"
         means any member of the Stena AB Group to whom a Mortgaged Ship or a
         Transferred Ship or a Mortgaged Linkspan may be chartered;

         "STENA GERMANICA ASSIGNMENT"
         means the second priority assignment of all the right, title and
         interest of the Borrower in the Stena Germanica Loan Documents to be
         executed and delivered by the Borrower in favour of the Security Agent
         in substantially the form set out in Schedule 19 to the Agreed Form
         Certificate;

         "STENA GERMANICA CHARTERER'S INSURANCE ASSIGNMENT"
         means the first priority assignment of Insurances in respect of m.v.
         "Stena Germanica" dated 28 September 2001 executed by Stena Line
         Scandinavia as bareboat charterer thereof in favour of the Borrower;

         "STENA GERMANICA CHARTERER'S SUBORDINATION UNDERTAKING"
         means the charterer's subordination undertaking in respect of m.v.
         "Stena Germanica" dated 28 September 2001 executed by Stena Line
         Scandinavia as bareboat charterer thereof in favour of the Borrower;

         "STENA GERMANICA DEED OF COVENANT"
         means the deed of covenant dated 21 December 2000 made between
         Scandlines as owner and Stena Line as mortgagee as assigned by Stena
         Line to Stena Line Scandinavia pursuant to the Stena Line Asset
         Purchase Agreement and as amended by an amendment no. 1 thereto dated
         28 September 2001 made between Scandlines, Stena Line Scandinavia and
         the Borrower amending certain provisions thereof and assigning all of
         Stena Line Scandinavia's rights, title and interest thereunder to the
         Borrower;

         "STENA GERMANICA LOAN AGREEMENT"
         means the inter-company loan agreement dated 21 December 2000 made
         between Scandlines as borrower and Stena Line as lender under which
         Stena Line made available to Scandlines a loan in the amount of
         $52,000,000 as assigned by Stena Line to Stena Line Scandinavia
         pursuant to the Stena Line Asset Purchase Agreement and as amended by
         an amendment no. 1 thereto dated 28 September 2001 made between
         Scandlines, Stena Line Scandinavia and the Borrower amending certain
         provisions thereof and assigning all of Stena Line Scandinavia's right,
         title and interest thereunder to the Borrower;

                                       40
<PAGE>

         "STENA GERMANICA LOAN DOCUMENTS"
         means the Stena Germanica Loan Agreement, the Stena Germanica Mortgage,
         the Stena Germanica Deed of Covenant, the Stena Germanica Charterer's
         Insurance Assignment and the Stena Germanica Charterer's Subordination
         Undertaking;

         "STENA GERMANICA MORTGAGE"
         means the first priority mortgage and pledge of mortgage of m.v. "Stena
         Germanica" dated 21 December 2000 executed and registered by Scandlines
         in favour of Stena Line as assigned by Stena Line to Stena Line
         Scandinavia pursuant to the Stena Line Asset Purchase Agreement and as
         assigned by Stena Line Scandinavia to the Borrower on 28 September
         2001;

         "STENA INTERNATIONAL GROUP"
         means Stena International B.V. and its Subsidiaries;

         "STENA LINE"
         means Forvaltningsaktiebolaget Lastluckan (formerly Stena Line AB), a
         company incorporated under the laws of the Kingdom of Sweden;

         "STENA LINE ASSET PURCHASE AGREEMENT"
         means the agreement dated 25 September 2001 made between Stena Line and
         Stena Line Scandinavia pursuant to which (inter alia) Stena Line has
         assigned all its rights in respect of the Stena Germanica Loan
         Agreement, the Stena Germanica Mortgage and the Stena Germanica Deed of
         Covenant to Stena Line Scandinavia;

         "STENA LINE PORTS"
         means Stena Line Ports Limited, a company incorporated with limited
         liability under the laws of England and Wales with company number
         1824328 and having its registered office at Charter House, Park Street,
         Ashford, Kent, TN24 8EX;

         "STENA LINE SCANDINAVIA"
         means Stena Line Scandinavia AB, a company incorporated under the laws
         of the Kingdom of Sweden with registration number 556231-7825 in the
         Swedish Companies Register and having its registered office at SE-405
         19 Gothenburg, Sweden;

         "STENA TAY NOTE AGREEMENT"
         means the note agreement dated as of 15 July 1999 made between Stena
         Tay Limited, Stena Maritime AG, the Borrower, Stena AB and the
         purchasers named in Schedule 1 thereto in relation to the issue of the
         Stena Tay Notes;

         "STENA TAY NOTES"
         means the Senior Secured Guaranteed Notes issued by Stena Tay Limited
         pursuant to the Stena Tay Note Agreement;

         "STEN A. OLSSON FAMILY"
         means:-

         (A)    Sten Allan Olsson;

         (B)    all the lineal descendants in direct line of the said Sten Allan
                Olsson;

         (C)    a husband and wife or former husband or wife or widower or widow
                of any of the above persons; and

                                       41
<PAGE>

         (D)    the estates or legal representatives of any of the above persons

         and so that for the purposes of this definition a step-child or adopted
         child or illegitimate child of any person shall be deemed to be a
         lineal descendant of such person and of the lineal ascendants of such
         person;

         "STEN A. OLSSON FAMILY TRUSTS"
         means trusts (whether arising under settlement, declaration of trust or
         other instrument by whomsoever or wheresoever made or under a
         testamentary disposition or on an intestacy) under which no immediate
         beneficial interest in the property which is the subject of such trust
         is for the time being vested in any person other than members of the
         Sten A. Olsson Family;

         "STRANRAER CHARGE"
         means the Scots law second priority standard security in respect of
         Stranraer Port to be executed and delivered by Stena Line Ports in
         favour of the Security Agent in substantially the form set out in
         Schedule 21 to the Agreed Form Certificate;

         "STRANRAER PORT"
         means all of the property belonging to Stena Line Ports at Stranraer
         Harbour, Stranraer, County of Wigtown, Scotland as is more particularly
         described in the Stranraer Charge;

         "SUBORDINATED DEBT"
         means Debt of Stena AB or any Subsidiary of Stena AB which is
         subordinate or junior in right of payment to the Notes (or any
         applicable Successor Financing) pursuant to a written agreement;

         "SUBSIDIARY"
         of any person means:-

         (A)    a corporation more than fifty per cent (50%) of the outstanding
                Voting Stock of which is owned, directly or indirectly, by such
                person or by one or more other Subsidiaries of such person or by
                such person and one or more Subsidiaries thereof; or

         (B)    any other person (other than a corporation) in which such
                person, or one or more other Subsidiaries of such person or such
                person and one or more other Subsidiaries thereof, directly or
                indirectly, has at least a majority ownership and power to
                direct the policies, management and affairs thereof

         but for the purposes of the definitions of "Affiliate", "Asset
         Disposition", "Consolidated Cash Flow", "Consolidated Interest Coverage
         Ratio", "Consolidated Interest Expense", "Consolidated Net Income",
         "Consolidated Tangible Assets", "Construction Financing", "Disqualified
         Stock", "Investment", "Lien", "Net Available Proceeds", "Non-Recourse
         Debt", "Permitted Investments", "Permitted Liens", "Post-Delivery
         Financing", "Ready for Sea Cost", "Related Business Investment",
         "Revolving Credit Facilities", "Single-Purpose Vessel-Owning
         Subsidiary", "Subordinated Debt", "Unrestricted Subsidiary", "Vessels",
         "Vessel Construction Contract", "Wholly Owned Subsidiary" and the
         proviso to the definition of "Incur" and Clauses 14.6, 14.7, 14.8,
         14.9, 14.10, 14.11, 14.12 and 14.14 Unrestricted Subsidiaries shall be
         deemed not to be Subsidiaries of Stena AB;

         "SUCCESSOR FINANCING"
         has the meaning ascribed thereto in Clause 14.18;

                                       42
<PAGE>

         "SWEDISH GAAP"
         means generally accepted accounting principles in the Kingdom of
         Sweden, consistently applied and (but only in relation to the
         definitions of "Capitalised Lease Obligation", "Consolidated Cash
         Flow", "Consolidated Interest Coverage Ratio", "Consolidated Interest
         Expense", "Consolidated Net Income", "Consolidated Operating Income",
         "Consolidated Tangible Assets" and "Tangible Assets" and not for any
         other purpose of this Agreement) as in effect on 1 October 1997;

         "TANGIBLE ASSETS"
         of any person means, at any date, the gross book value as shown by the
         accounting books and records of such person of all its property both
         real and personal, less (without duplication):-

         (A)    the net book value of all its licences, patents, patent
                applications, copyrights, trademarks, trade names, goodwill,
                non-compete agreements or organisational expenses and other like
                intangibles;

         (B)    unamortised Debt discount and expenses;

         (C)    all reserves for depreciation, obsolescence, depletion and
                amortisation of its properties; and

         (D)    all other proper reserves which in accordance with Swedish GAAP
                should be provided in connection with the business conducted by
                such person;

         "TAXES"
         includes all present and future taxes, levies, imposts, duties, fees or
         charges of whatever nature together with interest thereon and penalties
         in respect thereof and "TAXATION" shall be construed accordingly;

         "TERM"
         means, in relation to an Advance, the period for which such Advance is,
         or is to be, borrowed, as specified in the Drawdown Notice for such
         Advance;

         "TERMINATION DATE"
         means, subject to Clauses 3.8 and 11.4, the date falling sixty (60)
         months after the Execution Date;

         "TOTAL LOSS"
         in relation to a Ship or Linkspan means:-

         (A)    actual, constructive, compromised or arranged total loss of such
                Ship or Linkspan; or

         (B)    the Compulsory Acquisition of such Ship or Linkspan; or

         (C)    the condemnation, capture, seizure, arrest, detention or
                confiscation of such Ship or Linkspan (other than where the same
                amounts to the Compulsory Acquisition of such Ship or Linkspan)
                by any Government Entity, or by persons acting or purporting to
                act on behalf of any Government Entity, unless the Ship or
                Linkspan be released and restored to the relevant Shipowner,
                Stena Charterer or other charterer from such hijacking, theft,
                condemnation, capture, seizure, arrest,

                                       43
<PAGE>

                detention or confiscation within one hundred and eighty (180)
                days after the occurrence thereof;

         "TRANSFER CERTIFICATE"
         means a transfer certificate for the purposes of Clause 24.3
         substantially in the form set out in Schedule 9 (or in such other form
         as the Banks may approve or require);

         "TRANSFEREE BANK" and "TRANSFEROR BANK"
         shall have the meaning ascribed to those expressions in Clause 24.3;

         "TRANSFERRED SHIP"
         means a ship which was a Mortgaged Ship but the ownership or possession
         of which has been transferred to a person which is not a Subsidiary of
         Stena AB on Credit Terms so that either:-

         (A)    such person has obtained title thereto on terms that all or part
                of the purchase price of the Ship is payable after the date such
                person acquired title thereto; or

         (B)    such person will or may obtain title thereto under a hire
                purchase or conditional sale agreement by payment of hire
                payable in respect of the Ship and either by virtue of the
                exercise of an option, or an obligation, to purchase such Ship
                at the end of the hire period upon payment of a nominal sum or
                final obligatory rental payment or a sum referrable to the
                written down value or unamortised capital cost of the Ship

         provided that a Ship shall cease to be a Transferred Ship for the
         purposes of this Agreement if the Ship, having been sold by the
         relevant Shipowner on hire purchase or conditional sale terms is
         repossessed by the Shipowner following a default by the purchaser under
         the relevant Sale Agreement or by agreement between the Shipowner and
         the purchaser and is not required to be sold by the Shipowner pursuant
         to its agreement with the relevant purchaser and the Ship shall
         thereupon be treated as a Mortgaged Ship for all purposes of this
         Agreement;

         "UNRESTRICTED SUBSIDIARY"
         means:-

         (A)    Stena Fastigheter;

         (B)    Stena Realty BV;

         (C)    any Subsidiary of Stena AB which Stena AB by resolution of its
                Board of Directors shall classify as an Unrestricted Subsidiary
                and, for this purpose, a Subsidiary of Stena AB may only be
                classified as an Unrestricted Subsidiary if, immediately after
                giving effect to such classification:-

                (i)    there would be no Default or Event of Default under and
                       as defined in the Indentures (or any applicable Successor
                       Financing);

                (ii)   such Subsidiary would have no Debt other than
                       Non-Recourse Debt, as certified in an Opinion of Counsel
                       delivered to the relevant trustee under each Indenture or
                       any Successor Financing;

                                       44
<PAGE>

                (iii)  Stena AB would be able to Incur at least $1.00 of Debt
                       pursuant to Clause 14.8;

                (iv)   such Subsidiary has no assets which are essential to the
                       operations of Stena AB and its Subsidiaries, taken as a
                       whole; and

                (v)    neither Stena AB nor any of its Subsidiaries has any
                       obligation:-

                       (a)    to subscribe for additional shares of Capital
                              Stock or other equity interests of such
                              Subsidiary; or

                       (b)    to maintain or preserve such Subsidiary's
                              financial condition or to cause such Subsidiary to
                              achieve certain levels of operating results;

                Provided however that:-

                (x)    any Subsidiary of Stena AB may not be reclassified more
                       than once in any thirteen (13) month period;

                (y)    an Unrestricted Subsidiary may only be reclassified as a
                       Subsidiary of Stena AB if immediately after giving effect
                       to such reclassification, there would be no Default or
                       Event of Default as defined in the Indentures (or any
                       applicable Successor Financing); and

                (z)    any such classification or reclassification shall be
                       evidenced by, and shall become effective upon, the filing
                       with each relevant trustee under the Indentures (or any
                       Successor Financing) of the resolution of the Board of
                       Directors of Stena AB giving effect to such designation,
                       an Officer's Certificate certifying that such designation
                       complies with the applicable conditions set forth above
                       and, if applicable, the Opinion of Counsel required under
                       paragraph (C)(ii) above, in each case in form and
                       substance as satisfactory to such trustee;

         (D)    any Subsidiary of an Unrestricted Subsidiary;

         "VALUE ADDED TAX"
         means value added tax as provided for in the Value Added Tax Act 1994
         and legislation (whether delegated or otherwise) supplemental thereto
         or in any primary or subordinate legislation promulgated by the
         European Union or any body or agency thereof and which has legal effect
         in the United Kingdom and any similar tax replacing or introduced in
         addition to any of the same and any penalties and interest in relation
         thereto and any similar tax in any other territory;

         "VAT INVOICE"
         has the meaning given in section 6(15) of the Value Added Tax Act 1994
         or in any similar provision of the Value Added Tax legislation of
         another territory;

         "VESSEL CONSTRUCTION CONTRACT"
         means any contract for the construction (or construction and
         acquisition) or conversion of a Vessel or Vessels entered into by Stena
         AB or any Subsidiary of Stena AB;

                                       45
<PAGE>

         "VESSELS"
         means the shipping vessels whose primary purpose is the maritime
         transportation of cargo and/or passengers or which are otherwise
         engaged or used in any business activities of Stena AB and its
         Subsidiaries permitted under Clause 14.12 (including, without
         limitation, semi-submersible and other drilling rigs and drillships)
         and which are owned by and registered (or to be owned by and
         registered) in the name of Stena AB or any of its Subsidiaries or
         operated by Stena AB or any of its Subsidiaries pursuant to a lease or
         other operating agreement constituting a Capitalised Lease Obligation,
         in each case together with all related equipment and any additions or
         improvements;

         "VOTING STOCK"
         of any person means Capital Stock of such person which ordinarily has
         voting power for the election of directors (or persons performing
         similar functions) of such person, whether at all times or only so long
         as no senior class of securities has such voting power by reason of any
         contingency; and

         "WHOLLY OWNED SUBSIDIARY"
         of any person means a Subsidiary of such person all of the outstanding
         Capital Stock or other ownership interests of which (other than
         directors' qualifying shares) shall at the time be owned by such person
         or by one or more Wholly Owned Subsidiaries of such person or by such
         person and one or more Wholly Owned Subsidiaries of such person.

1.3      INSURANCE TERMS

         In Clause 15:-

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

         (B)    "THE IGA" means the International Group of Protection and
                Indemnity Associations and includes any successor association or
                replacement body of such associations;

         (C)    "PROTECTION AND INDEMNITY RISKS" means:-

                (i)    the usual risks (including oil pollution) covered by a
                       United Kingdom protection and indemnity association or a
                       protection and indemnity association which is managed in
                       London, Norway or Sweden or is a member of the IGA
                       (including, without limitation, the maximum proportion
                       (if any) of any sums payable to any other person or
                       persons in case of collision which are not recoverable
                       under the hull and machinery policies by reason of the
                       incorporation therein of Clause 1 of the Institute Time
                       Clauses (Hulls) (1/11/95) or the Institute Amended
                       Running Down Clause (1/10/71) or any equivalent
                       provision); or

                (ii)   (if placed on Norwegian terms) means protection and
                       indemnity risks as defined in the Norwegian Marine
                       Insurance Plan of 1996 as amended; and

         (D)      "WAR RISKS" includes those risks covered by the standard form
                  of English marine policy with Institute War and Strikes
                  Clauses (Time) (1/10/83) attached or similar cover which may
                  be insured by entry with such association or (if placed on

                                       46
<PAGE>

                  Norwegian terms) means the war risks described in the
                  Norwegian Marine Insurance Plan of 1996 as amended or (if
                  placed on Swedish terms) means the Swedish War Insurance
                  Conditions for Ships 1992/01/01;

1.4      ACCOUNTING TERMS

         All accounting terms not otherwise defined in this Agreement shall have
         the meanings assigned to them in accordance with Swedish GAAP where
         used in relation to the Stena AB Group and Dutch GAAP where used in
         relation to the Stena International Group (whether or not such is
         indicated in this Agreement).

1.5      HEADINGS

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

1.6      CONSTRUCTION OF CERTAIN TERMS

         In any Security Document unless the context otherwise requires:-

         (A)    references to Clauses and Schedules are to be construed as
                references to Clauses of, and Schedules to, such Security
                Document and references to such Security Document include its
                Schedules;

         (B)    references to (or to any specified provision of) any Security
                Document or any other document shall be construed as references
                to such Security Document, that provision or that document as in
                force for the time being and as novated and/or as amended in
                accordance with terms thereof, or, as the case may be, with the
                agreement of the relevant parties and (where such consent is, by
                the terms of any Security Document or the relevant document,
                required to be obtained as a condition to such amendment) with
                the consent of the Agent;

         (C)    references to a "regulation" include any present or future
                regulation, rule, directive, requirement, request or guideline
                (whether or not having the force of law) of any agency,
                authority, central bank or government department or any
                self-regulatory or other national or supra-national authority;

         (D)    words importing the plural shall include the singular and vice
                versa;

         (E)    references to a time of day are to London time;

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

         (G)    references to any person includes such person's assignees and
                successors in title; and

         (H)    references to any enactment shall be deemed to include
                references to such enactment as re-enacted, amended or extended.

1.7      CONSENTS AND APPROVALS

         (A)    Where any matter requires the approval or consent of the Agent
                and/or the Security Agent and/or the Banks and/or any Issuing
                Bank and/or the Standby

                                       47
<PAGE>

                Lender, such approval or consent shall not be deemed to have
                been given unless given in writing.

         (B)    Unless the context otherwise expressly states to the contrary,
                where in any Security Document any party is required or
                requested to consent or agree to, authorise or approve, either
                with or without conditions, or give an opinion or express
                satisfaction or certify, make payments, determinations or
                determine requirements in any such case at its discretion, then
                it is hereby agreed that such consent, agreement, authorisation,
                approval, conditions, opinion, expression of satisfaction,
                certification, determination, payment or requirement shall not
                (when taking into account all the circumstances) be unreasonably
                withheld, imposed, given or determined. Where in any Security
                Document the Agent, the Co-Arrangers, the Security Agent, any
                Issuing Bank, the Standby Lender or any of the Banks is required
                to give any notice, document or other information or to do any
                act or thing (unless the context otherwise expressly states to
                the contrary) such notice, document or other information shall
                be given and such act or thing shall be done as soon as is
                reasonably practicable.

1.8      CONFLICT WITH FACILITY AGREEMENT

         In the event of any conflict between the provisions of this Agreement
         and any other of the Security Documents, the provisions of this
         Agreement shall prevail.

1.9      MAJORITY BANKS

         Where this Agreement provides for any matter to be determined by
         reference to the opinion of the Majority Banks or to be subject to the
         consent or request of the Majority Banks or for any action to be taken
         on the instructions of the Majority Banks, such opinion, consent,
         request or instructions shall (as between the Banks) only be regarded
         as having been validly given or issued by the Majority Banks if all the
         Banks shall have received prior notice of the matter on which such
         opinion, consent, request or instructions are required to be obtained
         and the relevant majority of Banks shall have given or issued such
         opinion, consent, request or instructions but so that the Borrower
         shall be entitled (and bound) to assume that such notice shall have
         been duly received by each Bank and that the relevant majority shall
         have been obtained to constitute Majority Banks whether or not this is
         in fact the case.

1.10     TRANSFER AND SUCCESSION

         In this Agreement all references to the Agent, the Security Agent, the
         Banks, the Issuing Banks, the Standby Lender and/or the Co-Arrangers
         shall in each case include:-

         (A)    any successor in title to or assignee or transferee of all or
                any portion of that respective party's rights, title and
                interest in, to and under this Agreement including any
                Transferee to whom all or part of such person's rights and
                obligations hereunder are transferred; and

         (B)    any other person whomsoever in whose favour all or any portion
                of such rights, title and interest are transferred including any
                person who becomes a party to this Agreement by way of a
                novation hereof

         and the expressions "Bank", "Standby Lender" and "Issuing Bank" (as the
         case may be) shall include any such person aforesaid notwithstanding
         that such person may have made

                                       48
<PAGE>

         no advance to the Borrower hereunder and notwithstanding also that the
         indebtedness of the Borrower to such person may be operation of law or
         otherwise constitute, or be deemed to constitute, an indebtedness
         separate and distinct from the indebtedness arising on the date of
         drawing of the Commitment or the Standby Commitment or the issue of a
         Bank Guarantee in respect of which the assignment or other transfer of
         rights, title and interest is made.

2        THE COMMITMENTS

2.1      AGREEMENT TO LEND AND TO ISSUE BANK GUARANTEES

         Upon and subject to the terms and conditions of this Agreement and in
         reliance on the representations and warranties in Clause 13:-

         (A)    the Existing Guarantee Provider agrees to maintain the Existing
                Bank Guarantees for the account of the Borrower;

         (B)    the New Guarantee Provider agrees to issue Bank Guarantees to
                Beneficiaries for the account of the Borrower;

         (C)    each Bank agrees to reimburse the relevant Issuing Bank for its
                Percentage for each Bank Guarantee of all payments made by such
                Issuing Bank to the Beneficiary under any such Bank Guarantee;

         (D)    the Banks agree to lend Advances to the Borrower and the
                obligation of each Bank under this Agreement shall be to
                contribute its Percentage of each Advance; and

         (E)    the Standby Lender agrees to make available the Standby
                Facility.

2.2      OBLIGATIONS SEVERAL

         The obligations of each Bank, the Standby Lender and the Issuing Banks
         under this Agreement are several; the failure of any Bank or the
         Standby Lender or any Issuing Bank to perform such obligations shall
         not relieve any other of the Banks, the Standby Lender, the
         Co-Arrangers, the Issuing Banks, the Agent, the Security Agent or the
         Borrower (as the case may be) of any of their respective obligations or
         liabilities under this Agreement nor shall any other of the Banks, the
         Standby Lender, the Co-Arrangers, the Issuing Banks, the Agent or the
         Security Agent be responsible for the obligations of any Bank or the
         Standby Lender or any Issuing Bank (except for its own obligations, if
         any, as a Bank or as the Standby Lender or as an Issuing Bank).
         Provided that, in the event of the failure of any Bank or the Standby
         Lender or any Issuing Bank (the "DEFAULTING BANK") to perform its
         obligations under this Agreement:-

         (A)    the Agent shall consult with the Borrower and the others of the
                Banks, the Standby Lender and the Issuing Banks (as the case may
                be) with a view to taking steps to mitigate the effects of such
                default including the procuring of another bank to assume the
                obligations of the defaulting Bank; and

         (B)    the defaulting Bank shall indemnify the Borrower against any
                losses, costs and expenses which the Borrower may sustain or
                incur as a result of such failure.

                                       49
<PAGE>

2.3      INTERESTS SEVERAL

         Notwithstanding any other term of this Agreement (but without prejudice
         to Clause 25.4 (I) or the provisions of this Agreement relating to or
         requiring action by the Majority Banks) the interests of the
         Co-Arrangers, the Issuing Banks, the Agent, the Security Agent, the
         Banks and the Standby Lender are several and the amount due to the
         Co-Arrangers, each Issuing Bank, the Agent, the Security Agent, each
         Bank and the Standby Lender (each for its own account) is a separate
         and independent debt. The Co-Arrangers, the Issuing Banks, the Agent,
         the Security Agent, any Bank and the Standby Lender shall have the
         right to protect and enforce its rights arising out of this Agreement
         and it shall not be necessary for the Co-Arrangers, any Issuing Bank,
         the Agent, the Security Agent, any Bank or the Standby Lender (as the
         case may be) to be joined as an additional party in any proceedings for
         this purpose.

3        ADVANCES

3.1      DRAWDOWN

         Subject to the terms and conditions of this Agreement, an Advance may
         be made to the Borrower following receipt by the Agent from the
         Borrower of a Drawdown Notice not later than 10.00 a.m. on the third
         Banking Day before the date on which the Advance is intended to be made
         which shall be a Banking Day falling within the Availability Period. A
         Drawdown Notice shall be effective on actual receipt by the Agent and,
         once given, shall, subject as provided in Clause 8.5(A), be
         irrevocable. No Drawdown Notice may be given in respect of an amount
         which is the subject of a notice of cancellation under Clause 9.

3.2      AMOUNT

         Each Advance shall be a minimum of $10,000,000 but no more than the
         balance of the Available Commitments or such other amount (not
         exceeding the Available Commitments) as the Banks may agree but no
         Advance may be drawn down on any day of an amount exceeding the
         Available Commitments on such day, taking into account for this purpose
         any Advance to be repaid on such day, any other Advance which is to be
         made which is the subject of a current Drawdown Notice and any Bank
         Guarantee which is to be issued or extended on such day which is the
         subject of a current Bank Guarantee Request.

3.3      TERM

         Subject to Clause 3.6, Advances may be borrowed only for a Term of one
         (1), two (2), three (3) or six (6) months or such other periods up to
         twelve (12) months as the Agent may agree or such other periods
         exceeding twelve (12) months as the Banks may agree, in each case
         ending on or before the Termination Date.

3.4      AVAILABILITY

         Upon receipt of a Drawdown Notice complying with the terms of this
         Agreement the Agent shall notify each Bank thereof and of the date on
         which the Advance is to be made and, subject to the provisions of
         Clause 18, on such date each of the Banks shall make available to the
         Agent its portion of such Advance for payment by the Agent in
         accordance with Clause 11.2. Except with the Banks' consent, no
         Advances shall be

                                       50
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         made to the Borrower under this Agreement after the date falling one
         (1) month before the Termination Date.

3.5      THE TERMINATION DATE

         Without prejudice to any other provisions of this Agreement, the
         Commitments shall in any event be reduced to zero on the Termination
         Date and no Advances shall be made to the Borrower or Bank Guarantees
         issued or extended under this Agreement thereafter.

3.6      NUMBER OF ADVANCES

         Notwithstanding the provisions of Clauses 3.2 and 3.3, Advances may be
         drawn only so that the number of separate Advances outstanding at any
         time does not exceed fifteen (15) or such other number as may be agreed
         by all the Banks or so that on the Maturity Date in respect of the next
         Advance to be repaid the number of Advances outstanding (excluding
         those repayable on such Maturity Date) will not exceed fifteen (15) or
         such other number as may be agreed by all the Banks. No more than
         twelve (12) Terms of one month (or, if agreed by the Banks, any shorter
         period) may be selected by the Borrower in respect of Advances during
         any calendar year.

3.7      APPLICATION OF PROCEEDS

         Without prejudice to the Borrower's obligations under Clause 14.19,
         none of the Banks, the Issuing Banks, the Co-Arrangers or the Agent
         shall have any responsibility for the application of proceeds of any
         Advance by the Borrower.

3.8      EXTENSION OF TERMINATION DATE

         The Termination Date may be extended by up to twenty four (24) months
         in accordance with the following provisions:-

         (A)    on the third anniversary of the Execution Date (subject always
                to Clause 11.4), the Borrower may request that the Termination
                Date be extended by twelve (12) months so that, if the Banks and
                the Standby Lender at that time unanimously agree to such
                request (which agreement they shall be at full liberty to
                withhold), the Termination Date shall be extended until the date
                falling seventy two (72) months after the Execution Date
                (subject to further adjustment under Clause 11.4); and

         (B)    on the fourth anniversary of the Execution Date (subject always
                to Clause 11.4), the Borrower may request that the Termination
                Date be extended by twelve (12) months so that, if the Banks and
                the Standby Lender at that time unanimously agree to such
                request (which agreement they shall be at full liberty to
                withhold), the Termination Date shall be extended until the date
                falling seventy two (72) months after the Execution Date or, if
                the Termination Date has already been extended pursuant to
                paragraph (A) above, the date falling eighty four (84) months
                after the Execution Date (subject always to further adjustment
                under Clause 11.4).

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4        ISSUE OF BANK GUARANTEES

4.1      AGREEMENT TO ISSUE BANK GUARANTEES

         Subject to the terms and conditions of this Agreement, the New
         Guarantee Provider shall issue to a Beneficiary, or (pursuant to Clause
         5.2) extend the Expiry Date of, a Bank Guarantee if:-

         (A)    the Agent has received a Bank Guarantee Request in respect of
                the issue of that Bank Guarantee or the extension of its Expiry
                Date, together with a final draft of the form in which the
                Borrower wishes such Bank Guarantee to be issued, from the
                Borrower not later than fifteen (15) days prior to the date on
                which such Bank Guarantee is intended to be issued or the Expiry
                Date which is intended to be extended;

         (B)    the date on which such Bank Guarantee is intended to be issued,
                or the date on which its Expiry Date is intended to be extended,
                is a Banking Day at least thirty (30) days prior to the
                Termination Date and the date to which the Expiry Date of a Bank
                Guarantee is to be issued or extended is a date not later than
                thirty (30) days prior to the Termination Date;

         (C)    the conditions specified in Clause 18.4 have been satisfied or
                waived;

         (D)    the proposed Bank Guarantee is an Acceptable Bank Guarantee;

         (E)    no more than nine (9) other Bank Guarantees have been issued or
                extended by the New Guarantee Provider during the calendar year
                during which such Bank Guarantee is to be issued or extended;
                and

         (F)    the Outstanding Guarantee Amount of such Bank Guarantee will not
                be such as would result in the aggregate Outstandings of the
                Banks as at the date of issue or as at the Expiry Date of such
                Bank Guarantee or as at the date to which it is intended to be
                extended being greater than the amount of the Commitments.

         A Bank Guarantee Request shall be effective on actual receipt by the
         Agent and the Bank Guarantee referred to therein shall be issued or
         extended by the New Guarantee Provider in accordance with the terms of
         such Bank Guarantee Request without the requirement for any further
         request or instruction from the Borrower unless, at the time the Bank
         Guarantee Request is given, the Borrower stipulates that the Bank
         Guarantee referred to therein shall only be issued or extended upon the
         Borrower's further written request in which case such Bank Guarantees
         shall not be issued or extended unless and until such further written
         request is received.

4.2      NOTIFICATION TO BANKS

         Upon receipt of a Bank Guarantee Request complying with the terms of
         this Agreement, the Agent shall notify the New Guarantee Provider and
         each Bank thereof and of the content of the Bank Guarantee which is,
         and the date on which it is, to be issued.

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4.3      CURRENCIES OF BANK GUARANTEES

         The New Guarantee Provider shall not issue a Bank Guarantee in a
         currency other than Dollars if to do so would cause the number of
         currencies other than Dollars in which Bank Guarantees are outstanding
         to exceed five (5).

4.4      EXCESS AMOUNTS

         The Agent shall monitor the Outstanding Guarantee Amounts not less than
         monthly. If at any time and from time to time by reason of fluctuations
         in the currency conversion rates or interest rates the Agent reasonably
         considers that the aggregate of all Outstanding Guarantee Amounts of
         Bank Guarantees then in issue and the other Outstandings as at the date
         of determination exceed the Commitments, the Agent shall notify the
         Borrower and require the Borrower to pay an amount equal to the excess
         certified by the Agent to the Cash Collateral Account and/or prepay the
         Outstandings by an amount equal to the excess within two (2) Banking
         Days of the Agent's notice whereupon the Borrower shall be liable to
         make such payment within such period. The Borrower shall be entitled to
         the release of amounts paid to the Cash Collateral Account under this
         Clause from time to time provided no Event of Default has occurred and
         is continuing to the extent that the Commitments as reduced or
         suspended pursuant to Clause 9.4 and/or any other relevant provisions
         of this Agreement at the time of the Borrower's request then exceed the
         Outstandings expressed in Dollars. In determining the Outstanding
         Guarantee Amounts for the purposes of this Clause the Agent shall in
         relation to interest by reference to which each Issuing Bank's
         liability under the outstanding Bank Guarantees may be calculated take
         into account only such amounts as have accrued to form part of such
         Issuing Bank's liability under the relevant Bank Guarantees at the time
         the Agent's determination is made.

5        REDUCTION AND EXTENSION OF BANK GUARANTEES

5.1      REDUCTION OF OUTSTANDING GUARANTEE AMOUNT

         The Outstanding Guarantee Amount of a Bank Guarantee shall not be
         treated as reduced for the purposes of this Agreement unless (i) the
         relevant Issuing Bank has received a written confirmation from the
         Beneficiary of the amount of such reduction or (ii) the relevant
         Issuing Bank has notified the Agent in writing that (notwithstanding
         the absence of written confirmation from the Beneficiary) it is
         satisfied that its liability under such Bank Guarantee has been
         irrevocably reduced or (iii) a payment has been made by the relevant
         Issuing Bank under such Bank Guarantee. The relevant Issuing Bank shall
         in each case promptly notify the Agent (which shall notify the Banks
         and the Borrower) of the amount and date of such reduction. Upon such
         notification the liability of each Bank with respect to such Bank
         Guarantee shall (but without prejudice to such Bank's obligations under
         Clause 6.2) be reduced by an amount equal to its Percentage of such
         reduction.

5.2      REQUEST FOR EXTENSION OF EXPIRY DATE

         If the New Guarantee Provider and the Agent shall be requested by the
         Borrower to extend the Expiry Date of a Bank Guarantee, the Agent shall
         advise the Banks of such request, specifying the date to which it is
         proposed the Bank Guarantee be extended. The New Guarantee Provider
         shall not extend the Expiry Date of a Bank Guarantee otherwise than in
         accordance with Clause 4.1. The Expiry Date of an Existing Bank
         Guarantee may not be extended under this Agreement.

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5.3      RELEASE OF BANK GUARANTEES

         On or before the end of the Availability Period the Borrower shall
         procure that each Issuing Bank is fully discharged and released from
         all of its obligations under all of the Bank Guarantees issued by it
         and failure to do so shall constitute an Event of Default.

6        PAYMENTS UNDER BANK GUARANTEES

6.1      PAYMENTS TO CONSTITUTE LOANS

         Any payment by an Issuing Bank to the Beneficiary under a Bank
         Guarantee shall constitute a loan from that Issuing Bank to the
         Borrower. Such loan shall be:-

         (A)    of an amount equal to the amount of such payment (less any
                amount paid to such Issuing Bank by the Agent and debited to the
                Cash Collateral Account pursuant to Clause 23.3) and in the case
                of a payment made in a currency other than Dollars shall be
                deemed to be in an amount equal to the amount in Dollars yielded
                by the Agent purchasing such amount of the relevant foreign
                currency with Dollars at the Agent's spot rate of exchange at
                11.00 a.m. two (2) Banking Days before the date on which the
                payment in foreign currency is made;

         (B)    treated as made at the time of payment to the Beneficiary;

         (C)    due and payable by the Borrower at the time it is made; and

         (D)    reduced by the amount of each payment made by a Bank to the
                Agent for account of such Issuing Bank pursuant to Clause
                6.2(A).

6.2      BANKS' OBLIGATIONS TO REIMBURSE

         If an Issuing Bank makes payment to the Beneficiary under a Bank
         Guarantee such Issuing Bank shall forthwith give notice to the Agent
         and the Banks and each Bank shall, on demand by the Agent, pay to the
         Agent for account of such Issuing Bank an amount equal to the aggregate
         of:-

         (A)    such Bank's Percentage of the amount of any loan constituted
                pursuant to Clause 6.1, as reduced by the amount of any
                repayment made by the Borrower prior to the date of such demand
                (but for the purpose of calculating the amount of such loan any
                amount paid by the Agent and debited to the Cash Collateral
                Account pursuant to Clause 23.3 shall, if such amount was paid
                to the Cash Collateral Account pursuant to Clause 9.12 or Clause
                21.1, be deemed not to have been paid); and

         (B)    such Issuing Bank's cost of funding the amount payable by such
                Bank pursuant to Clause 6.2(A) from the date of payment by such
                Issuing Bank to the Beneficiary to the date of payment of such
                amount to the Agent by such Bank.

         The relevant Issuing Bank shall (without prejudice to the obligation of
         the Banks to pay such amount) provide reasonable detail as to the basis
         on which it has determined its said cost of funding.

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6.3      BORROWER'S OBLIGATION TO REIMBURSE

         Any payment by a Bank to the Agent pursuant to Clause 6.2 shall
         constitute a loan from the Bank to the Borrower. Such loan shall be:-

         (A)    of an amount equal to the amount of such payment;

         (B)    treated as made at the time of payment to the Agent; and

         (C)    due and payable at the time it is made.

         If and to the extent that at that time the Borrower would (if it had
         given a Drawdown Notice and if the Banks had agreed to make an Advance
         of that amount) be entitled under the other provisions of this
         Agreement to borrow an Advance not exceeding the amount of such
         payments to the Banks (other than any Bank whose Commitment has been
         reduced pursuant to Clauses 9.12 or 21.1), the aggregate of such loans
         by such Banks shall to such extent be deemed for the purposes of this
         Agreement to be an Advance of that amount with a Term of the minimum
         period for which the Borrower would at that time be entitled to borrow
         an Advance under Clause 3.3 and any balance of such loan shall be
         deemed payable at the time it is made. Where the Commitment of a Bank
         has been reduced pursuant to Clauses 9.12 or 21.1, any such loan made
         by that Bank under this Clause 6.3 will be due and payable at the time
         it is made.

6.4      BANKS' ENTITLEMENTS

         Upon payment by a Bank of the full amount due from such Bank under
         Clause 6.2, such Bank shall be entitled to receive its Percentage of
         all interest payable by the Borrower under Clause 8.2 in respect of the
         relevant payment by the relevant Issuing Bank to the Beneficiary.

6.5      ISSUING BANK'S ENTITLEMENT

         The relevant Issuing Bank shall be entitled to pay immediately any
         amount for which a demand or request has been made at any time under
         any Bank Guarantee issued by it without any reference to or further
         authority from the Borrower or any Bank and shall not be under any duty
         to investigate or enquire whether any claim or demand on that Issuing
         Bank under a Bank Guarantee shall have been properly made
         notwithstanding that the Borrower or any Bank may dispute the validity
         of such claim or demand. The liabilities of the Borrower and the Banks
         under this Clause 6.5 shall be in no way prejudiced, affected or
         diminished by the fact that the relevant Issuing Bank was or might have
         been justified in refusing payment of any amount claimed or demanded
         under a Bank Guarantee.

6.6      FAILURE OF A BANK TO PAY

         If any Bank fails to make any payment to the Agent for account of the
         relevant Issuing Bank when due pursuant to Clause 6.2, then until such
         Bank's failure has been remedied in full such Issuing Bank shall be
         entitled to (i) the benefit of all security then existing or thereafter
         created to secure the obligations of the Borrower under this Agreement
         to which such Bank would have been entitled had it made such payment
         and (ii) such Bank's rights to fees and commissions in respect of the
         Bank Guarantee in respect of which it has failed to perform its
         obligations and, for the purpose of determining the Majority Banks, the
         relevant Issuing Bank shall be treated as a Bank having Outstandings
         equal to the

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<PAGE>

         Outstandings of the Bank which has failed to make such payment. The
         rights conferred upon each Issuing Bank by this Clause 6.6 shall be in
         addition and without prejudice to its rights against such Bank under
         this Clause 6.

7        THE STANDBY FACILITY

7.1      AVAILABILITY

         Subject to the terms and conditions of this Agreement and in reliance
         on the representations and warranties contained in Clause 13, the
         Standby Commitment will be available to the Borrower at any time during
         the Standby Availability Period.

7.2      DRAWINGS

         Drawings against the Standby Commitment may be made available to the
         Borrower by written instructions from the Borrower to the Standby
         Lender to make payments or remittances on behalf of the Borrower. Each
         drawing when aggregated with previous drawings then outstanding shall
         not exceed the balance of the Available Standby Commitment. Drawings
         may be made on a call basis or for a fixed term of one, three or six
         months or such other period (but not, unless the Standby Lender
         otherwise agrees, in any case longer than twelve (12) months) as the
         Borrower may request and the Standby Lender agree in its discretion in
         each case ending on or before the Termination Date. The minimum amount
         which may be drawn for any fixed period is $500,000 (unless the Standby
         Lender shall consent to a lesser or other amount).

         In the case of a request to draw an amount otherwise than on a call
         basis a notice of drawdown shall be given to the Standby Lender in
         mutatis mutandis the same form as Schedule 6 and such notice shall be
         given not later than 10.00 a.m. on the second Banking Day before the
         proposed drawing.

7.3      APPLICATION OF PROCEEDS

         Without prejudice to the Borrower's obligations to use the Standby
         Facility exclusively for the purposes specified in Clause 1.1 the
         Standby Lender shall have no responsibility for the application by the
         Borrower of the proceeds of drawings representing Standby Outstandings.

7.4      INTEREST

         (A)    CALL BASIS

                The Borrower shall pay interest on the cleared daily balance of
                the amount of Standby Outstandings in relation to which interest
                is to be calculated on a call basis at the rate per annum
                determined by the Standby Lender to be the aggregate of (i) the
                Margin and (ii) the applicable Standby Rate. Such interest shall
                be payable quarterly in arrears on 31 March, 30 June, 30
                September and 31 December in each year and on the Termination
                Date.

         (B)    TERM BORROWINGS

                The Borrower shall pay interest on any each amount borrowed
                under the Standby Facility for which interest is to be
                calculated for a fixed period at the rate per annum determined
                by the Standby Lender to be the aggregate of (i) the Margin

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<PAGE>

                and (ii) the applicable Standby Rate, such interest to be
                payable (a) at the end of such period and/or (b) if the period
                exceeds six (6) months, on each date falling at six (6) monthly
                intervals within such period and (c) on the date the amount
                borrowed is repaid.

7.5      DEFAULT INTEREST

         If the Borrower fails to pay any sum (including, without limitation,
         any sum payable pursuant to this Clause 7.5) in relation to the Standby
         Facility on its due date for payment under this Agreement, the Borrower
         shall pay interest on such sum on demand from the due date up to the
         date of actual payment (as well after as before judgment) at a rate
         determined by the Standby Lender pursuant to this Clause 7.5 as
         follows:-

         (A)    In the case of amounts borrowed on a call basis the rate of
                interest shall be the Standby Lender's current standard default
                rate and such interest shall be payable on demand.

         (B)    In the case of amounts borrowed for a fixed term the period
                beginning on such due date and ending on such date of payment
                shall be divided into successive periods of not more than three
                (3) months as selected by the Standby Lender each of which
                (other than the first, which shall commence on such due date)
                shall commence on the last day of the preceding such period. The
                rate of interest applicable to each such period shall be the
                aggregate (as determined by the Standby Lender) of (i) two per
                cent (2%) per annum, and (ii) the Standby Rate for such period.
                Default interest shall be due and payable on the last day of
                each such period as determined by the Standby Lender pursuant to
                this Clause 7.5 or, if earlier, on the date on which the sum in
                respect of which such default interest is accruing shall
                actually be paid. If, for the reasons specified in Clause
                8.5(A), the Standby Lender is unable to determine a rate in
                accordance with the foregoing provisions of this Clause 7.5,
                interest on any sum not paid on its due date for payment shall
                be calculated at a rate determined by the Standby Lender to be
                two per cent (2%) per annum above the cost of funds to the
                Standby Lender.

7.6      NOTIFICATION OF INTEREST RATE

         The Standby Lender shall notify the Borrower promptly of each rate of
         interest determined by it in relation to borrowings in relation to
         which interest is to be calculated by reference to a fixed term.

7.7      MARKET DISRUPTION; NON-AVAILABILITY

         (A)    If and whenever, at any time prior to the making of a drawing
                under the Standby Facility:-

                (i)    the Standby Lender shall have determined (which
                       determination shall, in the absence of manifest error, be
                       conclusive) that adequate and fair means do not exist for
                       ascertaining the applicable Standby Rate during the term
                       of such drawing; or

                (ii)   the Standby Lender certifies that deposits in Dollars are
                       not available to it in the London Interbank Market in the
                       ordinary course of business in an amount sufficient to
                       fund such drawing,

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<PAGE>

                the Standby Lender shall forthwith give notice (a "STANDBY
                FACILITY DETERMINATION NOTICE") thereof to the Borrower and the
                Agent and such drawing shall not be made. The Standby Facility
                Determination Notice shall contain particulars of the relevant
                circumstances giving rise to its issue.

         (B)    After the giving of any the Standby Facility Determination
                Notice no further amounts may be borrowed under the Standby
                Facility until notice to the contrary is given to the Borrower
                by the Standby Lender.

         (C)    During the period of twenty (20) days following the giving of
                any Standby Facility Determination Notice, the Borrower and the
                Standby Lender shall negotiate in good faith in order to arrive
                at a mutually acceptable substitute basis for the Standby Lender
                to continue to make the Standby Facility available and, if
                within such twenty (20) day period the Borrower and the Standby
                shall agree in writing upon such an alternative basis (the
                "STANDBY FACILITY SUBSTITUTE BASIS"), the Standby Facility
                Substitute Basis shall be retroactive to and effective from the
                first day of the relevant interest period.

         (D)    If the Borrower and the Standby Lender fail to agree on a
                Standby Facility Substitute Basis within such twenty (20) day
                period, the Borrower shall pay interest to the Standby Lender on
                the principal amount drawn under the Standby Facility at the
                rate certified by the Standby Lender as being a reasonable
                interest rate reflecting the cost to it of funding the Standby
                Outstandings during the period from the date of the relevant
                Standby Facility Determination Notice, plus the Margin and such
                rate plus the Margin shall be the Standby Facility Substitute
                Basis.

         (E)    So long as any Standby Facility Substitute Basis is in force,
                the Standby Lender shall from time to time (but at least
                monthly) review whether or not the circumstances are such that
                such Standby Facility Substitute Basis is no longer necessary
                and, if the Standby Lender so determines, it shall notify the
                Borrower that the Standby Facility Substitute Basis shall cease
                to be effective from such date as the Standby Lender shall
                reasonably specify.

7.8      REPAYMENT

         The Borrower shall repay any Standby Outstandings on the last day of
         the Standby Availability Period and shall repay each amount drawn for a
         fixed period on the last day of such period.

7.9      SCHEDULED CANCELLATION OF STANDBY COMMITMENT

         Without prejudice to any other provisions of this Agreement, the
         Standby Commitment shall in any event be reduced to zero on the
         Termination Date and no drawings shall be made by the Borrower
         thereafter.

7.10     VOLUNTARY CANCELLATION OF STANDBY COMMITMENT

         The Borrower may at any time during the Standby Availability Period by
         notice to the Standby Lender (effective only on actual receipt) (with
         copy to the Agent) cancel with effect from a date not less than thirty
         (30) days after the receipt by the Standby Lender of such notice the
         whole or any part (being $500,000 or any larger sum which is an
         integral multiple of $100,000 but not more than the Available Standby
         Commitment as at such

                                       58
<PAGE>

         date) of the total of the Available Standby Commitment as at such date.
         Any such notice of cancellation, once given, shall be irrevocable and
         upon such cancellation taking effect the Standby Commitment shall be
         reduced accordingly and the Borrower shall on the date designated in
         its notice for such cancellation pay to the Standby Lender all Standby
         Outstandings exceeding the amount of the Standby Commitment as reduced
         by such cancellation.

7.11     VOLUNTARY REPAYMENT

         The Borrower may repay the Standby Outstandings in whole or in part on
         any Banking Day but if in part in relation to an amount borrowed for a
         fixed term the payment shall be an amount of $500,000 or an integral
         multiple thereof (unless the Standby Lender shall consent to the
         repayment of a lesser or other amount).

7.12     AMOUNTS PAYABLE ON REPAYMENT OR PREPAYMENT

         Any repayment of all or part of the Standby Outstandings under this
         Agreement shall be made together with (i) accrued interest on the
         amount to be repaid or prepaid to the date of such repayment, (ii) any
         additional amount payable under Clauses 11.7 or 21.2, (iii) costs
         certified by the Standby Lender as necessary to compensate it for the
         cost of repaying fixed deposits borrowed to fund any amount in respect
         of the Standby Facility which is drawn for a fixed term and which is
         prepaid before the end of such fixed term and (iv) all other sums
         payable by the Borrower to the Standby Lender in its capacity as such
         under this Agreement including, without limitation, any amounts payable
         under Clause 10.4.

7.13     INTEREST ON CREDIT BALANCES

         For credit balances to the Standby Facility credit interest will be
         paid by the Standby Lender after specific agreement with the Borrower.
         Such credit interest will be computed in accordance with an interest
         rate and upon terms from time to applicable to accounts of this type
         with the Standby Lender. Accrued credit interest will be paid by the
         Standby Lender by crediting the account subject to the Standby Lender's
         obligation, if any, to make withholdings for Taxes so that the Borrower
         shall not be entitled to set off against any amount payable to the
         Standby Lender, the Banks, the Agent, the Security Agent, the Issuing
         Banks or the Co-Arrangers any amount due to the Borrower under this
         Clause 7.13.

8        INTEREST ON ADVANCES

8.1      NORMAL INTEREST RATE

         The Borrower shall pay interest on each Advance on its Maturity Date
         (or, in the case of an Advance having a Term of more than six (6)
         months, by instalments, the first six (6) months from the drawdown of
         such Advance and the subsequent instalments at intervals of six (6)
         months or, if shorter, the period from the date of the preceding
         instalment until the relevant Maturity Date) at the rate per annum
         determined by the Agent to be the aggregate of (i) the Margin and (ii)
         LIBOR

         Provided however that, in the case of any Advance which is borrowed for
         a Term of one month or less, the amount of interest payable in respect
         thereof shall be that amount which is the higher of:-

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         (A)    the amount of interest which would be payable thereon if
                calculated at the interest rate specified in the foregoing
                provisions of this Clause 8.1; and

         (B)    the amount which is equal to the aggregate of (i) that amount of
                interest which would be payable thereon pursuant to the
                foregoing provisions of this Clause 8.1 if the Margin were zero
                and (ii) eight thousand three hundred and thirty three Dollars
                ($8,333).

8.2      DEFAULT INTEREST

         Except as provided in Clause 7.5 in relation to sums due in respect of
         the Standby Facility, if the Borrower fails to pay any sum (including,
         without limitation, any sum payable pursuant to this Clause 8.2) on its
         due date for payment under any of the Security Documents, the Borrower
         shall pay interest on such sum on demand from the due date up to the
         date of actual payment (as well after as before judgment) at a rate
         determined by the Agent pursuant to this Clause 8.2. The period
         beginning on such due date and ending on such date of payment shall be
         divided into successive periods of not more than three (3) months as
         selected by the Agent (after consultation with the Banks) each of which
         (other than the first, which shall commence on such due date) shall
         commence on the last day of the preceding such period. The rate of
         interest applicable to each such period shall be the aggregate (as
         determined by the Agent) of (i) two point seven five per cent (2.75%)
         per annum and (ii) LIBOR for such period provided that if such unpaid
         sum is an amount of principal which became due and payable, by reason
         of a declaration by the Agent under Clause 19.2 or a prepayment
         pursuant to Clauses 9.4, 9.7, 9.8, 9.11 or 21.1 on a date other than a
         Maturity Date relating thereto, the first such period selected by the
         Agent shall be of a duration equal to the period between the due date
         of such principal sum and such Maturity Date and interest shall be
         payable on such principal sum during such period at a rate of two point
         seven five per cent (2.75%) above the rate of LIBOR applicable thereto
         immediately before it shall have become so due and payable. Default
         interest shall be due and payable on the last day of each such period
         as determined by the Agent pursuant to this Clause 8.2 or, if earlier,
         on the date on which the sum in respect of which such default interest
         is accruing shall actually be paid. If, for the reasons specified in
         Clause 8.5(A), the Agent is unable to determine a rate in accordance
         with the foregoing provisions of this Clause 8.2, each Bank shall
         promptly notify the Agent of the cost of funds to such Bank and
         interest on any sum not paid on its due date for payment shall be
         calculated for each Bank at a rate determined by the Agent to be two
         point seven five per cent (2.75%) per annum above the cost of funds to
         such Bank. Each Bank shall (without prejudice to the obligation of the
         Borrower to pay such interest) provide reasonable detail as to the
         basis on which it has determined such cost of funds.

8.3      NOTIFICATION OF INTEREST RATE

         The Agent shall notify the Borrower promptly of each rate of interest
         determined by it under this Clause 8.

8.4      REFERENCE BANK QUOTATIONS

         If any Reference Bank is unable or otherwise fails to furnish a
         quotation for the purpose of calculating LIBOR pursuant to the proviso
         contained in the definition of LIBOR the interest rate shall be
         determined, subject to Clause 8.5, on the basis of the quotations
         furnished by the remaining Reference Banks.

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8.5      MARKET DISRUPTION; NON-AVAILABILITY

         (A)    If and whenever, at any time prior to the making of an Advance:-

                (i)    the Agent shall have determined (which determination
                       shall, in the absence of manifest error, be conclusive)
                       that adequate and fair means do not exist for
                       ascertaining LIBOR during the Term of that Advance;

                (ii)   where applicable, none of the Reference Banks supplies
                       the Agent with a quotation for the purpose of calculating
                       LIBOR; or

                (iii)  the Agent shall have received notification from Banks
                       with Commitments aggregating not less than one-half of
                       the total of the Commitments (or, if no Advance has been
                       made, Commitments aggregating not less than one-half of
                       the Commitments of all the Banks) that deposits in
                       Dollars are not available to such Banks in the London
                       Interbank Market in the ordinary course of business in
                       sufficient amounts to fund their Contributions to such
                       Advance or, where applicable, that the arithmetic mean of
                       the quotations for LIBOR supplied by the Reference Banks
                       does not accurately reflect the cost to such Banks of
                       obtaining such deposits,

                the Agent shall forthwith give notice (a "DETERMINATION NOTICE")
                thereof to the Borrower and to each of the Banks and such
                Advance shall not be made. A Determination Notice shall contain
                particulars of the relevant circumstances giving rise to its
                issue.

         (B)    After the giving of any Determination Notice no further Advances
                may be borrowed until notice to the contrary is given to the
                Borrower by the Agent.

         (C)    During the period of twenty (20) days following the giving of
                any Determination Notice, the Borrower and the Agent in
                consultation with the Banks shall negotiate in good faith in
                order to arrive at a mutually acceptable substitute basis for
                each Bank to continue its Contribution to any further Advances
                and, if within such twenty (20) day period the Borrower and the
                Agent (in consultation as aforesaid) shall agree in writing upon
                such an alternative basis (the "SUBSTITUTE BASIS"), the
                Substitute Basis shall be retroactive to and effective from the
                first day of the relevant Term.

         (D)    If the Borrower and the Agent (in consultation with the Banks)
                fail to agree on a Substitute Basis within such twenty (20) day
                period, the Borrower shall pay interest on the Advances to each
                Bank at the rate certified by each such Bank and notified
                through the Agent to the Borrower as being a reasonable interest
                rate reflecting the cost to such Bank of funding its
                Contribution to such Advances during the period from the date of
                the relevant Determination Notice, plus the Margin and such rate
                plus the Margin shall be the Substitute Basis.

         (E)    So long as any Substitute Basis is in force, the Agent shall
                from time to time (but at least monthly) and in consultation
                with the Banks review whether or not the circumstances are such
                that such Substitute Basis is no longer necessary and, if the
                Agent so determines, it shall notify the Borrower and the Banks
                that the Substitute Basis shall cease to be effective from such
                date as the Agent shall reasonably specify.

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9        REPAYMENT, REDUCTION AND CANCELLATION

9.1      REPAYMENT OF ADVANCES

         The Borrower shall repay each Advance on its Maturity Date. If an
         Advance (the "NEW ADVANCE") is to be made on a day on which another
         Advance (the "MATURING ADVANCE") is due to be repaid then, subject to
         the terms of this Agreement, (i) the maturing Advance shall be deemed
         to have been repaid on its Maturity Date either in whole (if the new
         Advance is equal to or greater than the maturing Advance) or in part
         (if the new Advance is less than the maturing Advance) and (ii) to the
         extent that the maturing Advance is so deemed to have been repaid, the
         principal amount of the new Advance to be made on such date shall be
         deemed to have been credited to the account of the Borrower by the
         Agent on behalf of the Banks in accordance with the terms of this
         Agreement and the Banks shall only be obliged to make available to the
         Borrower pursuant to Clause 3 a principal amount equal to the amount by
         which the new Advance exceeds the maturing Advance. On the Termination
         Date, all outstanding Advances and other sums (if any) then owing under
         this Agreement shall in any event be repaid or paid in full.

9.2      SCHEDULED REDUCTION OF COMMITMENTS

         All of the Commitments shall be cancelled and reduced to zero on the
         Termination Date.

9.3      REDUCTION OF COMMITMENTS UPON EXTENSION OF THE TERMINATION DATE

         Without prejudice to any other provision of this Agreement, if the
         Termination Date is extended pursuant to Clause 3.8 the Commitments
         shall be reduced as follows:-

         (A)    if the Termination Date is extended pursuant to Clause 3.8(A),
                the Commitments shall be reduced pro rata in accordance with the
                Banks' respective Percentages on the date falling sixty (60)
                months after the Execution Date by the aggregate amount of
                $100,000,000 or, if lower, by an amount in Dollars equal to
                10/57ths of the then aggregate amount of the Commitments;

         (B)    if the Termination Date is extended pursuant to Clause 3.8(B)
                without first having been extended pursuant to Clause 3.8(A),
                the Commitments shall be reduced pro rata in accordance with the
                Banks' respective Percentages on the date falling sixty (60)
                months after the Execution Date by the aggregate amount of
                $100,000,000 or, if lower, by an amount in Dollars equal to
                10/57ths of the then aggregate amount of the Commitments; and

         (C)    if the Termination Date is extended pursuant to Clause 3.8(B)
                after first having been extended pursuant to Clause 3.8(A), the
                Commitments shall be reduced pro rata on the date falling
                seventy two (72) months after the Execution Date by the
                aggregate amount of $100,000,000 or, if lower, by an amount in
                Dollars equal to 10/47ths of the then aggregate amount of the
                Commitments.

         If, upon any reduction of the Commitments pursuant to this Clause 9.3,
         the aggregate of the Outstandings at such time exceeds the Commitments
         as thereby reduced, the Borrower shall, on the date on which such
         reduction takes effect, prepay such amount of the outstanding Advances
         and/or procure the release and discharge by the Beneficiaries of such
         of the Bank Guarantees as will ensure that immediately thereafter the
         aggregate amount of the Outstandings will not exceed the Commitments as
         so reduced.

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9.4      REDUCTION OF COMMITMENTS ON TOTAL LOSS OR SALE OR BY RECEIPT OF
         INSTALMENTS

         (A)    TOTAL LOSS OR SALE OF MORTGAGED SHIPS

                If a Mortgaged Ship is sold or becomes a Total Loss, the
                Commitments shall, subject to Clause 9.4(E), be reduced on the
                Disposal Reduction Date for such Ship by the relevant Disposal
                Reduction Amount.

         (B)    TRANSFERRED SHIPS

                On each Disposal Reduction Date applicable to a Transferred
                Ship, the Commitments shall, subject to Clause 9.4(E), be
                reduced by the relevant Disposal Reduction Amount.

         (C)    SALE OF MORTGAGED PORTS AND/OR PORT OWNER

                If a Mortgaged Port or any part thereof is sold (other than any
                part of a Mortgaged Port which is sold for a consideration of
                less than $25,000 or the equivalent thereof in any other
                currency), or any of the shares in the capital of any Port Owner
                are sold, the aggregate amount of the Commitments shall, subject
                to Clause 9.4(E), be reduced on the Disposal Reduction Date
                relating thereto by the relevant Disposal Reduction Amount.

         (D)    PREPAYMENT UPON REDUCTION OF COMMITMENTS AND/OR STANDBY
                COMMITMENT

                If, upon reduction or suspension of the Commitments by any such
                Disposal Reduction Amount, the aggregate of the Outstandings at
                such time exceeds the Commitments as thereby reduced or after
                deduction of the amount to be suspended as the case may be, the
                Borrower shall on such Disposal Reduction Date prepay such
                amount of the outstanding Advances and/or procure the release
                and discharge by the Beneficiaries of such of the Bank
                Guarantees as will ensure that immediately thereafter the
                aggregate amount of the Outstandings will not exceed the
                Commitments as so reduced or after deduction of the amount to be
                suspended as the case may be. If after such reduction or after
                deduction of the amount to be suspended as the case may be the
                Commitments are reduced to zero, the Standby Commitment shall be
                reduced or suspended by the amount of the excess of the Disposal
                Reduction Amount over the amount of the Commitments prior to
                such reduction or the relevant suspension and the Borrower shall
                repay such part of the Standby Outstandings as is necessary to
                ensure that they do not exceed the Standby Commitment as so
                reduced or after deduction of the amount to be suspended as the
                case may be, together with any costs certified by the Standby
                Lender as necessary to compensate it for the cost or repaying
                fixed deposits borrowed to fund any amount in respect of the
                Standby Facility which is drawn for a fixed term and which is
                prepaid pursuant to this Clause 9.4(D) before the end of such
                fixed term.

         (E)    SUBSTITUTE SECURITY

                (i)    Without prejudice to the Borrower's obligation to make
                       any payment due under Clause 9.4(D) the Commitments shall
                       be suspended for a period of up to twelve (12) months
                       from the relevant Disposal Reduction Date in an amount
                       equal to the relevant Disposal Reduction Amount. The
                       Borrower shall on any one or more dates during such
                       twelve (12) month period

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                       (each such date being a "SUBSTITUTE SECURITY PROVISION
                       DATE") provide the Security Agent with substitute
                       security in accordance with the provisions of this
                       paragraph such that, upon the Agent giving notice to the
                       Borrower and the Banks that such security has been duly
                       granted, the suspended amount of the Commitments
                       (adjusted, if appropriate, in accordance with the
                       provisions of this paragraph) shall cease to be suspended
                       by an amount equal to two-thirds (2/3rds) of the value of
                       such substitute security or such lesser amount as the
                       Borrower requests, but so that the Commitments may not at
                       any time exceed the amount of the Commitments as they
                       would have stood but for the suspension of part thereof
                       and taking into account reductions and cancellations by
                       virtue of the other provisions of this Agreement.

                       For the purpose of this paragraph:-

                       (a)    the value of any substitute security shall be the
                              market value on the Substitute Security Provision
                              Date of the asset subject to that Security
                              Document minus, in the case of any substitute
                              security provided under a Security Document which
                              ranks behind a Prior Security Document, 115% of
                              the amount of the Commitments under the SIBV $275m
                              Facility Agreement (as defined therein) which
                              cease to be suspended thereunder on that
                              Substitute Security Provision Date by reason of
                              the relevant Prior Security Document being granted
                              over that asset on such date; and

                       (b)    the suspended amount of the Commitments shall be
                              reduced during the period of the suspension in
                              proportion to the reduction of the Commitments
                              (including the suspended portions) which takes
                              effect by virtue of any reduction or partial
                              cancellation in respect of the Commitments which
                              takes effect during the period of the suspension
                              by virtue of the other provisions of this
                              Agreement.

                (ii)   The Borrower's obligation to provide substitute security
                       in relation to an amount of the Commitments suspended by
                       virtue of this Clause 9.4(E) shall be deemed discharged
                       if any member of the Stena AB Group provides security
                       over a Vessel or Vessels (a "SUBSTITUTE VESSEL") owned by
                       such member of the Stena AB Group and the following
                       conditions in relation thereto are satisfied:-

                       (a)    the relevant member of the Stena AB Group (except
                              in the case of Stena Rederi AB and Stena Line
                              Scandinavia) has executed a Shipowner's Guarantee
                              in favour of the Security Agent;

                       (b)    the relevant member of the Stena AB Group has
                              executed in favour of the Security Agent a first
                              priority Ship Mortgage and either a first priority
                              Deed of Covenant or a first priority Insurance
                              Assignment in respect of the Substitute Vessel in
                              substantially the forms of Schedules 7 and 10
                              respectively to the Agreed Form Certificate

                              PROVIDED THAT, if the Commitments are suspended by
                              virtue of this Clause 9.4(E) due to the sale or
                              Total Loss of a Ship which

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                              at the time of such sale or Total Loss was subject
                              to a Prior Mortgage, and if the Borrower is
                              required to provide substitute security under the
                              SIBV $275m Facility Agreement to avoid a
                              cancellation of part of the SIBV $275m Facility as
                              a result thereof, then the relevant member of the
                              Stena AB Group shall execute in favour of the
                              Security Agent a second priority Ship Mortgage
                              (ranking behind a Prior Mortgage only) and either
                              a second priority Deed of Covenant or a second
                              priority Insurance Assignment in respect of the
                              Substitute Vessel in substantially the forms of
                              Schedules 8 and 11 respectively to the Agreed Form
                              Certificate;

                       (c)    the Substitute Vessel is registered under the laws
                              and flag of an Approved Flag State;

                       (d)    the Agent shall have received the documents and
                              evidence referred to in Clause 23.12(F) in
                              relation to the Substitute Vessel.

                       If the Borrower provides substitute security in any other
                       form such security shall be in such form and constituted
                       in such manner as shall be in all respects satisfactory
                       to the Majority Banks.

                (iii)  To the extent that the Borrower does not grant or procure
                       the grant of additional security as provided in this
                       Clause 9.4(E) or cancel the whole or part of the
                       suspended amount under paragraph (iv) of this Clause
                       9.4(E) within the period of twelve (12) months after the
                       relevant Disposal Reduction Date, then the Commitments
                       shall be treated as permanently reduced by the suspended
                       amount or lesser amount in respect of which the Borrower
                       has not granted or procured the grant of substitute
                       security in accordance with the preceding provisions of
                       this Clause 9.4(E).

                (iv)   The Borrower may, during any period for which a part of
                       the Commitments is suspended under this Clause 9.4(E), by
                       notice to the Agent cancel with effect from a date not
                       less than thirty (30) days after the receipt by the Agent
                       of such notice in whole or part (being $1,000,000 or any
                       larger sum) of the suspended amount. Any such notice of
                       cancellation, once given, shall be irrevocable and upon
                       such cancellation taking effect the Commitment of each of
                       the Banks shall be reduced proportionately.

                (v)    Nothing in this Clause 9.4(E) shall affect the Borrower's
                       obligation to procure that all amounts realised from the
                       property pledged to the Security Agent as security under
                       the Security Documents shall, after an Event of Default
                       has occurred and is continuing, be applied in payment of
                       the relevant Disposal Reduction Amounts and, following a
                       declaration by the Agent under Clause 19.2, be applied in
                       accordance with Clause 11.10.

                (vi)   If the Borrower or any other member of the Stena AB Group
                       creates a Lien over any asset on or after the Execution
                       Date as security for payment of the SIBV $275m Facility
                       (whether pursuant to Clause 5.3(E) of the SIBV $275m
                       Facility Agreement or otherwise) the Borrower shall
                       procure that, simultaneously with the creation of such
                       Lien, a second

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                       priority Lien over that asset is granted in favour of the
                       Security Agent as security for payment of the Outstanding
                       Indebtedness.

         (F)    DEFINED TERMS

                For the purposes of this Clause 9.4:-

                "DISPOSAL REDUCTION AMOUNT"
                means:-

                (x)    in relation to a Mortgaged Ship which has become a Total
                       Loss or is sold, an amount in Dollars which is the lesser
                       of:-

                       (i)    (aa)    where the Ship has become a Total Loss,
                                      the Net Total Loss Proceeds of such Ship
                                      and (if relevant) its related Linkspans
                                      less, in the case of a Mortgaged Ship
                                      which is subject to a Ship Mortgage
                                      ranking with second priority, the Relevant
                                      Reduction/Prepayment Amount; or

                              (bb)    where the Ship has been sold (otherwise
                                      than on Credit Terms) the Net Cash Sale
                                      Proceeds of such Ship and (if relevant)
                                      its related Linkspans less, in the case of
                                      a Mortgaged Ship which is subject to a
                                      Ship Mortgage ranking with second
                                      priority, the Relevant
                                      Reduction/Prepayment Amount; and

                       (ii)   such amount (if any) as will, after reduction or
                              suspension of the Commitments and the Standby
                              Commitment pursuant to Clauses 9.4(A) or 9.4(E)
                              and, if required by Clause 9.4(D), after any
                              prepayment of Advances and/or amounts drawn under
                              the Standby Facility and/or any release and
                              discharge of Bank Guarantees pursuant to the
                              Clause 9.4(D) on the Disposal Reduction Date for
                              such Ship, result in the Security Value being not
                              less than one hundred and fifty per cent (150%) of
                              the aggregate of (a) the total of the Commitments
                              and (b) the Standby Commitment (as so reduced or
                              suspended);

                (y)    in relation to a Transferred Ship, an amount in Dollars
                       which is the lesser of:-

                       (i)    (aa)    if the Ship has become a Total Loss, the
                                      Net Total Loss Proceeds of such Ship and
                                      (if relevant) its related Linkspans less,
                                      in the case of a Transferred Ship which is
                                      subject to a Receivables Assignment
                                      ranking with second priority, the Relevant
                                      Reduction/Prepayment Amount; or

                              (bb)    if the Ship is sold pursuant to a power
                                      conferred on the mortgagee or lessor
                                      thereof, or an obligation on the lessor
                                      thereof, following a default by the
                                      purchaser or lessee, the Net Cash Sale
                                      Proceeds of such Ship and (if relevant)
                                      its related Linkspans less, in the case of
                                      a Transferred Ship which is subject to a
                                      Receivables Assignment ranking with second
                                      priority, the Relevant
                                      Reduction/Prepayment

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                                      Amount; or

                              (cc)    in any other case the amount of deferred
                                      payment instalments, rent or other
                                      deferred consideration received since the
                                      drawdown date of the first Advance or, as
                                      the case may be, the preceding Disposal
                                      Reduction Date by the member of the Stena
                                      AB Group which has disposed of the
                                      relevant Ship less, in the case of a
                                      Transferred Ship which is subject to a
                                      Receivables Assignment ranking with second
                                      priority, the Relevant
                                      Reduction/Prepayment Amount; or

                              (dd)    if, following a default by the purchaser
                                      or lessee of the Ship under an agreement
                                      for the sale of the Ship on Credit Terms
                                      or the agreed early termination thereof
                                      the agreement is validly terminated, and
                                      the Ship is sold by the Shipowner
                                      following the default or agreed early
                                      termination the amount received by the
                                      Shipowner by way of damages for breach of
                                      the agreement (or any payment received by
                                      the Shipowner or Stena Charterers on the
                                      compromise of legal proceedings in respect
                                      of such breach) or compensation for early
                                      termination less, in the case of a
                                      Transferred Ship which is subject to a
                                      Receivables Assignment ranking with second
                                      priority, the Relevant
                                      Reduction/Prepayment Amount;

                       (ii)   the amount referred to in paragraph (x)(ii) of
                              this Clause 9.4(F) (as if the reference therein to
                              Clause 9.4(A) were a reference to Clause 9.4(B));
                              and

                (z)    in relation to any Mortgaged Port or part of a Mortgaged
                       Port (other than any such part sold for a consideration
                       of less than $25,000 or the equivalent thereof in any
                       other currency) and/or any shares in the capital of a
                       Port Owner which is or are sold, an amount in Dollars
                       which is the lesser of:-

                       (i)    the Net Cash Sale Proceeds thereof less, in the
                              case of a Mortgaged Port which is subject to a
                              Port Mortgage ranking with second priority, the
                              Relevant Reduction/Prepayment Amount; and

                       (ii)   the amount referred to in paragraph (x)(ii) of
                              this Clause 9.4(F) (as if the reference therein to
                              Clause 9.4(A) were a reference to Clause 9.4(C)
                              and the reference therein to "such Ship" were a
                              reference to "such Port").

                However, if the Security Value has not been determined by the
                relevant Disposal Reduction Date, the Disposal Reduction Amount
                shall be the amount referred to in sub-paragraph (x)(i), (y)(i)
                or (z)(i) (as the case may be) of this definition, provided that
                if, no later than thirty (30) days after such Disposal Reduction
                Date, the Borrower demonstrates to the Agent's satisfaction
                that, on the basis of the Security Value as at the relevant
                Disposal Reduction Date, a lower Disposal Reduction Amount would
                have applied at such date, such lower Disposal Reduction Amount
                shall, for the purposes of determining the respective

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                Commitments of the Banks and for all other relevant purposes of
                this Agreement, be deemed to have applied on and from such
                Disposal Reduction Date;

                "RELEVANT REDUCTION/PREPAYMENT AMOUNT"
                means, in the case of a Mortgaged Ship or Transferred Ship or
                Mortgaged Port which is subject to a Prior Security Document,
                the amount (if any) by which the SIBV $275m Facility is
                initially suspended upon the sale or Total Loss or other
                disposal of such Ship or Port, whether mandatorily by the
                relevant "Disposal Reduction Amount" as defined in the SIBV
                $275m Facility Agreement or voluntarily by a higher amount upon
                the election of the Borrower in accordance with the terms of the
                SIBV $275m Facility Agreement;

                "SECURITY VALUE" means the amount in Dollars (as certified by
                the Agent whose certificate shall, in the absence of manifest
                error, be conclusive and binding on the parties hereto) which,
                at any relevant time, is equal to:-

                (u)    the market value of all the Owned Ships which are then
                       Mortgaged Ships (together with their related Linkspans,
                       if any, but only if they are Mortgaged Linkspans)
                       determined in accordance with Clause 9.4(G) provided that
                       if the Ship Mortgage on any such Owned Ship or the
                       Linkspan Mortgage on such Linkspan (as the case may be)
                       is restricted to a registered maximum amount recoverable
                       thereunder then such maximum mortgage amount shall be
                       used towards calculating the Security Value if it is
                       lower than the market value determined as aforesaid in
                       respect of such Owned Ship or Linkspan provided further
                       that, in the case of m.v. "Stena Germanica", if the
                       principal amount due under the Stena Germanica Loan
                       Agreement is less than the market value of the Ship and
                       the registered maximum amount recoverable under the Stena
                       Germanica Mortgage then such principal amount shall be
                       used towards calculating the Security Value in respect of
                       such Ship; plus

                (v)    in the case of a Transferred Ship which is sold on terms
                       which provide for capital payments to be paid over a
                       period of time together with interest at an agreed rate
                       or let on hire purchase terms where the rentals are
                       calculated by reference to an inherent rate of interest,
                       the aggregate amount of the capital payments or the
                       capital element of such payments payable in respect of
                       the Ship during the period for which such payments are to
                       be made under the relevant Sale Agreement; plus

                (w)    in the case of a Transferred Ship which is sold or let on
                       hire purchase terms and the relevant Sale Agreement does
                       not distinguish between capital and interest payments
                       inherent in the instalment or rental payments made the
                       aggregate of the payments payable in respect of the Ship
                       during the period for which such payments are to be made
                       under the relevant Sale Agreement, discounted to their
                       net present value at a discount rate certified by an
                       Officer's Certificate as the average cost of funds of the
                       Stena AB Group as at the date on which the Asset
                       Disposition affecting the relevant ship is completed and
                       in the case that any of the above are initially expressed
                       in a currency other than Dollars the relevant value shall
                       be taken to be the amount in Dollars obtained by
                       converting the amount in foreign currency at the Agent's
                       spot rate for the purchase of the relevant foreign
                       currency with Dollars as at the date of determination of
                       the Security Value; plus

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<PAGE>

                (x)    the market value of the Ports which are then subject to a
                       Port Mortgage determined in accordance with Clause 9.4(H)
                       unless the Port Mortgage on any such Port is restricted
                       to a registered maximum amount recoverable thereunder in
                       which case such maximum mortgage amount shall be used
                       towards calculating the Security Value if it is lower
                       than the market value determined as aforesaid in respect
                       of such Port; plus

                (y)    the market value of any other asset over which a Lien has
                       been granted in favour of the Security Agent pursuant to
                       a Security Document (such market value being determined
                       on such basis as the Agent shall reasonably require or
                       approve); minus

                (z)    the lower of (i) 115% of the then amount of the SIBV
                       $275m Facility (being the aggregate of all amounts drawn
                       under the SIBV $275m Facility Agreement and all amounts
                       then undrawn but committed and available for drawing
                       thereunder and not suspended) and (ii) the aggregate
                       value of the those assets subject to the Prior Security
                       Documents as determined in accordance with paragraphs (u)
                       to (y) above.

         (G)    VALUATION OF SHIPS AND LINKSPANS

                The value of each Mortgaged Ship shall be determined as being
                the mortgage free value thereof after deduction of the aggregate
                amount of any mortgage debt secured thereon in favour of any
                creditor other than the Security Agent and, in the case of m.v.
                "Stena Carisma" and any other Ship which may become a Mortgaged
                Ship and which requires the use of Linkspans for its operation,
                such value shall be taken as the mortgage free value thereof
                together with the book value of its related Linkspans (but only
                if they are Mortgaged Linkspans) as shown in the then latest
                Free Net Worth Compliance Certificate delivered to the Agent.
                For these purposes, the mortgage free value of each such Ship
                (together, if relevant, with its Linkspans) shall be the mean of
                the valuations of the charter-free market value thereof on a
                willing buyer/willing seller basis as assessed as at the
                relevant date by, in the case of any ro-ro or ferry, three
                leading European shipbrokers active in the ro-ro/ferry market
                appointed by the Borrower from the following list of brokers:-

                Barry Rogliano Salles
                Brax Shipping HB
                Simsonship AB
                Maersk Sales
                Parimar Francharte S.A.
                English White Shipping Ltd.
                Nor Ocean

                in the case of any drilling rig, by three leading shipbrokers
                active in the offshore market appointed by the Borrower from the
                following list of brokers:-

                Fearnleys A/S
                Kennedy Marr
                Bassoe Offshore A/S
                Barry Rogliano Salles
                Seascope Offshore

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<PAGE>

                in the case of any crude oil or other products tanker, by three
                leading shipbrokers active in the tanker market appointed by the
                Borrower from the following list of brokers:-

                Mallory Jones Lynch Flynn & Associates
                H Clarkson & Co Limited
                Bassoe A/S
                Fearnleys A/S
                Simpson Spence & Young Shipbrokers
                Brostrom Tankers AB

                or any other broker nominated by the Borrower and approved by
                the Agent.

                Valuations of each Mortgaged Ship and each Mortgaged Linkspan
                shall be obtained twice annually as at 30 June and 31 December
                in each year (which valuations are to be received by the Agent
                within twenty one (21) days after the relevant dates).

         (H)    VALUATION OF HOLYHEAD PORT AND STRANRAER PORT

                The value of each Port shall be the amount (expressed in Dollars
                by reference to exchange rates prevailing on the day of
                computation of the Security Value) determined as the earnings
                before interest, taxes, depreciation and amortisation in respect
                of such Port for the previous period of twelve (12) months as
                shown in the documents relating to such Port most recently
                delivered to and accepted by the Agent pursuant to Clause
                14.2(E) multiplied by six and one half (6.5) provided that if
                the Agent on the instructions of the Majority Banks gives notice
                to the Borrower that the foregoing does not represent a fair
                market value of Holyhead Port and/or Stranraer Port the value
                shall be determined by the auditors of the Borrower or such
                other firm of auditors as the Agent shall on the instructions of
                the Majority Banks appoint on a basis which in the opinion of
                such auditors provides a Fair Market Valuation in accordance
                with the practice adopted by auditors in valuing similar port
                facilities in the United Kingdom.

                The foregoing procedure shall also be used to value any other
                Port which may from time to time be subject to a Port Mortgage
                in favour of the Security Agent.

                The initial values in Sterling of Holyhead Port and Stranraer
                Port shall be (pound)72,202,000 and (pound)13,533,000
                respectively (being the values determined as at 31 December 2001
                by reference to the earnings before interest, taxes,
                depreciation and amortisation for the previous twelve (12)
                months in respect of each respective Port).

         (I)    VALUATION COSTS

                The reasonable costs of valuations carried out pursuant to this
                Clause 9.4 shall be reimbursed by the Borrower to the Agent on
                the Agent's request.

         (J)    DATE OF TOTAL LOSS

                For the purpose of this Agreement, a Total Loss shall be deemed
                to have occurred:-

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                (i)    in the case of an actual total loss of a Ship or Linkspan
                       on the actual date and at the time such Ship or Linkspan
                       was lost or, if such date is not known, on the date on
                       which the Ship or Linkspan was last reported;

                (ii)   in the case of a constructive total loss of a Ship or
                       Linkspan, upon the date and at the time notice of
                       abandonment of such Ship or Linkspan is given to the
                       insurers of such Ship or Linkspan for the time being
                       (provided a claim for total loss is admitted by such
                       insurers) or, if such insurers do not forthwith admit
                       such a claim, at the date and at the time at which either
                       a total loss is subsequently admitted by the insurers or
                       a total loss is subsequently adjudged by a competent
                       court of law or arbitration panel to have occurred or, if
                       earlier, the date falling six (6) months after notice of
                       abandonment of such Ship or Linkspan was given to the
                       insurers;

                (iii)  in the case of a compromised or arranged total loss, on
                       the date upon which a binding agreement as to such
                       compromised or arranged total loss has been entered into
                       by the insurers of the relevant Ship or Linkspan;

                (iv)   in the case of Compulsory Acquisition of a Ship or
                       Linkspan, on the date upon which the relevant requisition
                       of title or other compulsory acquisition of such Ship or
                       Linkspan occurs; and

                (v)    in the case of hijacking, theft, condemnation, capture,
                       seizure, arrest, detention or confiscation of a Ship or
                       Linkspan (other than where the same amounts to Compulsory
                       Acquisition of such Ship or Linkspan) by any Government
                       Entity, or by persons purporting to act on behalf of any
                       Government Entity, which deprives the relevant Shipowner
                       of the use or the relevant Stena Charterer or third party
                       demise charterer of such Ship or Linkspan for more than
                       one hundred and eighty (180) days, upon the expiry of the
                       period of one hundred and eighty (180) days after the
                       date upon which the relevant hijacking, theft,
                       condemnation, capture, seizure, arrest, detention or
                       confiscation occurred.

         (K)    APPLICATION OF TOTAL LOSS AND SALE PROCEEDS

                Provided no Event of Default has occurred and is continuing, and
                provided the Borrower shall have complied with Clauses 9.4 and
                9.5, any insurance moneys or Requisition Compensation or
                proceeds of sale received by the Agent or the Security Agent in
                respect of a Total Loss of a Ship or sale of a Mortgaged Ship or
                Mortgaged Port or Mortgaged Linkspan under the relevant Security
                Documents or in consideration of the agreement of the Security
                Agent to release its security in relation to any Ship or Port
                shall be paid to the relevant mortgagor or assignor or (if and
                to the extent necessary to ensure compliance with Clause 9.4)
                retained by the Agent for application in or towards making any
                prepayment and paying any other moneys required under Clauses
                9.4 and 9.5. For this purpose, any such insurance moneys or
                Requisition Compensation or proceeds of sale so received (or the
                relevant part thereof) may be applied, if the relevant mortgagor
                or assignor so requests the Agent in writing before the date of
                receipt thereof, in effecting any prepayment required in
                accordance with Clause 9.4 and paying related amounts due under
                Clause 9.5 provided that in relation to any Transferred Ships
                the references in this Clause 9.4(K) to sale proceeds, insurance
                moneys and Requisition Compensation shall be deemed to refer to
                the moneys received by the Security Agent under the relevant
                Receivables Assignment. Pending each

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                Disposal Reduction Date in relation thereto such moneys shall be
                accumulated in an account of the relevant assignor with the
                Agent and the balance thereof after making applications required
                by Clauses 9.4 and 9.5 shall, provided no Event of Default has
                occurred and is continuing or would be occasioned thereby, be
                released to the relevant assignor on the relevant Disposal
                Reduction Date or as soon thereafter as is reasonably
                practicable.

         (L)    SALE OF SHIPS ON CREDIT TERMS

                Where a Shipowner sells its Mortgaged Ship on Credit Terms, the
                relevant Shipowner shall before completion of the sale (in the
                case of a credit sale) or delivery of the Ship to the relevant
                charterer (in the case of a hire purchase or conditional sale)
                execute and deliver to the Security Agent an assignment in
                substantially the form of the Receivables Assignment of the
                amounts receivable in respect of the sale or letting of the Ship
                and all security granted to such Shipowner in respect of the
                obligation of the buyer to pay the outstanding balance of the
                purchase price or rentals and the option price under any
                relevant hire purchase agreement in respect of such Ship. Where
                the Ship is sold pursuant to a credit sale or other arrangement
                under which the purchaser acquires title to the Ship, such
                security shall in any event include either:-

                (i)    a first priority mortgage in favour of the seller of the
                       Ship constituted under the laws of an Approved Flag State
                       and a first priority assignment in favour of the seller
                       of the Insurances of the Ship which shall be placed on
                       terms which are not materially less favourable to the
                       seller than the terms set out in the form of Deed of
                       Covenant in Schedule 7 to the Agreed Form Certificate in
                       the case of mortgage covenants and the terms set out in
                       Schedule 10 to the Agreed Form Certificate in the case of
                       an Insurance Assignment; or

                (ii)   a bank guarantee from a first class international bank
                       guaranteeing to the seller of the Ship repayment of the
                       full amount of the deferred consideration for the sale of
                       the Ship.

                The Borrower and Stena AB shall procure that without the consent
                of the Banks no Ship is sold on Credit Terms for a consideration
                the principal or capital amount of which is less than the Fair
                Market Value of the Ship at the time the Ship is sold.

9.5      AMOUNTS PAYABLE ON PREPAYMENT

         Any prepayment of an Advance under this Agreement shall be made
         together with:-

         (A)    accrued interest on the amount to be prepaid to the date of such
                prepayment (calculated in respect of the period during which the
                relevant Substitute Basis has applied by virtue of Clause 8.5,
                at a rate per annum equal to the aggregate of (i) the Margin and
                (ii) for such period the cost to such Bank of funding its
                Contribution);

         (B)    any additional amounts payable under Clauses 11.7 and 21.2;

         (C)    costs certified by the Agent as necessary to compensate the
                Banks or the Standby Lender for the cost of repaying fixed
                deposits borrowed to fund any part of any

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                Advance or drawing under the Standby Facility which is prepaid
                before the Maturity Date of any Advance or the fixed term by
                reference to which the relevant rate of interest has been
                ascertained;

         (D)    all other sums payable by the Borrower to the relevant Bank
                under this Agreement or any of the other Security Documents
                including, without limitation, any accrued commitment or
                guarantee commission payable under Clause 10 and any amounts
                payable under Clause 21.

9.6      NOTICE OF PREPAYMENT

         No voluntary prepayment of an Advance may be effected under this Clause
         9 unless the Borrower shall have given the Agent at least ten (10)
         days' notice of its intention to make such prepayment, except on the
         sale of a Ship or a Total Loss. Every notice of prepayment shall be
         effective only on actual receipt by the Agent, shall be irrevocable,
         shall specify the amount to be prepaid and shall oblige the Borrower to
         make such prepayment on the date specified. Unless and to the extent
         that the Commitments are cancelled or reduced on or with effect from
         the date of any such prepayment, amounts prepaid may be re-drawn under
         this Agreement. The Borrower may not prepay any Advance or any part
         thereof save as expressly provided in this Agreement.

9.7      CHANGE OF CONTROL OF STENA AB: MANDATORY CANCELLATION

         If at any time during the Security Period less than seventy five per
         cent (75%) of the issued voting share capital of Stena AB (including
         any votes attached to any shares of Stena AB into which outstanding
         warrants or other securities may be converted) is held by members of
         the Sten A. Olsson Family the Borrower or the Agent shall immediately
         upon becoming aware thereof give notice to the other. The Agent shall
         consult with the Banks as to the appropriate action to be taken in the
         light of representations by the Borrower as to the consequences of the
         change of shareholding. Without prejudice to Clause 19, not earlier
         than one hundred and twenty (120) days after receiving from or giving
         notice to the Borrower as provided above the Agent shall unless all of
         the Banks agree otherwise if the shareholding of the Sten A. Olsson
         Family in Stena AB does not then exceed seventy five per cent (75%),
         give notice to the Borrower requiring the Borrower to prepay all the
         Outstandings and the Standby Outstandings within thirty (30) days of
         the Agent's notice and upon such notice the Borrower shall within such
         period make payment to the Agent accordingly and the Commitments and
         the Standby Commitment shall be cancelled in full at the end of such
         thirty (30) day period.

9.8      CHANGE OF CONTROL OF THE BORROWER: MANDATORY CANCELLATION

         If at any time during the Security Period Stena AB ceases directly or
         via a Wholly Owned Subsidiary of Stena AB to hold the entire issued
         share capital of the Borrower without the prior consent of the Majority
         Banks the Outstandings and the Standby Outstandings shall forthwith
         become repayable on the Agent's demand and the Agent may, and if so
         directed by the Majority Banks shall, make such a demand on the
         Borrower whereupon the Outstandings and the Standby Outstandings shall
         be repayable on the date specified in such notice together with all
         interest and any commitment commission accrued and all other sums
         payable under this Agreement and the Commitments and the Standby
         Commitment shall be cancelled in full.

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9.9      FAILURE TO PROVIDE SECURITY ON M.V. "STENA TAY": MANDATORY PARTIAL
         CANCELLATION.

         If the Agent, or its duly authorised representative, does not receive
         all of the documents and evidence specified in Part 2 of Schedule 8 in
         respect of "STENA TAY" in form and substance satisfactory to the Agent
         on or before the date falling sixty (60) days after the Availability
         Date then, unless the Banks and the Standby Lender agree otherwise
         before such date, the aggregate commitments shall be reduced on such
         date pro rata in accordance with the Banks' respective percentage by
         the aggregate amount of $95,000,000 and the Standby Commitment shall be
         reduced on such date by the amount of $5,000,000.

         If, upon any reduction of the Commitments pursuant to this Clause 9.9,
         the aggregate of the Outstandings at such time exceeds the Commitments
         as thereby reduced the Borrower shall, on the date on which such
         reduction takes effect, prepay such amount of the outstanding Advances
         and/or procure the release and discharge by the Beneficiaries of such
         of the Bank Guarantees as will ensure that immediately thereafter the
         aggregate amount of the Outstandings will not exceed the Commitments as
         so reduced.

         If upon any reduction of the Standby Commitment pursuant to this Clause
         9.9, the Standby Outstandings at that time exceed the Standby
         Commitment as thereby reduced the Borrower shall, on the date on which
         such reduction takes effect, prepay such amount of the Standby
         Outstandings as will ensure that immediately thereafter the aggregate
         amount of the Standby Outstandings will not exceed the Standby
         Commitment as so reduced.

9.10     VOLUNTARY CANCELLATION OF COMMITMENTS

         The Borrower may at any time during the Availability Period by notice
         to the Agent (effective only on actual receipt) cancel with effect from
         a date not less than thirty (30) days after the receipt by the Agent of
         such notice the whole or any part (being $10,000,000 or any larger sum
         but not more than the Available Commitments of all of the Banks as at
         such date) of the total of the Available Commitments as at such date of
         all the Banks. Any such notice of cancellation, once given, shall be
         irrevocable and upon such cancellation taking effect the Commitment of
         each of the Banks shall be reduced proportionately and the Borrower
         shall on the date designated in its notice prepay such amount of the
         outstanding Advances and/or procure the release and discharge by the
         Beneficiaries of such of the Bank Guarantees as will ensure that
         immediately thereafter the aggregate amount of the Outstandings will
         not exceed the Commitments as so reduced by virtue of the Borrower's
         cancellation.

9.11     ALTERNATIVE COLLATERALISATION OF BANK GUARANTEES

         If the Commitments and the Standby Commitment are cancelled in full by
         virtue of any provision of this Agreement (including without limitation
         Clauses 9.7, 9.8 or 9.9) and the Borrower is unable to or does not wish
         to procure the release and discharge of one or more of the Bank
         Guarantees then in issue, it may, in relation to such Bank Guarantees
         (and without prejudice to its obligation to prepay either the
         outstanding Advances and the Standby Outstandings as provided above),
         instead of procuring such release and discharge, either:-

         (A)      pay to the credit of the relevant Cash Collateral Account
                  amounts equal to the Outstanding Guarantee Amounts of the
                  relevant Bank Guarantees (less any amounts already standing to
                  the credit thereof); and/or

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         (B)      provide to each Issuing Bank a counter-indemnity or
                  counter-indemnities from any one or more first class banks or
                  financial institutions acceptable to such Issuing Bank
                  covering the Outstanding Guarantee Amounts of the relevant
                  Bank Guarantees issued by it (less any amounts standing to the
                  credit of the Cash Collateral Accounts in relation thereto),
                  such counter-indemnity or counter-indemnities to be in form
                  and substance acceptable to each relevant Issuing Bank

         whereupon the Banks shall be released from any further obligation to
         the Issuing Banks under Clause 6.2, no further commission shall be
         payable under Clause 10.2, Clauses 14, 15, 16, 17 and 19 shall cease to
         be operative and the Security Agent shall release all of the security
         constituted by the Security Documents (other than that constituted over
         the Cash Collateral Account pursuant to this Agreement and the Cash
         Collateral Account Pledges).

9.12     ADDITIONAL PARTIAL CANCELLATION

         The Borrower may at any time during the Availability Period by notice
         to the Agent (effective only on actual receipt) cancel with effect from
         a date not less than thirty (30) Banking Days after receipt by the
         Agent of such notice the whole but not part only, but without prejudice
         to its obligations under Clauses 11.7 and 21.2, of the Commitment of
         any Bank to which the Borrower shall have become obliged to pay
         additional amounts under Clause 11.7 or 21.2. Upon any notice of such
         prepayment being given, the Commitment of the relevant Bank shall be
         reduced to zero and:-

         (A)    the Borrower shall on the date on which such Bank's Commitment
                is reduced to zero pay to the Agent for credit to the Cash
                Collateral Account an amount equal to such Bank's Percentage of
                the difference between (i) the Outstanding Guarantee Amounts of
                the Bank Guarantees and (ii) the amount then standing to the
                credit of the Cash Collateral Account (less any amount standing
                to the credit of the Cash Collateral Account as a result of a
                payment in respect of another Bank pursuant to Clause 21.1 or
                this Clause 9.12); and

         (B)    the Borrower shall be obliged to prepay the Contribution of such
                Bank on such date; and

         (C)    such Bank shall be under no obligation under Clause 6.2 in
                respect of any Bank Guarantees which may be issued after the
                date upon which its Commitment has been so reduced.

         If the Borrower has made the payment to the Cash Collateral Account
         required of it in respect of a Bank Guarantee under this Clause 9.12,
         the Percentage of the Bank in respect of which such payment was made of
         the liabilities of the Banks for each Bank Guarantee shall be reduced
         to zero. To the extent that the Borrower has not made such payment,
         such Bank shall continue to be liable to the relevant Issuing Bank
         under Clause 6.2 for an amount equal to its Percentage of such Bank
         Guarantee less the amount of any such payment by the Borrower to the
         Cash Collateral Account in relation to the relevant Bank Guarantee.

9.13     PREPAYMENT DURING TERM

         The Borrower may at any time by notice to the Agent (effective only on
         actual receipt) prepay the whole or any part (being $10,000,000 or any
         larger sum) of any Advance prior to its Maturity Date on not less than
         ten (10) days notice (whether or not any part of the

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         Commitment is also being cancelled on such date pursuant to any
         provision of this Agreement) and the Borrower shall when making such
         prepayment, make such prepayment together with any amounts as referred
         to in Clause 9.5.

9.14     TRANSFERRED SHIPS : APPLICATION OF MONEYS RECEIVED

         The Borrower shall procure that moneys payable by the purchasers of
         Transferred Ships on account of the deferred consideration for the
         purchase of the relevant Ships shall be paid to accounts in the name of
         the Security Agent established with itself. The amounts accumulated in
         such accounts shall be applied on each Disposal Reduction Date in
         payment to the Agent of the Disposal Reduction Amount in respect of the
         relevant Ship and, provided that no Event of Default has occurred and
         is continuing, the balance standing to the credit of the relevant
         accounts shall be released to the relevant seller immediately following
         such application. Moneys credited to the relevant accounts will bear
         interest at the normal rates paid by the Agent for accounts of the
         relevant type to first class customers.

10       FEES, COMMISSION, MARGIN AND EXPENSES

10.1     AGENCY FEE

         The Borrower shall pay to the Agent and Security Agent on the Execution
         Date and on each anniversary thereof during the Security Period an
         agency fee of the amount set out in a separate letter agreement dated
         25 October 2002 made between Svenska Handelsbanken AB (publ) as Agent
         and Security Agent, the Borrower and Stena AB.

10.2     COMMISSION ON BANK GUARANTEES

         The Borrower shall pay to the Agent for the account of the Banks in
         accordance with their respective Percentages semi-annually in arrears
         during the Availability Period guarantee commission in Dollars
         calculated on a daily basis at an annual rate (based on a year of 360
         days) equal to the Margin on the daily aggregate Outstanding Guarantee
         Amounts since the later of the Availability Date and the later of the
         preceding 30 June and 31 December of all Bank Guarantees. For the
         purpose of calculating the daily aggregate Outstanding Guarantee Amount
         during each such half-year period of any Bank Guarantee denominated in
         a currency other than Dollars, the Agent shall convert the daily
         amounts of this other currency into Dollars using the Agent's ordinary
         spot rate of exchange for the purchase of such currency with Dollars as
         at 11.00 a.m. on the last Banking Day of that period.

         The first period in respect of which such guarantee commission shall be
         calculated will be the period from the Availability Date up to and
         including 31 December 2002; thereafter the guarantee commission shall
         be calculated for each of the following consecutive periods of six (6)
         months ending on 30 June and 31 December respectively in each year with
         a final instalment being calculated in respect of the period ending on
         the last day of the Availability Period.

         The amount of guarantee commission payable in respect of each such
         period shall be calculated by the Agent within five (5) Banking Days of
         the end of such period and shall be notified by the Agent to the
         Borrower who shall pay such amount to the Agent not later than five (5)
         Banking Days after receiving the Agent's notification thereof.

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10.3     ISSUING BANK COMMISSION

         The Borrower shall pay to the Agent for the account of each Issuing
         Bank semi-annually in arrears during the Availability Period in respect
         of all Bank Guarantees issued by that Issuing Bank a guarantee
         provider's commission in Dollars calculated on a daily basis at an
         annual rate (based on a year of 360 days) equal to zero point one five
         per cent (0.15%) per annum on the daily amount of the sum of the
         aggregate Outstanding Guarantee Amounts of all such Bank Guarantees
         since the later of the Availability Date and the later of the preceding
         30 June and 31 December minus the relevant Issuing Bank's own
         Percentage of such Outstanding Guarantee Amounts in its capacity as a
         Bank. For the purpose of calculating the daily aggregate Outstanding
         Guarantee Amount during each such half-year period of any Bank
         Guarantee denominated in a currency other than Dollars, the Agent shall
         convert the daily amounts of this other currency into Dollars using the
         Agent's ordinary spot rate of exchange for the purchase of such
         currency with Dollars as at 11.00 a.m. on the last Banking Day of that
         period.

         The first period in respect of which such guarantee provider's
         commission shall be calculated will be the period from the Availability
         Date up to and including 31 December 2002; thereafter the guarantee
         provider's commission shall be calculated for each of the following
         consecutive periods of six (6) months ending on 30 June and 31 December
         respectively in each year with a final instalment being calculated in
         respect of the period ending on the last day of the Availability
         Period.

         The amount of guarantee provider's commission payable in respect of
         each such period shall be calculated by the Agent within five (5)
         Banking Days of the end of such period and shall be notified by the
         Agent to the Borrower who shall pay such amount to the Agent not later
         than five (5) Banking Days after receiving the Agent's notification
         thereof.

10.4     COMMITMENT COMMISSION

         The Borrower shall pay to the Agent for the account of the Banks and
         the Standby Lender quarterly in arrears during the Availability Period
         commitment commission computed from the date of this Agreement at an
         annual rate equal to zero point five per cent (0.5%) on the daily
         average undrawn and uncancelled amount of each Bank's Available
         Commitment and the Available Standby Commitment in relation to the
         relevant period. Commitment commission shall also be payable in respect
         of any portion of the Commitments which has been suspended pursuant to
         Clause 9.4 (E) but not cancelled.

         The first period in respect of which such commitment commission shall
         be calculated will be the period from the Execution Date up to and
         including 31 December 2002; thereafter the commitment commission shall
         be calculated for each of the following consecutive periods of three
         (3) months ending on 31 March, 30 June, 30 September and 31 December
         respectively in each year with a final instalment being calculated in
         respect of the period ending on the last day of the Availability
         Period.

         The amount of commitment commission payable in respect of each such
         period shall be calculated by the Agent within five (5) Banking Days of
         the end of such period and shall be notified by the Agent to the
         Borrower who shall pay such amount to the Agent not later than five (5)
         Banking Days after receiving the Agent's notification thereof.

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10.5     ARRANGEMENT FEE

         The Borrower shall pay to the Agent for the account of the Co-Arrangers
         on the Execution Date an arrangement fee of the amount set out in the
         mandate letter dated 23 September 2002 made between the Co-Arrangers,
         the Borrower and Stena AB.

10.6     EXPENSES

         The Borrower shall pay to the Agent on a full indemnity basis on demand
         all expenses (including external and internal legal, printing and
         out-of-pocket expenses) incurred:-

         (A)    by any Issuing Bank and/or the Agent and/or the Security Agent
                and/or the Standby Lender and/or the Co-Arrangers in connection
                with the negotiation, preparation, primary syndication,
                execution and, where relevant, registration of the Security
                Documents and of any amendment or extension of or the granting
                of any waiver or consent under, any of the Security Documents
                (but excluding, for the avoidance of doubt, any such expense
                incurred in connection with the transfer, assignment or
                sub-participation of any of the rights and/or obligations of any
                Bank under the Security Documents other than by the Co-Arrangers
                in connection with the primary syndication of the facility
                granted hereunder);

         (B)    by the Agent, the Security Agent and the New Guarantee Provider
                in connection with the issue of any Bank Guarantee or the
                extension of the Expiry Date of any Bank Guarantee; and

         (C)    by the Agent, the Issuing Banks, any of the Banks, the Standby
                Lender and the Security Agent in contemplation of, or otherwise
                in connection with, the enforcement of, or preservation of any
                rights under, any of the Security Documents, or otherwise in
                respect of the moneys owing under any of the Security Documents
                together with interest at the rate referred to in Clause 8.2
                from the date on which such expenses were incurred, to the date
                of payment (as well after as before judgment)

         provided that the Borrower shall not be liable to reimburse the costs
         of any external legal advisers under paragraph (A) except the legal
         fees and disbursements of Stephenson Harwood as counsel to the
         Co-Arrangers and the fees and disbursements of the legal counsel who
         are to render opinions in respect of any of the Security Documents or
         to deal with registration of any of the Ship Mortgages or other
         Security Documents on behalf of the Security Agent.

10.7     VAT

         All fees, commissions and expenses payable pursuant to this Clause 10
         shall be paid together with an amount equal to any VAT payable by the
         Agent, the Security Agent, the Co-Arrangers, the Issuing Banks, any
         Bank or the Standby Lender in respect of such fees and expenses and any
         VAT chargeable in respect of any services supplied by the Agent, the
         Security Agent, the Co-Arrangers, the Issuing Banks, any Bank or the
         Standby Lender under this Agreement shall, on delivery of a VAT
         Invoice, be paid in addition to any sum agreed to be paid hereunder to
         the extent that, in either case, the Agent, the Security Agent, the
         Co-Arrangers, the Issuing Banks, the relevant Bank or the Standby
         Lender (as the case may be) shall have certified (such certificate to
         be binding and conclusive, in the absence of manifest error, on the
         Borrower) to the Borrower that it is not entitled to credit for such
         VAT as input tax.

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10.8     STAMP AND OTHER DUTIES

         The Borrower shall pay all stamp, documentary, registration or other
         like duties or taxes (including any duties or taxes payable by the
         Agent, the Security Agent, the Issuing Banks, the Co-Arrangers, the
         Banks and the Standby Lender but excluding any such duties or taxes
         incurred in connection with any transfer, assignment or
         sub-participation of any of the rights and/or obligations of the Agent,
         the Security Agent, an Issuing Bank, a Co-Arranger, a Bank or the
         Standby Lender under any of the Security Documents other than at the
         request of the Borrower) imposed on or in connection with any of the
         Commercial Documents, the Security Documents or the Bank Guarantees and
         shall indemnify the Agent, the Issuing Banks, the Co-Arrangers, the
         Security Agent, the Banks and the Standby Lender against any liability
         arising by reason of any delay or omission by the Borrower to pay such
         duties or taxes.

10.9     SUPPLEMENTAL MARGIN

         (A)    The Margin is calculated on the basis that the daily average of
                the Outstandings of the Banks during each Calculation Period
                will not exceed thirty three and one-third of one per cent (33
                1/3%) of the daily average of the Commitments of the Banks
                during such Calculation Period. If such daily average for a
                Calculation Period exceeds thirty three and one-third of one per
                cent (33 1/3%) and sixty six and two-thirds of one per cent (66
                2/3%) (as the case may be) an additional amount shall be payable
                by the Borrower to each Bank in the manner provided by this
                Clause 10.9.

         (B)    For the purposes of this Clause 10.9:-

                (i)    "CALCULATION PERIOD" means the period commencing on the
                       Availability Date and ending on the first Review Date and
                       each of the successive three (3) monthly periods
                       thereafter each expiring on a Review Date with the final
                       Calculation Period (whether of three (3) months or
                       shorter) ending on the final Review Date;

                (ii)   "REVIEW DATE" means 31 December 2002 and 31 March, 30
                       June and 30 September and 31 December in each year
                       thereafter up to the date upon which all of the
                       Commitments are reduced to zero, and such date itself;
                       and

                (iii)  in relation to Svenska Handelsbanken AB (publ)
                       "OUTSTANDINGS" and "COMMITMENT" shall be deemed to
                       include Standby Outstandings and the Standby Commitment
                       and reference to "BANK" shall include Svenska
                       Handelsbanken AB (publ) both in its capacity as Bank and
                       as Standby Lender

         (C)    Within five (5) Banking Days after each Review Date the Agent
                shall calculate the actual daily average of the Outstandings of
                each Bank during the Calculation Period expiring on such Review
                Date according to the following formula -

                     A     =     O     x     100
                                 -
                                 C

                where -

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                A is the actual daily average of the Outstandings of the Banks
                during the relevant Calculation Period, expressed as a
                percentage.

                O is the aggregate of the amounts of the Outstandings of the
                Banks on each day during such Calculation Period; and

                C is the aggregate of the amounts of the Commitments of the
                Banks on each day during such Calculation Period.

         (D)    For the purposes of this Clause 10.9, the rate of supplemental
                margin in relation to a Calculation Period will be as follows:-

                (i)    where A as so calculated exceeds thirty three and
                       one-third of one per cent (33 1/3%) but does not exceed
                       sixty six and two-thirds of one per cent (66 2/3%), the
                       supplemental margin applicable to all of the Outstandings
                       for such Calculation Period will be zero point twenty
                       five per cent (0.25%); and

                (ii)   where A as so calculated exceeds sixty six and two-thirds
                       of one per cent (66 2/3%), the supplemental margin
                       applicable to all of the Outstandings for such
                       Calculation Period will be zero point three hundred and
                       seventy five per cent (0.375%).

         (E)    Upon calculating the rate of supplemental margin (if any), the
                Agent shall promptly calculate an amount (the "SUPPLEMENTAL
                MARGIN AMOUNT") equal to interest accruing at an annual
                percentage rate equal to the supplemental margin for such
                Calculation Period on the daily Outstandings of each Bank from
                the beginning of such Calculation Period to the Review Date on
                which it ends. The Agent shall then notify the Borrower and each
                Bank of the rate of supplemental margin (if any) for such
                Calculation Period and the Supplemental Margin Amount (if any)
                due to such Bank for such Calculation Period.

         (F)    The Borrower shall pay to the Agent, for the account of the
                Banks and the Standby Lender, the aggregate of the Supplemental
                Margin Amounts due to each of the Banks and the Standby Lender
                for a Calculation Period within five (5) Banking Days of being
                notified by the Agent of the rate of supplemental margin and the
                amount of the Supplemental Margin Amounts for that Calculation
                Period.

11       PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS

11.1     NO SET-OFF OR COUNTERCLAIM; DISTRIBUTION TO THE BANKS

         The Borrower acknowledges that in performing its obligations under this
         Agreement, the Banks, the Standby Lender and the Issuing Banks will be
         incurring liabilities to third parties in relation to the funding of
         amounts to the Borrower, such liabilities matching the liabilities of
         the Borrower to the Banks, the Standby Lender and the Issuing Banks and
         that it is reasonable for the Banks, the Standby Lender and the Issuing
         Banks to be entitled to receive payments from the Borrower gross on the
         due date in order that the Banks, the Standby Lender and the Issuing
         Banks are put in a position to perform their matching obligations to
         the relevant third parties. Accordingly all payments to be made by the
         Borrower under any of the Security Documents shall be made in full,
         without any set-off or counterclaim whatsoever and, subject as provided
         in Clause 11.7, free and clear of any deductions or withholdings, in
         Dollars (except for costs, charges or expenses

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         which shall, at the request of the Agent, be payable in the currency in
         which they are incurred) on the due date to the account required under
         Clause 11.12. Save where this Agreement specifically provides for a
         payment to be made for the account of a particular Bank (including,
         without limitation, Clauses 9.12, 10, 11.7, 20.2, 21.1, 21.2 and 22.2)
         in which case the Agent shall distribute the relevant payment to the
         Bank concerned and except in relation to amounts payable to the Standby
         Lender in respect of the Standby Facility or to the relevant Issuing
         Bank in respect of any Bank Guarantee, payments to be made by the
         Borrower under this Agreement shall be for the account of all the Banks
         and the Agent shall forthwith distribute such payments in like funds as
         are received by the Agent to the Banks rateably in accordance with
         their Commitments.

11.2     PAYMENTS BY THE BANKS

         (A)    TO THE AGENT AND THE ISSUING BANKS

                All payments to be made by a Bank to or for the account of an
                Issuing Bank or the Agent under this Agreement shall be made in
                full, without any set-off or counterclaim whatsoever and,
                subject as provided in Clause 11.8, free and clear of any
                deductions or withholdings, in Dollars on the due date to the
                account of the Agent at such bank as the Agent may from time to
                time specify for this purpose and, in the case of payments for
                the account of an Issuing Bank, shall be paid by the Agent on
                such date in like funds as are received by the Agent to such
                Issuing Bank.

         (B)    TO THE BORROWER

                All sums to be advanced by the Banks to the Borrower under this
                Agreement shall be remitted in Dollars on the date of the
                Advance to the account of the Agent at such bank as the Agent
                may have notified to the Banks and shall be paid by the Agent on
                such date in like funds as are received by the Agent to the
                account specified in the relevant Drawdown Notice.

11.3     AGENT MAY ASSUME RECEIPT

         Where any sum is to be paid under any of the Security Documents to the
         Agent for the account of another person, the Agent may assume that the
         payment will be made when due and the Agent may (but shall not be
         obliged to) make such sum available to the person so entitled. If it
         proves to be the case that such payment was not made to the Agent, then
         the person to whom such sum was so made available shall on request
         refund such sum to the Agent together with interest thereon sufficient
         to compensate the Agent for the cost of making available such sum up to
         the date of such repayment and the person by whom such sum was payable
         shall indemnify the Agent and/or person to whom such sum was made
         available by the Agent for any and all loss or expense which the Agent
         or such person may sustain or incur as a consequence of such sum not
         having been paid on its due date.

11.4     NON-BANKING DAYS

         When any payment under any of the Security Documents would otherwise be
         due, or the Termination Date or any relevant anniversary of the
         Execution Date would otherwise fall, on a day which is not a Banking
         Day, the due date for payment or (as the case may be) the Termination
         Date or such anniversary date shall be extended to the next following
         Banking Day unless such Banking Day falls in the next calendar month in
         which case

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         payment shall be made, or (as the case may be) the Termination Date or
         such anniversary date shall fall, on the immediately preceding Banking
         Day.

11.5     CALCULATIONS

         All interest, commissions, fees and other payments of an annual nature
         under any of the Security Documents shall accrue from day to day and be
         calculated on the basis of actual days elapsed and a 360 day year.

11.6     CERTIFICATES CONCLUSIVE

         Any certificate or determination of the Agent, any Issuing Bank, any
         Bank or the Standby Lender as to any rate of interest or any other
         amount pursuant to and for the purposes of any of the Security
         Documents shall substantiate in reasonably sufficient detail the
         interest or other amount concerned and, subject thereto, shall, in the
         absence of manifest error, be conclusive and binding on the Borrower
         and (in the case of a certificate or determination by the Agent) on the
         Issuing Banks and the Banks. The Agent or, as the case may be, the
         Standby Lender shall, promptly upon the request of the Borrower, send
         to the Borrower such details as may reasonably be required by the
         Borrower setting out the manner in which any such rate or amount has
         been determined, together with such documents and calculations as may
         reasonably be required by the Borrower in order to verify the same.

11.7     GROSSING-UP FOR TAXES - BORROWER

         (A)    GROSSING UP

                If at any time the Borrower or Stena AB is required to make any
                deduction or withholding in respect of Taxes from any payment
                due under any of the Security Documents for the account of any
                Bank, the Standby Lender, the Co-Arrangers, the Security Agent,
                any Issuing Bank or the Agent (or if the Agent is required to
                make any deduction or withholding from a payment to the
                Co-Arrangers, the Security Agent, an Issuing Bank, a Bank or the
                Standby Lender), the sum due from the Borrower or, as the case
                may be, Stena AB in respect of such payment shall be increased
                to the extent necessary to ensure that, after the making of such
                deduction or withholding, each Bank, the Standby Lender, each
                Co-Arranger, the Security Agent, each Issuing Bank and the Agent
                receives on the due date for such payment (and retains, free
                from any liability in respect of such deduction or withholding),
                a net sum equal to the sum which it would have received had no
                such deduction or withholding been required to be made and the
                Borrower and Stena AB shall indemnify each Bank, the Standby
                Lender, the Co-Arrangers, the Security Agent, each Issuing Bank
                and the Agent against any losses or costs incurred by any of
                them by reason of any failure of the Borrower or Stena AB to
                make any such deduction or withholding or by reason of any
                increased payment not being made on the due date for such
                payment. The Borrower or, as the case may be, Stena AB shall
                promptly deliver to the Agent any receipts, certificates or
                other proof evidencing the amounts (if any) paid or payable in
                respect of any deduction or withholding as aforesaid.

         (B)    TAX CREDITS

                If, following any such deduction or withholding as is referred
                to in Clause 11.7(A) from any payment by the Borrower or Stena
                AB, the recipient of that

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                payment shall receive or be granted a credit against or
                remission for any Taxes payable by it, such recipient shall,
                subject to the Borrower or, as the case may be, Stena AB having
                made any increased payment in accordance with Clause 11.7(A) and
                to the extent that the recipient can do so without prejudicing
                the retention of the amount of such credit or remission and
                without prejudice to the right of the recipient to obtain any
                other relief or allowance which may be available to it,
                reimburse the Borrower or, as the case may be, Stena AB with
                such amount as the recipient shall in its absolute discretion
                certify to be the proportion of such credit or remission as will
                leave the recipient (after such reimbursement) in no worse
                position than it would have been in had there been no such
                deduction or withholding from the payment to the recipient as
                aforesaid. Such reimbursement shall be made forthwith upon the
                recipient certifying that the amount of such credit or remission
                has been received by it. Nothing contained in this Agreement
                shall oblige the recipient to rearrange its tax affairs or to
                disclose any information regarding its tax affairs and
                computations. Without prejudice to the generality of the
                foregoing, neither the Borrower nor Stena AB shall by virtue of
                this Clause 11.7(B) be entitled to enquire about the recipient's
                tax affairs.

11.8     GROSSING-UP FOR TAXES - BANKS

         If at any time any Bank is required to make any deduction or
         withholding in respect of Taxes from any payment due under any of the
         Security Documents for the account of the Agent, the Security Agent or
         any Issuing Bank the sum due from such Bank in respect of such payment
         shall be increased to the extent necessary to ensure that, after the
         making of such deduction or withholding, the Agent, the Security Agent
         and the Issuing Banks receive on the due date for such payment (and
         retain free from any liability in respect of such deduction or
         withholding) a net sum equal to the sum which they would have received
         had no such deduction or withholding been required to be made and each
         Bank shall indemnify the Agent, the Security Agent and the Issuing
         Banks against any losses or costs incurred by any of them by reason of
         any failure of such Bank to make any such deduction or withholding or
         by reason of any increased payment not being made on the due date for
         such payment.

11.9     BANK ACCOUNTS

         Each Bank and the Standby Lender shall maintain, in accordance with its
         usual practice, an account or accounts evidencing the amounts from time
         to time lent by, owing to and paid to it under the Security Documents.
         The Agent shall maintain a control account showing the Advances and
         other sums owing to the Issuing Banks, the Agent, the Security Agent,
         the Banks and the Standby Lender under the Security Documents and all
         payments in respect thereof made from time to time. The control account
         shall, in the absence of manifest error, be conclusive as to the amount
         from time to time owing to the Issuing Banks, the Agent, the Security
         Agent, the Banks and the Standby Lender under the Security Documents.

11.10    APPLICATION OF MONEYS

         All moneys received by the Agent, the Security Agent, any Bank, any
         Issuing Bank or the Standby Lender under or pursuant to this Agreement
         or any other of the Security Documents and expressed to be applicable
         in accordance with this Clause 11.10 or whose application is not
         otherwise specifically provided for in the Security Documents shall (if
         not already done so) be paid to the Agent and shall be applied by the
         Agent, unless the Banks and the Standby Lender unanimously require
         otherwise:-

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         First:      in or towards satisfaction pari passu of any amounts in
                     respect of the balance of the Outstanding Indebtedness as
                     are then accrued due and payable or are then due and
                     payable by virtue of payment demanded;

         SECONDLY:   in or towards transfer to the Cash Collateral Account for
                     any outstanding Bank Guarantees of amounts equal to their
                     Outstanding Guarantee Amounts less any amounts already
                     standing to the credit of such Cash Collateral Account; and

         THIRDLY:    the surplus (if any) shall be paid to the Borrower or
                     whomsoever else shall be entitled thereto.

11.11    SUSPENSE ACCOUNT

         Notwithstanding the provisions of Clause 11.10, insofar as any moneys
         are received or recovered by the Security Agent under or in connection
         with the guarantee and indemnity contained in Clause 12, such moneys
         may at the Security Agent's discretion be transferred to a suspense or
         impersonal account and may be held in such account for so long as the
         Security Agent thinks fit pending payment to the Agent for application
         in or towards discharging the obligations of the Borrower under this
         Agreement and the other Security Documents.

11.12    PLACE OF PAYMENT

         All payments to be made by the Borrower or Stena AB under any of the
         Security Documents shall be made not later than 10.00 a.m. New York
         time on the due date and in same day funds to the account of the Agent
         at JPMorgan Chase Bank, New York City, USA, SWIFT Address CHASUS33 by
         way of payment order MT103, SWIFT Address HANDSESG or tested telex no.
         27500 answerback HANDGBS quoting reference RVIC STBNL 675 or at such
         other office or bank in New York City as the Agent may from time to
         time designate.

12       GUARANTEE AND INDEMNITY

12.1     GUARANTEE

         In consideration of the Banks and the Standby Lender agreeing at the
         request of Stena AB to make available to the Borrower the loan and
         guarantee facilities provided for in this Agreement in accordance with
         the terms of this Agreement and in order to secure the payment of the
         Outstanding Indebtedness in accordance with the provisions of the
         Security Documents and the performance and observance of all of the
         obligations contained in the Security Documents:-

         (A)    Stena AB as primary obligor as and for its own debt and not
                merely as surety hereby irrevocably and unconditionally
                undertakes to the Security Agent as trustee for and on behalf of
                itself, the Banks, the Issuing Banks, the Standby Lender, the
                Co-Arrangers and the Agent to be responsible for and hereby
                guarantees to the Security Agent the due and punctual payment by
                the Borrower to the Agent on behalf of the Banks, the Issuing
                Banks, the Standby Lender, the Co-Arrangers, the Security Agent
                and the Agent (as and when due by acceleration, demand or
                otherwise howsoever) of the Outstanding Indebtedness and every
                part thereof;

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         (B)    Stena AB irrevocably and unconditionally undertakes immediately
                on demand by the Security Agent from time to time to pay and/or
                perform its obligations under Clause 12.1(A); and

         (C)    Stena AB irrevocably and unconditionally undertakes immediately
                on demand by the Agent from time to time to indemnify and hold
                harmless the Security Agent, the Banks, the Issuing Banks, the
                Standby Lender, the Co-Arrangers and the Agent in respect of:-

                (i)    any loss incurred by the Security Agent, the Banks, the
                       Issuing Banks, the Standby Lender, the Co-Arrangers
                       and/or the Agent as a result of any of the Security
                       Documents or any provision thereof being or becoming
                       invalid, void, voidable or unenforceable for any reason
                       whatsoever; and

                (ii)   all loss or damage of any kind arising directly or
                       indirectly from any failure on the part of the Borrower
                       to perform any obligation to be performed by the Borrower
                       under and pursuant to the Security Documents or any of
                       them.

         The obligations of Stena AB under this Clause 12 shall not be
         diminished by any of the other obligations undertaken by Stena AB in
         this Agreement and the obligations of Stena AB set out in Clause
         12.1(A) shall be construed as a guarantee of payment and not of
         collection.

12.2     SURVIVAL OF STENA AB'S LIABILITY

         Stena AB's liability to the Security Agent and the Banks, the Issuing
         Banks, the Standby Lender, the Co-Arrangers and the Agent under Clause
         12.1 shall not be discharged, impaired or otherwise affected by reason
         of any of the following events or circumstances (regardless of whether
         any such events or circumstances occur with or without the knowledge or
         consent of Stena AB):-

         (A)    any time, forbearance or other indulgence given or agreed by the
                Security Agent, the Banks, the Issuing Banks, the Standby
                Lender, the Co-Arrangers and/or the Agent to or with any
                Security Party in respect of any of its respective obligations
                to the Security Agent, the Banks, the Issuing Banks, the Standby
                Lender, the Co-Arrangers and/or the Agent hereunder or under any
                other of the Security Documents; or

         (B)    any legal limitation, disability or incapacity relating to any
                Security Party; or

         (C)    any invalidity, irregularity, unenforceability, imperfection or
                avoidance of or any defect in any security granted by, or the
                obligations of any Security Party under, this Agreement or any
                other of the Security Documents or any amendment to or variation
                thereof or to or of any other document or security comprised
                therein; or

         (D)    any change in the name, constitution or otherwise of any
                Security Party or the merger of any Security Party with any
                other corporate entity; or

         (E)    the liquidation, bankruptcy or dissolution (or proceedings
                analogous thereto) of any Security Party or the appointment of a
                receiver or administrative receiver or administrator or trustee
                or similar officer of any of the assets of any Security Party or
                the occurrence of any circumstances whatsoever affecting any
                Security

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                Party's liability to discharge its respective obligations under
                any of the Security Documents; or

         (F)    any challenge, dispute or avoidance by any liquidator of any
                Security Party in respect of any claim by Stena AB or the
                Borrower or any of them by right of subrogation in any such
                liquidation; or

         (G)    any release of any other Security Party or any renewal, exchange
                or realisation of any security or obligation provided under or
                by virtue of any of the Security Documents or the provision to
                the Security Agent, the Banks, the Issuing Banks, the Standby
                Lender, the Co-Arrangers and/or the Agent at any time of any
                further security for the obligations of the Borrower under any
                of the Security Documents; or

         (H)    the release of any co-guarantor and/or indemnor who is now or
                may hereafter become under a joint and several liability with
                Stena AB under this guarantee or the release of any other
                guarantor, indemnor or other third party obligor in respect of
                the obligations of any Security Party under any of the Security
                Documents; or

         (I)    any failure on the part of the Security Agent, the Banks, the
                Issuing Banks, the Standby Lender, the Co-Arrangers and/or the
                Agent (whether intentional or not) to take or perfect any
                security agreed to be taken under or in relation to any of the
                Security Documents or to enforce any of the Security Documents;
                or

         (J)    any other act, matter or thing (save for repayment in full of
                the Outstanding Indebtedness) which might otherwise constitute a
                legal or equitable discharge of any of Stena AB's obligations
                under this Clause 12.

12.3     CONTINUING GUARANTEE

         The guarantee contained in Clause 12.1 shall be:

         (A)    a continuing guarantee remaining in full force and effect until
                payment in full has been received by the Security Agent, the
                Banks, the Issuing Banks, the Standby Lender, the Co-Arrangers
                and the Agent of each and every part and the ultimate balance of
                the Outstanding Indebtedness in whatever currency or currencies
                the same may from time to time be denominated in accordance with
                this Agreement; and

         (B)    in addition to and not in substitution for or in derogation of
                any other security held by the Security Agent, the Banks, the
                Issuing Banks, the Standby Lender, the Co-Arrangers and/or the
                Agent from time to time in respect of the Outstanding
                Indebtedness or any part thereof.

12.4     CIRCUMSTANCES WHERE DISCHARGE TO BE VOID AB INITIO

         Any satisfaction of obligations by Stena AB to the Security Agent, the
         Banks, the Issuing Banks, the Standby Lender, the Co-Arrangers and/or
         the Agent or any discharge given by the Security Agent, the Banks, the
         Issuing Banks, the Standby Lender, the Co-Arrangers and/or the Agent to
         Stena AB or any other agreement reached by Stena AB with the Security
         Agent, the Banks, the Issuing Banks, the Standby Lender, the
         Co-Arrangers and/or the Agent in relation to this Clause 12 shall be,
         and be deemed always to have been, void ab initio if any act satisfying
         any of the said obligations or on the faith of

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         which any such discharge was given or any such agreement was entered
         into is subsequently avoided in whole or in part by or pursuant to any
         provision of any applicable law whatsoever.

12.5     EXCLUSION OF THE RIGHTS OF STENA AB AS GUARANTOR

         Until the actual and contingent obligations of each Security Party
         under the Security Documents have been performed in full Stena AB shall
         not:-

         (A)    be entitled to share in or succeed to or benefit from (by
                subrogation or otherwise) any rights which the Security Agent,
                the Banks, the Issuing Banks, the Standby Lender, the
                Co-Arrangers and/or the Agent may have in respect of the
                Outstanding Indebtedness or any security therefor or all or any
                of the proceeds of such rights or security; or

         (B)    without the prior consent of the Security Agent (as directed by
                the Banks):-

                (i)    exercise in respect of any amount paid by it hereunder
                       any right of subrogation, contribution or any other right
                       or remedy which it may have in respect thereof; or

                (ii)   prove in a liquidation of any Security Party in
                       competition with the Security Agent or the Agent, the
                       Issuing Banks, the Standby Lender, the Co-Arrangers or
                       any of the Banks for any moneys owing to Stena AB by any
                       other Security Party on any account whatsoever.

13       REPRESENTATIONS AND WARRANTIES

13.1     CONTINUING

         The Borrower and Stena AB each represent and warrant (subject to the
         reservations or qualifications as to matters of law as set forth in the
         Legal Opinions delivered to the Agent) to the Agent, the Security
         Agent, the Issuing Banks, the Standby Lender, the Co-Arrangers and the
         Banks that as at the Execution Date (and each other date referred to in
         Clause 13.3):-

         (A)    STATUS

                each of the Security Parties is a limited liability company,
                duly constituted and validly existing under the laws of its
                place of incorporation, possessing perpetual corporate
                existence, the capacity to sue and be sued in its own name and
                the power to own its assets and carry on its business as it is
                now being conducted;

         (B)    POWERS AND AUTHORITY

                each of the Security Parties has the power and capacity to enter
                into, and to perform its obligations under, those of the
                Security Documents to which it is or will be a party and has
                taken all necessary action to authorise the entry into such
                Security Documents and the performance by it of its obligations
                thereunder;

         (C)    LEGAL VALIDITY

                this Agreement constitutes and each other of the Security
                Documents, upon execution and delivery thereof, will constitute
                (subject to any Post-Completion

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                Registrations) the legal, valid and binding obligations of each
                Security Party which is a party thereto enforceable in
                accordance with its terms except as such enforcement may be
                limited by any relevant bankruptcy, insolvency, administration
                or similar laws affecting creditors' rights generally and by
                general principles of equity and subject to any relevant
                qualifications contained in any of the Legal Opinions delivered
                to the Agent;

         (D)    NON-CONFLICT WITH LAWS

                the entry into and performance of the Security Documents to
                which each Security Party is or will be a party and the
                transactions contemplated hereby and thereby do not and will not
                contravene or conflict with:-

                (i)    any law or regulation or any official or judicial order;
                       or

                (ii)   the constitutional documents of such Security Party; or

                (iii)  any material agreement or document to which such Security
                       Party is a party or which is binding upon it or any of
                       its assets;

                nor, save as contemplated by this Agreement and the other
                Security Documents, result in the creation or imposition of any
                Lien on the assets of any Security Parties pursuant to the
                provisions of any such agreement or document;

         (E)    PARI PASSU STATUS

                the claims of the Banks, the Co-Arrangers, the Agent and the
                Security Agent against each Security Party under the Security
                Documents will (subject to the terms of the relevant Security
                Documents) rank at least pari passu with the claims of all other
                unsecured creditors of such Security Party other than claims of
                such creditors to the extent that they are statutorily
                preferred;

         (F)    NO IMMUNITY

                no Security Party nor any of its respective assets enjoys any
                right of immunity from set-off, suit or execution in respect of
                its obligations under this Agreement or any other of the
                Security Documents to which it is a party;

         (G)    EXECUTIVE OFFICE

                none of the Security Parties has an executive office in any part
                of the U.S.A. which would entitle it to apply for a
                reorganisation under Chapter XI of the United States Bankruptcy
                Act;

         (H)    NO MONEY LAUNDERING

                in relation to the utilisation by the Borrower of the facilities
                granted to it hereunder, the performance and discharge of its
                obligations and liabilities under the Security Documents to
                which it is a party, and the transactions and other arrangements
                effected or contemplated by the Security Documents to which the
                Borrower is a party, the Borrower confirms that it is acting for
                its own account and that the foregoing will not involve or lead
                to contravention of any law, official requirement or other
                regulatory measure or procedure implemented to

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                combat "money laundering" (as defined in Article 1 of the
                Directive (91/308/EEC) of the Council of the European
                Communities).

13.2     INITIAL

         The Borrower and Stena AB each represent and warrant (subject to the
         reservations or qualifications as to matters of law as set forth in the
         Legal Opinions delivered to the Agent) to the Agent, the Security
         Agent, the Issuing Banks, the Standby Lender, the Co-Arrangers and the
         Banks that as at the Execution Date:-

         (A)    NO DEFAULT

                no event has occurred which constitutes a material default under
                or in respect of:-

                (i)    any agreement or document relating to Debt to which any
                       Security Party is a party or by which any Security Party
                       may be bound; or

                (ii)   any other agreement or document to which any Security
                       Party is a party or by which any Security Party may be
                       bound and which default will have, or may reasonably be
                       expected to have, a material adverse effect on the
                       ability of such Security Party to perform its respective
                       obligations under this Agreement and the other Security
                       Documents;

         (B)    CONSENTS

                save as disclosed in writing to the Agent or as disclosed in any
                of the documents or evidence referred to in Schedule 8 delivered
                to, and accepted by, the Agent under this Agreement, all
                authorisations, approvals, consents, licences, exemptions,
                filings, registrations, notarisations and other matters,
                official or otherwise, required by any Security Party:-

                (i)    in connection with the entry into, performance, validity
                       and enforceability of this Agreement and the other
                       Security Documents and the transactions contemplated
                       hereby and thereby;

                (ii)   in order to maintain its corporate existence in good
                       standing; and

                (iii)  in order to ensure that it has the right, and is duly
                       qualified and able, to conduct its business as it is
                       conducted in all applicable jurisdictions including,
                       without limitation to the generality of the foregoing,
                       all such consents and approvals as are required to
                       conduct its business and/or own and operate its assets

                have been obtained or effected and are in full force and effect
                other than

                (a)    Post-Completion Registrations in respect of paragraph (i)
                       above; and

                (b)    any consent or approval required by a Security Party to
                       conduct its business and/or own and operate its assets to
                       the extent that such Security Party is unaware or cannot
                       reasonably be expected to be aware of the requirement to
                       obtain such consent or approval or to the extent that the
                       absence of such consent or approval would not have a
                       material adverse effect on the ability of such Security
                       Party to perform its obligations under the Security
                       Documents;

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         (C)    ACCURACY OF INFORMATION

                all factual information furnished in writing to the Co-Arrangers
                by the Borrower and Stena AB relating to the businesses and
                affairs of the Stena AB Group in connection with this Agreement,
                the other Security Documents and the Commercial Documents was
                (when given) true and correct in all material respects and there
                are no other material facts or considerations the omission of
                which would render any such information misleading;

         (D)    ACCOUNTS

                the Audited Stena AB Financial Statements for the financial year
                ended 31 December 2001 (which accounts were prepared in
                accordance with Swedish GAAP) fairly represent the consolidated
                financial condition of the Stena AB Group as at 31 December 2001
                and since that date there has been no material adverse change in
                the consolidated financial condition of the Stena AB Group as
                shown in such audited accounts save as disclosed in writing to
                the Agent;

         (E)    NO LIENS

                save for m.v. "STENA TAY", none of the Ships listed in Part A of
                Schedule 2 or any of their Insurances or Earnings is subject to
                any Lien other than Permitted Ship Liens and Liens securing the
                SIBV $500m Facility which will be released on or before the
                Availability Date and none of the Ports or any of the Ships
                listed in Part B of Schedule 2 or any of their Insurances or
                Earnings is subject to any Lien other than Permitted Ship Liens
                and Liens created by the relevant Prior Security Documents and
                neither m.v. "STENA TAY" nor any of her Insurances or Earnings
                is subject to any Lien other than Permitted Ship Liens, Liens
                securing the SIBV $500m Facility which will be released on or
                before the Availability Date and Liens securing the Stena Tay
                Notes;

         (F)    EXISTING DEBT

                neither Stena AB nor any of its Subsidiaries (other than
                Unrestricted Subsidiaries) has incurred any Debt other than:

                (i)    in respect of Existing Debt;

                (ii)   the Notes (to the extent not included in the definition
                       Existing Debt); or

                (iii)  pursuant to this Agreement;

         (G)    WINDING-UP, ETC.

                no Security Party has taken any corporate action nor have any
                other steps been taken or legal proceedings been started or (to
                the best of the knowledge and belief of the Borrower and Stena
                AB) threatened against any of Stena AB or any other Security
                Party for its winding-up or dissolution or for the appointment
                of a liquidator, administrator, receiver, administrative
                receiver, trustee or similar officer of any Security Party of
                any or all of its assets or revenues nor has any Security Party
                sought any other relief under any applicable insolvency or
                bankruptcy law;

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         (H)    LITIGATION

                save as disclosed in writing to the Agent, no litigation,
                arbitration or administrative proceedings are current or pending
                or, to the knowledge of the Borrower and/or Stena AB,
                threatened, which involve a claim against any Security Party in
                an amount exceeding $2,000,000;

         (I)    TAXES ON PAYMENTS

                all amounts payable by each Security Party under the Security
                Documents may be made free and clear of and without deduction
                for or on account of any Taxes;

         (J)    COMPLETENESS OF DOCUMENTS

                the copies of the Commercial Documents, the Stena Germanica Loan
                Documents and the Stena Line Asset Purchase Agreement delivered
                to the Agent are true and complete copies of each such document
                and no amendments thereto or variations thereof have been made
                or agreed which are substantial in relation to the business as
                presently conducted of the Stena AB Group as a whole.

13.3     REPETITION OF CONTINUING REPRESENTATIONS AND WARRANTIES

         On and as of the Availability Date, each date of drawing an Advance or
         issuing or extending a Bank Guarantee, each date on which a drawing is
         made under the Standby Facility, each Maturity Date, each date on which
         guarantee commission is payable pursuant to Clause 10.2 and each date
         on which a drawing is made under the Standby Facility the Borrower and
         Stena AB shall be deemed to repeat the representations and warranties
         in Clause 13.1 as if made with reference to the facts and circumstances
         existing on such day.

13.4     FUTURE FINANCIAL STATEMENTS

         In relation to the financial statements provided or to be provided
         under Clause 14, the Borrower and Stena AB each represent and warrant,
         as at the date to which such statements were prepared, that the
         statements were prepared in accordance with Swedish GAAP (in the case
         of Stena AB) or Dutch GAAP (in the case of the Borrower) and fairly
         represent the consolidated financial position of (as the case may be)
         the Stena AB Group or the Stena International Group as at such date.

14       UNDERTAKINGS

14.1     DURATION

         The undertakings contained in this Clause 14 shall remain in force from
         the date of this Agreement until the end of the Security Period.

14.2     PROVISION OF FINANCIAL AND OTHER INFORMATION

         The Borrower will provide to the Agent in sufficient copies for
         distribution to each of the Banks:-

         (A)    within one hundred and eighty (180) days after the close of the
                relevant financial years, copies of the Audited Stena AB
                Financial Statements and of the Audited Stena International
                Financial Statements for that financial year;

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         (B)    as soon as practicable, but in any event within ninety (90) days
                after 31 December 2002 and each of the dates falling quarterly
                thereafter (other than the final quarter of each financial
                year), certified copies of the unaudited consolidated management
                accounts of the Stena AB Group and of the Stena International
                Group for the preceding quarter;

         (C)    promptly, such further information in the possession or control
                of the Borrower or Stena AB regarding the financial condition
                and operations of the Stena AB Group and/or the Stena
                International Group as the Agent may reasonably request;

         (D)    within ninety (90) days after the end of each financial year of
                Stena AB, an Officer's Certificate (one of the signors of which
                is the principal executive, financial or accounting officer of
                Stena AB), stating whether or not to the best knowledge of the
                signors thereof, Stena AB is in default in the performance and
                observance of any of the terms, provisions and conditions of
                Clauses 14.6, 14.7, 14.8, 14.9, 14.10, 14.11, 14.14, 14.17,
                14.20 and 14.21 and, if Stena AB shall be in default, specifying
                all such defaults and the nature and status thereof of which
                they may have knowledge;

         (E)    as soon as practicable, but in any event within one hundred and
                twenty (120) days after the close of each financial year:-

                (i)    a certificate from the chief financial officer of each
                       Port Owner certifying the amount of earnings before
                       interest, taxes, depreciation and amortisation during the
                       previous twelve (12) month period of each Mortgaged Port
                       owned by the Port Owner; and

                (ii)   copies of the unaudited management accounts of each Port
                       Owner for such financial year showing the earnings before
                       interest, taxes, depreciation and amortisation of each
                       such Port

                such documents to be in a form reasonably acceptable to the
                Agent so that, if they are not so acceptable, the Borrower
                shall, if requested by the Agent, procure that an auditor's
                certificate and/or audited accounts are delivered to the Agent
                showing the earnings before interest, taxes, depreciation and
                amortisation of each Mortgaged Port as referred to in paragraph
                (i) above,

         (F)    not later than the Availability Date in respect of the position
                as at 30 June 2002 and thereafter within ninety (90) days after
                31 December 2002 and each of the dates falling at six (6)
                monthly intervals thereafter, an Officer's Certificate together
                with the method of the calculation of the Free Net Worth and all
                supporting documents, in substantially the form set out in
                Schedule 11 in respect of the Free Net Worth test set out in
                Clause 14.21(A) confirming:-

                (i)    the respective amounts of the Appraised Value of
                       Restricted Group Assets, Secured Debt, Strategic
                       Investments, Cash and Marketable Securities, Other Assets
                       and Working Capital, Available Asset Value and Unsecured
                       Debt (as each of those terms is defined in Clause
                       14.21(C)) as at the relevant date and that such amounts
                       were calculated in accordance with this Agreement and
                       Swedish GAAP; and

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                (ii)   the amounts of the valuations of the assets comprised in
                       the calculation of the Available Asset Value (including a
                       list of each of the vessels and ports and their
                       respective valuations).

14.3     NOTIFICATION OF DEFAULT

         The Borrower or Stena AB will notify the Agent of any Default promptly
         upon their becoming aware of the occurrence thereof.

14.4     PREPARATION OF FINANCIAL STATEMENTS

         Each set of financial statements and management accounts to be provided
         to the Agent pursuant to Clause 14.2 shall be prepared in accordance
         with Swedish GAAP (in the case of the Stena AB Group) or Dutch GAAP (in
         the case of the Stena International Group) consistently applied (or, if
         not consistently applied, accompanied by details of the
         inconsistencies) and shall fairly represent the financial condition of
         Stena AB Group and the Stena International Group respectively.

14.5     CONSENTS AND REGISTRATIONS AND MAINTENANCE OF STATUS

         Each of the Borrower and Stena AB will do, and will procure that each
         other Security Party will do, all such things as are necessary to
         enable it to comply with any of its financial obligations under those
         of the Security Documents to which it is a party including, without
         limitation, obtaining, maintaining, promptly renewing (when necessary)
         and complying at all times with (and promptly furnishing certified
         copies to the Agent of) all such authorisations, approvals, consents,
         licences and exemptions as are from time to time required under any
         applicable law or regulation in connection with any of the matters
         aforesaid.

         Insofar as any such filings or registrations aforesaid have not been
         completed on or before the first Advance is drawn the Borrower and
         Stena AB will procure the filing or registration within applicable time
         limits of each Security Document which requires filing or registration
         together with all ancillary documents required to preserve the priority
         and enforceability of the Security Documents.

         Where the operation of any Mortgaged Ship or Mortgaged Linkspan in
         accordance with its owner's or operator's requirements requires the
         obtaining or maintenance of a route licence or port licence, the
         Borrower and Stena AB further undertake to procure that such licence is
         obtained, maintained, promptly renewed (when necessary) and complied
         with in all material respects at all relevant times during the Security
         Period.

14.6     LIMITATION ON LIENS

         Except with the prior written consent of the Majority Banks, the
         Borrower and Stena AB will not, and shall procure that no other member
         of the Stena AB Group will:-

         (A)    create or incur or permit to subsist any Lien on m.v. "STENA
                TAY" or on the whole or any part of any property or rights which
                is or are presently or may in future during the Security Period
                be subject to any Lien in favour of the Security Agent pursuant
                to the Security Documents or over any Earnings of any Shipowner
                or Stena Charterer in relation to any Mortgaged Ship (other than
                Permitted Ship Liens or Liens created by a Prior Security
                Document or, in the case of m.v. "STENA TAY", Liens securing the
                Stena Tay Notes); or

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         (B)    create or incur any Lien (other than Permitted Liens) on or with
                respect to any other property or assets of Stena AB or any
                Subsidiary thereof now owned or hereafter acquired to secure
                Debt of any person without making, or causing such Subsidiary to
                make, effective provision for securing the Outstanding
                Indebtedness equally and rateably with such Debt or, in the
                event such Debt is subordinate in right of payment to the
                Outstanding Indebtedness, prior to such Debt, as to such
                property or assets for so long as such Debt shall be so secured
                provided however that Stena AB and its Subsidiaries may incur
                Liens to secure any Debt under this paragraph (B) without
                securing the Outstanding Indebtedness equally and rateably with
                or prior to such Debt, as applicable, if the outstanding amount
                of Debt secured by Liens created after the date of this
                Agreement and otherwise prohibited by this Agreement does not at
                the time of such incurrence, when aggregated with the
                outstanding amount of Debt secured by Liens created after 1
                October 1997 but before the Execution Date otherwise prohibited
                by the 2007 Indenture but which Liens are permitted by Section
                10.14(b) thereof, exceed:-

                (i)    5% of Consolidated Tangible Assets; minus;

                (ii)   the lesser of (a) the Fair Market Value of the Related
                       Collateral and/or other property granted as additional
                       security pursuant to paragraph (N) of the definition of
                       "Permitted Liens" and subject to Liens at such time and
                       (b) the maximum amount of Debt secured at such time or
                       thereafter by such additional collateral set forth in a
                       written security or other agreement at such time or
                       thereafter with respect to such additional collateral.

14.7     ASSET DISPOSITIONS

         (A)    Stena AB will not, and will not permit any Subsidiary of Stena
                AB to, make any Asset Disposition in one or more related
                transactions by Stena AB or a Subsidiary of Stena AB unless:-

                (i)    Stena AB or the Subsidiary of Stena AB, as the case may
                       be, receives consideration for such disposition at least
                       equal to the Fair Market Value for the shares or assets
                       sold or disposed of as determined by the Board of
                       Directors of Stena AB or such Subsidiary in good faith;

                (ii)   at least eighty five per cent (85%) of the consideration
                       for such disposition consists of one or more of the
                       following:-

                       (w)    cash or Cash Equivalents, provided that any
                              promissory note (or other evidence of
                              indebtedness) received by Stena AB or such
                              Subsidiary that is immediately converted into cash
                              or Cash Equivalents shall be deemed to be cash for
                              the purposes of this provision to the extent of
                              the cash or Cash Equivalents actually received
                              upon such conversion;

                       (x)    in the case of an Asset Disposition relating to a
                              Vessel or Vessels, a promissory note (or other
                              evidence of indebtedness) issued by the purchaser
                              of the asset sold or disposed of and secured by a
                              first perfected security interest in such asset,
                              (provided such security interest remains in full
                              force and perfected, or is replaced by a bank
                              guarantee, letter of credit or cash collateral,
                              until all obligations arising under such
                              promissory note (or other evidence

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                              of indebtedness) are paid in full), a bank
                              guarantee, a letter of credit or cash collateral;

                       (y)    the assumption of Debt (which, for the purposes of
                              the calculation of the consideration received
                              pursuant to the Asset Disposition, shall be valued
                              at the principal amount so assumed) of Stena AB or
                              such Subsidiary or other obligations relating to
                              such assets and release from all liability on such
                              Debt or other obligations assumed;

                       (z)    in the case of an Asset Disposition relating to a
                              Vessel or Vessels, notes received in consideration
                              for such disposition, provided, that at no time
                              shall there be, in the aggregate, more than
                              $15,000,000 of notes received under this
                              sub-clause (z) outstanding (exclusive of notes
                              complying with the requirements of clauses (w) or
                              (x) above); and

                (iii)  no Default or Event of Default (as defined in either
                       Indenture or any Successor Financing) shall have occurred
                       and be continuing at the time of, or after giving effect
                       to, such Asset Disposition.

         (B)    The Net Available Proceeds of any Asset Disposition shall
                subject to Clauses 9.4 and 9.5 be applied by Stena AB or any
                Subsidiary of Stena AB (as the case may be) within three hundred
                and sixty (360) days after such Asset Disposition:-

                (i)    first, to repay permanently any outstanding Debt of:-

                       (a)    Stena AB that ranks senior to or pari passu with
                              the Notes or any Successor Financing; or

                       (b)    any Subsidiary of Stena AB that does not
                              constitute Subordinated Debt,

                       in each case as required by the terms thereof,

                (ii)   second, to the extent of any then remaining Net Available
                       Proceeds and to the extent Stena AB or such Subsidiary so
                       elects:-

                       (a)    to the prepayment of Debt of:-

                              (x)     Stena AB that ranks senior to or pari
                                      passu with the Notes or any Successor
                                      Financing; or

                              (y)     any Subsidiary of Stena AB that does not
                                      constitute Subordinated Debt; and/or

                       (b)    to an investment (which shall be deemed to include
                              entering into a legally binding agreement, subject
                              to customary conditions, to invest) in assets,
                              other than Cash Assets, that will be used in the
                              business of Stena AB and its Subsidiaries subject
                              to the limitations of Clause 14.11; provided that
                              Stena AB or any Subsidiary of Stena AB may deem
                              that the amount of any prior investment
                              (including, without limitation, any payments made
                              in respect of

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                              Vessel Construction Contracts) made in connection
                              with the delivery or acquisition of any Vessel,
                              equal to the difference between the Ready for Sea
                              Cost of such Vessel and the aggregate Debt
                              Incurred to finance the purchase of such Vessel
                              (or related assets) occurring within one (1) year
                              prior to such Asset Disposition, shall be
                              considered an investment made with the Net
                              Available Proceeds of such Asset Disposition.

                       If any legally binding agreement to invest any Net
                       Available Proceeds is terminated, then Stena AB, or any
                       Subsidiary of Stena AB, may invest such Net Available
                       Proceeds, prior to the end of the one (1) year period
                       after such Asset Disposition or six (6) months from such
                       termination, whichever is later, in the business of Stena
                       AB and Subsidiaries of Stena AB as provided above. The
                       amount of such Net Available Proceeds neither used to
                       repay or prepay Debt nor used or invested (or deemed used
                       or invested) as set forth in the preceding sentences
                       constitutes "EXCESS PROCEEDS."

         (C)    If at any time the aggregate amount of Excess Proceeds not
                previously applied pursuant to this Clause 14.7 equals
                $30,000,000 or more, Stena AB shall apply such Excess Proceeds:-

                (i)    first, to the extent of the remaining Excess Proceeds at
                       Stena AB's option, (a) to make an offer to purchase the
                       outstanding 2005 Notes (as required by the 2005 Indenture
                       or any Successor Financing) at one hundred per cent
                       (100%) of their principal amount plus accrued interest to
                       the date of purchase or (b) to make an offer to purchase
                       the outstanding 2007 Notes at one hundred per cent (100%)
                       of their principal amount plus accrued interest to the
                       date of purchase;

                (ii)   second, if an offer to purchase is made under (C)(i)(a)
                       above and there are any, and to the extent of any,
                       remaining Excess Proceeds following completion of such
                       purchase, to make an offer to purchase the outstanding
                       2007 Notes (as required by the 2007 Indenture or any
                       Successor Financing) at one hundred per cent (100%) of
                       their principal amount plus accrued interest to the date
                       of purchase;

                (iii)  third, to the extent of any remaining Excess Proceeds
                       following the completion of the offer to purchase, to the
                       repayment of other Debt (other than Subordinated Debt) of
                       Stena AB and its Subsidiaries to the extent permitted by
                       the agreements governing such Debt; and

                (iv)   fourth, to the extent of any then remaining Excess
                       Proceeds, for general corporate purposes of Stena AB and
                       its Subsidiaries.

         (D)    This Clause 14.7 will not apply to a transaction consummated in
                compliance with Section 8.1 (Mergers, Consolidations and Certain
                Sales and Purchases of Assets) of each of the Indentures (or the
                corresponding provision in any Successor Financing).

14.8     INCURRENCE OF DEBT BY STENA AB

         (A)    Stena AB shall not Incur any Debt unless:-

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                (i)    immediately after giving effect to the Incurrence of such
                       Debt and the receipt and application of the proceeds
                       thereof, the Consolidated Interest Coverage Ratio for the
                       four full fiscal quarters for which quarterly or annual
                       financial statements are available next preceding the
                       Incurrence of such Debt, calculated on a pro forma basis
                       as if such Debt had been Incurred (and the receipt and
                       application thereof had been made) at the beginning of
                       such four full fiscal quarters, would be greater than 2
                       to 1; and

                (ii)   no Default or Event of Default (as defined in the Notes
                       or any Successor Financing) shall have occurred and be
                       continuing at the time of, or after giving effect to, the
                       Incurrence of such Debt.

         (B)    Notwithstanding the foregoing limitation, Stena AB may Incur the
                following Debt:-

                (i)    Existing Debt;

                (ii)   Debt pursuant to any of the Notes or any Successor
                       Financing (to the extent not included in the definition
                       of Existing Debt);

                (iii)  Debt to finance the replacement of a Vessel owned or
                       leased under a Capitalised Lease Obligation by Stena AB
                       or any Subsidiary of Stena AB secured by a Lien of the
                       type described under paragraph (D) of the definition of
                       "Permitted Liens" upon a total loss, destruction,
                       condemnation, confiscation, requisition, seizure,
                       forfeiture or other taking of title to or use of such
                       Vessel (provided that such loss, destruction,
                       condemnation, confiscation, requisition, seizure,
                       forfeiture or other taking of title to or use of such
                       Vessel was covered by insurance or resulted in the
                       payment of compensation or similar payments to such
                       person) (collectively, a "RELEVANT TOTAL LOSS") in an
                       aggregate amount up to the Ready for Sea Cost for such
                       replacement Vessel less all compensation, damages and
                       other payments (including insurance proceeds other than
                       in respect of business interruption insurance, protection
                       and indemnity insurance or other third-party liability
                       insurance) received from any person in connection with
                       the Relevant Total Loss in excess of amounts actually
                       used to repay Debt secured by the Vessel subject to the
                       Relevant Total Loss;

                (iv)   Debt under any interest rate swap, foreign currency
                       hedge, exchange or similar agreements to the extent
                       entered into to hedge any other Debt permitted under this
                       Agreement or otherwise entered into in the ordinary
                       course of business;

                (v)    Debt to renew, extend, refinance, replace or refund
                       (herein, "REFINANCE") any Debt permitted to be Incurred
                       under Clause 14.8(A) (including, without limitation, Debt
                       in respect of binding commitments for Post-Delivery
                       Financing permitted under Clause 14.8(A)), any Existing
                       Debt or any Debt permitted to be incurred under
                       paragraphs (ii), (iv), (v) or (vii) of this Clause
                       14.8(B) provided that:-

                       (a)    the amount of such Debt does not exceed:-

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                              (x)     except as provided in (y) below, the
                                      principal amount of Debt to be so
                                      refinanced (which amount shall be deemed
                                      to include the amount of any undrawn or
                                      available amounts under any committed
                                      credit or lease facility being so
                                      refinanced); or

                              (y)     in the case of the refinancing of the
                                      Post-Delivery Financing of a Vessel within
                                      two hundred and seventy (270) days after
                                      the acquisition or delivery of such Vessel
                                      pursuant to a Capitalised Lease
                                      Obligation, one hundred per cent (100%) of
                                      the Ready for Sea Cost of such Vessel

                              plus, in either case, the amount of any premium
                              required to be paid in connection with such
                              refinancing pursuant to the terms of the Debt
                              refinanced or the amount of any premium reasonably
                              determined by Stena AB as necessary to accomplish
                              such refinancing by means of a tender offer or
                              privately negotiated repurchase, plus the expenses
                              of Stena AB or any of its Subsidiaries Incurred in
                              connection with such refinancing; and

                       (b)    the Incurrence of Debt the proceeds of which are
                              used to refinance Debt shall only be permitted if
                              the refinancing Debt by its terms, or by the terms
                              of any agreement or instrument pursuant to which
                              such Debt is issued, has an Average Life and
                              Stated Maturity which is equal to or greater than
                              that of the Debt to be refinanced at the time of
                              the Incurrence of such refinancing Debt;

                (vi)   Debt owed by Stena AB to any Subsidiary of Stena AB;
                       provided that upon either:-

                       (a)    the transfer or other disposition by any such
                              Subsidiary of any Debt so permitted to a person
                              other than Stena AB or a Subsidiary of Stena AB or

                       (b)    the issuance, sale, transfer or other disposition
                              (other than a pledge of the shares of such
                              Subsidiary permitted under Clause 14.6) of shares
                              of Capital Stock (including by consolidation or
                              merger) of such Subsidiary to a person other than
                              Stena AB or a Subsidiary of Stena AB which, after
                              giving effect thereto, results in such Subsidiary
                              ceasing to be a Subsidiary of Stena AB,

                       the provisions of this paragraph (vi) shall no longer be
                       applicable to such Debt and such Debt shall be deemed to
                       have been Incurred at the time of such transfer or other
                       disposition;

                (vii)  Debt Incurred pursuant to this Agreement or under any
                       other Revolving Credit Facilities; and

                (viii) Debt of Stena AB not otherwise permitted to be Incurred
                       pursuant to paragraphs (ii) to (vii) above, which,
                       together with:-

                       (a)    any other outstanding Debt Incurred pursuant to
                              this paragraph (viii) and/or Clause 14.9(I) (and
                              any outstanding Preferred Stock

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                              issued by Subsidiaries of Stena AB pursuant to
                              Clause 14.10(D)); and

                       (b)    any other outstanding Debt Incurred after 1
                              October 1997 but before the Execution Date
                              pursuant to Section 10.8(vii) and/or Section
                              10.9(viii) of the 2007 Indenture (and any
                              outstanding Preferred Stock issued by Subsidiaries
                              of Stena AB after 1 October 1997 but before the
                              Execution Date pursuant to Section 10.10(iv) of
                              the 2007 Indenture)

                       has an aggregate principal amount (and/or liquidation
                       preference) not in excess of $50,000,000 at any time
                       outstanding.

14.9     INCURRENCE OF DEBT BY SUBSIDIARIES

         Stena AB will not permit any Subsidiary of Stena AB to Incur any Debt
         except:-

         (A)    Debt to finance the replacement of a Vessel owned or leased
                under a Capitalised Lease Obligation by that Subsidiary secured
                by a Lien of the type described under paragraph (D) of the
                definition of "Permitted Lien" upon a Relevant Total Loss of
                such Vessel (as defined in Clause 14.8(B)(iii)) in an aggregate
                amount up to the Ready for Sea Cost for such replacement Vessel
                less all compensation, damages and other payments (including
                insurance proceeds other than in respect of business
                interruption insurance, protection and indemnity insurance or
                other third-party liability insurance) received from any person
                in connection with the Relevant Total Loss in excess of amounts
                actually used to repay Debt secured by the Vessel subject to the
                Relevant Total Loss; provided that if the Debt Incurred by that
                Subsidiary in financing the Vessel subject to the Relevant Total
                Loss is subordinated to the Debt Incurred under this Agreement,
                the Debt Incurred to finance the replacement Vessel shall be
                subordinated to the same degree;

         (B)    Debt under any interest rate swap, foreign currency hedge,
                exchange or similar agreements to the extent entered into by
                that Subsidiary to hedge any other Debt permitted to be Incurred
                by it under this Agreement or otherwise entered into in the
                ordinary course of business;

         (C)    Debt owed to Stena AB or a Subsidiary of Stena AB provided that
                upon either (x) the transfer or other disposition by Stena AB or
                such Subsidiary of any Debt so permitted to a person other than
                Stena AB or a Subsidiary of Stena AB or (y) the issuance, sale,
                transfer or other disposition (other than a pledge of the shares
                of such Subsidiary permitted under Clause 14.6) of shares of
                Capital Stock (including by consolidation or merger) of such
                Subsidiary to a person other than Stena AB or another such
                Subsidiary which, after giving effect thereto, results in such
                Subsidiary ceasing to be a Subsidiary of Stena AB, the
                provisions of this paragraph (C) shall no longer be applicable
                to such Debt and such Debt shall be deemed to have been Incurred
                at the time of such transfer or other disposition;

         (D)    subject to the satisfaction of the incurrence test set forth in
                Clause 14.8(A), Debt Incurred by a person prior to the time (a)
                such person became a Subsidiary of Stena AB, (b) such person
                merges with or into or consolidates with a Subsidiary of Stena
                AB or (c) another Subsidiary of Stena AB merges with or into or
                consolidates with such person (in a transaction in which such
                person becomes a

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                Subsidiary of Stena AB), which Debt was not Incurred or issued
                in anticipation of such transaction and was outstanding prior to
                such transaction;

         (E)    subject to the satisfaction of the incurrence test set forth in
                Clause 14.8(A), Debt of a Subsidiary of Stena AB secured by a
                Lien of the type described under paragraph (D) of the definition
                of "Permitted Liens";

         (F)    (subject to Clause 14.22) Debt to refinance Existing Debt of any
                Subsidiary and Debt to refinance any Debt permitted to be
                Incurred pursuant to paragraphs (A), (D), (E), (F) and (G) of
                this Clause 14.9 provided that:-

                (i)    the amount of such Debt does not exceed:-

                       (a)    except as provided in (b) below, the principal
                              amount of Debt to be so refinanced (which amount
                              shall be deemed to include the amount of any
                              undrawn or available amounts under any committed
                              credit or lease facility being so refinanced); or

                       (b)    in the case of the refinancing of the
                              Post-Delivery Financing of a Vessel within 270
                              days after the acquisition or delivery of such
                              Vessel pursuant to a Capitalised Lease Obligation,
                              100% of the Ready for Sea Cost of such Vessel

                       plus, in either case, the amount of any premium required
                       to be paid in connection with such refinancing pursuant
                       to the terms of the Debt refinanced or the amount of any
                       premium reasonably determined by Stena AB as necessary to
                       accomplish such refinancing by means of a tender offer or
                       privately negotiated repurchase, plus the expenses of
                       Stena AB or any of its Subsidiaries Incurred in
                       connection with such refinancing;

                (ii)   such refinancing Debt shall not be used to refinance
                       outstanding Debt or Preferred Stock of Stena AB; and

                (iii)  such refinancing Debt by its terms, or by the terms of
                       any agreement or instrument pursuant to which such Debt
                       is issued, has an Average Life and Stated Maturity which
                       is equal to or greater than that of the Debt to be
                       refinanced at the time of the Incurrence of such
                       refinancing Debt;

         (G)    Debt Incurred under this Agreement and/or any other Revolving
                Credit Facilities including, without limitation, Debt Incurred
                pursuant to guarantees made by Subsidiaries of Stena AB in
                respect of this Agreement and/or any other Revolving Credit
                Facilities;

         (H)    Debt of any Subsidiary pursuant to a guarantee issued pursuant
                to the first paragraph of Section 10.13 of either Indenture or
                the corresponding provision of any Successor Financing;

         (I)    Debt of Subsidiaries of Stena AB not otherwise permitted to be
                Incurred pursuant to paragraphs (A) through (H) above which
                together with:-

                (i)    any other outstanding Debt Incurred pursuant to this
                       paragraph (I) and/or Clause 14.8(B)(viii) (and any
                       outstanding Preferred Stock issued by Subsidiaries of
                       Stena AB pursuant to Clause 14.10(D)); and

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                (ii)   any other outstanding Debt Incurred after 1 October 1997
                       but before the Execution Date pursuant to Section
                       10.8(vii) and/or Section 10.9(viii) of the 2007 Indenture
                       (and any outstanding Preferred Stock issued by
                       Subsidiaries of Stena AB after 1 October 1997 but before
                       the Execution Date pursuant to Section 10.10(iv) of the
                       2007 Indenture)

                has an aggregate principal amount (and/or liquidation
                preference) not in excess of $50,000,000 at any time
                outstanding.

14.10    LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES

         Stena AB will not permit any of its Subsidiaries to issue, directly or
         indirectly, any Preferred Stock except:-

         (A)    Preferred Stock of a Subsidiary of Stena AB issued to and held
                by Stena AB or any of its Wholly Owned Subsidiaries, provided
                that any subsequent issuance or transfer of any Capital Stock
                which results in such Wholly Owned Subsidiary ceasing to be a
                Wholly Owned Subsidiary of Stena AB or any transfer of such
                Preferred Stock by any such Wholly Owned Subsidiary will, in
                each case, be deemed an issuance of Preferred Stock;

         (B)    Preferred Stock issued by a person prior to the time (i) such
                person becomes a Subsidiary of Stena AB, (ii) such person merges
                with or into or consolidates with a Subsidiary of Stena AB or
                (iii) another Subsidiary of Stena AB merges with or into or
                consolidates with such person (in a transaction in which such
                person becomes a Subsidiary of Stena AB), which Preferred Stock
                was not issued in anticipation of such transaction;

         (C)    Preferred Stock (other than Disqualified Stock) which is
                exchanged for Preferred Stock permitted to be outstanding
                pursuant to paragraphs (A) and (B) above or which is used to
                refinance Debt (or any refinancing thereof), having a
                liquidation preference not to exceed the liquidation preference
                of the Preferred Stock in the principal amount of the Debt so
                refinanced; and

         (D)    Preferred Stock issued by Subsidiaries of Stena AB not otherwise
                permitted to be issued pursuant to paragraphs (A) through (C)
                above which together with:-

                (i)    any other Preferred Stock outstanding pursuant to this
                       paragraph (D);

                (ii)   any Debt of Subsidiaries of Stena AB Incurred pursuant to
                       Clause 14.9(I);

                (iii)  any Debt of Stena AB Incurred pursuant to Clause
                       14.8(B)(viii); and

                (iv)   any other outstanding Debt Incurred after 1 October 1997
                       but before the Execution Date pursuant to Section
                       10.8(vii) and/or Section 10.9(viii) of the 2007 Indenture
                       (and any outstanding Preferred Stock issued by
                       Subsidiaries of Stena AB after 1 October 1997 but before
                       the Execution Date pursuant to Section 10.10(iv) of the
                       2007 Indenture)

                has an aggregate principal amount (and/or liquidation
                preference) not in excess of $50,000,000 at any time
                outstanding.

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14.11    LIMITATION ON INVESTMENTS

         Except with the prior written consent of the Majority Banks, the
         Borrower and Stena AB will not, and shall procure that no other member
         of the Stena AB Group will, make any Investment in any person (other
         than Stena AB, any Subsidiary of Stena AB or any person which, after
         giving effect to such Investment, would become a Subsidiary of Stena
         AB) except Permitted Investments.

14.12    BUSINESS ACTIVITIES

         Stena AB will not, and will not permit any of its Subsidiaries (other
         than any Unrestricted Subsidiaries) to, engage in any type of business
         other than the business Stena AB and its Subsidiaries are engaged in on
         the date of this Agreement, other business activities within the
         shipping, offshore oilfield services and real estate investment and
         management industries and (as determined in good faith by the Board of
         Directors of Stena AB) other business activities complementary,
         incidental or reasonably related thereto.

14.13    MERGERS AND CONSOLIDATION

         Except with the prior written consent of the Majority Banks, neither
         the Borrower nor any other Security Party will merge or consolidate
         with any other person save for a merger or consolidation by operation
         of law with one or more other entities into a single surviving entity
         which is the Borrower or (as the case may be) such other Security Party
         and which succeeds by operation of law to all of the assets and
         liabilities of the Borrower or (as the case may be) such other Security
         Party immediately prior to such merger or consolidation.

14.14    RESTRICTED PAYMENTS BY STENA AB GROUP

         Stena AB will not, and will not permit any Subsidiary of Stena AB
         (other than an Unrestricted Subsidiary) to, directly or indirectly:-

         (A)    declare or pay any dividend, or make any distribution of any
                kind or character (whether in cash, property or securities), in
                respect of any class of Stena AB's Capital Stock to the holders
                thereof, excluding any dividends or distributions payable solely
                in shares of the Capital Stock of Stena AB or in options,
                warrants or other rights to acquire the Capital Stock of Stena
                AB;

         (B)    purchase, redeem, defease, or otherwise acquire or retire for
                value:-

                (i)    any Capital Stock of Stena AB or any Related Person of
                       Stena AB; or

                (ii)   any options, warrants or rights to purchase or acquire
                       shares of Capital Stock of Stena AB or any Related Person
                       of Stena AB or any securities convertible or exchangeable
                       into shares of Capital Stock of Stena AB or any Related
                       Person of Stena AB, in either case other than
                       acquisitions of Capital Stock or options, warrants or
                       rights to acquire such Capital Stock pursuant to
                       paragraph (C) of the definition of "Permitted
                       Investments";

         (C)    make any Investment in any Affiliate or Related Person of Stena
                AB (other than Stena AB or a Subsidiary of Stena AB) and other
                than a person which becomes a Subsidiary of Stena AB as a result
                of such Investment) provided that this

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                paragraph (C) shall not prohibit the making of an Investment
                otherwise permitted under Clause 14.11;

         (D)    redeem, defease, repurchase, retire or otherwise acquire or
                retire for value prior to any scheduled maturity, repayment or
                sinking fund payment, Debt of Stena AB which is subordinate in
                right of payment to any of the Notes or any Successor Financing,
                except to the extent that payment for such Debt is made from the
                proceeds of a simultaneous refinancing of such Debt otherwise
                permitted under the Indentures or any Successor Financing; or

         (E)    declare or pay any dividend or make any distribution of any kind
                or character (whether in cash, property or securities) on any
                Capital Stock of any Subsidiary of Stena AB (except where Stena
                AB or any Subsidiary of Stena AB receives a rateable portion of
                such dividend or distribution) to any person (other than Stena
                AB or any Subsidiary of Stena AB) or purchase, redeem or
                otherwise acquire or retire for value any Capital Stock of any
                Subsidiary of Stena AB held by any person (other than Stena AB
                or any Subsidiary of Stena AB)

         each of the matters described in paragraphs (A) to (E) being a
         "RESTRICTED PAYMENT" if at the time thereof:-

                (i)    a Default or Event of Default as defined in the
                       Indentures shall have occurred and is continuing; or

                (ii)   upon giving effect to such Restricted Payment, Stena AB
                       could not Incur at least $1 of additional Debt pursuant
                       to Clause 14.8(A); or

                (iii)  upon giving effect to such Restricted Payment, the
                       aggregate of all Restricted Payments, together with, (a)
                       payments on guarantees of obligations of Affiliates or
                       Related Persons (other than Stena AB or a Subsidiary of
                       Stena AB) of Stena AB in effect on 1 October 1997 but
                       only to the extent such payments have not been reimbursed
                       in accordance with the terms of the relevant guarantee or
                       other agreement, and (b) outstanding Investments made
                       pursuant to paragraph (B) of the definition of "Permitted
                       Investments" (or, in respect of Investments made prior to
                       the Execution Date, paragraph (ii) of the definition of
                       "Permitted Investments" in the 2007 Indenture) in either
                       case made after 1 October 1997 exceeds the greater of:-

                       (a)    the sum of (x) fifty per cent (50%) of cumulative
                              Consolidated Net Income of Stena AB (or, if
                              cumulative Consolidated Net Income of Stena AB
                              shall be negative, less one hundred per cent
                              (100%) of such deficit) since the end of the most
                              recent fiscal quarter of Stena AB ended on or
                              prior to 1 October 1997 through the last day of
                              the period for which quarterly or annual financial
                              statements of Stena AB are available, plus (y) one
                              hundred per cent (100%) of the aggregate net
                              proceeds received after 1 October 1997, including
                              the fair value of property other than cash, from
                              the issuance of Capital Stock (other than
                              Disqualified Stock) of Stena AB and warrants,
                              rights or options on Capital Stock (other than
                              Disqualified Stock) of Stena AB and the principal
                              amount of Debt that has been converted into
                              Capital Stock (other

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                              than Disqualified Stock) of Stena AB after 1
                              October 1997, plus (z) $50,000,000; and

                       (b)    $50,000,000.

                The foregoing provisions will not prohibit the payment of any
                dividend on Capital Stock of any class within sixty (60) days
                after the declaration thereof if, on the date when the dividend
                was declared, such dividend could have been paid in accordance
                with the provisions of the foregoing covenant.

                Under Swedish law, any shareholder of a Swedish corporation
                owning ten per cent (10%) or more of the outstanding shares of
                such corporation has the right to demand the payment of
                dividends from the profits of the corporation in accordance with
                the Swedish Companies Act. Whilst this Agreement cannot prevent
                the payment of a dividend by Stena AB under such circumstances,
                the declaration or payment by Stena AB of dividends (or other
                distributions) in excess of the amount then permitted under this
                Clause 14.14 shall constitute an Event of Default under this
                Agreement.

14.15    FINANCIAL YEAR

         Except with the prior written consent of the Agent (such consent not to
         be unreasonably withheld or delayed), the Borrower and Stena AB will
         not alter their respective financial years.

14.16    OWNERSHIP OF STENA AB GROUP COMPANIES

         Stena AB will procure that Stena Rederi AB and Stena Line Scandinavia
         remain Wholly Owned Subsidiaries of Stena AB until the Availability
         Date and that each of the Security Parties which are at the Execution
         Date members of the Stena AB Group (other than Stena AB itself) remain
         Subsidiaries of Stena AB and that none of the shares of any person
         which is a Security Party at any time during the Security Period shall
         (except in favour of the Security Agent) be pledged to any person.

14.17    STENA AB GROUP WORKING CAPITAL

         (A)    Stena AB and the Borrower will procure that:-

                (i)    the aggregate of (i) the Consolidated Current Assets and
                       (ii) Available Facilities shall be not less than one
                       hundred and twenty five per cent (125%) of the
                       Consolidated Current Liabilities; and

                (ii)   the aggregate of (i) Consolidated Liquid Assets and (ii)
                       Available Facilities shall be not less than $50,000,000.

         (B)    The requirements contained in this Clause 14.17 as to the
                financial condition of the Stena AB Group shall be tested on the
                Availability Date by reference to the most recently published
                unaudited financial statements of the Stena AB Group and
                thereafter quarterly as at 31 March, 30 June, 30 September and
                31 December in each year in each case by reference to the
                Audited Stena AB Financial Statements and the unaudited
                financial statements delivered to the Agent pursuant to Clause
                14.2 provided however that no breach shall be deemed to have
                arisen under this Clause 14.17 unless and until Stena AB shall,
                within ten (10) Banking

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                Days following receipt by the Stena AB of written notification
                from the Agent that a shortfall has occurred under this Clause
                14.17, have failed to satisfy the Agent that such shortfall has
                been eliminated.

         (C)    For the purposes of this Clause 14.17, accounting terms are used
                and shall be construed in accordance with Swedish GAAP but so
                that:-

                "AVAILABLE FACILITIES" means, at any relevant time, the undrawn
                amount of any committed loan or overdraft facilities (including
                the facilities provided under this Agreement) available to one
                or more members of the Stena AB Group at the date of such
                financial statements;

                "CONSOLIDATED CURRENT ASSETS" means the aggregate at the date of
                computation of the consolidated stocks, assets held for sale,
                receivables and prepayments, intercompany receivables,
                securities, cash at banks and in hand and other current assets
                (as determined in accordance with Swedish GAAP) of the Stena AB
                Group;

                "CONSOLIDATED CURRENT LIABILITIES" means the aggregate at the
                date of computation of intercompany payables and other current
                liabilities (as determined in accordance with Swedish GAAP) of
                the Stena AB Group;

                "CONSOLIDATED LIQUID ASSETS" means the aggregate of:-

                (i)    the cash and Cash Equivalents of the Stena AB Group; and

                (ii)   the market value of shares or other marketable debt or
                       equity securities held by members of the Stena AB Group
                       which are quoted on any recognised stock exchange or over
                       the counter or similar market in any member of the
                       European Union or European Economic Area, U.S.A., Canada,
                       Hong Kong, Tokyo, Singapore or as otherwise approved by
                       the Agent and other marketable securities having a rating
                       of no less than BBB- from Standard & Poor's Corporation
                       or Moody's Investors Service Inc or other rating agency
                       which the Agent accepts to be of equivalent standing

                provided that cash or Cash Equivalents expressed or denominated
                in a currency other than Dollars shall be converted into Dollars
                by reference to the rate of exchange used for conversion of such
                currency in the consolidation of the relevant consolidated
                balance sheets or, if the relevant currency was not thereby
                involved, by reference to the rate of exchange or approximate
                rate of exchange ruling on such date and determined on such
                basis as Stena AB's auditors may determine or approve.

14.18    EARLY REDEMPTION OR DEFEASANCE OF NOTES

         Stena AB will not exercise its rights of optional redemption of any of
         the Notes under Article XI (Redemption of Securities) of either of the
         Indentures or its rights of defeasance of the Notes under Article XII
         (Defeasance and Covenant Defeasance) of either of the Indentures or
         voluntarily redeem or repay any Successor Financing unless such
         optional redemption, defeasance or voluntary repayment of the Notes or
         (as the case may be) such voluntary redemption, defeasance or repayment
         of the Successor Financing

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         is fully financed on the date thereof by an Acceptable Refinancing and
         for the purposes of this Clause 14.18:-

         "ACCEPTABLE REFINANCING" means Debt incurred by Stena AB or any
         Subsidiary of Stena AB other than the Borrower (otherwise than from
         other members of the Stena AB Group) which:-

         (A)    is for an amount not less than the amount required to effect
                such optional redemption, defeasance or voluntary repayment of
                the relevant Notes or (as the case may be) voluntarily to
                redeem, defease or repay the relevant Successor Financing;

         (B)    is on terms that the scheduled date for repayment or redemption
                of such Debt is no earlier than the scheduled maturity date of
                the relevant Notes or (as the case may be) Successor Financing
                being refinanced and that the person or persons to whom such
                Debt is owed is or are not entitled to require any earlier
                repayment or redemption in circumstances more onerous upon Stena
                AB or such Subsidiary of Stena AB than those applicable in
                respect of such Notes or relevant Successor Financing; and

         (C)    is not secured or preferred by any Liens over any of the
                Mortgaged Ships or other assets or rights mortgaged, charged or
                assigned to the Security Agent pursuant to the Security
                Documents from time to time or any of their Insurances or
                Requisition Compensation or by a pledge of shares of any
                Security Party; and

         "SUCCESSOR FINANCING" means:-

         (A)    any Debt incurred for the purpose of assisting Stena AB to
                effect optional redemption of any Notes under Article XI of the
                relevant Indenture or for the purpose of assisting Stena AB or
                any other member of the Stena AB Group voluntarily to repay such
                Notes; or

         (B)    any other Debt incurred for the purpose of assisting Stena AB or
                any other member of the Stena AB Group to redeem or repay any
                such Debt referred to in sub-paragraph (A) or which, directly or
                indirectly, refinances any such Debt.

14.19    APPLICATION OF PROCEEDS

         Stena AB and the Borrower will procure that the facilities provided
         under this Agreement are applied for the purposes specified in Clause
         1.1.

14.20    RESTRICTIONS ON GUARANTEES AND OTHER SECURITY

         Except as provided in this Agreement, the Borrower shall not, and shall
         procure that none of its Subsidiaries shall, give any guarantee or
         indemnify or grant any security in favour of any person in respect of
         any obligation of any member of the Stena AB Group other than the
         Borrower or a Subsidiary or another Subsidiary of the Borrower except
         that the Borrower or a Subsidiary of the Borrower may in its capacity
         as charterer of a Vessel owned by, or let under a Capitalised Lease
         Obligation to, a member of the Stena AB Group which is not the Borrower
         or a Subsidiary of the Borrower give security by way of a charterer's
         assignment of earnings and/or insurances if required in connection with
         the financing or refinancing of that Vessel where the liability of the
         Borrower or its relevant Subsidiary in respect of such financing or
         refinancing is limited to the value of the

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         earnings and/or insurances so assigned by it and where, in the case of
         a Vessel owned by a relevant member of the Stena AB Group, such owner
         has executed a mortgage on the Vessel as security for such financing or
         refinancing.

14.21    FREE NET WORTH CALCULATION

         (A)    FREE NET WORTH COVENANT

                Stena AB and the Borrower will procure that the Free Net Worth
                shall be not less than $850,000,000.

         (B)    TESTING OF COVENANT

                The requirements contained in this Clause 14.21 as to the Free
                Net Worth shall be tested as at 31 December 2002 and each of the
                dates falling six (6) monthly thereafter (each such date a
                "REFERENCE DATE" for the purposes of this Clause 14.21), in each
                case by reference to the Audited Stena AB Financial Statements
                and unaudited consolidated management accounts of the Stena AB
                Group and the Free Net Worth Compliance Certificate delivered to
                the Agent pursuant to Clause 14.2 provided however that no
                breach shall be deemed to have arisen under this Clause 14.21 if
                a shortfall has occurred under this Clause 14.21 but the
                Borrower is able to satisfy the Agent within ten (10) Banking
                Days of the Agent's receipt of the Free Net Worth Compliance
                Certificate evidencing that such shortfall has been eliminated.

         (C)    DEFINED TERMS

                For the purposes of this Clause 14.21 and Clause 14.2(F),
                accounting terms are used and shall be construed in accordance
                with Swedish GAAP but so that as at any Reference Date:-

                "APPRAISED VALUE OF RESTRICTED GROUP ASSETS" means the value,
                determined in accordance with this Clause 14.21, of the
                following assets of the Restricted Group, on a consolidated
                basis:-

                (i)    completed vessels owned by or, pursuant to a Capitalised
                       Lease Obligation, chartered to any member of the
                       Restricted Group;

                (ii)   ongoing newbuilding and other projects;

                (iii)  machinery and equipment;

                (iv)   ports and other real estate owned by or, pursuant to a
                       Capitalised Lease Obligation, leased to members of the
                       Restricted Group;

                (v)    all other assets and properties of the Restricted Group

                but excluding Strategic Investments, Cash and Marketable
                Securities and Other Assets and Working Capital;

                "AVAILABLE ASSET VALUE" means the amount which is the sum,
                determined on a consolidated basis of:-

                (i)    the Appraised Value of Restricted Group Assets; minus

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                (ii)   Secured Debt; plus

                (iii)  Strategic Investments; plus

                (iv)   Cash and Marketable Securities; plus

                (v)    Other Assets and Working Capital;

                "CASH AND MARKETABLE SECURITIES" means the aggregate value
                determined on a consolidated basis, of all:-

                (i)    cash and cash equivalents;

                (ii)   shares or other marketable equities;

                (iii)  bonds, floating rate notes and other marketable debt
                       securities

                owned by members of the Restricted Group less the amount of any
                Debt owing by any member of the Restricted Group in relation to
                the property referred to in paragraphs (ii) and (iii) of this
                definition;

                "FREE NET WORTH" means the amount which is equal to the
                Available Asset Value minus Unsecured Debt at any time;

                "OTHER ASSETS AND WORKING CAPITAL" means the value determined on
                a consolidated basis of all current and other assets of the
                Restricted Group (excluding the Appraised Value of Restricted
                Group Assets, Strategic Investments and Cash and Marketable
                Securities) less the amount of the current liabilities of the
                Restricted Group and less deferred tax as shown in the balance
                sheet;

                "RESTRICTED GROUP" means all members of the Stena AB Group which
                are not Unrestricted Subsidiaries;

                "SECURED DEBT" means the aggregate of all outstanding Debt of
                the Restricted Group on a consolidated basis which is at such
                time owed to parties who are not members of the Stena AB Group
                and is secured by a Lien in respect of any asset of the
                Restricted Group or, in the case of Debt in respect of a
                Capitalised Lease Obligation, the Debt outstanding under the
                relevant lease but excluding Debt owing by any member of the
                Restricted Group in relation to the property referred to in
                paragraphs (ii) and (iii) of the definition of "Cash and
                Marketable Securities";

                "STRATEGIC INVESTMENT" means the value, determined on a
                consolidated basis, of all Investments owned by members of the
                Restricted Group which Stena AB considers to be of a strategic
                nature;

                "UNRESTRICTED GROUP" means all members of the Stena AB Group
                which are Unrestricted Subsidiaries;

                "UNSECURED DEBT" means the aggregate of all outstanding Debt of
                the Restricted Group on a consolidated basis which is at such
                time owed to parties who are not members of the Stena AB Group
                and is not secured by a Lien in respect of any asset of the
                Restricted Group but excluding Debt owing by any member of the

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                Restricted Group in relation to the property referred in
                paragraphs (ii) and (iii) of the definition of "Cash and
                Marketable Securities",

                each as at the relevant Reference Date and so that the value of
                any assets or property is determined in accordance with the
                following provisions of this Clause 14.21 and the amount of any
                liability shall be determined in the same manner in which it is
                determined for the purpose of the balance sheet of the relevant
                member of the Stena AB Group as at the Reference Date in
                accordance with Swedish GAAP.

         (D)    VALUATION OF VESSELS AND LINKSPANS

                Every completed vessel owned by or, pursuant to a Capitalised
                Lease Obligation, chartered to any member of the Stena AB Group
                (for the purposes of this Clause 14.21, a "RELEVANT VESSEL")
                shall be valued in the manner and at the times specified below.

                The value of each Relevant Vessel shall be determined as being
                the mortgage free value thereof. For these purposes, the
                mortgage free value of each such Relevant Vessel shall be
                assessed semi-annually on 30 June and 31 December in each year
                as being the mean of the valuations of the charter-free market
                value thereof on a willing buyer/willing seller basis as
                assessed as at the relevant date by, in the case of any ro-ro or
                ferry, three leading European shipbrokers active in the
                ro-ro/ferry market appointed by the Borrower from the following
                list of brokers:-

                Barry Rogliano Salles
                Brax Shipping HB
                Simsonship AB
                Maersk Sales
                Parimar Francharte S.A.
                English White Shipping Ltd.
                Nor Ocean

                in the case of any drilling rig, by three leading shipbrokers
                active in the offshore market appointed by the Borrower from the
                following list of brokers:-

                Fearnleys A/S
                Kennedy Marr
                Bassoe Offshore A/S
                Barry Rogliano Salles
                Seascope Offshore

                in the case of any crude oil or other products tanker, by three
                leading shipbrokers active in the tanker market appointed by the
                Borrower from the following list of brokers:-

                Mallory Jones Lynch Flynn & Associates
                H Clarkson & Co. Ltd.
                Bassoe A/S
                Fearnleys A/S
                Simpson Spence & Young Shipbrokers
                Brostrom Tankers AB

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                or any other brokers nominated by the Borrower and approved by
                the Agent.

                For this purpose, any current valuation of a Mortgaged Ship
                provided pursuant to Clause 9.4(G) shall satisfy the Borrower's
                obligation to provide a broker valuation for such Mortgaged Ship
                pursuant to this Clause.

                The value of any linkspan owned by any member of the Stena AB
                Group shall be its book value (as determined in accordance with
                Swedish GAAP).

         (E)    VALUATION OF NEWBUILDING CONTRACTS

                Any vessel under construction owned by, or contracted for
                delivery on completion to, any member of the Stena AB Group
                (whether as owner or pursuant to a Capitalised Lease Obligation)
                and any contract entered into for the construction of such a
                vessel shall be valued at its book value (as determined in
                accordance with Swedish GAAP).

         (F)    VALUATION OF PORTS

                The value of any port shall be the amount (expressed in Dollars
                by reference to exchange rates prevailing on the Reference Date)
                determined as the earnings before interest, taxes, depreciation
                and amortisation in respect of the relevant port as shown in the
                then latest audited accounts of the owner of the relevant port
                multiplied by six and one half (6.5).

                For this purpose, any current valuation of Holyhead Port and
                Stranraer Port provided pursuant to Clause 9.4(H) shall satisfy
                the Borrower's obligation to provide a valuation for such Port
                pursuant to this Clause 14.21(F).

         (G)    VALUATION OF OTHER REAL ESTATE

                The value of any real estate (other than ports) owned by any
                member of the Stena AB Group shall be the value thereof as
                determined by the management of the relevant owning company as
                being its market value.

         (H)    VALUE OF STRATEGIC INVESTMENTS

                The value of any Strategic Investment held or owned by any
                member of the Stena AB Group shall be:-

                (i)    in the case of any listed securities or shares, their
                       market value; and

                (ii)   in the case of any other Strategic Investment, its book
                       value as determined in accordance with Swedish GAAP and
                       the accounting policies of the Stena AB Group or
                       otherwise as determined by such method of valuation as
                       shall from time to time be agreed between the Agent
                       (acting on the instructions of the Majority Banks) and
                       the Borrower having regard to the nature of the relevant
                       Strategic Investment.

         (I)    VALUATION OF OTHER ASSETS

                The value of any other assets not referred to in (D) to (H)
                above owned by any member of the Stena AB Group shall be the
                book value thereof as determined in

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                accordance with Swedish GAAP and the accounting policies of the
                Stena AB Group.

14.22    PROHIBITION ON AMENDMENTS TO, AND REFINANCING OF, THE SIBV $275M
         FACILITY

         The Borrower shall not:-

         (A)    without the prior written consent of the Lenders and the Standby
                Lender, agree to any amendment to the SIBV $275m Facility
                Agreement which has the effect of either (i) increasing the
                aggregate committed amount of the SIBV $275m Facility (but
                excluding the restoration of any suspended portion of the
                commitments by the provision of substitute security under Clause
                5.3(E) of the SIBV $275m Facility Agreement) or (ii) amending
                the amount and/or date of any scheduled reduction in such
                facility or (iii) extending the scheduled cancellation date for
                such facility or (iv) amending the provisions requiring part of
                such facility to be cancelled upon a sale or Total Loss or other
                relevant disposal of any of the assets mortgaged or charged as
                security for the Borrower's obligations under the SIBV $275m
                Facility Agreement; or

         (B)    refinance the SIBV $275m Facility on or before the scheduled
                maturity thereof.

15       SHIP AND LINKSPAN COVENANTS : INSURANCE

15.1     DURATION

         Stena AB and the Borrower undertake to the Agent, the Security Agent,
         the Issuing Banks, the Standby Lender, the Co-Arrangers and the Banks
         that throughout the Security Period they will procure that in relation
         to each Mortgaged Ship and each Mortgaged Linkspan:-

         (A)    during any period for which the Ship or Linkspan is in service
                under a bareboat charter to a charterer which is not a member of
                the Stena AB Group, the Shipowner and each Stena Charterer of
                the relevant Ship or Linkspan will use its reasonable endeavours
                to procure that:-

                (i)    the covenants as to insurance of the relevant Ship or
                       Linkspan in such bareboat charter are complied with by
                       such charterer so that the insurances are maintained in
                       force in accordance with the requirements of that
                       bareboat charter;

                (ii)   the rights of the Security Agent are protected by the
                       endorsement of loss payable clauses on the Insurances
                       (other than any Insurances for the benefit of such
                       charterer and which are not for the benefit of the
                       Shipowner or are effected in excess of the amount of
                       cover required to be effected by the charterer under the
                       terms of the relevant charterer) which, subject to the
                       rights of any assignee under a Prior Security Document,
                       will provide for payment to the Security Agent of all
                       moneys in respect of Total Loss proceeds and, in the case
                       of a Mortgaged Ship or Mortgaged Linkspan (but only on
                       terms that such claims shall be paid to the relevant
                       charterer insofar as the relevant moneys belong to the
                       charterer and may not be applied by the relevant
                       Shipowner or any Stena Charterer in or towards payment of
                       any amounts owing to them by such charterer pursuant to
                       the relevant charter and shall not otherwise be applied
                       in or

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                       towards payment of amounts owing under any of the
                       Security Documents) Major Casualty claims; and

                (iii)  in the case of a Mortgaged Ship or Mortgaged Linkspan
                       which is let on bareboat charter hereafter, the relevant
                       bareboat charter includes obligations on the charterer
                       not materially less favourable to the Shipowner or Stena
                       Charterer as disponent owner than those set out in
                       Schedule 10;

                provided that following the occurrence of an Event of Default
                and for so long as such Event of Default is continuing, subject
                to the rights of any assignee under a Prior Security Document,
                the Borrower shall procure that the Shipowners and each Stena
                Charterer will comply with the directions of the Security Agent
                in relation to the exercise of its rights in relation to the
                Insurances relating to each Mortgaged Ship and Mortgaged
                Linkspan;

         (B)    during any period for which the Ship or Linkspan is not employed
                on such a bareboat charter, the Shipowner will comply and/or
                procure that any Stena Charterer who is chartering the Ship or
                Linkspan under a bareboat charterer will comply with the
                covenants set out in Clauses 15.2 through 15.19 and will execute
                and deliver in favour of the Security Agent or, in the case of
                m.v. "Stena Germanica" (as long as she remains owned by
                Scandlines subject to the Stena Germanica Mortgage), the
                Borrower a Charterer's Subordination Undertaking and a
                Charterer's Insurance Assignment on or before delivery of the
                Ship and/or Linkspan to the relevant Stena Charterer under the
                charter; and

         (C)    the aggregate value of the Insurances placed in respect of Total
                Loss and which, subject to the relevant Ship Mortgage and/or
                Insurance Assignment and/or Charterer's Insurance Assignment,
                are receivable and which may be retained by the Shipowners in
                respect of the Mortgaged Ships which are subject to a Ship
                Mortgage then ranking with first priority and by the sellers of
                any Transferred Ships which are subject to a Receivables
                Assignment then ranking with first priority (when aggregated to
                the value of the insurances taken out pursuant to Clause 17.2 in
                respect of those Ports, if any, which are subject to a Port
                Mortgage then ranking with first priority) is at all times
                during the Security Period not less than 120% of the total of
                the Commitments and the Standby Commitment.

15.2     RISKS INSURED AND AMOUNT OF COVER

         Each Shipowner shall insure its Mortgaged Ships and Mortgaged Linkspans
         (if any) and keep them insured in the name of the Shipowner and any
         other persons with an insurable interest therein against:-

         (A)    in the case of a Mortgaged Ship, fire and insurance marine risks
                (including excess risks) and war risks on an agreed value basis
                for not less than the market value of the Ship (for which
                purpose the Ship shall be assessed with the benefit of any
                charterparty being or to be performed by the Ship unless the
                value would be greater if that charterparty were not taken into
                account in which case the Ship shall be valued without the
                benefit of any such charterparty);

         (B)    in the case of a Mortgaged Ship, protection and indemnity risks
                in the maximum amount available to the Shipowner for the Ship
                from any member of the IGA or, if the IGA has disbanded and
                there is no successor or replacement body of

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                associations, such leading protection and indemnity association
                or body as may be selected by the relevant Shipowner or Stena
                Charterer;

         (C)    in the case of a Mortgaged Ship, all other risks whatsoever
                which are customarily insured against by leading operators of
                vessels of the same age and type as in accordance with then
                current industry practice and taking account of the areas in
                which the Ships may trade from time to time;

         (D)    in the case of a Mortgaged Linkspan, loss or damage by fire,
                theft, storm or accident and such other risks and matters in
                respect of which the Linkspan is for the time being required by
                statute or otherwise to be insured against and generally in
                accordance with any relevant good shipping industry practice,
                for not less than the original cost of the Linkspan;

         (E)    in the case of a Mortgaged Linkspan, third party claims arising
                in respect of damage to and loss of property or death or injury
                to third parties arising directly or indirectly out of the
                ownership, management, use or operation of the Linkspan or the
                chartering thereof; and

         (F)    in the case of a Mortgaged Linkspan, all other risks whatsoever
                which are customarily insured against by leading operators of
                linkspans of the same age and type as the Linkspan in accordance
                with then current industry practice and taking account of the
                area in which the Linkspan is from time to time located.

15.3     PORT RISK COVER

         While a Mortgaged Ship is laid up, port risk insurance may be taken out
         on such Ship by the relevant Shipowner instead of hull insurance, on
         normal market terms.

15.4     TERMS OF COVER

         Each Shipowner shall procure that the Insurances for its Mortgaged Ship
         and Mortgaged Linkspans (if any) shall:-

         (A)    be effected through the Approved Brokers and reputable
                independent insurance companies and/or underwriters in Europe,
                North America, the Far East and other established insurance
                markets in OECD countries except that the insurances against
                protection and indemnity risks may be effected by the entry of
                the Ship with such protection and indemnity associations which
                are members of the IGA or, if the IGA has disbanded and there is
                no successor or replacement body of associations, other leading
                protection and indemnity associations and the insurances against
                war risks may be effected by the entry of the Ship with leading
                war risks associations;

         (B)    provide that all amounts payable thereunder shall be payable in
                Dollars, Sterling, Euro or any other currency approved by the
                Security Agent (such approval not to be unreasonably withheld);

         (C)    in all other respects be in a form and on terms customary in the
                insurance markets in which the cover is placed and/or as
                otherwise approved by the Security Agent (such approval not to
                be unreasonably withheld or delayed).

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15.5     NOTICE OF ASSIGNMENT OF INSURANCES AND ENDORSEMENT OF THE SECURITY
         AGENT'S INTERESTS

         Each Shipowner and Stena Charterer (as the case may be) shall forthwith
         upon execution by it of the relevant Insurance Assignment or Deed of
         Covenants or Charterer's Insurance Assignment to be entered into by it
         in respect of any Mortgaged Ship or Mortgaged Linkspan:-

         (A)    execute a Notice of Assignment of Insurances in respect of the
                relevant Ship or Linkspan in the form required by the terms of
                such Insurance Assignment or Deed of Covenant or Charterer's
                Insurance Assignment and in accordance with normal market
                practice serve the same on all brokers, insurance companies,
                underwriters, protection and indemnity and/or war risks
                associations through whom any of the policies or entries
                relating to the Insurances of such Ship or Linkspan are
                effected; and

         (B)    procure that the interests of the Security Agent in the
                Insurances of such Ship or Linkspan shall be endorsed upon all
                slips, cover notes, policies, certificates of entry and other
                instruments of insurance issued or to be issued in connection
                with the Insurances by means of the incorporation therein of the
                relevant Loss Payable Clause required by the terms of such
                Insurance Assignment or Deed of Covenant or Charterer's
                Insurance Assignment and the attachment thereto of the relevant
                Notice of Assignment of Insurances referred to in Clause 15.5(A)
                and/or by such other means and/or in such other form as is
                customary or appropriate in the insurance market in which the
                cover is placed and/or as the Security Agent shall otherwise
                reasonably require

         and, in the event that any further Mortgaged Ship or Mortgaged Linkspan
         is delivered to any Stena Charterer under a demise charter after the
         date of the relevant Charterer's Insurance Assignment entered into by
         it, such Stena Charterer shall perform its obligations under paragraphs
         (A) and (B) above in respect of such Mortgaged Ship or Mortgaged
         Linkspan forthwith upon its delivery to such Stena Charterer.

15.6     LETTERS OF UNDERTAKING

         Each Shipowner shall procure that the Approved Brokers and any
         protection and indemnity or war risks association in which its Ship may
         from time to time be entered shall deliver to the Security Agent a
         letter or letters of undertaking in such form as the Security Agent may
         reasonably require having regard to the then current market practice
         and the practices prescribed by the IGA or any successor association or
         body and/or the Lloyds Insurance Brokers' Committees and/or any other
         professional association of which the Approved Brokers are members.

15.7     DEPOSIT AND PRODUCTION OF INSURANCE DOCUMENTS

         Each Shipowner shall procure in respect of its Mortgaged Ship and
         Mortgaged Linkspans (if any):-

         (A)    that all original slips, cover notes, policies, certificates of
                entry and other instruments of insurance issued from time to
                time in respect of those of the Insurances in respect of its
                Ship and Linkspans (if any) which are effected through Approved
                Brokers shall forthwith be deposited with such Approved Brokers
                and (subject to the rights of any assignee under a Prior
                Security

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                Document) shall thereafter be held by the Approved Brokers to
                the order of the Security Agent upon and subject to such terms
                as the Security Agent shall reasonably require having regard to
                the then current market practice and subject to the rights of
                any prior assignee thereof;

         (B)    that, as soon as reasonably practicable upon the Security
                Agent's request therefor, certified copies of the instruments of
                insurance referred to in paragraph (A) above shall be produced
                to the Security Agent by the Approved Brokers;

         (C)    that, forthwith upon the Security Agent's request therefor,
                certified copies of all certificates of entry and policies
                relating to the Ship's entry with any protection and indemnity
                association or war risks association shall be produced to the
                Security Agent by such protection and indemnity and/or war risks
                association (as appropriate).

15.8     PAYMENT OF PREMIUMS AND CALLS

         Each Shipowner shall punctually pay all premiums, calls, contributions
         or other sums payable in respect of the Insurances and shall produce to
         the Security Agent all relevant receipts or other evidence of payment
         when so required by the Security Agent.

15.9     WAIVER OF BROKER'S LIEN

         Where any of the insurances effected through Approved Brokers form part
         of a fleet cover and such Approved Brokers are or would be entitled to
         exercise rights of set-off or cancellation in relation to claims under
         such Insurances relating to a Mortgaged Ship or Mortgaged Linkspan for
         non-payment of premiums in respect of other vessels or linkspans
         covered by the same Insurances, such Shipowner shall use its reasonable
         endeavours (having regard to then current market practice including the
         practice prescribed by the Lloyds Insurance Brokers' Committee and/or
         any other professional association of which the Approved Brokers are
         members) to procure that the Approved Brokers shall undertake to the
         Security Agent:-

         (A)    not to exercise against the policy or against any claims in
                respect of the Ship or Linkspan (as the case may be) any lien or
                right of set off for unpaid premiums in respect of vessels or
                linkspans other than the Ship or Linkspan covered under such
                fleet cover or for unpaid premiums in respect of any other such
                policies of insurance;

         (B)    not to cancel the insurances for the Ship or Linkspan or by
                reason of the non-payment of premiums for vessels or linkspans
                (other than any Mortgaged Ships or Mortgaged Linkspans) covered
                by such fleet cover;

         or, in lieu of the undertakings referred to in paragraphs (A) and (B)
         to issue a separate policy of insurance in respect of the Ship or
         Linkspan (as the case may be) as and when the Security Agent may
         reasonably so require.

15.10    RENEWAL OF INSURANCES

         Each Shipowner shall renew the Insurances (or relevant part thereof) in
         respect of its Mortgaged Ship and Mortgaged Linkspans (if any) before
         the relevant policies, contracts or entries expire and shall procure
         that the Approved Brokers and/or the relevant protection and indemnity
         association or war risks association or relevant Approved

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         Manager shall promptly confirm in writing to the Security Agent as and
         when each such renewal has been effected.

15.11    EXECUTION OF GUARANTEES

         Each Shipowner shall promptly arrange for the execution and delivery of
         such guarantees in respect of its Mortgaged Ship as may from time to
         time be required by any protection and indemnity or war risks
         association in accordance with its rules or the terms of entry of the
         Ship.

15.12    INFORMATION FROM BROKERS

         Each Shipowner shall procure that the Approved Brokers and the managers
         of any protection and indemnity and/or war risks association with which
         its Ship is entered shall give to the Security Agent such information
         as to the Insurances relating thereto as the Security Agent may
         reasonably request.

15.13    RESTRICTION ON AMENDMENTS TO COVER

         No Shipowner shall without the prior consent of the Security Agent
         (such consent not to be unreasonably withheld or delayed), make any
         alteration to the terms of any of the Insurances of a Mortgaged Ship or
         Mortgaged Linkspan which would or could reasonably be expected to have
         a material adverse effect on the rights or interests of the Security
         Agent nor shall any Shipowner take any action or omit to take any
         action or suffer any act or omission which would or would be likely to
         render any of the Insurances invalid, void, voidable, suspended,
         defeated or unenforceable or render any sum payable thereunder
         repayable in whole or in part (save and to the extent that replacement
         cover has been effected in accordance with this Clause 15).

15.14    MAJOR CASUALTIES RELATING TO MORTGAGED SHIPS

         In the event of a Major Casualty relating to any Mortgaged Ship the
         proceeds of insurance claims in respect of such Major Casualty shall,
         subject to the rights of any assignee under a Prior Security Document
         and to the rights of any charterer (other than a Stena Charterer), be
         paid to the Security Agent in accordance with the relevant Loss Payable
         Clauses and:-

         (A)    if no Event of Default has occurred and is continuing, such
                proceeds shall be applied by the Security Agent in or towards
                payment on behalf of the relevant Shipowner or bareboat
                charterer to the relevant repairer, salvor or other relevant
                creditor in respect of the cost of repairs, salvage or other
                charges unless the Shipowner or bareboat charterer has first
                fully repaired the damage or secured complete discharge of the
                liability insured against or otherwise made good the loss in
                which case the Security Agent shall reimburse the Shipowner or
                bareboat charterer therefor up to the amount received by the
                Security Agent provided however that the insurers with whom the
                fire and usual marine risks insurances are effected may, in the
                case of a Major Casualty, make payment on account of repairs in
                the course of being effected; or

         (B)    if an Event of Default has occurred and is continuing, and the
                Agent has given notice in accordance with Clause 19.2 the
                Security Agent shall be entitled to apply such proceeds in the
                manner specified in Clause 11.10.

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15.15    MINOR CASUALTIES RELATING TO MORTGAGED SHIPS; CASUALTIES RELATING TO
         MORTGAGED LINKSPANS

         Each Shipowner or relevant Stena Charterer shall apply all sums
         receivable under the Insurances in respect of its Mortgaged Ship or
         Mortgaged Linkspans (as the case may be) as are paid to it in
         accordance with the relevant Loss Payable Clauses for the purpose of
         fully repairing the damage or securing complete discharge of the
         liability insured against or otherwise making good the loss in respect
         of which such sums shall have been received and/or reimbursing itself
         for the expense of having previously carried out such repairs,
         discharging such liability or making good such loss.

15.16    TOTAL LOSSES RELATING TO MORTGAGED LINKSPANS

         In the event of a Total Loss relating to any Mortgaged Linkspan the
         proceeds of insurance claims in respect of such Total Loss shall,
         subject to the rights of any prior assignee under a Prior Security
         Document, be paid to the Security Agent in accordance with the relevant
         Loss Payable Clauses and:-

         (A)    if no Event of Default has occurred and is continuing, such
                proceeds shall be applied by the Security Agent in or towards
                payment on behalf of the relevant Shipowner for the purchase of
                a replacement Linkspan (it being a condition of such payment
                that the relevant Shipowner execute a Linkspan Mortgage in
                favour of the Security Agent immediately upon its acquisition of
                title to such replacement Linkspan and that, to the extent that
                to do so is consistent with market practice, the Shipowner
                assign to the Security Agent the benefit of the relevant
                building contract and any refund guarantee (or provide other
                security acceptable to the Majority Banks) where any proceeds of
                the Total Loss are paid over to the manufacturer or supplier of
                the replacement Linkspan before the relevant Shipowner acquires
                title thereto); and

         (B)    if an Event of Default has occurred and is continuing, and the
                Agent has given notice in accordance with Clause 19.2 the
                Security Agent shall be entitled to apply such proceeds in the
                manner specified in Clause 11.10.

15.17    RECEIPT OF PROCEEDS BY THE SHIPOWNER

         If, despite the provisions of the relevant Loss Payable Clauses, any
         Shipowner or relevant Stena Charterer receives any proceeds of an
         insurance claim in respect of a Major Casualty relating to its
         Mortgaged Ship or Total Loss relating to its Mortgaged Linkspan before
         having repaired the damage or discharged the liability or otherwise
         made good the loss in respect of which the moneys are paid, such
         Shipowner shall, subject to the rights of any prior assignee thereof,
         immediately pay such proceeds to the Security Agent who shall apply
         them in accordance with the relevant provisions of Clause 15.14 or
         Clause 15.16 and until payment thereof to the Security Agent the
         relevant Shipowner or relevant Stena Charterer shall hold the proceeds
         on trust for the Security Agent.

15.18    RESTRICTION ON SETTLEMENT OF CLAIMS

         Subject to the rights of any assignee under a Prior Security Document
         and to the rights of any charterer (other than a Stena Charterer), no
         Shipowner shall without the prior written consent of the Security Agent
         settle, compromise or abandon any claim under the Insurances for a
         Total Loss or Major Casualty relating to its Mortgaged Ship or
         Mortgaged Linkspan (if any).

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15.19    ASSISTANCE BY THE SHIPOWNER

         Subject to the rights of any prior assignee of the Insurances each
         Shipowner undertakes to do all things and provide all documents,
         evidence and information as may be necessary to enable the Security
         Agent to collect or recover any moneys which at any time become due in
         respect of the Insurances relating to its Mortgaged Ship or Mortgaged
         Linkspans (if any) and for such purpose (but without limitation) such
         Shipowner shall permit the Security Agent if necessary to sue in that
         Shipowner's name.

15.20    EMPLOYMENT IN CONFORMITY WITH INSURANCE COVER

         No Shipowner will at any time employ its Mortgaged Ship or Mortgaged
         Linkspans (if any) or suffer them to be employed except in conformity
         with the terms of the Insurances (including any express or implied
         warranties) without first obtaining the consent to such employment of
         the insurers and complying with such requirements as to extra premium
         or otherwise as the insurers may prescribe and before allowing its Ship
         to enter or trade to any zone which is declared a war zone by any
         government or by the Ship's war risks insurers 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 so as to
         ensure that such Ship is fully insured against war risks in accordance
         with this Clause 15 while in such zone.

16       SHIP AND LINKSPAN COVENANTS : OPERATION AND MAINTENANCE

16.1     DURATION

         Stena AB and the Borrower undertake to the Agent, the Security Agent,
         the Issuing Banks, the Standby Lender, the Co-Arrangers and the Banks
         that throughout the Security Period they will procure that in relation
         to each Mortgaged Ship and each Mortgaged Linkspan:-

         (A)    during any period for which the Ship or Linkspan is in service
                under a bareboat charter to a charterer which is not a member of
                the Stena AB Group, the Shipowner and each Stena Charterer of
                the relevant Ship or Linkspan will use its reasonable endeavours
                to procure that:-

                (i)    the covenants as to registration, operation and
                       maintenance of the relevant Ship or Linkspan are complied
                       with by the person on whom such obligations are imposed;
                       and

                (ii)   in the case of a Mortgaged Ship or Mortgaged Linkspan
                       which is let on bareboat charter hereafter, the relevant
                       bareboat charter includes obligations on the charterer
                       not materially less favourable to the Shipowner or Stena
                       Charterer as disponent owner than those set out in
                       Schedule 10;

                provided that following the occurrence of an Event of Default
                and for so long as such Event of Default is continuing the
                Borrower shall procure that the Shipowners and each Stena
                Charterer will comply with the directions of the Security Agent
                in relation to the exercise of its rights under each
                charterparty or other contract of employment relating to its
                Mortgaged Ship and Mortgaged Linkspans (if any); and

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         (B)    during any period for which the Ship or Linkspan is not employed
                on a bareboat charter as described in paragraph (A) above, the
                Shipowner will comply and/or procure that any Stena Charterer
                who is chartering the Ship or Linkspan under a bareboat charter
                will comply with the covenants set out in Clauses 16.3 through
                16.17.

16.2     SHIP AND LINKSPAN REGISTRATION

         Each Shipowner shall:-

         (A)    maintain the registration of its Mortgaged Ship under the
                registry of the Flag State at the Port of Registry; and

         (B)    maintain the registration of its Mortgaged Linkspan under the
                registry of the Flag State (but only if such Linkspan is capable
                of registry in a ship registry or other central or public
                registry)

         and (save pursuant to and in accordance with Clause 23.12) shall not do
         or omit to do anything or suffer any act or omission whereby such
         registration may be forfeited or imperilled.

16.3     STANDARD OF MAINTENANCE

         Each Shipowner shall keep its Mortgaged Ship and Mortgaged Linkspans
         (if any) in a good and efficient state of repair so as (in the case of
         each Ship) to entitle such Ship to its Classification with a
         Classification Society free of any requirement or recommendation
         affecting class which has not been complied with in accordance with its
         terms and (in the case of each Ship and Linkspan) so as to comply with
         all material legislation of the Flag State and all other legislation,
         regulations and requirements of any government, governmental agency or
         other regulatory authority (statutory or otherwise) from time to time
         applicable to such Ship and Linkspans. Each Shipowner shall procure
         that all appropriate repairs to or replacements of any damaged, worn or
         lost parts or equipment are carried out (both as regards workmanship
         and quality of materials) so as not to diminish the value or class of
         its Mortgaged Ship or Mortgaged Linkspans.

16.4     REMOVAL OF PARTS AND EQUIPMENT

         No part or item of equipment whose removal would materially reduce the
         value of any Mortgaged Ship or Mortgaged Linkspan shall be removed from
         such Ship or Linkspan unless it is replaced promptly by a suitable part
         or item and the replacement part or item:-

         (A)    is in the same or better condition than that part or item
                removed or enhances the value and/or earning capacity of such
                Ship or Linkspan;

         (B)    is (or upon its installation on board such Ship or Linkspan will
                become) legally and beneficially wholly owned by the relevant
                Shipowner;

         (C)    is free from Liens other than Permitted Ship Liens and/or Liens
                created by any Prior Security Document; and

         (D)    with effect from its installation on board such Ship or Linkspan
                is subject to the security constituted by the Ship Mortgage or
                Linkspan Mortgage (as the case may be) thereon.

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16.5     RESTRICTION ON MODIFICATIONS

         No Shipowner shall, without the prior consent of the Agent (such
         approval not to be unreasonably withheld or delayed), make any
         modifications to its Mortgaged Ship or any Mortgaged Linkspan or any
         part thereof which would or might materially and adversely alter the
         structure, type or performance characteristics of such Ship or Linkspan
         or materially reduce its value.

16.6     EQUIPMENT BELONGING TO THIRD PARTIES

         No Shipowner shall, without the prior consent of the Agent (such
         approval not to be unreasonably withheld or delayed), install on its
         Mortgaged Ship or Mortgaged Linkspan any equipment belonging to a third
         party which cannot be removed without causing significant damage to the
         structure or fabric of such Ship or Linkspan.

16.7     SURVEY

         Each Shipowner shall submit its Mortgaged Ship to such periodical or
         other surveys as may be required for classification purposes and, if so
         required by the Agent, such Shipowner shall supply to the Security
         Agent copies of all survey reports in respect thereof.

16.8     INSPECTION

         Each Shipowner shall permit surveyors or other persons appointed by the
         Agent to board its Mortgaged Ship at all reasonable times (but so as
         not to interfere with the ordinary operation of the Ship) for the
         purpose of inspecting her condition and her class or other records or
         satisfying themselves as to repairs proposed or already carried out
         subject to such persons and the Security Agent signing an indemnity
         and/or waiver letter reasonably required by the relevant shipyard or
         the Shipowner or relevant bareboat charterer. Each Shipowner shall
         afford all proper and reasonable facilities for such inspections and
         also for inspections of the Mortgaged Linkspans if reasonably required
         by the Agent.

16.9     EMPLOYMENT OF SHIPS

         No Shipowner shall knowingly or recklessly employ its Mortgaged Ship or
         suffer her employment in any trade or business which is forbidden by
         any applicable law or is otherwise illicit or in carrying illicit or
         prohibited goods or in any manner whatsoever which may render her
         liable to condemnation in a prize court or to destruction, seizure or
         confiscation or that may expose such Ship to penalties or sanctions.

16.10    INFORMATION

         Each Shipowner shall promptly provide the Agent with all such
         information which the Agent may periodically and reasonably require
         regarding its Mortgaged Ship and its Mortgaged Linkspans (if any),
         their employment, position and engagements, particulars of all towages
         and salvages and copies of all charters and other contracts for her
         employment or otherwise concerning such Ship or Linkspans.

16.11    PAYMENT OF TRADING EXPENSES AND WAGES

         Each Shipowner shall promptly pay all tolls, dues and other outgoings
         whatsoever in respect of its Mortgaged Ship, its Mortgaged Linkspans
         (if any) and their Insurances and

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         keep accounts in respect thereof in accordance with its current
         practice. As and when the Agent may so reasonably require each
         Shipowner shall make such accounts available for inspection on behalf
         of the Agent and shall provide evidence satisfactory to the Security
         Agent that the wages and allotments and the insurance and pension
         contributions of the master and crew are being regularly paid, that all
         deductions from crew's wages in respect of any tax and/or social
         security liability are being properly accounted for and that the master
         has no claim for disbursements other than those incurred in the
         ordinary course of trading on the voyage (if any) then in progress or
         completed prior to such inspection.

16.12    AVOIDANCE AND DISCHARGE OF OTHER LIENS

         Each Shipowner shall in accordance with good shipping industry practice
         pay and discharge or cause to be paid and discharged all debts, damages
         and liabilities whatsoever which have given rise, or may give rise, to
         maritime, statutory or possessory liens on or claims enforceable
         against its Mortgaged Ship or its Mortgaged Linkspans (if any) under
         the laws of all countries to whose jurisdiction such Ship or Linkspans
         may from time to time be subject. If any Mortgaged Ship or Mortgaged
         Linkspan is arrested pursuant to legal process or detained in exercise
         or purported exercise of any such lien or claim as aforesaid the
         relevant Shipowner shall use all reasonable endeavours to procure the
         release of the Ship or Linkspan from such arrest or detention as soon
         as reasonably practicable after receiving notice thereof by providing
         bail or taking such other steps as the circumstances may require (but,
         in the case of an arrest or detention as a consequence of claims or
         alleged claims against a charterer of such Ship or Linkspan which is
         not a member of the Stena AB Group, the relevant Shipowner or Stena
         Charterer may defer procuring such release if it reasonably considers
         it to be in the best commercial interests of the Stena AB Group and
         provided that, unless otherwise agreed by the Agent, and for so long as
         so doing does not involve any imminent likelihood of a sale of such
         Ship or Linkspan by order of any court of competent jurisdiction).

16.13    NOTICE OF MORTGAGE

         Each Shipowner will do everything necessary under the laws of any
         relevant jurisdiction for the purpose of perfecting and maintaining the
         Ship Mortgage in relation to its Mortgaged Ship and the Linkspan
         Mortgage in relation to each of its Mortgaged Linkspans (if any) as a
         valid and enforceable mortgage and for preserving the priority of such
         Ship Mortgage and Linkspan Mortgage and, in particular (but without
         limitation), it will keep on board its Ship each such document or
         record as may be required by law and cause such particulars relating to
         the relevant Ship Mortgage and Linkspan Mortgages to be recorded as may
         be required by law.

16.14    NOTIFICATION OF CERTAIN EVENTS

         Each Shipowner shall notify the Agent by telefax promptly upon the same
         coming to its knowledge and in reasonable detail of:-

         (A)    any casualty to its Mortgaged Ship which is or is likely to be a
                Major Casualty;

         (B)    any occurrence in consequence whereof its Mortgaged Ship or any
                Mortgaged Linkspan has become or is likely to become a Total
                Loss;

         (C)    any requirement or recommendation made by its Classification
                Society or by any competent authority in respect of its
                Mortgaged Ship which has not been complied with by the date by
                which it is required to be complied with (as

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                extended by agreement with the Classification Society) other
                than any such requirement or recommendation the imposition of
                which is being contested in good faith by the relevant
                Shipowner;

         (D)    any arrest or detention of its Mortgaged Ship or any Mortgaged
                Linkspan or the exercise or purported exercise of any lien on
                such Ship or Linkspan;

         (E)    its Mortgaged Ship or, if capable of registration, its Mortgaged
                Linkspan ceasing to be registered under the laws of its Flag
                State or anything which is done or omitted to be done whereby
                such registration may be imperilled.

16.15    RESTRICTIONS ON EMPLOYMENT

         Except with the prior written consent of the Agent, no Shipowner and no
         Stena Charterer shall let or employ a Mortgaged Ship or a Mortgaged
         Linkspan:-

         (A)    on demise charter for any period;

         (B)    on any time or consecutive voyage charter or (in respect of a
                rig or drilling unit) under any drilling contract for a term
                which exceeds or which by virtue of any optional extensions
                therein contained may exceed twenty-five (25) months' duration;
                or

         (C)    on terms which permit the charterer or operator to purchase the
                Ship or Linkspan (save for an option price which reflects the
                market value of such Ship or Linkspan at the time the relevant
                option is exercisable or a reasonable pre-estimate of such value
                having regard to the other terms of the relevant charter and
                save for a charter which is a hire purchase or conditional sale
                agreement on Credit Terms);

         provided however that:-

                (i)    no such consent shall be required in respect of a charter
                       to a Stena Charterer provided that the relevant Stena
                       Charterer has executed and delivered to the Agent a
                       Charterer's Subordination Undertaking and (if the charter
                       is a demise charter) a Charterer's Insurance Assignment
                       in relation to the Mortgaged Ship and (if relevant) the
                       Mortgaged Linkspans and the Approved Manager shall have
                       delivered to the Security Agent a Manager's Subordination
                       Undertaking in relation thereto; and

                (ii)   in respect of the matters referred to in sub-paragraph
                       (B) of this Clause 16.15 the Agent's consent shall be
                       deemed to have been given thereto if the relevant
                       Shipowner shall not have been informed by the Agent
                       either in writing or by word of mouth that such consent
                       is refused within two (2) Banking Days in Gothenburg and
                       London of the time at which the relevant Shipowner's
                       application for such consent was received by the Agent;
                       and

                (iii)  the Agent shall not unreasonably withhold its consent to
                       any charter or drilling contract and it shall not for
                       this purpose be reasonable to withhold consent or to
                       impose conditions on its consent either (a) by reason of
                       the failure of the proposed charterer (other than a Stena
                       Charterer) or operator to agree to grant an assignment of
                       its interest in the Insurances of the Ship and/or
                       Linkspan and/or to agree to subordinate its rights in
                       respect of the Ship and/or Linkspan and/or to agree to
                       subordinate its rights in respect of the

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                       Ship and/or Linkspan to those of the Security Agent as
                       its mortgagee and/or assignee of its Insurances (in each
                       case either at all or on terms required by the Agent)
                       and/or to agree the terms of the relevant charter or
                       drilling contract reflecting or containing the provisions
                       of Clauses 15 and/or 16 or (b) by reason of the duration
                       of the charter or drilling contract and/or the identity
                       and/or creditworthiness of the charterer or operator or
                       (c) by reason of the relevant Shipowner and/or any
                       charterer (including a Stena Charterer) and/or any
                       operator failing to agree to assign its rights under the
                       relevant charter or drilling contract and/or in respect
                       of the Earnings of the Ship and/or Linkspan as security
                       for the obligations of the Borrower pursuant to the
                       Security Documents or (d) by reason of any bareboat
                       charterer or operator of a rig or drilling unit (other
                       than a Stena Charterer) requiring the Security Agent as
                       mortgagee to enter into a quiet enjoyment undertaking in
                       its favour in substantially the form set out in Schedule
                       12 or such other form as the Borrower may reasonably
                       require which is not materially more onerous on the
                       Security Agent than that set out in Schedule 12 (in which
                       case the Security Agent undertakes to issue such
                       undertaking). The Security Agent further undertakes to
                       issue a quiet enjoyment undertaking in such form in
                       favour of any other charterer or operator of a rig or
                       drilling unit (other than a Stena Charterer) if required
                       by the Borrower in respect of any drilling contract or
                       charter for which the Agent's consent is not required
                       under this Clause 16.15.

16.16    MANAGEMENT

         No Shipowner or Stena Charterer shall appoint any manager of a
         Mortgaged Ship or Mortgaged Linkspan other than an Approved Manager and
         each Approved Manager of a Mortgaged Ship or Mortgaged Linkspan so
         appointed by any Shipowner or Stena Charterer shall execute and deliver
         to the Security Agent a Manager's Subordination Undertaking in relation
         to each of the Mortgaged Ships and Mortgaged Linkspans from time to
         time managed by it.

16.17    ISM COMPLIANCE

         Each Shipowner shall comply, or procure that any other relevant person
         such as the Approved Manager or bareboat charterer who has assumed the
         responsibility for operation of its Mortgaged Ship for the purposes of
         the ISM Code will comply, with the ISM Code or any replacement thereof.

17       COVENANTS IN RESPECT OF THE PORTS

17.1     DURATION

         Stena AB and the Borrower undertake to the Agent, the Security Agent,
         the Issuing Banks, the Standby Lender, the Co-Arrangers and the Banks
         that throughout the Security Period they will procure that in relation
         to each Mortgaged Port the Port Owner will comply with the covenants
         set out in Clauses 17.2 through 17.16.

17.2     INSURANCE

         Save where the provisions of Clause 17.4 are applicable, each Port
         Owner shall:-

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         (A)    insure and keep insured all such buildings, fixtures, fittings,
                plant and machinery on its Mortgaged Port as are in each case
                used or required in the ordinary course of the Stena AB Group's
                business (other than those in respect of which the Security
                Agent agrees that insurance is not reasonably required) with
                such insurer and against such risks and in such amounts (being
                no less than their full reinstatement value if realistically
                capable of being so severely damaged as to require
                reinstatement) and otherwise upon such terms as the Security
                Agent may reasonably require;

         (B)    use its best endeavours to procure that a note of the Security
                Agent's interest is endorsed on all insurance policies relating
                thereto; and

         (C)    (if the Security Agent so requires but subject to the rights of
                any mortgagee or chargee pursuant to a Prior Mortgage) produce
                to or deposit with the Security Agent all such insurance
                policies in respect of its Mortgaged Port and the receipts for
                all premiums and other payments necessary for effecting and
                keeping up such policies.

17.3     SECURITY AGENT'S RIGHT TO REMEDY BREACH OF INSURANCE COVENANTS

         If a Port Owner fails to comply with any of its obligations under
         Clause 17.2 in respect of its Mortgaged Port (whether or not the Port
         Mortgage relating thereto shall have become enforceable) the Security
         Agent may, but without being under any duty to do so, itself insure and
         keep insured any of the buildings, fixtures, fittings, plant and
         machinery which the relevant Port Owner has in Clause 17.2 covenanted
         to insure in each case in accordance with the provisions of Clause 17.2
         and the Port Owner shall be liable to the Security Agent for the
         expense of the Security Agent in so doing.

17.4     LEASEHOLD PROPERTY INSURED BY LESSOR

         If the interest of any Port Owner in its Mortgaged Port or any part
         thereof is leasehold and the lessor (or any superior lessor) covenants
         to insure (or procure the insurance of) the same the relevant Port
         Owner shall:-

         (A)    provide the Security Agent with details of the insurance of such
                Port and provide the Security Agent with a copy of the insurance
                policies and any subsequent endorsements if such Port Owner has
                the right to obtain the same from the landlord and has so
                obtained the same;

         (B)    provide the Security Agent with receipts or other evidence of
                the payment of all premiums under such policies of insurance if
                such Port Owner has the right to obtain the same from the
                landlord and has so obtained the same;

         (C)    insure separately (in accordance with the provisions of Clause
                17.2) against such risks as are referred to in Clause 17.2 for
                additional sums required by the Security Agent (or failing such
                requirement in accordance with the practice in respect of assets
                of the same type from time to time current amongst prudent
                businessmen) not insured by the lessor but only to the extent
                that such Port Owner is not prohibited from doing so under the
                terms of the relevant lease; and

         (D)    take all steps open to it to enforce the insurance and (unless
                the Security Agent agrees otherwise) reinstatement covenants on
                the part of the lessors and any superior lessors. The Security
                Agent shall not unreasonably withhold its approval

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                to a request from the relevant Port Owner that it terminate the
                relevant lease in lieu of enforcing the reinstatement covenants
                therein if, in the reasonable opinion of such Port Owner, it
                would be commercially advantageous to it to do so.

17.5     NOTIFICATION AND SETTLEMENT OF INSURANCE CLAIMS

         The relevant Port Owner shall as soon as possible give notice to the
         Security Agent of all claims in respect of its Mortgaged Port made
         under each policy of insurance referred to in Clause 17.2 and 17.4
         estimated to be in excess of $2,000,000 (or the equivalent in any other
         currency) and of all facts and matters relating to such claims. Subject
         to complying with its obligations to any lessor or tenant under any
         existing lease, the relevant Port Owner shall not agree to the
         settlement of any such claim without the prior written consent of the
         Security Agent.

17.6     APPLICATION OF INSURANCE PROCEEDS

         Subject to the obligations of the relevant Port Owner to any tenant in
         respect thereof and subject to the rights of any mortgagee or chargee
         pursuant to a Prior Mortgage, all sums at any time payable under any
         policies of insurance relating to a Mortgaged Port shall be paid to the
         Security Agent and shall be applied in making good or recouping
         expenditure in respect of the loss or damage for which such moneys are
         received or as the Security Agent may otherwise require (and if the
         same is not paid directly to the Security Agent or any prior mortgagee
         or chargee by the insurers then the relevant Port Owner shall hold the
         same on trust for the benefit of the Security Agent and shall account
         to the Security Agent accordingly) provided however that until the
         Security Agent otherwise requires by notice in writing to the relevant
         Port Owner, such Port Owner will not be required so to pay to the
         Security Agent any such sums in respect of any claim for $2,000,000 (or
         the equivalent in any other currency) or less.

17.7     REPAIR

         Each Port Owner shall keep its Mortgaged Port in good and substantial
         repair and condition and (when necessary) replace all such buildings,
         fixtures, fittings, plant and machinery thereon as are in each case
         used or required in the ordinary course of the Stena AB Group's
         business but not where the relevant Port Owner reasonably considers
         that repair or replacement is not necessary or desirable to enable it
         efficiently to carry on its business.

17.8     SECURITY AGENT'S RIGHT TO REMEDY BREACH OF REPAIR COVENANTS

         Subject to the rights of any mortgagee or chargee pursuant to a Prior
         Mortgage, if a Port Owner fails to comply with any of its obligations
         under Clause 17.7 in respect of its Mortgaged Port (whether or not the
         Port Mortgage relating thereto shall have become enforceable) the
         Security Agent may, but without being under any duty to do so, itself
         repair any such buildings, fixtures, fittings, plant and machinery
         which the relevant Port Owner has in Clause 17.7 covenanted to repair
         (and for such purpose the Security Agent may enter upon the Mortgaged
         Port or any part thereof without being deemed to have gone into
         possession thereof).

17.9     MAINTENANCE

         None of the Port Owners will, without the prior written consent of the
         Security Agent (such consent not to be unreasonably withheld), pull
         down or remove the whole or any

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         part of any buildings on its Mortgaged Port or sever or unfix or remove
         any of the fixtures thereon or (except for the purpose of effecting
         necessary repairs thereto or of replacing the same with new or improved
         models or substitutes) remove any of the plant and machinery forming
         part of such Mortgaged Port except where:-

         (A)    it is required to do so pursuant to any mandatory local
                authority or other requirement;

         (B)    the effect of doing so will not materially reduce the value of
                such Mortgaged Port;

         (C)    if there is a material reduction in the value of such Mortgaged
                Port following the removal of any plant or machinery therefrom,
                such plant or machinery is removed to another Mortgaged Port
                which is subject to a Port Mortgage in favour of the Security
                Agent and there is an increase in the value of that Mortgaged
                Port commensurate with the decrease in value of the first
                Mortgaged Port; or

         (D)    the relevant building, fixture, plant or machinery is disposed
                of in accordance with Clause 9.4.

17.10    NOTIFICATION OF PLANNING AUTHORITY NOTICES, ETC.

         Each of the Port Owners will, within seven (7) days after becoming
         aware thereof, give to the Security Agent a copy of any notice, order,
         direction, designation, resolution or proposal having specific
         application to its Mortgaged Port or any part thereof or to the
         locality in which the same is situate given or made by any planning
         authority or other public body or authority whatsoever the compliance
         with which is likely to have a material adverse effect on the value of
         the Mortgaged Port concerned and (if the Security Agent so requires or
         if such Port Owner is obliged by law to do so and so decides) that it
         will forthwith and at the cost of such Port Owner take all reasonable
         and necessary steps to comply with any such notice, order, direction,
         designation or resolution and make or join with the Security Agent in
         making such objections or representations in respect of any such
         proposal as the Security Agent may require.

17.11    PERFORMANCE OF COVENANTS

         Each of the Port Owners will:-

         (A)    observe and perform all material covenants, stipulations and
                conditions to which its Mortgaged Port or any part thereof or
                the user thereof is now or may hereafter be subjected so far as
                the same are still subsisting and capable of being enforced and
                of which such Port Owner receives written notice that it is in
                breach thereof from the person entitled to enforce the same
                (including all material covenants and obligations of such Port
                Owner as lessor);

         (B)    (without prejudice to the generality of the foregoing) as
                regards any lease under which all or any part of its Mortgaged
                Port is held, duly and punctually pay all rents due or to become
                due thereunder and perform and observe all the material
                covenants and conditions on the part of the tenant which are
                therein contained; and

         (C)    notify the Security Agent of any material claim, notice or
                proceedings in respect of any (alleged) breach of any of the
                foregoing.

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17.12    RESTRICTION ON LICENCES, TENANCIES AND LEASES

         Except with the prior written consent of the Security Agent (which
         consent shall not be unreasonably withheld and which shall not be
         withheld at all where the relevant Port Owner is contractually obliged
         to any existing lessor or tenant to perform the act for which the
         Security Agent's consent is required), no Port Owner shall grant or
         agree to grant or vary or agree to vary any licence or tenancy
         affecting all or any part of its Mortgaged Port nor exercise the powers
         of leasing or agreeing to lease or of accepting or agreeing to accept
         surrenders conferred by Sections 99 and 100 of the Law of Property Act
         1925 nor in any other way dispose or agree to dispose of or create any
         legal or equitable estate or interest in or otherwise part with or
         share possession or occupation of its Mortgaged Port or any part
         thereof to or with any person (other than another member of the Stena
         AB Group) where this would materially and adversely affect the value of
         the Port or the profitability of the business carried out thereat.

         It is agreed for the purpose of this Clause 17.12 that there will be no
         material and adverse effect on the value of a Mortgaged Port or the
         profitability of any business carried out thereat where:-

         (A)    the relevant Port Owner grants a lease or licence of any part of
                the Port for a term not exceeding twenty five (25) years on
                proper commercial terms with rents to be reviewed at reasonable
                intervals of not more than five (5) years if appropriate and at
                either:-

                (i)    the best rent reasonably obtainable in the open market
                       without taking a fine or premium or other capital
                       consideration; or

                (ii)   at a lower rent where the relevant Port Owner is
                       satisfied that it is in the best commercial interests of
                       the business carried on at the Port that the lease or
                       licence should be granted; and

         (B)    in any case where the term of any lease is for not more than
                five (5) years the letting excludes the provisions of Sections
                24 to 28 of the Landlord and Tenant Act 1954

         and such lease or licence would have no material adverse effect on the
         use of the Port for the purpose of any undertaking carried on at the
         Port.

17.13    LAND REGISTRATION ACTS 1925 TO 1986

         In respect of any Port situated in England and Wales, each of the Port
         Owners shall procure that no person shall be registered under the Land
         Registration Acts 1925 to 1986 as proprietor of its Mortgaged Port or
         any part thereof who is not now or when the same is acquired by the
         relevant Port Owner so registered without the prior written consent of
         the Security Agent (provided always that this restriction shall not
         apply to any lease granted pursuant to Clause 17.12) and the relevant
         Port Owner shall be liable for the costs incurred by the Security Agent
         in lodging from time to time cautions against the first registration of
         title at H.M. Land Registry to its Mortgaged Port.

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17.14    RESTRICTION ON DEVELOPMENT

         Each of the Port Owners undertakes in respect of its Mortgaged Port
         that, where this would materially and adversely affect the value of its
         Mortgaged Port, it will not without the prior written consent of the
         Security Agent:-

         (A)    carry out or permit or suffer to be carried out any development
                (as defined in the Planning Acts) on such Mortgaged Port or any
                part thereof; or

         (B)    materially change or permit or suffer to be materially changed
                the user of the such Mortgaged Port or any part thereof.

17.15    COMPLIANCE WITH PLANNING ACTS

         None of the Port Owners will do or omit or permit or suffer to be done
         or omitted any act, matter or thing in, on or respecting its Mortgaged
         Port or any part thereof which is required to be omitted or done by the
         Planning Acts or any other Acts or statutory provisions whatever or
         which shall contravene the provisions of such Acts or any of them and
         each Port Owner will at all times indemnify and keep indemnified the
         Security Agent against all actions, proceedings, costs, expenses,
         claims and demands whatsoever in respect of any such matter or thing
         contravening the provisions of the said Acts or any of them as
         aforesaid.

17.16    PAYMENT OF OUTGOINGS

         Each of the Port Owners will pay, and indemnify the Agent, the Security
         Agent, the Issuing Banks, the Standby Lender, the Co-Arrangers and the
         Banks against, all claims in respect of rates, taxes, duties, charges,
         assessments and outgoings assessed or charged upon its Mortgaged Port
         or payable by the owner or occupier.

17.17    INSPECTION

         Each of the Port Owners undertakes in respect of its Mortgaged Port
         that it will permit the Security Agent and any duly authorised agent,
         architect or surveyor of the Security Agent to have access to such Port
         or any part thereof at all reasonable times (but so as not to interfere
         with the ordinary conduct of business at such Port) upon prior
         appointment for the purpose of inspecting the same.

18       CONDITIONS

18.1     DOCUMENTS AND EVIDENCE

         The obligation of each Bank to make its Commitment available and of the
         Standby Lender to make the Standby Commitment available and of the New
         Guarantee Provider to issue Bank Guarantees shall be subject to the
         condition that the Agent, or its duly authorised representative, shall
         have received all the documents and evidence specified in Part 1 of
         Schedule 8 in form and substance satisfactory to the Agent.

18.2     GENERAL CONDITIONS PRECEDENT

         The obligation of each Bank to make its Commitment available and of the
         Standby Lender to make the Standby Commitment available and of the New
         Guarantee Provider to issue Bank Guarantees shall be subject to the
         further conditions that, as at the Availability Date:-

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         (A)    the representations and warranties contained in Clauses 13.1 and
                13.2 are true and correct on and as of the Availability Date as
                if each was made with respect to the facts and circumstances
                existing at such time;

         (B)    no Default shall have occurred and be continuing or would result
                from the making of an Advance or a drawing under the Standby
                Facility or the issue of a Bank Guarantee on the Availability
                Date; and

         (C)    no material adverse change has occurred in the business,
                financial condition or prospects of the Stena AB Group or the
                Stena International Group as a whole from that shown in the
                information memorandum dated September 2002 prepared by J. P.
                Morgan plc and received by the Banks.

18.3     WAIVER OF CONDITIONS PRECEDENT

         The conditions specified in this Clause 18 are inserted solely for the
         benefit of the Banks and the Standby Lender and may be waived on their
         behalf in whole or in part and with or without conditions by the Agent
         acting on the instruction of all the Banks (in respect of any Advance
         or Bank Guarantee) or on the instructions of the Standby Lender (in
         respect of any drawing under the Standby Facility) without prejudicing
         the right of the Agent acting on such instructions to require
         fulfilment of such conditions in whole or in part in respect of any
         other Advance or Bank Guarantee or drawing under the Standby Facility.

18.4     FURTHER CONDITIONS PRECEDENT IN RESPECT OF BANK GUARANTEES

         Not later than three (3) Banking Days prior to the date on which a Bank
         Guarantee is to be issued, the Agent may request and the Borrower
         shall, not later than two (2) Banking Days prior to such date, deliver
         to the Agent on such request, in relation only to the issue of such
         Bank Guarantee, further favourable certificates and/or opinions as to
         any or all of the relevant matters which are the subject of Clauses 13,
         14, 15, 16, 17, and 19.

18.5     NOTIFICATION TO BANKS

         The Agent shall notify the Banks promptly after receipt by it of the
         documents and evidence referred to in Clause 18.1 in form and substance
         satisfactory to it.

19       DEFAULT

19.1     EVENTS OF DEFAULT

         Each of the events set out below is an Event of Default:-

         (A)    NON-PAYMENT

                any Security Party does not pay within three (3) Banking Days of
                the due date any amount payable by it under any Security
                Document at the place and in the currency in which it is
                expressed to be payable or, in the case of amounts due on
                demand, within seven (7) Banking Days of receipt of the relevant
                demand;

         (B)    BREACH OF OTHER OBLIGATIONS

                any Security Party fails to comply with any other provision of
                any Security Document in a material respect and (unless in the
                reasonable opinion of the Agent incapable of remedy) such action
                as the Agent may require shall not have been

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                taken within a period of twenty one (21) days of the Agent
                notifying the relevant Security Party of such default and of
                such required action or within two (2) Banking Days of such
                notification in relation to any breach of any insurance covenant
                leading to a possible avoidance of insurance cover;

         (C)    MISREPRESENTATION

                any representation or warranty made or repeated by any Security
                Party in any Security Document or in any certificate, statement
                or opinion delivered by or on behalf of any Security Party
                thereunder or in connection therewith is incorrect in a material
                respect when made or repeated and (unless in the reasonable
                opinion of the Agent incapable of remedy) action has not been
                taken by the relevant Security Party to ensure that such
                representation or warranty is rendered correct within twenty one
                (21) days of the Agent notifying the relevant Security Party;

         (D)    CROSS-ACCELERATION

                at any time the aggregate amount at such time of:-

                (i)    the amount of any Debt of the Security Parties which is
                       not paid when due or within any originally applicable
                       grace period relating thereto and remains unpaid or which
                       has been declared due and payable prior to the date when
                       it would otherwise have become due (unless as a result of
                       the exercise by the relevant person of a voluntary right
                       of prepayment or upon mandatory prepayment as a result of
                       a change of law or other circumstances not constituting
                       an event of default under, or breach of, any agreement
                       regulating and/or securing the relevant Debt) and such
                       declaration has not been cancelled or withdrawn; and

                (ii)   any amounts demanded of, but not paid when due and
                       remaining unpaid by, the Security Parties under any
                       guarantee in respect of Debt (other than Debt referred to
                       in sub-paragraph (i) of this paragraph)

                exceeds $15,000,000;

         (E)    WINDING-UP

                any order is made or resolution passed or other action taken
                without the prior written consent of the Majority Banks for the
                suspension of payments or resulting in the dissolution,
                termination of existence, liquidation, winding-up or bankruptcy
                of any Security Party, unless in each case such proceeding is
                revoked within fourteen (14) days of such order being made,
                resolution passed or action taken;

         (F)    MORATORIUM OR ARRANGEMENT WITH CREDITORS

                a moratorium in respect of all or a significant part of the
                debts of any Security Party, or a composition or an arrangement
                with creditors of any Security Party or any similar proceeding
                or arrangement by which the assets of any Security Party are
                submitted to the control of its creditors, is applied for,
                ordered or declared;

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         (G)    APPOINTMENT OF LIQUIDATORS ETC.

                a liquidator, trustee, administrator, receiver, manager or
                similar officer is appointed in respect of any Security Party or
                in respect of all or any substantial part of the respective
                assets of any Security Party;

         (H)    INSOLVENCY

                any Security Party becomes or is declared insolvent or suspends
                payment of or is unable, or admits in writing its inability, to
                pay its debts as they fall due or becomes insolvent within the
                terms of any applicable law;

         (I)    LEGAL PROCESS

                any distress, execution, attachment or other process is levied
                against the whole or any substantial part of the assets of any
                Security Party and remains undischarged for a period of thirty
                (30) days (except in the case of a Vessel);

         (J)    ANALOGOUS EVENTS

                anything analogous to or having a substantially similar effect
                to any of the events specified in sub-Clauses (E) to (I) of this
                Clause 19.1 shall occur in relation to a Security Party under
                the laws of any applicable jurisdiction;

         (K)    UNLAWFULNESS

                at any time it becomes unlawful or impossible for any Security
                Party to perform any of its material obligations under any
                Security Document to which it is a party or it is unlawful or
                impossible for the Agent, the Security Agent, any Bank, any
                Issuing Bank or the Standby Lender to exercise any of their
                respective material rights under any of the Security Documents
                and (unless in the reasonable opinion of the Agent any such
                impossibility or unlawfulness is incapable of rectification or
                remedy) the relevant Security Party (with due co-operation from
                the Agent, the Security Agent, the Banks, the Issuing Banks and
                the Standby Lender) shall have failed to procure within twenty
                eight (28) days of notice from the Agent to do so that the
                foregoing is no longer impossible or unlawful;

         (L)    MATERIAL ADVERSE CHANGE; MATERIAL ADVERSE LITIGATION

                either:-

                (i)    any material adverse change in the consolidated financial
                       condition of the Stena AB Group as a whole from that set
                       forth in the Audited Stena AB Financial Statements as at
                       31 December 2001 occurs the effect of which is materially
                       to imperil, delay or prevent the due fulfilment by any
                       Security Party of all or any of their material payment
                       obligations under any Security Documents; or

                (ii)   any final and conclusive judgment, order or award is made
                       by any court, arbitration board or other tribunal against
                       any member of the Stena AB Group the effect of complying
                       with which will materially imperil, delay or prevent the
                       due fulfilment by any Security Party of all or any of
                       their material payment obligations under any Security
                       Documents

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                and in either such case such circumstances continue unremedied
                for a period of one hundred and twenty (120) days after
                notification from the Agent to the Borrower requiring the same
                to be remedied provided that such one hundred and twenty (120)
                day remedy period shall only be taken into account if the Agent
                certifies to the Borrower that such circumstances are in the
                opinion of the Majority Banks capable of remedy and the Borrower
                demonstrates to the satisfaction of the Agent that reasonable
                steps are being taken which are likely to lead to such
                circumstances being remedied within such one hundred and twenty
                (120) day period.

         For the purposes of the foregoing, the Borrower or Stena AB shall be
         deemed to have failed to perform or comply with any covenant contained
         in this Agreement or the other Security Documents requiring the
         Borrower or Stena AB to cause certain actions to be taken (or to
         prohibit the taking of certain actions) by any Subsidiary of the
         Borrower or Stena AB if such Subsidiary shall have taken (or failed to
         take) such actions, even where the Borrower or Stena AB lacks the
         corporate power and authority under Book 2 of the Netherlands Civil
         Code or the Swedish Companies Act (1975:1385) respectively to cause or
         prohibit such actions.

19.2     TERMINATION AND COLLATERALISATION

         The Agent if so requested by the Majority Banks shall, without
         prejudice to any other rights of the Agent, the Security Agent, the
         Issuing Banks, the Standby Lender and the Banks, at any time after the
         happening of an Event of Default by notice to the Borrower:-

         (A)    declare that all outstanding Advances and all interest and
                commitment commission accrued and all other sums payable under
                the Security Documents have become due and payable, whereupon
                the same shall, immediately or in accordance with the terms of
                such notice, become due and payable; and/or

         (B)    declare that the obligation of each Bank to make its Commitment
                available shall be terminated, whereupon the Commitments shall
                be reduced to zero forthwith; and/or

         (C)    declare that the obligation of the New Guarantee Provider to
                issue the Bank Guarantees shall be terminated, whereupon such
                obligations shall be terminated forthwith; and/or

         (D)    require the Borrower to pay to the Agent for credit to the Cash
                Collateral Account for each Bank Guarantee an amount as at the
                date of such demand in Dollars equal to the Outstanding
                Guarantee Amount of such Bank Guarantee less the amount standing
                to the credit of such Cash Collateral Account at such date,
                whereupon such amounts shall become immediately or in accordance
                with such notice due and payable; and/or

         (E)    declare that the Standby Commitment shall be terminated
                whereupon such obligations shall be terminated forthwith and all
                amounts outstanding in respect of the Standby Facility and
                accrued interest thereon shall be immediately due and payable in
                accordance with such notice

         and thereupon each Issuing Bank, or the Agent on its behalf, may take
         such action as it thinks fit to procure the release and discharge of
         any relevant Bank Guarantee by its Beneficiary.

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19.3     DEMAND BASIS

         If, pursuant to Clause 19.2(A) and/or (E), the Agent declares all
         outstanding Advances and/or amounts outstanding under the Standby
         Facility to be due and payable on demand, the Agent may (and, if so
         instructed by the Majority Banks, shall) by written notice to the
         Borrower (i) call for repayment of the Advances and/or amounts
         outstanding under the Standby Facility on such date as may be specified
         whereupon the Advances and/or all amounts outstanding under the Standby
         Facility shall become due and payable on the date so specified together
         with all interest and any commitment commission accrued and all other
         sums payable under this Agreement or (ii) withdraw such declaration
         with effect from the date specified in such notice.

20       INDEMNITIES

20.1     MISCELLANEOUS INDEMNITIES

         The Borrower shall on demand indemnify each Bank, the Co-Arrangers, the
         Security Agent, each Issuing Bank, the Standby Lender and the Agent,
         without prejudice to any of their other rights under any of the
         Security Documents, against any loss or expense which such Bank, the
         Co-Arrangers, the Security Agent, such Issuing Bank, the Standby Lender
         or the Agent shall certify as sustained or incurred by it as a
         consequence of:-

         (A)    any default in payment by the Borrower of any sum under any of
                the Security Documents when due; or

         (B)    the occurrence of any other Event of Default; or

         (C)    as a consequence of or arising in any way whatsoever in
                connection with the issue of any Bank Guarantee or the
                performance of its obligations hereunder; or

         (D)    applying any sum standing to the credit of a Cash Collateral
                Account otherwise than on the last day of a deposit period
                relating thereto; or

         (E)    receiving or recovering all or any part of a sum unpaid
                otherwise than on the due date for the payment of interest in
                respect thereof; or

         (F)    any prepayment of any Advance or amount drawn under the Standby
                Facility or part thereof being made under Clauses 7.10, 7.11,
                9.4, 9.9 or 21.1, or any other repayment of any Advance or
                amount drawn under the Standby Facility or part thereof being
                made otherwise than on its Maturity Date or due date for
                repayment; or

         (G)    any Advance or drawing under the Standby Facility not being made
                for any reason (excluding any default by the Agent, the
                Co-Arrangers, the Security Agent, any Bank or the Standby
                Lender) after a Drawdown Notice or request for drawing has been
                given; or

         (H)    any Issuing Bank, or the Agent on its behalf, taking any action,
                following the occurrence of an Event of Default, to procure the
                release and discharge of any relevant Bank Guarantee by its
                Beneficiary

         including, in any such case, but not limited to, any loss or expense
         sustained or incurred by any Issuing Bank, any Bank, the Standby
         Lender, the Security Agent or the Agent in

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         maintaining or funding its Contribution or the Standby Facility or any
         part thereof or its portion of any other sum to be paid by it hereunder
         or in liquidating or re-employing deposits from third parties acquired
         or contracted for to fund, effect or maintain its Contribution or the
         Standby Facility or any part thereof or any other amount owing to such
         Issuing Bank, such Bank, the Standby Lender, the Security Agent or the
         Agent.

20.2     CURRENCY INDEMNITY

         If any sum due from the Borrower or Stena AB under any of the Security
         Documents or any order or judgment given or made in relation thereto
         has to be converted from the currency (the "FIRST CURRENCY") in which
         the same is payable under the relevant Security Document or under such
         order or judgment into another currency (the "SECOND CURRENCY") for the
         purpose of (i) making or filing a claim or proof against the Borrower
         or Stena AB, (ii) obtaining an order or judgment in any court or other
         tribunal or (iii) enforcing any order or judgment given or made in
         relation to any of the Security Documents, the Borrower and Stena AB
         shall indemnify and hold harmless the Agent, the Co-Arrangers, the
         Security Agent, the Issuing Banks, the Standby Lender and each Bank
         from and against any loss suffered as a result of any difference
         between (a) the rate of exchange used for such purpose to convert the
         sum in question from the first currency into the second currency and
         (b) the rate or rates of exchange at which the Agent, the Co-Arrangers,
         the Security Agent, any Issuing Bank, the Standby Lender or any Bank
         may in the ordinary course of business purchase the first currency with
         the second currency upon receipt of a sum paid to it in satisfaction,
         in whole or in part, of any such order, judgment, claim or proof. Any
         amount due from the Borrower or Stena AB under this Clause 20.2 shall
         be due as a separate debt and shall not be affected by judgment being
         obtained for any other sums due under or in respect of any of the
         Security Documents and the term "RATE OF EXCHANGE" includes any premium
         and costs of exchange payable in connection with the purchase of the
         first currency with the second currency.

20.3     WAIVER

         If and insofar as the Borrower has a right to invoke the nullity of any
         indemnity granted by it in this Agreement on the basis of Article 2.7
         Netherlands Civil Code, it hereby explicitly waives its right to invoke
         such nullity on the basis of Article 2.7 Netherlands Civil Code.

21       UNLAWFULNESS AND INCREASED COSTS

21.1     UNLAWFULNESS

         If at any time after the Execution Date the introduction, imposition,
         variation or change of any law, regulation or regulatory requirement or
         any judgment, order or direction of any court, tribunal or authority
         binding upon an Issuing Bank or a Bank or the Standby Lender in the
         jurisdiction in which it is formed or has its principal office or the
         office identified against its name in this Agreement (or in any
         Transfer Certificate, in the case of a Transferee Bank) or in which any
         action is required to be performed by it for the purposes of this
         Agreement (whether or not in force before the Execution Date):-

         (A)    causes the New Guarantee Provider to believe that it has become
                unlawful prior to the date of issue of a Bank Guarantee for it
                to issue such Bank Guarantee;

         (B)    causes an Issuing Bank to believe that it has become unlawful
                for it to perform its obligations under any Bank Guarantee
                previously issued;

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         (C)    causes any Bank to believe that it has become unlawful for any
                Bank:-

                (i)    to perform its obligations under Clause 6.2 in respect of
                       any Bank Guarantee which has previously been issued; or

                (ii)   to perform its obligations under Clause 6.2 in respect of
                       any Bank Guarantee which is to be issued; or

                (iii)  renders it unlawful for that Bank to contribute to the
                       Advances or to fund its Contribution; or

         (D)    causes the Standby Lender to believe that it has become unlawful
                to make available or maintain the Standby Facility;

         then that Issuing Bank, that Bank or the Standby Lender (as the case
         may be) shall promptly inform the Agent and the Agent shall notify the
         Borrower whereupon:-

                (i)    the relevant Issuing Bank or Bank or Standby Lender (the
                       "AFFECTED PARTY") shall, following consultation with the
                       Borrower, use all reasonable efforts to avoid the effects
                       of such introduction, imposition, variation or change and
                       in particular shall consider, subject to obtaining any
                       necessary consents, transferring at par its rights and
                       obligations under this Agreement to another legal entity
                       approved by the Borrower not affected by such law;

                (ii)   if the Affected Party is unable, within ninety (90) days
                       following the date upon which the Affected Party became
                       aware of any such introduction, imposition, variation or
                       change, or such shorter period permitted thereby, to
                       avoid the effect thereof, or the Borrower fails to agree
                       to any proposal put forward by the Affected Party to
                       avoid the effects of such introduction, imposition
                       variation or change, then the Agent shall, at the request
                       and on behalf of the Affected Party, give notice to the
                       Borrower that on such date or on a future specified date,
                       in either case not being earlier than the latest date
                       permitted by such introduction, imposition, variation or
                       change:-

                       (a)    in the case of paragraph (A) above, the
                              obligations of the New Guarantee Provider to issue
                              such Bank Guarantee shall forthwith terminate;

                       (b)    in the case of paragraph (B) above, the Borrower
                              shall within fourteen (14) Banking Days after such
                              notice pay to the Agent for credit to the Cash
                              Collateral Account an amount equal to the
                              difference between (i) the Outstanding Guarantee
                              Amount of such Bank Guarantee and (ii) the amount
                              then standing to the credit of the Cash Collateral
                              Account (less any amount standing to the credit of
                              the Cash Collateral Account as a result of a
                              payment in respect of another Bank pursuant to
                              Clause 9.12 or this Clause 21); or

                       (c)    in the case of paragraph (C) above:-

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                              (i)     such Bank's Commitment shall be reduced to
                                      zero;

                              (ii)    the Borrower shall within fourteen (14)
                                      Banking Days after such notice pay to the
                                      Agent for credit to the Cash Collateral
                                      Account an amount equal to such Bank's
                                      Percentage of the difference between (1)
                                      the Outstanding Guarantee Amounts of the
                                      Bank Guarantees and (2) the amount then
                                      standing to the credit of the Cash
                                      Collateral Account (less any amount
                                      standing to the credit of the Cash
                                      Collateral Account as a result of a
                                      payment in respect of another Bank
                                      pursuant to Clause 9.12 or this Clause
                                      21); and

                              (iii)   the Borrower shall be obliged to prepay
                                      the Contribution of such Bank either (a)
                                      forthwith or (b) on a future specified
                                      date not being earlier than the latest
                                      date permitted by the relevant law or
                                      regulation; and

                              (iv)    no further Bank Guarantees may be issued;

                       (d)    in the case of paragraph (D) above the Borrower
                              shall immediately repay all Standby Outstandings.

                       If the Borrower has made the payment to the Cash
                       Collateral Account required of it in respect of a Bank
                       Guarantee under Clause 21.1(C), the Percentage of the
                       Bank in respect of which such payment was made of the
                       liabilities of the Banks for each Bank Guarantee shall be
                       reduced to zero. To the extent that the Borrower has not
                       made such payment, such Bank shall continue to be liable
                       to the relevant Issuing Bank under Clause 6.2 for an
                       amount equal to its Percentage of such Bank Guarantee
                       less the amount of any such payment by the Borrower to
                       the Cash Collateral Account.

21.2     INCREASED COSTS

         If the result of any change in, or in the interpretation or application
         of, any law or regulation (including, without limitation, those
         relating to Taxation, capital adequacy, liquidity, reserve assets and
         special deposits) after the Execution Date is to:-

         (A)    subject any Issuing Bank or any Bank or the Standby Lender to
                Taxes or change the basis of Taxation of any Issuing Bank or any
                Bank or the Standby Lender with respect to any payment under any
                of the Security Documents (other than Taxes or Taxation on the
                overall net income, profits or gains of such Issuing Bank or
                such Bank or the Standby Lender imposed in the jurisdiction in
                which its principal or lending office under this Agreement is
                located); and/or

         (B)    increase the cost to, or impose an additional cost on, any
                Issuing Bank or any Bank or the Standby Lender in making or
                keeping its Commitment available or maintaining or funding its
                Contribution or the Standby Facility or otherwise in maintaining
                its obligations under this Agreement; and/or

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         (C)    reduce the amount payable or the effective return to any Issuing
                Bank or any Bank or the Standby Lender under any of the Security
                Documents; and/or

         (D)    reduce any Issuing Bank's or any Bank's or the Standby Lender's
                rate of return on its capital by reason of a change in the
                manner in which it is required to allocate capital resources to
                its obligations under any of the Security Documents; and/or

         (E)    require any Issuing Bank or any Bank or the Standby Lender to
                make a payment or forgo a return on or calculated by reference
                to any amount received or receivable by it under any of the
                Security Documents,

         then and in each such case (but subject to Clause 21.3):-

                (i)    such Issuing Bank or such Bank or the Standby Lender
                       shall notify the Borrower in writing of such event
                       promptly upon its becoming aware of the same specifying
                       reasonable details of the relevant event and of any
                       increased cost, reduction in any rate of return or
                       liability and its method of calculation and attribution
                       to its obligations under this Agreement; and

                (ii)   the Borrower shall on demand, made at any time whether or
                       not the relevant Bank's Contribution or the Standby
                       Outstandings have been repaid, pay to the Agent for the
                       account of such Issuing Bank or such Bank or the Standby
                       Lender the amount which such Issuing Bank or such Bank or
                       the Standby Lender specifies (in a certificate setting
                       forth the basis of the computation of such amount in
                       reasonable detail but not including any matters which
                       such Issuing Bank or such Bank or the Standby Lender
                       regards as confidential in relation to its funding
                       arrangements) is required to compensate such Issuing Bank
                       or such Bank or the Standby Lender for such increased
                       cost, reduction, payment or forgone return.

21.3     EXCEPTION

         Nothing in Clause 21.2 shall entitle any Issuing Bank or any Bank or
         the Standby Lender to compensation for any such increased costs,
         reduction, payment or foregoing return to the extent that the same is
         the subject of an additional payment under Clause 11.7.

21.4     MITIGATION

         If circumstances arise which would, or would upon the giving of notice,
         result in:-

         (A)    the Borrower being required to make an increased payment to a
                Bank pursuant to Clause 11.7;

         (B)    the reduction of the Commitment of a Bank to zero or the
                Borrower being required to prepay the Outstandings of a Bank or
                the Standby Outstandings pursuant to Clause 21.1; or

         (C)    the Borrower being required to make a payment to a Bank or the
                Standby Lender to compensate such Bank or the Standby Lender for
                an increased cost, reduction, payment or forgone return pursuant
                to Clause 21.2

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         then, without in any way limiting, reducing or otherwise qualifying the
         obligations of the Borrower under Clauses 11.7 and 21, the Agent, the
         relevant Bank or the Standby Lender (as the case may be) shall
         endeavour to take such reasonable steps as may be open to it to
         mitigate or remove such circumstances including (without limitation)
         the transfer of its rights and obligations under this Agreement to
         another bank or financial institution acceptable to the Borrower unless
         to do so might (in its opinion) be prejudicial to it or be in conflict
         with its general banking policies or involve it in expense or an
         unreasonable increased administrative burden.

22       SET-OFF AND PRO-RATA PAYMENTS

22.1     SET-OFF

         The Borrower and Stena AB each authorise each Issuing Bank and each
         Bank and the Standby Lender (without prejudice to any of such Issuing
         Bank's or such Bank's or the Standby Lender's rights at law, in equity
         or otherwise), at any time when an Event of Default has occurred and is
         continuing and without notice to the Borrower or Stena AB:-

         (A)    to apply any credit balance to which the Borrower or Stena AB is
                then entitled standing upon any account of the Borrower or Stena
                AB with any branch of such Issuing Bank or such Bank or the
                Standby Lender in or towards satisfaction of any sum due and
                payable from the Borrower or Stena AB to such Issuing Bank or
                such Bank or the Standby Lender under any of the Security
                Documents;

         (B)    in the name of the Borrower and/or Stena AB and/or such Issuing
                Bank or such Bank or the Standby Lender to do all such acts and
                to execute all such documents as may be necessary or expedient
                to effect such application; and

         (C)    to combine and/or consolidate all or any accounts in the name of
                the Borrower and/or Stena AB with such Issuing Bank or such Bank
                or the Standby Lender.

         For such purposes, each Issuing Bank and each Bank and the Standby
         Lender is authorised to purchase with the moneys standing to the credit
         of such account such other currencies as may be necessary to effect
         such application. No Issuing Bank nor any Bank nor the Standby Lender
         shall be obliged to exercise any right given to it by this Clause 22.1.
         Each Issuing Bank and each Bank and the Standby Lender shall notify the
         Agent and the Borrower forthwith upon the exercise or purported
         exercise of any right of set-off giving full details in relation
         thereto and the Agent shall inform the other Banks.

22.2     PRO RATA PAYMENTS

         (A)    If at any time any Bank, any Issuing Bank or the Standby Lender
                (the "RECOVERING BANK") receives or recovers any amount owing to
                it by the Borrower or Stena AB under this Agreement by direct
                payment, set-off or in any manner other than by payment through
                the Agent pursuant to Clause 11.1 or 11.10 (not being a payment
                received from an assignee, a Transferee Bank or a
                sub-participant in such Bank's Contribution or any other payment
                of an amount due to the Recovering Bank for its sole account
                pursuant to Clauses 7, 8.5, 9.12, 10.1, 10.3, 10.5, 10.6, 11.7,
                20.1, 20.2, 21.1 or 21.2) the Recovering Bank shall, within two
                Banking Days of such receipt or recovery (a "RELEVANT RECEIPT")
                notify the Agent of the amount of the Relevant Receipt. If the
                Relevant Receipt exceeds the amount which the Recovering Bank
                would have received if the

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                Relevant Receipt had been received by the Agent and distributed
                pursuant to Clause 11.1 or 11.10 as the case may be then:

                (i)    within two Banking Days of demand by the Agent, the
                       Recovering Bank shall pay to the Agent an amount equal
                       (or equivalent) to the excess;

                (ii)   the Agent shall treat the excess amount so paid by the
                       Recovering Bank as if it were a payment made by the
                       Borrower and shall distribute the same to the Banks, the
                       Standby Lender and the Issuing Banks (other than the
                       Recovering Bank) in accordance with Clause 11.10; and

                (iii)  as between the Borrower or, as the case may be, Stena AB,
                       and the Recovering Bank the excess amount so
                       re-distributed shall be treated as not having been paid
                       but the obligations of the Borrower and Stena AB to the
                       others of the Banks, the Standby Lender and the Issuing
                       Banks shall, to the extent of the amount so
                       re-distributed to them, be treated as discharged.

         (B)    If any part of the Relevant Receipt subsequently has to be
                wholly or partly refunded by the Recovering Bank (whether to a
                liquidator or otherwise) each Bank, the Standby Lender and each
                Issuing Bank to which any part of such Relevant Receipt was so
                re-distributed shall on request from the Recovering Bank repay
                to the Recovering Bank such Bank's, the Standby Lender's and
                such Issuing Bank's pro rata share of the amount which has to be
                refunded by the Recovering Bank.

         (C)    Each Bank, the Standby Lender and each Issuing Bank shall on
                request supply to the Agent such information as the Agent may
                from time to time request for the purpose of this Clause 22.2.

         (D)    Notwithstanding the foregoing provisions of this Clause 22.2 no
                Recovering Bank shall be obliged to share any Relevant Receipt
                which it receives or recovers pursuant to legal proceedings
                taken by it to recover any sums owing to it under this Agreement
                with any other party which has a legal right to, but does not,
                either join in such proceedings or commence and diligently
                pursue separate proceedings to enforce its rights in the same or
                another court (unless the proceedings instituted by the
                Recovering Bank are instituted by it without prior notice having
                been given to such party through the Agent).

22.3     NO RELEASE

         For the avoidance of doubt it is hereby declared that failure by any
         Recovering Bank to comply with the provisions of Clause 22.2 shall not
         release any other Recovering Bank from any of its obligations or
         liabilities under Clause 22.2.

22.4     NO CHARGE

         The provisions of this Clause 22 shall not, and shall not be construed
         so as to, constitute a charge by a Bank, an Issuing Bank or the Standby
         Lender over all or any part of a sum received or recovered by it in the
         circumstances mentioned in Clause 22.2.

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22.5     PARTIAL REALISATION OF SECURITY

         If, by reason of the transfer or purported transfer by any Bank or the
         Standby Lender of all or any of its rights, title and interest
         hereunder by means of a Transfer Certificate or otherwise, the
         indebtedness of the Borrower to any successor in title, assignee or
         transferee (including a Transferee) of such Bank or the Standby Lender
         constitutes, or is deemed to constitute, at the time of such transfer
         or purported transfer by operation of law or otherwise indebtedness
         ("NEW INDEBTEDNESS") separate and distinct from the indebtedness
         ("ORIGINAL INDEBTEDNESS") owed by the Borrower to the other Banks and
         the Standby Lender (including the Bank or the Standby Lender making the
         transfer insofar as it does not transfer all of its rights, title and
         interest hereunder) and if the New Indebtedness is not secured by any
         particular Security Document or, if so secured, if such security ranks
         in priority after the security constituted thereby in respect of the
         Original Indebtedness, the proceeds of realisation of that particular
         Security Document received by the Agent from the Security Agent shall
         be applied by the Agent:-

         (A)    insofar as the proceeds of realisation relate to the Original
                Indebtedness, in distribution thereof between the Banks and/or
                the Standby Lender to whom the Original Indebtedness is owed pro
                rata to their respective contributions to the Original
                Indebtedness; and

         (B)    insofar as the proceeds of realisation relate to the New
                Indebtedness, in distribution thereof to the relevant successors
                in title, assignees or transferees (including any Transferees)
                in respect of the Bank or the Standby Lender making the transfer
                (being the persons to whom the New Indebtedness is owed) pro
                rata to their respective contributions to the New Indebtedness.

23       SECURITY

23.1     CASH COLLATERAL ACCOUNT

         The Agent shall at such time as it considers appropriate (and is hereby
         irrevocably authorised by the Borrower to) open in its books one or
         more Cash Collateral Accounts to which shall be credited all sums
         required to be paid to the Agent under this Agreement for credit to a
         Cash Collateral Account. Each Cash Collateral Account shall be charged
         in favour of the Security Agent by the execution on the date of opening
         of the account of a Cash Collateral Account Pledge.

23.2     WITHDRAWALS

         Except as provided in Clauses 23.3 and 23.4 the Borrower agrees not to
         withdraw or attempt to withdraw any monies from the Cash Collateral
         Accounts nor assign, transfer or suffer any Encumbrance other than the
         Encumbrance created pursuant to Clause 23.1 to arise over the whole or
         any part thereof.

23.3     PAYMENTS OUT OF CASH COLLATERAL ACCOUNT

         The Agent shall, subject to Clause 23.5, pay to the relevant Issuing
         Bank and debit to the Cash Collateral Account opened in relating to any
         particular Bank Guarantee or in relation to the Bank Guarantees
         generally or Bank Guarantees issued in a particular currency or which
         have other common characteristics on the date on which such Issuing
         Bank makes any payment to the Beneficiary under a Bank Guarantee, an
         amount equal to

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         the amount of such payment (or the amount standing to the credit of the
         Cash Collateral Account, if less).

23.4     APPLICATION OF MONEYS IN CASH COLLATERAL ACCOUNT

         The Agent shall at all times be entitled, subject to Clause 23.5, to
         apply the whole or any part of the sums standing to the credit of the
         Cash Collateral Account in or towards payment of any sums due from the
         Borrower under the Security Documents but unpaid and for that purpose
         may purchase with such sums such other currencies as may be necessary
         to effect such application.

23.5     PAYMENTS INTO CASH COLLATERAL ACCOUNTS

         Subject to Clause 23.4 any amount which the Borrower has paid to the
         Agent for credit to a Cash Collateral Account pursuant to Clauses 9.12
         or 21.1 shall be applied solely in or towards the discharge of the
         obligations of the Borrower which, but for such payment, would have
         fallen to be satisfied by the Bank whose Percentage has, by virtue of
         such payment, been reduced as a consequence of the Borrower paying that
         amount for credit to the relevant Cash Collateral Account.

23.6     INTEREST

         The amount from time to time standing to the credit of the Cash
         Collateral Accounts shall bear interest by reference to successive
         deposit periods or as otherwise agreed, the rate at which such interest
         is payable and the duration of each such deposit period to be agreed
         between the Borrower and the Agent from time to time. Such interest
         shall, until an Event of Default shall have occurred, be payable by the
         Agent to the Borrower or as it may direct and thereafter shall accrue
         to the relevant Cash Collateral Account.

23.7     DISCHARGE

         When all moneys, obligations and liabilities due, owing or incurred by
         the Borrower under this Agreement shall have been paid or discharged in
         full, the Agent shall at the request and cost of the Borrower reassign
         to the Borrower the property pledged pursuant to the Cash Collateral
         Account Pledge and release any moneys standing to the credit of the
         Cash Collateral Accounts to the Borrower.

23.8     CONTINUING SECURITY

         The security created under the Security Documents is a continuing
         security and shall remain in full force and effect until all moneys,
         obligations and liabilities from time to time due, owing or incurred by
         the Borrower under the Security Documents shall have been paid or
         satisfied in full, and is in addition to and not in substitution for,
         and shall not be prejudiced or affected by, any other security or
         guarantee from time to time held by the Agent, the Security Agent, the
         Issuing Banks, the Standby Lender, the Co-Arrangers or any Bank for the
         payment or satisfaction of such moneys, obligations or liabilities.

23.9     AMENDMENTS

         The liability of the Borrower and Stena AB under the Security Documents
         shall not be lessened or impaired by any time, indulgence or relief
         being given by the Beneficiary to any Issuing Bank, by any Issuing Bank
         to any Bank or by the Agent, the Security Agent,

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         the Standby Lender, the Co-Arrangers or any Bank to any other person
         liable, any amendment or extension of or supplement to the Bank
         Guarantees, the taking, variation, compromise, renewal or release of or
         refusal or neglect to perfect or enforce any rights, remedies or
         securities against any other person liable, any legal limitation,
         disability, incapacity or other circumstances relating to any other
         person liable, whether or not known to any Issuing Bank, the Agent, the
         Security Agent, the Standby Lender, the Co-Arrangers or any Bank, any
         invalidity in or irregularity or unenforceability of the obligations of
         any other person liable or anything done or omitted which but for this
         provision might constitute a legal or equitable discharge or defence of
         the Borrower or Stena AB.

23.10    WAIVER BY BORROWER AND STENA AB

         The Borrower and Stena AB hereby waive all rights they may have of
         first requiring the Agent, the Security Agent, any Issuing Bank, any
         Bank, the Standby Lender or the Co-Arrangers to proceed against or
         enforce any guarantee or security of, or claim payment from, the
         Borrower or Stena AB or any other person liable to make any claim or
         file any proof in the bankruptcy, insolvency or liquidation of the
         Borrower or Stena AB or any other person liable.

23.11    SETTLEMENT OR DISCHARGE

         Any settlement or discharge between the Agent, the Security Agent, any
         Issuing Bank, any Bank, the Co-Arrangers or the Standby Lender and the
         Borrower and/or Stena AB shall be conditional upon no security or
         payment to the Agent, the Security Agent, any Issuing Bank, any Bank,
         the Co-Arrangers or the Standby Lender by the Borrower or any other
         person being avoided or set aside or ordered to be refunded or reduced
         by virtue of any provision or enactment relating to bankruptcy,
         insolvency or liquidation for the time being in force and the Agent,
         the Security Agent, any Issuing Bank, any Bank, the Co-Arrangers and
         the Standby Lender shall be entitled to recover from the Borrower
         and/or Stena AB the value which the Agent, the Security Agent, such
         Issuing Bank, such Bank, the Co-Arrangers or the Standby Lender has
         placed upon such security or the amount of any such payment as if such
         settlement or discharge has not occurred.

23.12    REFLAGGING

         (A)    REFLAGGING NOTICE

                At any time and from time to time during the Security Period
                provided that no Event of Default has occurred and is
                continuing, the Borrower may give a notice (a "REFLAGGING
                NOTICE") to the Agent that the Shipowner of a Mortgaged Ship or
                Mortgaged Linkspan wishes:-

                (i)    to transfer the port of registry of such Ship or Linkspan
                       from one port of registry (the "EXISTING PORT OF
                       REGISTRY") in the Ship's or Linkspan's Flag State to
                       another port of registry (a "NEW PORT OF REGISTRY") in
                       such Flag State (a "TRANSFER OF PORT OF REGISTRY"); or

                (ii)   to redocument and reregister such Ship or Linkspan under
                       the laws of any jurisdiction (the "NEW FLAG State") other
                       than its existing Flag State (the "EXISTING FLAG STATE")
                       (a "TRANSFER OF FLAG"); or

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                (iii)  to transfer ownership of such Ship or Linkspan to the
                       sole ownership of another member of the Stena AB Group
                       (the "NEW OWNER") (a "TRANSFER OF OWNERSHIP"); or

                (iv)   to suspend the use of the flag of such Ship's or
                       Linkspan's Flag State (the "PRIMARY FLAG STATE") while
                       such Ship or Linkspan is on bareboat charter and where it
                       is proposed that, for the duration of such bareboat
                       charter, such Ship or Linkspan will fly the flag of
                       another jurisdiction (the "SECONDARY FLAG State")
                       selected by such charterer (a "Dual Registration").

         (B)    CONTENTS OF REFLAGGING NOTICE

                Any Reflagging Notice delivered by the Borrower to the Agent
                shall contain the following particulars:-

                (i)    the name of the Mortgaged Ship or Mortgaged Linkspan
                       which is the subject of such Reflagging Notice;

                (ii)   the name of the relevant Shipowner;

                (iii)  in the case of a Transfer of Port of Registry, the
                       proposed New Port of Registry;

                (iv)   in the case of a Transfer of Flag, the proposed New Flag
                       State;

                (v)    in the case of a Transfer of Ownership, the full name,
                       place of incorporation and principal place of business of
                       the proposed New Owner;

                (vi)   if applicable, any proposed new name of such Ship or
                       Linkspan on a Transfer of Port of Registry, Transfer of
                       Flag, Transfer of Ownership and/or Dual Registration;

                (vii)  in the case of a Transfer of Ownership taking place in
                       conjunction with a Transfer of Port of Registry and/or a
                       Transfer of Flag, details of the name of the proposed New
                       Flag State and (if applicable) proposed New Port of
                       Registry of the Ship or Linkspan upon completion of the
                       Transfer of Ownership; and

                (viii) in the case of a Dual Registration, details of the
                       Secondary Flag State, the bareboat charter and the
                       charterer.

         (C)    RELEASE OF SECURITY DOCUMENTS ON TRANSFER OF FLAG AND/OR
                TRANSFER OF OWNERSHIP

                Subject to fulfilment of the conditions specified in Clause
                23.12(F), the Agent shall instruct the Security Agent to, and
                the Security Agent shall, duly release and discharge the Ship
                Mortgage in respect of the relevant Mortgaged Ship or (as the
                case may be) the Linkspan Mortgage in respect of the relevant
                Mortgaged Linkspan, and release and re-assign the Deed of
                Covenant or Insurance Assignment and, if so requested by the
                Borrower, any Charterer's Insurance Assignment executed in
                respect of such Ship or Linkspan by a Stena Charterer

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                upon reasonable notice from the Borrower to enable the Transfer
                of Flag of such Ship or Linkspan and/or the Transfer of
                Ownership of such Ship or Linkspan.

         (D)    CONSENT TO TRANSFER OF PORT OF REGISTRY

                The Agent shall give instructions to the Security Agent to, and
                the Security Agent shall, give any requisite consents required
                by any applicable ship registrar or other official to enable a
                Mortgaged Ship or Mortgaged Linkspan to be transferred from its
                Existing Port of Registry to the New Port of Registry provided
                that the Ship Mortgage over such Ship or (as the case may be)
                the Linkspan Mortgage over such Linkspan will continue to be
                registered against such Ship or Linkspan at the New Port of
                Registry or in any applicable central register of ship mortgages
                in the Flag State.

         (E)    CONSENT TO DUAL REGISTRATION

                Subject to fulfilment of the conditions specified in Clause
                23.12(G), the Agent shall instruct the Security Agent to, and
                the Security Agent shall, give any requisite consents required
                by any applicable ship registrar or other official in the
                Primary Flag State and/or the Secondary Flag State to permit the
                Dual Registration of a Mortgaged Ship or Mortgaged Linkspan.

         (F)    CONDITIONS TO TRANSFER OF OWNERSHIP AND/OR TRANSFER OF FLAG

                Upon completion of the Transfer of Ownership and/or Transfer of
                Flag, the Borrower shall deliver or procure the delivery to the
                Agent of:-

                (i)    a Shipowner's Guarantee and a Ship Mortgage or (in the
                       case of a Linkspan) a Linkspan Mortgage together with a
                       Deed of Covenant (in the case of a Designated Ship) or an
                       Insurance Assignment (in the case of a Linkspan or any
                       other Ship) in respect of the Mortgaged Ship or Mortgaged
                       Linkspan executed by the relevant Shipowner or (in the
                       case of a Transfer of Ownership) the New Owner (provided
                       that no Shipowner's Guarantee shall be required from
                       Stena Rederi AB or Stena Line Scandinavia);

                (ii)   in the case of a Ship or Linkspan managed by another
                       member of the Stena AB Group, a Manager's Subordination
                       Undertaking;

                (iii)  in the case of a Ship or Linkspan let on bareboat charter
                       to a Stena Charterer, a Charterer's Subordination
                       Undertaking and a Charterer's Insurance Assignment;

                (iv)   a notice of assignment of insurances in relation to the
                       Ship or Linkspan executed by the New Owner and any Stena
                       Charterer;

                (v)    evidence that the Ship or Linkspan has been insured in
                       accordance with the requirements of the Deed of Covenant,
                       Insurance Assignment and any Charterer's Insurance
                       Assignment;

                (vi)   opinions satisfactory to the Banks in relation to the
                       registration of the Ship and the Ship Mortgage or (as the
                       case may be) the Linkspan and the Linkspan Mortgage, the
                       due execution and authorisation of any

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                       documents executed pursuant to paragraphs (i) to (iv)
                       above and such other matters as the Banks may reasonably
                       require in relation to English law and to the
                       jurisdictions of incorporation of the Shipowner, any
                       Stena Charterer, any other charterer and the registry or
                       registries of the Ship or Linkspan;

                (vii)  evidence that the New Owner of the Ship or Linkspan has
                       acquired good marketable title to the Ship or Linkspan
                       and that the Ship or Linkspan is unencumbered save for
                       the new Ship Mortgage or new Linkspan Mortgage (as the
                       case may be), Permitted Ship Liens and, if relevant,
                       Liens created by any Prior Security Document;

                (viii) in the case of a Transfer of Flag, evidence that the New
                       Flag State shall be an Approved Flag State;

                (ix)   the Agent being satisfied, where the relevant Shipowner
                       or (in the case of a Transfer of Ownership) the New Owner
                       is incorporated in Sweden, that such Shipowner or New
                       Owner is able to grant the Security Documents referred to
                       in Clause 23.12(F)(i) to secure an amount equal to at
                       least the market value of the relevant Ship or Linkspan
                       and that the amount recoverable thereunder will not be
                       limited by Swedish law rules on corporate benefit or any
                       other relevant provision of Swedish company law

                and the obligations of the Agent and the Security Agent under
                Clause 23.12(D) shall be subject to the condition that the Agent
                has received all of such documents and evidence.

         (G)    CONDITIONS TO DUAL REGISTRATION

                Upon suspension of the use of the flag of the Primary Flag State
                and commencement of the use of the flag of the Secondary Flag
                State, the Borrower shall deliver or procure the delivery to the
                Agent of the following documents and/or evidence:-

                (i)    evidence that the Secondary Flag State shall be an
                       Approved Flag State;

                (ii)   an opinion satisfactory to the Agent from lawyers
                       qualified or accustomed to advise on the laws of the
                       Primary Flag State and the Secondary Flag State that the
                       Dual Registration is permitted by their respective laws
                       for the duration of the relevant charter period or a
                       specified part thereof and that the Ship Mortgage over
                       the relevant Ship or (as the case may be) the Linkspan
                       Mortgage over the relevant Linkspan and the relevant
                       Shipowner's title thereto remain duly registered under
                       the laws of the Primary Flag State following the Dual
                       Registration and that on termination of the charter by
                       virtue of which the Ship or Linkspan is registered in the
                       Secondary Flag State or a judicial sale of the Ship or
                       Linkspan the Dual Registration will be terminated without
                       delay and without any discretionary consents from
                       authorities in the Secondary Flag State;

                (iii)  if the laws of the Secondary Flag State require that the
                       Ship Mortgage or Linkspan Mortgage be noted or registered
                       against the Ship or Linkspan (as the case may be) in the
                       Secondary Flag State, evidence reasonably

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                       satisfactory to the Agent that such notation or
                       registration will be effected upon or within an
                       appropriate period following commencement of the Dual
                       Registration

                and the obligations of the Agent and the Security Agent under
                Clause 23.12(E) shall be subject to the condition that the Agent
                has received all of such documents and evidence.

         (H)    COMBINED TRANSACTIONS

                Where a combined Transfer of Ownership and/or Transfer of Flag
                and/or Dual Registration is proposed, Clauses 23.12(C) and (E)
                and Clauses 23.12(F) and (G) shall respectively be read
                together.

         (I)    APPROVED FLAG STATES

                For the purposes of this Agreement, "APPROVED FLAG STATE" means
                any of the following:-

                (i)    the United Kingdom, Bermuda, the Cayman Islands, any
                       other British Dependent Territory, the Channel Islands,
                       the Isle of Man and Hong Kong;

                (ii)   Sweden and any other Member State of the European Union
                       or Switzerland;

                (iii)  Norway (including, without limitation, the Norwegian
                       International Shipping Register) and any other member of
                       the European Economic Area;

                (iv)   United States of America and Canada;

                (v)    Australia and New Zealand;

                (vi)   the Bahamas, Cyprus, Greece, Liberia and Panama;

                (vii)  if the European Union establishes a register of ships for
                       the European Union as a whole (whether instead of, in
                       addition to or as an alternative to registration in a
                       Member State of the European Union), the European Union
                       shall, in relation to the registration of a Mortgaged
                       Ship in such register, be deemed to be an Approved Flag
                       State for the purposes of this Agreement; and

                (viii) any other state approved by the Majority Banks which
                       approval shall not be unreasonably withheld in the case
                       of a state in which significant numbers of vessels owned
                       by entities whose ultimate parent companies and/or
                       shareholders are resident in North America or the
                       European Union, European Economic Area or Switzerland are
                       registered and/or where such state is proposed as the
                       Secondary Flag State for the relevant Ship.

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         (J)    REFLAGGING OF TRANSFERRED SHIPS

                If the purchaser of a Transferred Ship requests the relevant
                Shipowner to consent to a change of the flag state in which a
                Transferred Ship is registered, the relevant Shipowner may agree
                to such change of flag provided that:-

                (i)    the requirements of this Clause 23.12 are satisfied in
                       relation to the Ship;

                (ii)   the Agent has received evidence satisfactory to it that
                       the Ship is insured in accordance with the terms of the
                       relevant Sale Agreement;

                (iii)  the Agent is satisfied that the obligation of the
                       purchaser of the Transferred Ship is effectively secured
                       by an assignment in favour of the Security Agent of a
                       first priority mortgage over the Ship and an assignment
                       in favour of the Security Agent of the purchaser's
                       interest in the insurances of the Ship in the event of a
                       Total Loss (such assignments to rank with the same
                       priority as the Receivables Assignment relating to such
                       Transferred Ship).

23.13    RELEASE OF SECURITY

         Provided that no declaration has been made by the Agent under Clause
         19.2 the Agent shall instruct the Security Agent to, and the Security
         Agent shall, release and discharge the Ship Mortgage and the Deed of
         Covenants or Insurance Assignment in respect of any Mortgaged Ship
         which is sold by the relevant Shipowner (whether on Credit Terms or
         otherwise) on terms that ownership of the relevant Mortgaged Ship
         passes from the relevant Shipowner as and when ownership of the
         relevant Ship is to pass to the relevant purchaser, in exchange for the
         purchase price, or relevant portion thereof, payable to the Shipowner
         by the relevant purchaser upon transfer of title to such purchaser (to
         be applied in accordance with the provisions of this Agreement and the
         other Security Documents) and provided that (in the case of a sale on
         Credit Terms) the relevant Shipowner has executed a Receivables
         Assignment in relation to the sale of such Ship in accordance with the
         provisions of this Agreement.

23.14    INCREASE IN MAXIMUM MORTGAGE AMOUNTS

         In respect of any Mortgaged Ship or Mortgaged Linkspan which is
         registered in Sweden or any other jurisdiction where the amount
         recoverable thereunder is restricted to a registered maximum amount:-

         (A)    the relevant Shipowner may at any time execute and register all
                such documents as are required to increase the registered
                maximum amount recoverable by the Security Agent under the Ship
                Mortgage or Linkspan Mortgage relating thereto to such higher
                amount as that Shipowner may elect; and

         (B)    if according to the latest valuation of such Ship or Linkspan
                the market value thereof exceeds the registered maximum amount
                recoverable by the Security Agent under the Ship Mortgage or
                Linkspan Mortgage relating thereto, and if at that time the
                Security Value is less than 150% of the aggregate of (a) the
                total of the Commitments (excluding any part thereof suspended
                under Clause 9.4 and not yet reinstated) and (b) the Standby
                Commitment, the Agent (acting on the instructions of the
                Majority Banks) may require the relevant Shipowner to execute
                and register all such documents as are required to increase the
                registered

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                maximum amount recoverable by the Security Agent under the Ship
                Mortgage or Linkspan Mortgage relating thereto to an amount
                equal to 110% of such latest valuation (such documents to be
                executed and registered within ten (10) Banking Days of notice
                from the Agent requiring the same to be done).

24       ASSIGNMENT, TRANSFER AND LENDING OFFICE

24.1     BENEFIT AND BURDEN

         This Agreement shall be binding upon, and enure for the benefit of,
         each of the Banks, the Agent, the Co-Arrangers, the Security Agent, the
         Issuing Banks, the Standby Lender, the Borrower, Stena AB and their
         respective successors.

24.2     NO ASSIGNMENT BY BORROWER

         Neither of the Borrower nor Stena AB may assign or transfer any of
         their rights or obligations under any of the Security Documents.

24.3     TRANSFERS

         Any Bank (the "TRANSFEROR BANK") may at any time cause all or any part
         of its rights, benefits and/or obligations under this Agreement and the
         Security Documents to be transferred to any bank or financial
         institution (a "TRANSFEREE BANK") by delivering to the Agent a Transfer
         Certificate duly completed and duly executed by the Transferor Bank and
         the Transferee Bank.

         Any such transfer shall require the consent of the Borrower (such
         consent not to be unreasonably withheld) unless (i) it is made in
         favour of another Bank or an affiliate of the Transferor Bank or any
         other Bank or (ii) it is made in favour of any other bank or financial
         institution after an Event of Default has occurred and has been
         continuing for 45 days, in which case it may be made without the
         Borrower's consent.

         Any transfer by a Bank shall be offered and effected in compliance with
         all applicable laws and regulations. No such transfer is binding on, or
         effective in relation to, the Borrower, the Agent or the Security Agent
         unless it is effected or evidenced by a Transfer Certificate which
         complies with the provisions of this Clause 24.3 and is signed by or on
         behalf of the Transferor Bank, the Transferee Bank and the Agent (on
         behalf of itself, the Borrower and Stena AB, the Security Agent, the
         Co-Arrangers, the Issuing Banks, the Standby Lender and the other
         Banks). Upon signature of any such Transfer Certificate by the Agent,
         which signature shall be effected as promptly as is practicable after
         such Transfer Certificate has been delivered to the Agent, and subject
         to the terms of such Transfer Certificate, such Transfer Certificate
         shall have effect as set out below.

         The following further provisions shall have effect in relation to any
         Transfer Certificate:-

         (A)    a Transfer Certificate may be in respect of a Bank's rights in
                respect of all or part of its Commitment and shall be in respect
                of the same proportion of its Percentage and of its
                Contribution;

         (B)    a Transfer Certificate shall only be in respect of rights and
                obligations of the Transferor Bank in its capacity as a Bank and
                shall not transfer its rights and obligations as Agent, Security
                Agent, Issuing Bank or Standby Lender, or in any

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                other capacity, as the case may be and such other rights and
                obligations may only be transferred in accordance with any
                applicable provisions of this Agreement;

         (C)    a Transfer Certificate shall take effect in accordance with
                English law as follows:-

                (i)    to the extent specified in the Transfer Certificate, the
                       Transferor Bank's payment rights and all its other rights
                       (other than those referred to in paragraph (B) above)
                       under this Agreement are assigned to the Transferee Bank
                       absolutely, free of any defects in the Transferor Bank's
                       title and of any rights or equities which the Borrower
                       had against the Transferor Bank;

                (ii)   the Transferor Bank's Commitment is discharged to the
                       extent specified in the Transfer Certificate;

                (iii)  the Transferee Bank becomes a Bank with a Contribution, a
                       Percentage and a Commitment of the amounts specified in
                       the Transfer Certificate;

                (iv)   the Transferee Bank becomes bound by all the provisions
                       of this Agreement and the Security Documents which are
                       applicable to the Banks generally, including those about
                       pro rata sharing and the exclusion of liability on the
                       part of, and the indemnification of, the Agent, the
                       Security Agent and the Issuing Banks in accordance with
                       the provisions of this Agreement and to the extent that
                       the Transferee Bank becomes bound by those provisions,
                       the Transferor Bank ceases to be bound by them;

                (v)    an Advance or part of an Advance which the Transferee
                       Bank makes after the Transfer Certificate comes into
                       effect ranks in point of priority and security in the
                       same way as it would have ranked had it been made by the
                       Transferor Bank, assuming that any defects in the
                       Transferor Bank's title and any rights or equities of any
                       Security Party against the Transferor Bank had not
                       existed; and

                (vi)   the Transferee Bank becomes entitled to all the rights
                       under this Agreement which are applicable to the Banks
                       generally, including but not limited to those relating to
                       the Majority Banks and those under Clauses 8.5, 11 and
                       21, and to the extent that the Transferee Bank becomes
                       entitled to such rights, the Transferor Bank ceases to be
                       entitled to them;

         (D)    the rights and equities of the Borrower or of any other Security
                Party referred to above include, but are not limited to, any
                right of set off and any other kind of cross-claim;

         (E)    the Borrower, the Security Agent, the Issuing Banks, the Standby
                Lender, the Banks, Stena AB and the Co-Arrangers hereby
                irrevocably authorise and instruct the Agent to sign any such
                Transfer Certificate on its behalf (and, in the case of the
                Security Agent, on behalf of any Security Party which has in the
                relevant Security Document given a corresponding authorisation
                and instruction to the Security Agent) and undertake not to
                withdraw, revoke or qualify such authority or instruction at any
                time. Promptly upon its signature of any Transfer Certificate,
                the Agent shall notify the Borrower, the Security Agent, the
                Transferor Bank and the Transferee Bank.

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24.4     RELIANCE ON TRANSFER CERTIFICATE

         (A)    The Agent shall be entitled to rely on any Transfer Certificate
                believed by it to be genuine and correct and to have been
                presented or signed by the persons by whom it purports to have
                been presented or signed, and shall not be liable to any of the
                parties to this Agreement and the Security Documents for the
                consequences of such reliance.

         (B)    (i)    The Agent shall at all times during the continuation of
                       this Agreement maintain a register in which it shall
                       record the name, Commitments, Contributions, Percentages
                       and administrative details (including the lending office)
                       from time to time of each Bank holding Transfer
                       Certificates and the date at which the transfer referred
                       to in such Transfer Certificate held by each Bank was
                       transferred to such Bank, and the Agent shall make the
                       said register available for inspection by any Bank, the
                       Security Agent, the Issuing Banks, the Standby Lender,
                       the Borrower and Stena AB during normal banking hours
                       upon receipt by the Agent of reasonable prior notice
                       requesting the Agent to do so.

                (ii)   The entries on the said register shall, in the absence of
                       manifest error, be conclusive in determining the
                       identities of the Commitments, the Contributions, the
                       Percentages and the Transfer Certificates held by the
                       Banks from time to time and the principal amounts of such
                       Transfer Certificates and may be relied upon by the
                       Agent, the Security Agent and the other Security Parties
                       for all purposes in connection with this Agreement and
                       the Security Documents.

24.5     TRANSFER FEES AND EXPENSES

         If any Bank causes the transfer of all or any part of its rights,
         benefits and/or obligations under the Security Documents, it shall pay
         to the Agent for its own account a registration fee of $1,000 for each
         transfer, and shall also pay to the Agent on demand all costs, fees and
         expenses (including, but not limited to, legal fees and expenses), and
         all VAT thereon, certified by the Agent as having been reasonably
         incurred by it in connection with such transfer.

24.6     DOCUMENTING ASSIGNMENTS AND TRANSFERS

         If any Bank transfers all or any part of its rights, benefits and/or
         obligations as provided in Clause 24.3 the Borrower and Stena AB
         undertake, immediately on being requested to do so by the Agent and at
         the cost of the Transferor Bank, to enter into, and procure that the
         other Security Parties shall enter into, such documents as may be
         necessary or desirable to transfer to the Transferee Bank all or the
         relevant part of such Bank's interest in the Security Documents and all
         relevant references in this Agreement to such Bank shall thereafter be
         construed as a reference to the Bank and/or its Transferee Bank (as the
         case may be) to the extent of their respective interests.

24.7     SUB-PARTICIPATION

         Except with the consent of the Borrower (such consent not to be
         unreasonably withheld), a Bank may not sub-participate all or any part
         of its rights and/or obligations under the Security Documents or enter
         into any contractual arrangement with any person (other

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         than as permitted under Clause 24.3) the effect of which is to give
         that person an interest in that Bank's rights and/or obligations under
         the Security Documents.

24.8     LENDING OFFICE

         Each Bank shall lend through its office at the address specified in
         Schedule 1 or, as the case may be, in any relevant Transfer Certificate
         or through any other office of such Bank selected from time to time by
         it through which such Bank wishes to lend for the purposes of this
         Agreement. If the office through which such Bank is lending is changed
         pursuant to this Clause 24.8, such Bank shall notify the Agent promptly
         of such change and the Agent shall notify the Borrower.

24.9     DISCLOSURE OF INFORMATION

         Any Bank may disclose to a prospective assignee, substitute or
         transferee or to any other person who may propose entering into
         contractual relations with the Bank in relation to this Agreement such
         information about the Borrower and the Stena AB Group as such Bank
         shall consider appropriate if such Bank first procures that the
         relevant prospective assignee, substitute or transferee or other person
         (such person together with any prospective assignee, substitute or
         transferee being hereinafter described as the "PROSPECTIVE ASSIGNEE")
         shall undertake to the Borrower to keep secret and confidential and,
         not without the prior written consent of the Borrower, disclose to any
         third party any of the information, reports or documents supplied by
         such Bank provided however that the Prospective Assignee shall be
         entitled to disclose any such information, reports or documents in the
         following situations:-

         (A)    in relation to any proceedings arising out of this Agreement or
                the other Security Documents to the extent considered necessary
                by the Prospective Assignee to protect its interest; or

         (B)    pursuant to a court order relating to discovery or otherwise; or

         (C)    pursuant to any law or regulation or to any fiscal, monetary,
                tax, governmental or other competent authority; or

         (D)    to its auditors, legal or other professional advisers.

         In addition, the Prospective Assignee shall be entitled to disclose or
         use any such information, reports or documents if the information
         contained therein shall have emanated, in conditions free from
         confidentiality, bona fide from some person other than such Bank or the
         Borrower or any member of the Stena AB Group.

24.10    NO ADDITIONAL COSTS

         If at the time of, or immediately after, any transfer by a Bank of any
         part of the rights, benefits and/or obligations under this Agreement,
         or any change in the office through which it lends for the purposes of
         this Agreement, the Borrower would be obliged to pay to the Transferee
         Bank or (in the case of a change of lending office) the Bank under
         Clauses 11.7 or 21.2 any sum in excess of the sum (if any) which it
         would have been obliged to pay to the relevant Bank under the relevant
         Clause in the absence of such transfer or change, the Borrower shall
         not be obliged to pay that excess.

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25       REFERENCE BANKS, CO-ARRANGERS, AGENT AND SECURITY AGENT

25.1     REFERENCE BANKS

         If (i) the whole of the Contribution (if any) of any Reference Bank is
         prepaid, (ii) the Commitments (if any) of any Reference Bank are
         reduced to zero in accordance with Clause 21 or any other relevant
         provision hereof, (iii) a Reference Bank transfers the whole of its
         rights and obligations (if any) as a Bank under this Agreement or (iv),
         where applicable, any Reference Bank ceases to provide quotations to
         the Agent for the purposes of determining LIBOR, the Agent may, acting
         on the instructions of the Majority Banks, terminate the appointment of
         such Reference Bank and appoint another Bank to replace such Reference
         Bank.

25.2     DECISION MAKING

         (A)    DECISIONS REQUIRING CONSENT OF ALL THE BANKS AND THE STANDBY
                LENDER

                Save as expressly provided in Clause 25.2(B) or as otherwise
                expressly provided herein, any proposed course of action in
                connection with any matter requiring the consent of the Banks
                and the Standby Lender under or in connection howsoever with
                this Agreement or any other Security Document shall only be
                taken with the consent of all the Banks and the Standby Lender
                including, but without limitation to the generality of the
                foregoing:-

                (i)    (save as required by the terms of the Security Documents)
                       the release of any of the Security Documents or the
                       release of any Security Party from any of its obligations
                       hereunder or under any other Security Document;

                (ii)   the amendment of any of the provisions of this Agreement
                       or any other of the Security Documents;

                (iii)  any time or other indulgence to be granted to the
                       Borrower or any other Security Party in respect of its
                       obligations under any of the Security Documents.

         (B)    DECISIONS REQUIRING CONSENT OF THE MAJORITY BANKS

                Proposals in connection with the following matters shall, in the
                absence of agreement thereon by all of the Banks and the Standby
                Lender or as otherwise provided in this Agreement, be determined
                by the Majority Banks:-

                (i)    the making of any declaration by the Agent under Clause
                       19.2;

                (ii)   the institution of any legal proceedings for the
                       enforcement of any rights or powers whatsoever pursuant
                       to the terms of this Agreement or any other of the
                       Security Documents;

                (iii)  any course of action whatsoever from time to time (other
                       than the making of a demand for payment hereunder)
                       whether of a legal or commercial nature or otherwise
                       howsoever for the purpose of achieving a full or partial
                       recovery of any principal, interest or other amount due
                       and payable by the Borrower hereunder or otherwise in
                       connection therewith following the making of a
                       declaration by the Agent under Clause 19.2;

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                (iv)   any other matter in respect of which this Agreement or
                       any other Security Document expressly provides that the
                       consent of the Majority Banks shall be required.

         (C)    METHOD OF SOLICITING AGREEMENT

                Any determination of the Banks and the Standby Lender shall be
                ascertained by the Agent or the Security Agent (as the case
                may be) either:-

                (i)    by means of a telefax sent by the Agent or the Security
                       Agent (as the case may be) to each of the Banks and the
                       Standby Lender in identical terms on the proposal or
                       matter in issue; or

                (ii)   by means of the vote of representatives of each Bank and
                       the Standby Lender at a meeting convened by the Agent or
                       the Security Agent (as the case may be) and held for the
                       purpose of discussing (inter alia) such proposal or
                       matter in issue.

                Furthermore, it is hereby agreed by the Banks and the Standby
                Lender that:-

                       (a)    where a decision of the Banks and the Standby
                              Lender is sought by the Agent or the Security
                              Agent by means of a telefax sent in accordance
                              with paragraph (i) above and provided that the
                              Agent or Security Agent (as appropriate) verifies
                              forthwith by telephone with each relevant Bank and
                              the Standby Lender that it has received such
                              telefax in good order and provided further that
                              such telefax states that it is issued in
                              accordance with this Clause 25.2(C) and states the
                              consequences to the recipient of failing to
                              respond, then the Agent or Security Agent (as the
                              case may be) may in its telefax:-

                              (i)     recommend a proposed course of action to
                                      be taken by the Banks and the Standby
                                      Lender; and

                              (ii)    specify a time limit (of not less than
                                      three (3) Banking Days) within which the
                                      Banks and the Standby Lender are required
                                      to respond to the Agent's or Security
                                      Agent's recommendation

                              so that, if any Bank or the Standby Lender fails
                              to notify the Agent or Security Agent (as
                              appropriate) within such time limit of its
                              response to the recommendation, such Bank or
                              Standby Lender shall be deemed to have accepted
                              and approved the course of action proposed by the
                              Agent or the Security Agent (as the case may be);
                              and

                       (b)    where the approval of the Majority Banks is
                              required in respect of any matter, the approval
                              shall be deemed to have been given as soon as the
                              Agent or the Security Agent (as the case may be)
                              receives the requisite number of votes in favour
                              of the proposal so that the Agent or Security
                              Agent may act on the basis of such votes without
                              having to wait for the response of (or to give any

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                              notification to) any other Bank or the Standby
                              Lender who has yet to reply to the Agent or
                              Security Agent.

25.3     THE AGENT

         (A)    APPOINTMENT OF THE AGENT

                Each of the Banks, the Issuing Banks, the Standby Lender, the
                Co-Arrangers and the Security Agent hereby appoints the Agent to
                act as its agent under this Agreement with such rights, powers
                and discretions as are expressly delegated to the Agent
                hereunder.

         (B)    OBLIGATIONS OF THE AGENT

                The Agent shall:-

                (i)    promptly inform the Banks, the Issuing Banks and the
                       Standby Lender of the contents of any notice or request
                       received by it from the Borrower or any other Security
                       Party under the Security Documents (whether such notice
                       or request is addressed to the Agent alone or the Agent
                       on behalf of the Banks, the Issuing Banks, the Standby
                       Lender and/or the Security Agent) and of any information
                       delivered to it pursuant to Clause 14.2(C) and of any
                       other matters which the Agent considers material;

                (ii)   promptly deliver to the Banks, the Issuing Banks and the
                       Standby Lender copies of any accounts and certificates
                       delivered to it pursuant to Clause 14.2 and, as soon as
                       reasonably practicable after the Availability Date,
                       copies of the documents delivered in satisfaction of the
                       requirements of Schedule 8;

                (iii)  promptly inform the Banks, the Issuing Banks and the
                       Standby Lender in reasonable detail of any exercise by it
                       of any of the rights, powers and/or discretions vested in
                       it hereunder (but without the Agent being under any
                       obligation to give prior notice to the Banks, the Issuing
                       Banks or the Standby Lender of any such exercise);

                (iv)   promptly notify the Banks, the Issuing Banks and the
                       Standby Lender of the occurrence of any Default or any
                       other default by a Security Party in the due performance
                       of or compliance with its material obligations under any
                       of the Security Documents of which the Agent has actual
                       knowledge or actual notice and the occurrence of which
                       the Agent has verified;

                (v)    if directed by the Majority Banks, exercise (or refrain
                       from exercising) any right, power or discretion vested in
                       it hereunder in accordance with the directions (subject
                       to Clause 25.2(A)) of the Majority Banks provided,
                       however, that it may refrain from acting in accordance
                       with any such directions until it has received such
                       security as it may require (whether by way of payment in
                       advance or otherwise) for all costs, claims, expenses
                       (including legal fees) and liabilities which it will or
                       may expend or incur in complying with such directions and
                       for this purpose the Agent shall make a demand for such
                       security addressed to all the Banks and the Standby
                       Lender;

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                (vi)   receive from the Borrower all payments of principal,
                       interest and other moneys expressed to be payable to the
                       Agent hereunder on behalf of all or any of the Banks, the
                       Issuing Banks, the Standby Lender, the Co-Arrangers
                       and/or the Security Agent and shall receive from the
                       Security Agent the proceeds of realisation of the
                       securities constituted by the Security Documents and
                       shall promptly distribute the same amongst the Banks, the
                       Issuing Banks, the Standby Lender, the Co-Arrangers, the
                       Security Agent and itself in accordance with the terms of
                       this Agreement pending which the Agent shall hold any and
                       all such moneys on trust for the Banks, the Issuing
                       Banks, the Standby Lender, the Co-Arrangers, the Security
                       Agent and itself.

         (C)    RELATIONSHIP OF AGENT AND PRINCIPAL

                The relationship between the Agent on the one part and each
                Bank, each Issuing Bank, the Standby Lender, the Co-Arrangers
                and the Security Agent on the other is that of agent and
                principal and, except in relation to any moneys referred to in
                Clause 25.3(B)(vi) held by the Agent pending distribution
                hereunder, the Agent shall not have a fiduciary relationship
                with or be, or be deemed to be, a trustee of or for any such
                party.

25.4     THE SECURITY AGENT

         (A)    APPOINTMENT OF THE SECURITY AGENT

                Each of the Banks, the Issuing Banks, the Standby Lender, the
                Co-Arrangers and the Agent hereby appoints the Security Agent to
                act for and on its behalf as its trustee in connection with this
                Agreement and the other Security Documents and authorises the
                Security Agent to enter into each of the Security Documents and
                exercise such rights, powers and discretions as are specifically
                delegated to it by the terms thereof together with such rights,
                powers and discretions as are reasonably incidental thereto.

         (B)    THE TRUST PROPERTY

                In this Clause 25 the expression "TRUST PROPERTY" shall mean:-

                (i)    all rights, title and interests that may at any time be
                       or have been granted, mortgaged, charged or assigned in
                       favour of the Security Agent pursuant to the Security
                       Documents (except to the extent that such rights, title
                       and/or interests are intended to be for the sole benefit
                       or protection of the Security Agent);

                (ii)   all moneys which are received or recovered by or on
                       behalf of the Security Agent under or by virtue of any
                       right, title and/or interest described in paragraph (i)
                       above; and

                (iii)  all moneys and other assets accrued on, or derived from,
                       any moneys described in paragraph (ii) above but shall
                       not include any moneys which the Security Agent has
                       transferred to the Agent or (being entitled to do so) has
                       retained in accordance with the provisions of Clause
                       25.4(D).

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         (C)    DECLARATION OF TRUST

                The Security Agent shall hold the Trust Property for the benefit
                of each of the Banks, the Issuing Banks, the Standby Lender, the
                Co-Arrangers, the Agent and itself from time to time upon the
                trusts and in accordance with the provisions contained in this
                Clause 25 and the obligations, rights and benefits vested or to
                be vested in the Security Agent by this Agreement, any other
                Security Document or any document entered into pursuant hereto
                or thereto shall (as well before as after enforcement) be
                performed and (as the case may be) exercised in accordance with
                the provisions of this Clause 25.

         (D)    APPLICATION OF MONEYS

                Save as expressly stated to the contrary herein or in any other
                Security Document, any moneys received or recovered by the
                Security Agent and which form part of the Trust Property shall
                (without prejudice to the rights of the Security Agent pursuant
                to any Security Document to credit any moneys received by it to
                any suspense account) be transferred forthwith to the Agent for
                distribution in accordance with the relevant provisions of this
                Agreement

                Provided however that, before transferring such moneys to the
                Agent, the Security Agent shall be entitled to deduct therefrom
                any sum then properly due and payable under this Agreement or
                any other Security Document to the Security Agent or any
                receiver, attorney, agent, delegate or other person appointed by
                it and retain that sum for its own account or (as the case may
                be) remit such sum to the other person to whom it is then due
                and payable.

                For as long as Svenska Handelsbanken AB (publ) continues to act
                as both Agent and Security Agent (or at any other time when any
                single bank shall act in both such capacities) it shall be
                sufficient for the purposes of complying with this Clause
                25.4(D) for the moneys concerned to be credited to the account
                kept by the Agent for the purposes of dealing with amounts
                received by it under or pursuant to the Security Documents.

         (E)    DUTIES OF THE SECURITY AGENT

                In addition to its obligations under Clause 25.4(D) the Security
                Agent shall:-

                (i)    promptly inform the Banks, the Issuing Banks and the
                       Standby Lender of the contents of any notice or request
                       received by it from the Borrower or any other Security
                       Party under the Security Documents and of any other
                       matters which the Security Agent considers material;

                (ii)   promptly inform the Banks, the Issuing Banks and the
                       Standby Lender in reasonable detail of any exercise by it
                       of any of the rights, powers and/or discretions vested in
                       it hereunder (but without the Security Agent being under
                       any obligation to give prior notice to the Banks, the
                       Issuing Banks or the Standby Lender of any such
                       exercise);

                (iii)  promptly notify the Banks, the Issuing Banks and the
                       Standby Lender of the occurrence of any Default or any
                       other default by a Security Party in the due performance
                       of or compliance with its material obligations under any
                       of the Security Documents of which the Security Agent has
                       actual

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                       knowledge or actual notice and the occurrence of which
                       the Security Agent has verified;

                (iv)   if directed by the Majority Banks, exercise (or refrain
                       from exercising) any right, power or discretion vested in
                       it hereunder in accordance with the directions (subject
                       to Clause 25.2(A)) of the Majority Banks provided,
                       however, that it may refrain from acting in accordance
                       with any such directions until it has received such
                       security as it may require (whether by way of payment in
                       advance or otherwise) for all costs, claims, expenses
                       (including legal fees) and liabilities which it will or
                       may expend or incur in complying with such directions and
                       for this purpose the Security Agent shall make a demand
                       for such security addressed to all the Banks and the
                       Standby Lender.

         (F)    POWERS AND DISCRETIONS OF THE SECURITY AGENT

                The Security Agent shall have all the powers and discretions
                conferred upon a trustee by the Trustee Act 1925 and/or any
                other relevant legislation from time to time in force (to the
                extent not inconsistent herewith) and upon a receiver appointed
                under the Security Documents or any of them (as though the
                Security Agent were a receiver thereunder).

         (G)    DELEGATION OF POWERS; APPOINTMENT OF CO-TRUSTEES

                The Security Agent shall be entitled:-

                (i)    whenever it thinks fit, to delegate by power of attorney
                       or otherwise to any person or persons all or any of the
                       rights, trusts, powers, authorities and discretions
                       vested in it by this Agreement or any other Security
                       Document and such delegation may be made upon such terms
                       and subject to such conditions and subject to such
                       regulations as the Security Agent may think fit and the
                       Security Agent shall not be bound to supervise the
                       proceedings or be in any way responsible for any loss
                       incurred by reason of any misconduct or default on the
                       part of any such delegate or sub-delegate provided that
                       the Security Agent shall have acted reasonably in making
                       such delegation to such delegate and the Security Agent
                       shall promptly give notice to each of the Banks, the
                       Issuing Banks, the Standby Lender, the Co-Arrangers and
                       the Agent of the appointment of any delegate or such
                       delegate as aforesaid; and

                (ii)   with the prior consent of the Majority Banks and the
                       Borrower, to appoint (and subsequently to dismiss) such
                       other person or persons as it thinks fit to become
                       additional trustees hereunder (but so that there shall
                       not be more than two trustees at any time) to assist it
                       in carrying out its rights and duties hereunder and under
                       the other Security Documents and each such additional
                       trustee shall be entitled to the same rights and subject
                       to the same obligations hereunder as the Security Agent.

         (H)    AUTHORITY TO ENTER INTO DOCUMENTS AND GRANT WAIVERS

                Each of the Banks, the Issuing Banks, the Standby Lender, the
                Co-Arrangers and the Agent hereby authorises the Security
                Agent:-

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                (i)    to enter into the SIBV $275m Facility Intercreditor
                       Agreement;

                (ii)   to enter into any amendment to any Security Document or
                       to grant any waiver of any obligation of any Security
                       Party under any Security Document which in either case
                       has either been approved by the Banks or is, in the
                       unfettered opinion of the Security Agent, of a minor or
                       technical nature and not likely to have any material
                       effect on the obligation of the relevant Security Party
                       under the relevant Security Document;

                (iii)  to enter into any quiet enjoyment undertaking as
                       contemplated by Clause 16.15; and

                (iv)   to enter into a tripartite agreement with Stena Ferries
                       Limited as owner and P&O Ferries Limited as bareboat
                       charterer in respect of m.v. "P O AQUITAINE"
                       substantially in the form set out in Schedule 24 to the
                       Agreed Form Certificate.

         (I)    SECURITY AGENT TO BE CREDITOR

                The parties hereto agree that for the purpose of enforcing
                rights established under the Security Documents in the
                Netherlands, to the extent Netherlands law will apply thereto,
                the Security Agent will be the joint creditor of each and every
                obligation of the Borrower towards the Banks, the Issuing Banks,
                the Standby Lender, the Co-Arrangers and the Agent under this
                Agreement, so that the Security Agent will have its own
                independent right to demand performance by the Borrower of each
                such obligation but so that payment to the Security Agent will
                serve as payment to the Banks, the Issuing Banks, the Standby
                Lender, the Co-Arrangers and the Agent (as appropriate) and
                payment to any of the Banks, the Issuing Banks, the Standby
                Lender, the Co-Arrangers and the Agent will serve as payment to
                the Security Agent.

         (J)    WINDING-UP OF TRUSTS

                If:-

                (i)    all of the liabilities of the Borrower secured under the
                       Security Documents have been fully and finally
                       discharged; and

                (ii)   no future or contingent liability remains outstanding;
                       and

                (iii)  the Security Agent is satisfied that there is no
                       substantial risk of any payment or other transaction
                       under this Agreement or any other Security Document being
                       set aside in any liquidation or insolvency of the
                       Borrower or any other Security Party which has previously
                       occurred or may later occur

                then the trusts herein created shall be wound-up and the
                Security Agent shall release, without recourse or warranty, all
                security granted to it pursuant to the Security Documents then
                held by it, whereupon the Security Agent, the Banks, the Issuing
                Banks, the Standby Lender, the Co-Arrangers and the Agent shall
                each be released from their respective obligations under this
                Clause 25.4 (except those which arose prior to such winding-up).

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         (K)    PERPETUITY PERIOD

                The perpetuity period under the rule against perpetuities if
                applicable to the Trust Property shall be the period of eighty
                (80) years from the date of this Agreement.

         (L)    GOVERNING LAW

                The trusts created by this Clause 25 shall be governed by and
                construed in accordance with English law.

25.5     THE AGENT AND SECURITY AGENT: COMMON PROVISIONS

         (A)    POWERS OF THE AGENT AND SECURITY AGENT GENERALLY

                In addition to the powers expressly given to the Agent and/or
                the Security Agent by this Agreement:-

                (i)    the Banks and the Standby Lender may give the Agent
                       and/or the Security Agent (generally or in any particular
                       case) any powers which the Banks and the Standby Lender
                       consider appropriate; and

                (ii)   each of the Agent and the Security Agent has power to
                       take any other action which it considers to be reasonably
                       incidental or conducive to the performance of its
                       functions under this Agreement or otherwise appropriate
                       in the context of those functions, including the exercise
                       of any powers given to it by the Banks and the Standby
                       Lender.

         (B)    EXERCISE OF THE AGENT'S AND SECURITY AGENT'S POWERS

                The rights, powers and discretions vested in the Agent and the
                Security Agent by this Agreement and/or the other Security
                Documents shall only be exercised by the Agent or the Security
                Agent (as the case may be) in accordance with the instructions
                of the Majority Banks or (if so required in accordance with the
                provisions of Clause 25.2(A)) the Banks and the Standby Lender
                provided however that the Agent and the Security Agent shall
                each be entitled (but not bound) to exercise or refrain from
                exercising any such right, power or discretion without the
                directions of the Majority Banks or the Banks and the Standby
                Lender (as the case may be) if the Agent or Security Agent (as
                appropriate) believes that the immediate exercise of such right,
                power or discretion is necessary or desirable to protect the
                interests of the Banks and the Standby Lender under or in
                respect of the Security Documents or to protect or preserve the
                security afforded thereby.

                Where any right, power or discretion is vested in the Security
                Agent under this Agreement or any other Security Document but is
                expressed as being exercisable in accordance with the directions
                of the Banks and the Standby Lender or the Majority Banks, such
                right, power or discretion shall not be exercised by the
                Security Agent without the lawful directions of the Banks and
                the Standby Lender or the Majority Banks (as the case may be).

         (C)    LIMIT OF AGENT'S AND SECURITY AGENT'S OBLIGATIONS

                Notwithstanding anything to the contrary expressed or implied
                herein or in any other Security Document, neither the Agent nor
                the Security Agent shall:-

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                (i)    be bound to enquire as to the occurrence or otherwise of
                       any Default or as to the performance by any Security
                       Party of its obligations under any of the Security
                       Documents;

                (ii)   be bound to disclose to any other person any information
                       relating to any Security Party if such disclosure would
                       or might in its opinion constitute a breach of any law or
                       regulation or be otherwise actionable at the suit of any
                       person;

                (iii)  have any responsibility to the Banks, the Issuing Banks,
                       the Standby Lender, the Co-Arrangers or each other for:-

                       (a)    the financial position, creditworthiness, affairs
                              or prospects of any of the Security Parties;

                       (b)    the performance or non-performance howsoever by
                              any of the Security Parties of any of their
                              obligations hereunder or under any of the Security
                              Documents;

                       (c)    the due execution, effectiveness, genuineness,
                              validity or enforceability of any of the Security
                              Documents or any document relating thereto or any
                              filing or recording thereof or the taking of any
                              other action whatsoever and howsoever in
                              connection therewith or the collectability of any
                              sum due thereunder;

                       (d)    any computations and/or information supplied to
                              the Banks, the Issuing Banks and/or the Standby
                              Lender by the Agent or the Security Agent in
                              reliance upon which the Banks, the Issuing Banks
                              and/or the Standby Lender have entered into this
                              Agreement;

                (iv)   be under any liability whatsoever for any consequence of
                       relying on:-

                       (a)    any written communication or document believed by
                              it to be genuine or correct and to have been
                              communicated or signed by the person by whom it is
                              purported to have been communicated or signed; or

                       (b)    the advice or opinions of any professional
                              advisers selected by it;

                (v)    be under any duty to account to any Bank, any Issuing
                       Bank, the Standby Lender, the Co-Arrangers or each other
                       for any sum received by it for its own account or the
                       profit element of any such sum;

                (vi)   be under any obligation other than those for which
                       express provision is made herein.

         (D)    RIGHTS OF THE AGENT AND SECURITY AGENT

                Each of the Agent and Security Agent may:-

                (i)    carry out its duties hereunder through such officers,
                       directors, employees, consultants or independent agents
                       as it may in its unfettered discretion think fit;

                                      160
<PAGE>

                (ii)   assume that no Default has occurred and that none of the
                       Security Parties is in breach of its obligations under
                       any of the Security Documents unless the Agent or the
                       Security Agent (as the case may be) has actual knowledge
                       or actual notice to the contrary;

                (iii)  engage and pay for the advice or services of any internal
                       or external lawyers, accountants, surveyors or other
                       experts whose advice or services may to it seem
                       necessary, expedient or desirable and rely upon any
                       advice so obtained;

                (iv)   rely as to any matters of fact which might reasonably be
                       expected to be within the knowledge of any Security Party
                       upon a certificate signed by or on behalf of that
                       Security Party;

                (v)    rely upon any communication or document believed by it to
                       be genuine.

         (E)    RESPONSIBILITIES OF THE BANKS, THE ISSUING BANKS, THE STANDBY
                LENDER AND THE CO-ARRANGERS

                It is understood that each of the Banks, the Issuing Banks, the
                Standby Lender and the Co-Arrangers has itself been, and will
                continue to be, solely responsible for making its own
                independent appraisal of and investigations into the financial
                condition, creditworthiness, condition, affairs, status and
                nature of each Security Party and, accordingly, each of the
                Banks, the Issuing Banks, the Standby Lender and the
                Co-Arrangers warrants to both the Agent and the Security Agent
                that it has not relied and will not rely on the Agent or the
                Security Agent:-

                (i)    to check or enquire on its behalf into the adequacy,
                       accuracy or completeness of any information provided by
                       any Security Party in connection with this Agreement or
                       any other Security Document; or

                (ii)   to assess or keep under review on its behalf the
                       financial condition, creditworthiness, condition,
                       affairs, status or nature of any Security Party.

         (F)    ADMINISTRATION

                Subject to the terms of this Agreement, this Agreement and the
                other Security Documents shall be serviced, supervised and
                administered by the Agent and the Security Agent respectively in
                the ordinary course of its business and in accordance with its
                usual practices. In performing its duties and functions
                hereunder, the Agent or the Security Agent (as the case may be)
                shall exercise the same care as it normally exercises in making
                and administering loans for its own account, but assumes no
                further responsibility in respect of such performance.

         (G)    LIMITATION OF LIABILITY

                Neither the Agent nor the Security Agent shall be under any
                liability as a result of taking or omitting to take any action
                in relation to this Agreement or any other Security Document
                save in the case of gross negligence or wilful misconduct and
                neither the Banks, the Issuing Banks, the Standby Lender nor the
                Co-Arrangers will assert or seek to assert against any director,
                officer or employee of the Agent or the Security Agent (as the
                case may be) any claim they might have against any of them in
                respect of the matters referred to in this Clause 25.5(G).

                                      161
<PAGE>

         (H)    NO RESTRICTION ON OTHER BUSINESS

                Neither the Agent nor the Security Agent (nor any officer
                thereof) shall be precluded by reason of so acting from
                underwriting, guaranteeing the subscription of or subscribing
                for or otherwise acquiring, holding or dealing with any
                debentures, shares or securities whatsoever of any Security
                Party or from entering into any contract or financial or other
                transaction with or from engaging in any banking or other
                business with any Security Party and shall not be liable to
                account for any profit made or payment received by it thereby or
                in connection therewith.

25.6     RETIREMENT AND REPLACEMENT OF THE AGENT AND THE SECURITY AGENT

         (A)    Either or both of the Agent and the Security Agent may retire at
                any time without assigning any reason by giving to the Borrower,
                the Banks, the Issuing Banks, the Standby Lender and the
                Security Agent or Agent (as the case may be) not less than
                thirty (30) days notice of its intention to do so. Unless the
                Agent or Security Agent (as appropriate) in its notice of
                retirement nominates any of its associated companies to be its
                successor, the successor Agent or Security Agent may be
                appointed by the Majority Banks (with the prior written consent
                of the Borrower, such consent not to be unreasonably withheld or
                delayed) during such thirty (30) day period provided that,
                should they fail to do so, the Agent or the Security Agent (as
                the case may be) may then appoint as its successor a reputable
                and experienced bank with an office in London.

         (B)    If any Bank is dissatisfied with the Agent and/or the Security
                Agent and wants it to be replaced, such Bank shall consult with
                the other relevant Banks and the Borrower for a period of up to
                thirty (30) days to decide whether the Agent and/or the Security
                Agent should be replaced and, if so, by whom (such replacement
                being one of the relevant Banks or an associated company
                thereof). If at the end of such period the relevant Banks
                unanimously agree that the Agent and/or the Security Agent (as
                the case may be) should be replaced by a particular Bank or one
                of its associated companies, and if the Borrower consents in
                writing to the identity of the proposed replacement (such
                consent (i) not to be unreasonably withheld and (ii) not to be
                required if an Event of Default has occurred and is continuing),
                then notice shall be given by the relevant Banks to the Agent
                and/or the Security Agent (as the case may be) specifying the
                date, being not fewer than five (5) Banking Days after the date
                of such notice, on which the appointment of the successor Agent
                and/or Security Agent is, subject to Clause 25.6(D), to take
                effect.

         (C)    For the purposes of this Clause 25.6(A):-

                (i)    an "ASSOCIATED COMPANY" of the Agent or Security Agent or
                       any Bank shall mean any company which is a holding
                       company of the Agent or Security Agent or such Bank (as
                       the case may be) or a wholly-owned subsidiary of it or
                       its parent company; and

                (ii)   "RELEVANT BANKS" means all of the Banks other than that
                       Bank which acts as Agent or (as the case may be) Security
                       Agent or whose associated company acts in such capacity.

                                      162
<PAGE>

         (D)    Any appointment of a successor Agent or Security Agent under
                Clause 25.6(A) or (B) shall take effect upon:-

                (i)    the successor confirming in writing its agreement to be
                       bound by the provisions of this Agreement; and

                (ii)   notice thereof by the Agent or Security Agent and its
                       successor (which notice, in the case of a new Agent,
                       shall specify the bank in New York to which payments to
                       the new Agent shall be made thereafter) being given to
                       each of the other parties to this Agreement and/or the
                       other Security Documents; and

                (iii)  in the case of a new Security Agent, the outgoing
                       Security Agent has transferred to its successor all of
                       its rights and obligations under the Security Documents.

         (E)    If a successor to the Agent or Security Agent is appointed under
                the provisions of this Clause 25.6:-

                (i)    the outgoing Agent or Security Agent (as the case may be)
                       shall be discharged from any further obligation under
                       this Agreement;

                (ii)   its successor and each of the other parties hereto shall
                       have the same rights and obligations amongst themselves
                       as they would have had if such successor had been a party
                       hereto in place of the outgoing Agent or Security Agent
                       (as the case may be);

                (iii)  Clause 25 and the other provisions of this Agreement
                       shall remain in effect for the benefit and protection of
                       the outgoing Agent or Security Agent (as the case may be)
                       in relation to any claim or loss which may be brought
                       against or incurred by it in connection with or as a
                       result of any act, omission, breach, neglect or other
                       occurrence or matter relating to or arising out of this
                       Agreement which took place before its resignation.

26       NOTICES AND OTHER MATTERS

26.1     NOTICES

         Every notice, request, demand or other communication under this
         Agreement or (unless otherwise provided therein) under any of the other
         Security Documents shall:-

         (A)    be in writing delivered personally or by first-class prepaid
                letter (airmail if available) or facsimile transmission or other
                means of telecommunication in permanent written form provided
                that any communication by facsimile transmission shall be
                confirmed forthwith by letter;

         (B)    be deemed to have been received, subject as otherwise provided
                in the relevant Security Document, in the case of a letter, when
                delivered personally or 5 days after it has been put in to the
                post and, in the case of a facsimile transmission or other means
                of telecommunication in permanent written form, at the time of
                despatch (provided that if the date of despatch is not a
                business day in the country of the addressee or if the time of
                despatch is after the close of business in the

                                      163
<PAGE>

                country of the addressee it shall be deemed to have been
                received at the opening of business on the next such business
                day); and

         (C)    be sent:-

                (i)    to the Borrower at:-

                       Aegeristrasse 52
                       CH-6300 Zug
                       Switzerland

                       Fax: 41 41 728 8139

                       Marked for attention: Jan Larsson

                       with a copy to the Borrower at:-

                       World Trade Centre
                       Amsterdam Airport
                       Schipol Boulevard 237
                       1118 BH Schipol Airport
                       The Netherlands

                       Fax: 31 20 653 1960

                       Marked for attention: Deputy General Manager

                (ii)   to Stena AB at:-

                       Masthuggskajen
                       SE-405 19 Goteborg
                       Sweden

                       Fax:  46 31 243947

                       Marked for attention: Finance Manager

                (iii)  to the Agent, the Security Agent and the Standby Lender
                       at:-

                       Svenska Handelsbanken AB (publ)
                       Regional Bank of Western Sweden
                       SE-405 40 Goteborg
                       Sweden

                       Fax: 46 31 774 8308

                       Marked for attention: RVIC STBNL 675

                                      164
<PAGE>

                (iv)   to the New Guarantee Provider at:-

                       Nordea Bank Sverige AB (publ)
                       Ostra Hamngatan 16
                       SE-405 09 Goteborg
                       Sweden

                       Fax: 46 31 771 6470

                       Marked for attention: Nordea Shipping Offshore and Oil
                       Services

                (v)    to the Existing Guarantee Provider at:-

                       125 London Wall
                       London  EC2Y 5AJ
                       England

                       Fax: 44 20 7777 4613

                       Marked for attention: Morten Knudsen

                (vi)   to each Bank or Co-Arranger at its address and fax number
                       specified in Schedule 1 or in any relevant Transfer
                       Certificate,

                or to such other address and/or number as is notified by one
                party to the other party under this Agreement;

         (D)    be sent by the Borrower or Stena AB to the Banks, the relevant
                Issuing Bank, the Standby Lender or the Co-Arrangers by sending
                the same to the Agent and by the Banks, the Issuing Banks, the
                Standby Lender and the Co-Arrangers to the Borrower and Stena AB
                by forwarding the same through the Agent.

26.2     NO IMPLIED WAIVERS, REMEDIES CUMULATIVE

         No failure or delay on the part of the Agent, the Co-Arrangers, the
         Security Agent, the Issuing Banks, the Standby Lender, the Banks or any
         of them to exercise any power, right or remedy under any of the
         Security Documents shall operate as a waiver thereof, nor shall any
         single or partial exercise by the Agent, the Co-Arrangers, the Security
         Agent, the Issuing Banks, the Standby Lender, the Banks or any of them
         of any power, right or remedy preclude any other or further exercise
         thereof or the exercise of any other power, right or remedy. The
         remedies provided in the Security Documents are cumulative and are not
         exclusive of any remedies provided by law.

26.3     FURTHER ASSURANCE

         The Borrower and Stena AB undertake that the Security Documents shall,
         both at the date of execution and delivery thereof and so long as any
         moneys are owing under any of the Security Documents, be valid and
         binding obligations of the respective parties thereto and the rights of
         the Agent, the Security Agent, the Issuing Banks, the Standby Lender,
         the Banks and the Co-Arrangers thereunder enforceable in accordance
         with their respective terms and that they will, at their expense,
         execute, sign, perfect and do, and will procure the execution, signing,
         perfecting and doing by each of the other Security Parties of, any and
         every such further assurance, document, act or thing as in the
         reasonable opinion of

                                      165
<PAGE>

         the Agent may be necessary or desirable for perfecting the security
         contemplated or constituted by the Security Documents.

26.4     ENGLISH LANGUAGE

         All certificates, instruments and other documents to be delivered under
         or supplied in connection with any of the Security Documents shall be
         in the English language or shall be accompanied by a certified English
         translation upon which the Agent shall be entitled to rely.

26.5     THIRD PARTY RIGHTS

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

27       GOVERNING LAW AND JURISDICTION

27.1     LAW

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

27.2     SUBMISSION TO JURISDICTION

         The Borrower and Stena AB each agree, for the benefit of the Agent, the
         Co-Arrangers, the Security Agent, the Issuing Banks, the Standby Lender
         and the Banks, that any legal action or proceedings arising out of or
         in connection with this Agreement against the Borrower or Stena AB or
         any of its assets may be brought in the English courts. The Borrower
         and Stena AB each hereby irrevocably and unconditionally submits to the
         jurisdiction of such courts and irrevocably designates, appoints and
         empowers Stena (UK) Limited at present of 4/5 Arlington Street, London
         SW1 1RA to receive for it and on its behalf, service of process issued
         out of the English courts in any such legal action or proceedings. The
         submission to such jurisdiction shall not (and shall not be construed
         so as to) limit the right of the Agent, the Co-Arrangers, the Security
         Agent, the Issuing Banks, the Standby Lender or the Banks to take
         proceedings against the Borrower and Stena AB in the courts of any
         other competent jurisdiction nor shall the taking of proceedings in any
         one or more jurisdictions preclude the taking of proceedings in any
         other jurisdiction, whether concurrently or not. The parties further
         agree that only the courts of England or Sweden and not those of any
         other State shall have jurisdiction to determine any claim which the
         Borrower or Stena AB may have against the Agent, the Co-Arrangers, the
         Security Agent, the Issuing Banks, the Standby Lender or any Bank
         arising out of or in connection with this Agreement.

IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed as a deed on the date first written above.

                                      166
<PAGE>

                                   SCHEDULE 1

                         THE BANKS AND THEIR COMMITMENTS

<TABLE>
<CAPTION>
==================================================================================================================
              NAME                        ADDRESS AND FAX NUMBER               COMMITMENT          PERCENTAGE
                                                                                   $                    %
------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                           <C>                <C>
JPMorgan Chase Bank                125 London Wall                               33,000,000         5.789474
                                   London EC2Y 5AJ
                                   England
                                   Fax: 44 20 7777 4613
                                   Attention:  Morten Knudsen
------------------------------------------------------------------------------------------------------------------
Svenska Handelsbanken AB (publ)    Ostra Hamngatan 23                          90,000,000           15.789474
                                   SE-405 40 Goteborg
                                   Sweden
                                   Fax: 46 31 774 8308
                                   Attention:  RVIC STBNL 675
------------------------------------------------------------------------------------------------------------------
Nordea Bank Sverige                Ostra Hamngatan 16                         120,000,000           21.052632
AB (publ)                          SE-405 09 Goteborg
                                   Sweden
                                   Fax: 46 31 771 6470
                                   Attention:  NORDEA Shipping
                                   Offshore and Oil Services
------------------------------------------------------------------------------------------------------------------
HSBC Bank plc                      Transport Industries                        32,700,000           5.736842
                                   Corporate & Industrial Banking
                                   3rd Floor, 27-32 Poultry
                                   London EC2P 2BX
                                   England
                                   Fax:  44 20 7260 4495
                                   Attention:  Simon Deefholts
------------------------------------------------------------------------------------------------------------------
Landesbank     Schleswig-Holstein  Martensdamm 6                               32,700,000           5.736842
Girozentrale                       D-24103 Kiel
                                   Germany
                                   Fax:  49 431 900 1130
                                   Attention:  Shipping
                                   Department- Matthias Happich
------------------------------------------------------------------------------------------------------------------
The Governor and Company of the    2nd Floor, New Uberior House                32,700,000           5.736842
Bank of Scotland                   11 Earl Grey Street
                                   Edinburgh EH3 9BN
                                   Scotland
                                   Fax:  44 131 659 0387
                                   Attention:  Shipping Finance
------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      167
<PAGE>

<TABLE>
<CAPTION>
==================================================================================================================
              NAME                        ADDRESS AND FAX NUMBER               COMMITMENT          PERCENTAGE
                                                                                   $                    %
------------------------------------------------------------------------------------------------------------------
<S>                                <C>                                           <C>                <C>
Den norske Bank ASA                Stranden 21                                 32,700,000           5.736842
                                   N-0021 Oslo
                                   Norway
                                   Fax: 47 22 48 28 94
                                   Attention:  Credit
                                   Administration Shipping
------------------------------------------------------------------------------------------------------------------
Scotiabank Europe plc              Scotia House                                32,700,000           5.736842
                                   33 Finsbury Square
                                   London EC2A 1BB
                                   England
                                   Fax:  44 20 7826 5617
                                   Attention:  Graham Stark
------------------------------------------------------------------------------------------------------------------
Skandinaviska  Enskilda Banken AB  Ostra Hamngatan 24                          32,700,000           5.736842
(publ)                             S-405 04 Goteborg
                                   Sweden
                                   Fax:  46 31 15 14 50
                                   Attention:  PSF/Shipping
------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank N.V.                 P.O. Box 949                                32,700,000           5.736842
                                   3000 DD Rotterdam
                                   The Netherlands
                                   Fax:  31 10 402 5580
                                   Attention: Mr E J van Mastrigt
                                   And
                                   Fax: 31 10 402 4109
                                   Attention:  Mr P van der Have
------------------------------------------------------------------------------------------------------------------
Nedship Bank N.V.  acting through  P.O. Box 701,                               32,700,000           5.736842
Nedship Bank (Nordic)              5501 Bergen
                                   Norway
                                   Fax: 47 55 30 94 50
                                   Attention:  Mr Oyvind Holte/Mr Tom
                                   Elvoy
------------------------------------------------------------------------------------------------------------------
Citibank, N.A.                     33 Canada Square                            32,700,000           5.736842
                                   Canary Wharf
                                   London E1 5LB
                                   Fax: 44 20 7986 2762
                                   Attention: Simon Booth
------------------------------------------------------------------------------------------------------------------
Deutsche Bank AG                   Brandstwiete 1                              32,700,000           5.736842
In Hamburg                         D-20457 Hamburg
                                   Federal Republic of Germany
                                   Fax: 49 40 3701 4649
                                   Attention:  International Ship
                                   Financing, Carola Roth
==================================================================================================================
                                   TOTAL                                      570,000,000              100
==================================================================================================================
</TABLE>

                                      168
<PAGE>

                                   SCHEDULE 2

                               THE SHIPS - PART A

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------

            NAME                        SHIPOWNERS                           CLASSIFICATION
-----------------------------------------------------------------------------------------------------------
<S>                           <C>                              <C>
P O Aquitaine                 Stena Ferries Limited            LR + 100A1 Ro-Ro Passenger and Vehicle
(tbr Pride of aquitaine)                                       Ferry LMC UMS
-----------------------------------------------------------------------------------------------------------

Stena Clipper                 Stena Admiral Line Limited       ABS + A1 (E) +AMS+ACCU
-----------------------------------------------------------------------------------------------------------

Stena CLYDE                   Stenloyal Limited                DNV +1A1 Column Stabilised Drilling Unit
-----------------------------------------------------------------------------------------------------------

STENA DEE                     Stena Drilling Limited           DNV +1A1 Column Stabilised Drilling Unit
                                      DRILL
-----------------------------------------------------------------------------------------------------------

STENA DON                     Stena Don LLC                    DNV +1A1 Column Stabilised Unit, Drilling
                                                               Unit, Structure (N), DRILL (N), E0,
                                                               DYNPOS-AUTRO, CRANE, HELDK
-----------------------------------------------------------------------------------------------------------

STENA NAUTICA                 Stena Nautica Line Limited       BV I + HULL + MACH Ro-Ro Passenger Ship
                                                               Unrestricted Navigation Ice Class IB +
                                                               AUT-UMS
-----------------------------------------------------------------------------------------------------------

STENA SAGA                    Stena Rederi AB                  LR + 100A1 Ferry, Ice Class 1A Super,
                                                               +LMC, UMS, with descriptive note
                                                               ShipRight SCM
-----------------------------------------------------------------------------------------------------------

STENA SHIPPER                 Freehaven Ltd.                   GL +100A5 E1 Ro-Ro Ship Equipped for
                                                               Carriage of Containers
-----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
       CLASSIFICATION          OFFICIAL NO./CALL               FLAG
          SOCIETY                     SIGN
--------------------------------------------------------------------------------
<S>                           <C>                   <C>
Lloyds Register of Shipping   731221                Bermudan

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

American Bureau of Shipping   726099                Bahamian
--------------------------------------------------------------------------------

Det norske Veritas            376547                British
--------------------------------------------------------------------------------

Det norske Veritas            701160                British

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

Det norske Veritas            731309                Bermudan


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

Bureau Veritas                SCQU                  Swedish


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

Lloyds Register of Shipping   SLVH                  Swedish


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

Germanischer Lloyd            902333                British

--------------------------------------------------------------------------------
</TABLE>

                                      169
<PAGE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------

            NAME                        SHIPOWNERS                           CLASSIFICATION
-----------------------------------------------------------------------------------------------------------
<S>                           <C>                              <C>
STENA SPEY                    Stena HSD Limited                DNV +1A1 Column Stabilised Drilling
-----------------------------------------------------------------------------------------------------------

STENA Tay                     Stena Tay Limited                DNV +1A1 Column Stabilised Drilling Unit,
                                                               E0, HELDK DYNPOS-AUTR
-----------------------------------------------------------------------------------------------------------

STENA TENDER                  Stena Tender Line Limited        DNV +1A1 General Cargo Carrier Ro-Ro E0
-----------------------------------------------------------------------------------------------------------

STENA TIMER                   Stena Challenger Limited         DNV +1A1 General Cargo Carrier Ro-Ro E0
-----------------------------------------------------------------------------------------------------------

STENA TRAVELLER               Stena Rederi AB                  DNV +1A1 General Cargo Carrier Ro-Ro Car
                                                               Ferry A E0 ICE-1B
-----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
       CLASSIFICATION          OFFICIAL NO./CALL               FLAG
          SOCIETY                     SIGN
--------------------------------------------------------------------------------
<S>                           <C>                   <C>
Det norske Veritas            703396                British
--------------------------------------------------------------------------------

Det norske Veritas            731247                Bermudan

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

Det norske Veritas            720026                Isle of Man
--------------------------------------------------------------------------------

Det norske Veritas            718104                Isle of Man
--------------------------------------------------------------------------------

Det norske Veritas            SCQV                  Swedish

--------------------------------------------------------------------------------
</TABLE>

                                      170
<PAGE>

                               THE SHIPS - PART B

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------

            NAME                         SHIPOWNER                           CLASSIFICATION
----------------------------------------------------------------------------------------------------------
<S>                           <C>                              <C>
Stena Baltica                 Stena Line B.V.                  DNV+1A1 R280 Car Ferry A EO
----------------------------------------------------------------------------------------------------------

Stena Carisma                 Stena Line Scandinavia AB        DNV+1A1 HSLC RI Car Ferry A EO  ICS
----------------------------------------------------------------------------------------------------------

Stena Carrier                 Stena Line Shipholding B.V.      LR+100 A1 Ice Class 1A+LMC+ UMS
----------------------------------------------------------------------------------------------------------

Stena Danica                  Stena Line Scandinavia AB        DNV+1A1 Car Ferry A EO ICE-1B
----------------------------------------------------------------------------------------------------------

Stena Europe                  33 shares - Stena Line           DNV+1A1 Car Ferry A MCDK ICE- 1C
                              Shipholding B.V.
                              31 shares - Stena Line
                              Scandinavia AB
----------------------------------------------------------------------------------------------------------

Stena Freighter               Stena Line Scandinavia AB        LR+100 A1 Ice Class 1A +LMC+UMS
----------------------------------------------------------------------------------------------------------

Stena Germanica               Scandlines AB                    LR+100 A1 Car Ferry, Ice Class 2+LMC and
                                                               UMS
----------------------------------------------------------------------------------------------------------

Stena Gothica                 Stena Line Shipholding B.V.      DNV+1A1 MCDK EO
----------------------------------------------------------------------------------------------------------

Stena Scandinavica            Stena Line Scandinavia AB        LR+100 A1 Car Ferry, Ice Class 2+LMC and
                                                               UMS
----------------------------------------------------------------------------------------------------------

Stena Scanrail                Stena Line Scandinavia AB        BV 1 3/3 E Roll On Roll Off Deepsea ICE
                                                               III
----------------------------------------------------------------------------------------------------------

Stena Searider                Stena Line Scandinavia AB        DNV+1A1 Car and Train Ferry A EO ICE -1B
----------------------------------------------------------------------------------------------------------

Stena SeaTrader               Stena Line B.V.                  DNV+1A1 ICE- A
----------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
       CLASSIFICATION          OFFICIAL NO./CALL               FLAG
          SOCIETY                     SIGN
--------------------------------------------------------------------------------
<S>                           <C>                   <C>
Det norske Veritas            8000475               Bahamian
--------------------------------------------------------------------------------

Det norske Veritas            SGFV                  Swedish
--------------------------------------------------------------------------------

Lloyds Register of Shipping   SLUY                  Swedish
--------------------------------------------------------------------------------

Det norske Veritas            SKFH                  Swedish
--------------------------------------------------------------------------------

Det norske Veritas            905449                British



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

Lloyds Register of Shipping   SEPG                  Swedish
--------------------------------------------------------------------------------

Lloyds Register of Shipping   SKPZ                  Swedish

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

Det norske Veritas            SCQO                  Swedish
--------------------------------------------------------------------------------

Lloyds Register of Shipping   SLYH                  Swedish

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

Bureau Veritas                SLBM                  Swedish

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

Det norske Veritas            900102                British
--------------------------------------------------------------------------------

Det norske Veritas            904247                British
--------------------------------------------------------------------------------
</TABLE>

                                      171
<PAGE>

                                   SCHEDULE 3

                              COMMERCIAL DOCUMENTS

BAREBOAT CHARTERS MADE WITH STENA CHARTERERS

1     m.v. "STENA CLIPPER"     A charterparty by way of demise dated 15 November
                               1994 made between (1) Stena Admiral Line Limited
                               ("SALL") as owner and (2) Stena Ferries Limited
                               ("SFL") as charterer as amended by an addendum
                               no. 1 dated as of 15 November 1998 and an
                               addendum no. 2 dated as of 2 January 2002 each
                               made between (1) SALL and (2) SFL.

                               A BALTIME 1939 time charter dated 15 November
                               1994 made between (1) SFL as disponent owner and
                               (2) Stena Rederi AB ("SRAB") as time charterer as
                               amended by an addendum no. 1 dated as of 15
                               November 1998 and an addendum no. 2 dated as of 1
                               January 2002 each made between (1) SFL and (2)
                               SRAB.

2     m.v. "STENA SHIPPER"     A charterparty by way of demise dated 4 October
                               1994 made between (1) Stena Florida Line Limited
                               ("SFLL") as owner and (2) SFL as charterer as
                               amended by an addendum No.1 dated as of 14 March
                               1995 made between (1) SFLL and (2) SFL, as
                               further amended and novated by an addendum No.2
                               dated 16 December 1999 made between (1) SFLL, (2)
                               Orondo Limited ("ORONDO") and (3) SFL (so as to
                               constitute a charter between (1) Orondo as owner
                               and (2) SFL as charterer), as further amended by
                               an addendum No.3 dated as of 17 May 2000, an
                               addendum No.4 dated 14 November 2000 each made
                               between (1) Orondo and (2) SFL and as further
                               amended and novated by an addendum No.5 dated 20
                               December 2001 made between (1) Orondo, and (2)
                               SFL and (3) Freehaven Ltd. ("FREEHAVEN") (so as
                               to constitute a charter between (1) Freehaven as
                               owner and (2) SFL as charterer).

3     m.v. "STENA SAGA"        A BARECON 89 bareboat charter dated 19 June 1991
                               made between (1) SRAB as owner and (2) Sealink
                               U.K. Limited ("SEALINK") as charterer as amended
                               and novated by an addendum No.1 dated 3 March
                               1994 made between (1) SRAB, (2) Sealink (renamed
                               Stena Sealink Limited) and Stena Line AB ("SLAB")
                               (so as to constitute a charter between (1) SRAB
                               as owner and (2) SLAB as charterer), as further
                               amended by an addendum No.2 dated 13 April 1995
                               made between (1)

                                      172
<PAGE>

                               SRAB and (2) SLAB, as further amended by an
                               addendum No.3 dated 7 June 1995, an addendum No.4
                               dated 10 May 1996, an addendum No.5 dated 9 April
                               1997, an addendum No.6 dated 22 March 1999, each
                               between (1) SRAB and (2) SLAB, as further amended
                               and novated by an addendum No.7 dated 24
                               September 2001 made between (1) SRAB, (2) SLAB
                               (renamed Forvaltningsaktiebolaget Lastluckan AB
                               ("FL")) and (3) Stena Line Scandinavia AB
                               ("SLSAB") (so as to constitute a charter between
                               (1) SRAB as owner and (2) SLSAB as charterer) and
                               as further amended by an addendum No.8 dated 12
                               February 2002 made between (1) SRAB and (2)
                               SLSAB.

4     m.v. "STENA NAUTICA"     A BARECON 89 bareboat charter dated 15 October
                               1997 made between (1) Stena Nautica Line Limited
                               ("SNLL") as owner and (2) SLAB as charterer, as
                               amended by an addendum No.1 dated 26 March 1999
                               made between (1) SNLL and (2) SLAB, as amended
                               and novated by an addendum No.2 dated 28
                               September 2001 made between SNLL, (2) FL and (3)
                               SLSAB (so as to constitute a charter between (1)
                               SNLL as owner and (2) SLSAB as charterer), and as
                               further amended by an addendum No.3 dated 12
                               February 2002 made between (1) SNLL and (2)
                               SLSAB.

5     m.v. "STENA TRAVELLER"   A BARECON 89 bareboat charter dated 21 December
                               2001 made between (1) SRAB as owner and (2) SLSAB
                               as charterer.

6     m.v. "P O AQUITAINE"     A BARECON 89 bareboat charter dated 21 April 1999
                               made between (1) SFL as owner and (2) P&O Ferries
                               Limited (formerly P&O Stena Line Ltd.) as
                               charterer.

7     s.s.v. "STENA DON"       A bareboat charter dated 28 November 2001 made
                               between (1) Stena Don LLC as owner and (2) Stena
                               Don AS as charterer.

8     m.v. "STENA CARRIER"     A BARECON 89 bareboat charter dated 1 January
                               1992 made between (1) Stena Carrier Ltd ("SCL")
                               as owner and (2) SLAB as charterer as amended and
                               novated by addendum No.1 dated 31 March 1995 made
                               between (1) SCL, (2) Stena Empress Ltd ("SEL")
                               and (3) SLAB (so as to constitute a charter
                               between (1) SEL as owner and (2) SLAB as
                               charterer) as further amended and novated by an
                               addendum No.2 dated 20 December 1996 made between
                               (1) SEL, (2) Stena Line Shipholding B.V.
                               ("SLSHBV") and (3) SLAB (so as to constitute a
                               charter between (1) SLSHBV as owner and (2) SLAB
                               as charterer) as further amended by an addendum
                               No.3 dated 15 January 1997 made between (1)
                               SLSHBV and (2) SLAB and as further amended by an
                               addendum No.4 dated 15 January 1999, an addendum
                               No.5 dated 15 January 2000, an addendum No.6
                               dated 5 February 2001, each between (1) SLSHBV
                               and (2) SLAB, as further amended and novated by
                               an addendum No. 7 dated 28 September 2001 made
                               between (1) SLSHBV,

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<PAGE>

                               (2) SLAB and (3) SLSAB (so as constitute a
                               charter between (1) SLSHBV as owner and (2) SLSAB
                               as charterer) and as further amended by an
                               addendum No.8 dated 5 February 2002 made between
                               (1) SLSHBV and (2) SLSAB.

9     m.v. "STENA GOTHICA"     A BARECON 89 bareboat charter dated 15 October
                               1994 made between (1) Scandinavica Ltd as owner
                               and (2) Stena Line Scandinavia AB (formerly known
                               as Stena Line Service AB and subsequently merged
                               into SLAB on 1 January 1999) as charterer as
                               amended and novated by an addendum No.1 dated 31
                               March 1995 made between (1) Scandinavica Ltd (2)
                               SEL and (3) Stena Line Scandinavia AB (so as to
                               constitute a charter between (1) SEL as owner and
                               (2) Stena Line Scandinavia AB as charterer) as
                               further amended by an addendum No.2 dated 9
                               January 1996 between (1) SEL and (2) Stena Line
                               Scandinavia AB as further amended and novated by
                               an addendum No.3 dated 16 December 1996 made
                               between (1) SEL, (2) SLSHBV and (3) Stena Line
                               Scandinavia AB (so as to constitute a charter
                               between (1) SLSHBV as owner and (2) Stena Line
                               Scandinavia AB as charterer) as further amended
                               by an addendum No.4 dated 15 January 1997 and an
                               addendum No.5 dated 31 August 1998 each between
                               (1) SLSHBV and (2) Stena Line Scandinavia AB and
                               as further amended by an addendum No.6 dated 15
                               January 1999, an addendum No.7 dated 17 January
                               2000, an addendum No.8 dated 31 August 2000, an
                               addendum No.9 dated 5 February 2001 each between
                               (1) SLSHBV and (2) SLAB (as successor to Stena
                               Line Scandinavia AB), as further amended by an
                               addendum No.10 dated 17 September 2001 made
                               between (1) Stena Line Scandinavica AB and (2)
                               SLSHBV, as further amended and novated by an
                               addendum No.11 dated 28 September 2001 made
                               between (1) SLSHBV, (2) SLAB and (3) SLSAB (so as
                               to constitute a charter between (1) SLSHBV as
                               owner and (2) SLSAB as charterer), as further
                               amended by an addendum No.12 dated 5 February
                               2002 and an addendum No.13 dated 9 September
                               2002, each between (1) SLSHBV and (2) SLSAB.

10    m.v. "STENA GERMANICA"   A BARECON 89 bareboat charter dated 20 December
                               2000 between (1) Scandlines AB as owner and (2)
                               SLAB as charterer to be amended and novated on or
                               about the Availability Date by an addendum No. 1
                               dated 28 September 2001 made between (1)
                               Scandlines AB ("SCANDLINES"), (2) SLAB and (3)
                               SLSAB (so as to constitute a charter between (1)
                               Scandlines as owner and (2) SLSAB as charterer)
                               and as further amended by an addendum No.2 dated
                               5 February 2002 made between

                                      174
<PAGE>

                               (1) Scandlines and (2) SLSAB.

11    m.v. "STENA EUROPE"      A BARECON 89 bareboat charter dated 26 May 1997
                               between (1) SLSHBV as 33/64th owner and SLAB as
                               31/64th owner and (2) SLAB as charterer as
                               amended by an addendum dated 25 June 2001, as
                               further amended and novated by an addendum No. 2
                               dated 28 September 2001 made between (1) SLSHBV,
                               (2) SLAB and (3) SLSAB (so as to constitute a
                               charter between (1) SLSHBV as 33/64th owner and
                               SLSAB as 31/64th owner and (2) SLSAB as
                               charterer), as further amended and novated by an
                               addendum No.3 dated 11 October 2002 and made
                               between (1) SLSHBV, (2) SLSAB and (3) SLL (so as
                               to constitute a charter between (1) SLSHBV as
                               33/64th owner and SLSAB as 31/64th owner and (2)
                               SLL as charterer).

12    m.v. "STENA SEARIDER"    A BARECON 89 bareboat charter dated 25 September
                               2000 made between (1) SLAB as owner and (2) Stena
                               Line B.V. ("SLBV") as charterer as amended and
                               novated by an addendum No. 1 dated 28 September
                               2001 made between (1) SLAB, (2) SLBV and (3)
                               SLSAB (so as to constitute a charter between (1)
                               SLSAB as owner and (2) SLBV as charterer), as
                               further amended by an addendum No.2 dated 5
                               February 2001 made between (1) SLAB and (2) Stena
                               Line Limited ("SLL") and as further amended by an
                               addendum No.3 dated 5 February 2002 made between
                               (1) SLSAB and (2) SLBV.

13    m.v. "STENA BALTICA"     A BARECON 89 bareboat charter dated 9 June 1997
                               between (1) SLBV as owner and (2) SLL as
                               charterer as amended by an addendum No.1 dated 1
                               June 1999, an addendum No.2 dated 5 February 2001
                               and an addendum No.3 dated 28 September 2001 each
                               between (1) SLBV and (2) SLL and as amended and
                               novated by an addendum No.4 dated 11 October 2002
                               made between (1) SLBV, (2) SLL and (3) SLSAB (so
                               as to constitute a charter between (1) SLBV as
                               owner and (2) SLSAB as charterer).

                                      175
<PAGE>

                                   SCHEDULE 4

                                PRIOR SECURITIES

PART A - PRIOR MORTGAGES

1     The first priority Bahamian statutory ship mortgage dated 13 March 2002 on
      "Stena Baltica" made by Stena Line B.V. in favour of Svenska Handelsbanken
      AB (publ).

2     The first priority Swedish deed of mortgage no. 2294 dated 3 June 1998 on
      "stena Carisma" and the first priority pledge thereof dated 28 September
      2001 made by Stena Line Scandinavia AB in favour of Svenska Handelsbanken
      AB (publ).

3     The first priority Swedish deed of mortgage no. 1602 dated 4 May 2000 on
      "stena CarRier" and the first priority pledge thereof dated 28 September
      2001 made by Stena Line Shipholding B.V. in favour of Svenska
      Handelsbanken AB (publ).

4     The first priority Swedish deed of mortgage no. 2270 dated 3 June 1998 on
      "stena danica" and the first priority pledge thereof dated 28 September
      2001 made by Stena Line Scandinavia AB in favour of Svenska Handelsbanken
      AB (publ).

5     The first priority British statutory ship mortgage dated 27 February 2002
      in respect of 33/64 shares in "Stena Europe" made by Stena Line
      Shipholding B.V. in favour of Svenska Handelsbanken AB (publ).

6     The first priority British statutory ship mortgage dated 27 February 2002
      in respect of 31/64 shares in "Stena Europe" made by Stena Line
      Scandinavia AB in favour of Svenska Handelsbanken AB (publ).

7     The first priority Swedish deeds of mortgage nos. 4404 and 4405 dated 24
      August 1984 and the first priority Swedish deed of mortgage no. 266 dated
      27 January 1994 on "stena Freighter" and the first priority pledge thereof
      dated 28 September 2001 made by Stena Line Scandinavia AB in favour of
      Svenska Handelsbanken AB (publ).

8     The Stena Germanica Mortgage.

9     The first priority Swedish deeds of mortgage nos. 5302 and 5303 dated 5
      November 1991 on "stena gothica" and the first priority pledge thereof
      dated 28 September 2001 made by Stena Line Shipholding B.V. in favour of
      Svenska Handelsbanken AB (publ).

10    The first priority Swedish deed of mortgage no. 2290 dated 3 June 1998 on
      "stena scandinavica" and the first priority pledge thereof dated 28
      September 2001 made by Stena Line Scandinavia AB in favour of Svenska
      Handelsbanken AB (publ).

11    The first priority Swedish deeds of mortgage nos. 3121 and 6723 dated 18
      May 1984 and 3 November 1989 respectively on "stena scanrail" and the
      first priority pledge thereof dated 28 September 2001 made by Stena Line
      Scandinavia AB in favour of Svenska Handelsbanken AB (publ).

12    The first priority British statutory ship mortgage dated 28 September 2001
      on "Stena searider" made by Stena Line Scandinavia AB in favour of Svenska
      Handelsbanken AB (publ).

                                      176
<PAGE>

13    The first priority British statutory ship mortgage dated 28 September 2001
      on "Stena seatrader" made by Stena Line B.V. in favour of Svenska
      Handelsbanken AB (publ).

14    The first priority Swedish deed of mortgage no. 3454 dated 27 September
      2001 on "Linkspan i" and the first priority pledge thereof dated 28
      September 2001 made by Stena Line Scandinavia AB in favour of Svenska
      Handelsbanken AB (publ).

15    The first priority Swedish deed of mortgage no. 3458 dated 27 September
      2001 on "Linkspan ii" and the first priority pledge thereof dated 28
      September 2001 made by Stena Line Scandinavia AB in favour of Svenska
      Handelsbanken AB (publ).

16    The first priority legal charge over Holyhead Port dated 28 September 2001
      made by Stena Line Ports Limited in favour of Svenska Handelsbanken AB
      (publ).

17    The Scots law first priority standard security over Stranraer Port dated
      28 September 2001 made by Stena Line Ports Limited in favour of Svenska
      Handelsbanken AB (publ).

PART B - PRIOR DEEDS OF COVENANT

18    The first priority deed of covenant dated 28 September 2001 (as amended by
      a supplement to the deed of covenant dated 13 March 2002) made by Stena
      Line B.V. in favour of Svenska Handelsbanken AB (publ) in respect of
      "Stena Baltica".

19    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena Carisma", "Linkspan i" and "Linkspan ii".

20    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Shipholding B.V. in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena CarRier".

21    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena danica".

22    The first priority deed of covenant dated 28 September 2001 (as amended by
      a supplement to the deed of covenant dated 27 February 2002) made by Stena
      Line Shipholding B.V. in favour of Svenska Handelsbanken AB (publ) in
      respect of "Stena Europe".

23    The first priority deed of covenant dated 28 September 2001 (as amended by
      a supplement to the deed of covenant dated 27 February 2002) made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "Stena Europe".

24    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena Freighter".

25    The Stena Germanica Deed of Covenant.

                                      177
<PAGE>

26    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Shipholding B.V. in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena gothica".

27    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena scandinavica".

28    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "stena scanrail".

29    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line Scandinavia AB in favour of Svenska Handelsbanken AB (publ) in
      respect of "Stena searider".

30    The first priority deed of covenant dated 28 September 2001 made by Stena
      Line B.V. in favour of Svenska Handelsbanken AB (publ) in respect of
      "Stena seatrader".

PART C - PRIOR CHARTERER'S INSURANCE ASSIGNMENTS

31    The deed of assignment of insurances and requisition compensation dated 28
      September 2001 made by Stena Line Scandinavia AB in favour of Svenska
      Handelsbanken AB (publ).

32    The deed of assignment of insurances and requisition compensation dated 28
      September 2001 made by Stena Line B.V. in favour of Svenska Handelsbanken
      AB (publ).

33    The deed of assignment of insurances and requisition compensation dated 28
      September 2001 made by Stena Line Limited in favour of Svenska
      Handelsbanken AB (publ).

                                      178
<PAGE>

                                   SCHEDULE 5

                            EXISTING BANK GUARANTEES

Guarantee No:              9
Beneficiary:               Dalian Shipyard
Amount:                    $8,700,000
Valid from:                22 June 2001
Expiry Date:               15 January 2004

Guarantee No:              10
Beneficiary:               Dalian Shipyard
Amount:                    $8,700,000
Valid from:                22 June 2001
Expiry Date:               5 May 2004

Guarantee No:              11
Beneficiary:               Lloyds Capital Leasing Limited
Amount:                    (pound)8,212,255.11
Valid from:                1 November 2001
Expiry Date:               31 October 2003

Guarantee No:              12
Beneficiary:               Commerzbank AG, Kiel
Amount:                    (euro)1,044,000
Valid from:                28 September 2001
Expiry Date:               30 June 2003

Guarantee No:              17
Beneficiary:               HSBC Bank plc
Amount:                    (pound)776,000
Valid from:                5 October 2001
Expiry Date:               1 October 2003 (but renews automatically for a
                           further 12 months on each expiry date unless 60 days
                           prior notice to terminate is given by the Existing
                           Guarantee Provider thereunder)

Guarantee No:              18
Beneficiary:               Bank Handlowy w Warzawie
Amount:                    PLN250,000
Valid from:                5 October 2001
Expiry Date:               30 May 2003

Guarantee No:              21
Beneficiary:               ING Bank N.V., Amsterdam
Amount:                    (euro)147,585
Valid from:                31 July 2002
Expiry Date:               11 August 2003 (but renews automatically for a
                           further 12 months on each expiry date unless 60 days
                           prior notice to terminate is given by the Existing
                           Guarantee Provider thereunder)

                                      179
<PAGE>

Guarantee No:              22
Beneficiary:               Association of British Travel Agents Ltd.
Amount:                    (pound)758,500
Valid from:                1 October 2002
Expiry Date:               31 March 2004

Guarantee No:              23
Beneficiary:               Civil Aviation Authority
Amount:                    (pound)71,250          (Principal Bond)
Valid from:                26 September 2002
Expiry Date:               31 March 2004

Guarantee No:              24
Beneficiary:               Civil Aviation Authority
Amount:                    (pound)71,250          (Supplementary Bond)
Valid from:                26 September 2002
Expiry Date:               31 March 2004

                                      180
<PAGE>

                                   SCHEDULE 6

                             FORM OF DRAWDOWN NOTICE



To:      Svenska Handelsbanken AB (publ)
         SE-405 40 Goteborg
         Sweden
         Attention: RVIC STBNL 675
                                                                          o 20 o

                                U.S.$600,000,000
                    Facility Agreement dated 6 November 2002


We refer to the above Facility Agreement and hereby give you notice that we wish
to draw an Advance of $o on o 20o [and select a Term in respect thereof of o
months]. The funds should be credited to [NAME AND NUMBER OF ACCOUNT] with [NEW
YORK CITY].

We confirm that the borrowing to be effected by such Advance will be within our
corporate powers, has been validly authorised by appropriate corporate action
and will not cause any limit on our borrowings (whether imposed by statute,
regulation, agreement or otherwise) to be exceeded.

Words and expressions defined in the Facility Agreement shall have the same
meanings where used herein.

                              For and on behalf of
                            STENA INTERNATIONAL B.V.


                             ......................

                                      181
<PAGE>

                                   SCHEDULE 7

                         FORM OF BANK GUARANTEE REQUEST



To:      Svenska Handelsbanken AB (publ)
         SE-405 40 Goteborg
         Sweden
         Attention: RVIC STBNL 675
                                                                          o 20 o

                                U.S.$600,000,000
                    Facility Agreement dated 6 November 2002


We refer to the above Facility Agreement and hereby request that the New
Guarantee Provider [agrees to extend the Expiry Date of [DESCRIBE RELEVANT BANK
GUARANTEE] from o to o] [issues a Bank Guarantee in the form attached hereto in
favour of [INSERT NAME OF BENEFICIARY] on o 20o].

[This Bank Guarantee should only be [issued/extended] on our further written
request.]

Words and expressions defined in the Facility Agreement shall have the same
meanings where used herein.

                              For and on behalf of
                            STENA INTERNATIONAL B.V.


                             ......................

                                      182
<PAGE>

                                   SCHEDULE 8

                   CONDITIONS PRECEDENT/STENA TAY REQUIREMENTS

                      (referred to in Clauses 18.1 and 9.9)

PART 1 - CONDITIONS PRECEDENT

1        FACILITY AGREEMENT, AGREED FORM CERTIFICATE AND GUARANTEES

1.1      Originals of this Agreement and the Agreed Form Certificate executed by
         all of the parties thereto (in sufficient copies so that each Bank will
         be able to retain one original for itself).

1.2      Original Shipowner's Guarantees executed by each of the Shipowners
         (other than Stena Rederi AB, Stena Line Scandinavia, Stena Tay Limited
         and Scandlines).

1.3      An original Port Owner's Guarantee executed by Stena Line Ports.

2        THE SHIPS AND LINKSPANS

2.1      Such evidence as the Agent may require in respect of each Ship (other
         than m.v. "STENA TAY") that such Ship and, where appropriate, each of
         its associated Linkspans is:-

         (A)    registered in the sole name of the relevant Shipowner shown in
                Schedule 2 free from all Liens except for Permitted Ship Liens
                and, where relevant, Liens created by any Prior Security
                Document;

         (B)    classified 1A1 with its Classification Society;

         (C)    technically managed by its Approved Manager (if any); and

         (D)    (together with its operator) compliant with the requirements of
                the ISM Code.

2.2      Written confirmation from the insurance brokers and the managers of any
         protection and indemnity or war risks association through whom any
         Insurances of a Ship or Linkspan (other than m.v. "STENA TAY") have
         been placed that (i) they will each issue a letter of undertaking in a
         form acceptable to the Agent upon receipt of the Notice(s) of
         Assignment of Insurances relating to such Ship or Linkspan and (ii)
         that they have not received notice of any prior assignment of such
         Insurances other than, where relevant, pursuant to a Prior Security
         Document or an assignment securing the SIBV $500m Facility.

2.3      Originals of the Security Documents to be entered into in respect of
         each Ship and Linkspan (other than m.v. "STENA TAY") duly executed by
         the Security Parties which are party thereto together with all relevant
         notices, acknowledgements and other ancillary documents to be executed
         thereunder or pursuant thereto, namely:-

         (A)    in the case of m.v.'s "STENA NAUTICA", "STENA SAGA" AND "STENA
                TRAVELLER":-

                (i)    first priority instruments of pledge in the form set out
                       in Schedule 5 to the Agreed Form Certificate executed by
                       the relevant Shipowner in respect of

                                      183
<PAGE>

                       the Swedish law ship mortgages thereon registered or to
                       be registered against each of the above Ships in the
                       following amounts:-

                       SHIP                                               AMOUNT

                       "STENA NAUTICA"                               $22,000,000
                       "STENA SAGA"                                 $109,000,000
                       "STENA TRAVELLER"                             $45,000,000

                (ii)   the original mortgage deeds as referred to in (i) above
                       in respect of each of the above Ships; and

                (iii)  a Deed of Covenant and Notices of Assignment of
                       Insurances in the form of Schedule 1 thereto each
                       executed by the relevant Shipowner in respect thereof;

         (B)    in the case of m.v.'s "P O AQUITAINE", "STENA CLIPPER", "STENA
                CLYDE", "STENA DEE", "STENA DON", "STENA SHIPPER", "STENA SPEY",
                "STENA TENDER" AND "STENA TIMER":-

                (i)    a first priority statutory ship mortgage thereon
                       incorporating the text set out in Schedule 3 to the
                       Agreed Form Certificate executed by the relevant
                       Shipowner;

                (ii)   a Deed of Covenant and Notices of Assignment of
                       Insurances in the form of Schedule 1 thereto executed by
                       the relevant Shipowner in respect thereof;

         (C)    in the case of m.v.'s "STENA DANICA", "STENA SCANDINAVICA",
                "STENA FREIGHTER", "STENA SCANRAIL", "STENA CARRIER", "STENA
                CARISMA", "LINKSPAN I", "LINKSPAN II" AND "STENA GOTHICA":-

                (i)    second priority instruments of pledge in the form set out
                       in Schedule 6 to the Agreed Form Certificate executed by
                       the relevant Shipowner in respect of the Swedish law ship
                       mortgages thereon registered or to be registered against
                       each of the above Ships and Linkspans in the following
                       amounts:-

                       SHIP/LINKSPAN                                      AMOUNT

                       "STENA DANICA"                                $57,000,000
                       "STENA SCANDINAVICA"                         $115,000,000
                       "STENA FREIGHTER"                             $12,570,000
                       "STENA SCANRAIL"                               $8,000,000
                       "STENA CARISMA"                               $62,500,000
                       "LINKSPAN I"                                   $4,000,000
                       "LINKSPAN II"                                  $3,000,000
                       "STENA CARRIER"                                $8,500,000
                       "STENA GOTHICA"                               $14,437,500

                (ii)   a Deed of Covenant and Notices of Assignment of
                       Insurances in the form of Schedule 1 thereto each
                       executed by the relevant Shipowner in respect thereof;

                                      184
<PAGE>

         (D)    in the case of m.v.'s "STENA EUROPE", "STENA SEARIDER", "STENA
                SEATRADER" AND "STENA BALTICA":-

                (i)    a second priority statutory ship mortgage thereon
                       incorporating the text set out in Schedule 4 to the
                       Agreed Form Certificate executed by the relevant
                       Shipowner;

                (ii)   a Deed of Covenant and Notices of Assignment of
                       Insurances in the form of Schedule 1 thereto executed by
                       the relevant Shipowner in respect thereof;

         (E)    in the case of m.v. "STENA GERMANICA":-

                (i)    the Stena Germanica Assignment;

                (ii)   the notice of assignment in the form of Schedule 1 to the
                       Stena Germanica Assignment executed by the Borrower and
                       the acknowledgement thereof in the form of Schedule 2 to
                       the Stena Germanica Assignment executed by Scandlines;

                (iii)  the notice of assignment in the form of Schedule 3 to the
                       Stena Germanica Assignment executed by the Borrower and
                       the acknowledgement thereof in the form of Schedule 4 to
                       the Stena Germanica Assignment executed by Stena Line
                       Scandinavia;

                (iv)   the Notice of Assignment of Insurances in the form of
                       Schedule 5 to the Stena Germanica Assignment executed by
                       the Borrower;

         (F)    in the case of each of the Mortgaged Ships and Mortgaged
                Linkspans (other than m.v. "STENA TAY"):-

                (i)    the Charterer's Insurance Assignment (if any) executed by
                       any Stena Charterer of such Ship or Linkspan;

                (ii)   the Charterer's Subordination Undertaking (if any)
                       executed by any Stena Charterer of such Ship or Linkspan;

                (iii)  the Manager's Subordination Undertaking (if any) executed
                       by any Approved Manager of such Ship or Linkspan.

2.4      In the case of each Ship and Linkspan (other than m.v. "STENA
         GERMANICA" and m.v. "STENA TAY"), evidence that the relevant mortgage
         in favour of the Security Agent on such Ship or Linkspan has been
         registered against such Ship or Linkspan at the appropriate ship
         registry with first priority in the case of the Ships referred to in
         paragraphs (A) and (B) above and with second priority, subject only to
         the Prior Mortgages, in the case of the Ships and Linkspans referred to
         in paragraphs (C) and (D) above.

2.5      In the case of m.v. "STENA GERMANICA", evidence that the Stena
         Germanica Mortgage is registered at the appropriate ship registry with
         first priority.

                                      185
<PAGE>

3        HOLYHEAD PORT

3.1      Save for the Prior Mortgage relating thereto, a clear H.M. Land
         Registry search in favour of the Security Agent against such part of
         Holyhead Port as is registered or is in the course of registration,
         with priority expiring no earlier than twenty eight (28) days after the
         Availability Date.

3.2      An original of the Holyhead Charge executed by Stena Line Ports.

3.3      A certificate of title in respect of Holyhead Port (including details
         of the insurances of the relevant port) in form and substance
         acceptable to the Agent.

3.4      Confirmation in writing from Svenska Handelsbanken AB (publ) as chargee
         under the Prior Mortgage relating to Holyhead Port that it consents to
         the Holyhead Charge.

4        STRANRAER PORT

4.1      Save for the Prior Mortgage relating thereto, a clear search in the
         property register and in the computerised presentment book in respect
         of Stranraer Port to be continued to a date twenty two (22) days after
         the date of recording of the Stranraer Charge and a clear search in the
         personal register in respect of Stena Line Ports.

4.2      An original of the Stranraer Charge executed by Stena Line Ports.

4.3      A certificate of title in respect of Stranraer Port (including details
         of the insurances of the relevant port) in form and substance
         acceptable to the Agent.

4.4      Confirmation in writing from Svenska Handelsbanken AB (publ) as chargee
         under the Prior Mortgage relating to Stranraer Port that it consents to
         the Stranraer Charge.

5        CASH COLLATERAL ACCOUNTS

5.1      Evidence that the Borrower has opened Cash Collateral Accounts with the
         Agent in Dollars, Euro, Pounds Sterling and Polish Zlotych.

5.2      An original Cash Collateral Account Pledge executed by the Borrower in
         respect of the accounts referred to in paragraph 5.1 above.

6        CONSTITUTIONAL DOCUMENTS

         Certified copies of the Certificate of Incorporation and Memorandum and
         Articles of Association or equivalent constitutive documents of the
         Borrower and each other Security Party.

7        CORPORATE AUTHORISATIONS

7.1      Certified copies of resolutions of each Security Party approving the
         Security Documents to which such Security Party is a party and
         approving the transactions contemplated thereby and authorising the
         execution of such documents by an officer or attorney of the relevant
         Security Party.

7.2      Original or certified copies of the powers of attorney, if any, issued
         pursuant to the resolutions referred to in paragraph 6.1 above.

                                      186
<PAGE>

8        CERTIFICATE OF INCUMBENCY

         Certified copies of a certificate of incumbency or extract from the
         commercial register in respect of the Borrower and each other Security
         Party.

9        CONSENTS AND APPROVALS

         Such evidence as the Agent may require that all such consents have been
         obtained as may be required from any authority by each of the Borrower
         and each other Security Party for the execution of and performance by
         them of their respective obligations under those of the Security
         Documents to which they are respectively a party.

10       FEES

10.1     The agency fee letter agreement referred to in Clause 10.1 executed by
         the Borrower, Stena AB and Svenska Handelsbanken AB (publ) as Agent and
         Security Agent.

10.2     Evidence that such fees referred to in Clause 10 as are payable on or
         before the Availability Date have been received by the Agent.

11       INSURANCE OPINION
         An opinion on the insurances relating to all of the Ships, the
         Linkspans and the Ports by HSBC Insurance Brokers Limited dated not
         more than thirty (30) days before the Availability Date, such report to
         be in form and substance acceptable to the Agent.

12       LEGAL OPINIONS

         Legal opinions in form and substance acceptable to the Agent (or
         confirmation satisfactory to the Agent that such legal opinions will be
         issued in form and substance acceptable to it) from:-

         (A)    Messrs. Stephenson Harwood concerning such matters of English
                law as the Agent may reasonably require;

         (B)    Messrs. Mannheimer Swartling concerning such matters of Swedish
                law as the Agent may reasonably require;

         (C)    Messrs. Loyens & Loeff concerning such matters of Netherlands
                law as the Agent may reasonably require;

         (D)    Messrs. Wright, Johnston & Mackenzie concerning such matters of
                Scottish law as the Agent may reasonably require;

         (E)    Messrs. Dickinson Cruickshank & Co. concerning such matters of
                Manx law as the Agent may reasonably require;

         (F)    Messrs. Conyers Dill & Pearman concerning such matters of
                Bermudan law as the Agent may reasonably require;

         (G)    Messrs. Maples & Calder concerning such matters of Cayman law as
                the Agent may necessary require; and

                                      187
<PAGE>

         (H)    Messrs Simonsen F0yen Advokatfirma DA concerning such matters of
                Norwegian law as the Agent may reasonably require.

13       VALUATIONS

         Valuations of the Mortgaged Ships and Mortgaged Linkspans as at 30 June
         2002 or any later date, such valuations to be determined in accordance
         with Clause 9.4(G).

14       FINANCIAL CONDITION

14.1     Evidence that as at 30 June 2002:-

         (A)    the aggregate of (i) the Consolidated Current Assets and (ii)
                Available Facilities was at least one hundred and twenty five
                per cent (125%) of the Consolidated Current Liabilities; and

         (B)    the aggregate of (i) Consolidated Liquid Assets and (ii)
                Available Facilities was at least $50,000,000.

14.2     The Free Net Worth Compliance Certificate required to be produced under
         Clause 14.2(F) evidencing that as at 30 June 2002 the Free Net Worth
         was at least $850,000,000.

15       PROCESS AGENT

         Written confirmation from Stena (UK) Limited that it will act as the
         process agent for service of process in England of the Borrower and
         each other Security Party (other than Stena Tay Limited).

16       STENA GERMANICA DOCUMENTS

16.1     A certified copy of the Stena Germanica Loan Agreement as amended and
         transferred out of the name of Stena Line into the name of the Borrower
         as lender to Scandlines thereunder, such agreement to be on terms
         whereby the principal loan amount outstanding thereunder is $52,000,000
         and the repayment date thereof falls after the Termination Date
         hereunder.

16.2     Certified copies of the Stena Germanica Mortgage and the Stena
         Germanica Deed of Covenants together with certified copies of the
         agreement or agreements by which such documents have been assigned from
         Stena Line to the Borrower (including all appropriate notices and
         acknowledges of assignment given to and/or by Scandlines and Stena Line
         Scandinavia), all such documents to be in form and substance acceptable
         to the Agent.

16.3     Certified copies of the Stena Germanica Charterer's Insurance
         Assignment and the Stena Germanica Charterer's Subordination
         Undertaking.

16.4     A certified copy of the Stena Line Asset Purchase Agreement.

17       COMMERCIAL DOCUMENTS

17.1     Certified copies of the Commercial Documents (save those if any,
         relating specifically to m.v. "STENA TAY").

                                      188
<PAGE>

18       CANCELLATION OF EXISTING FACILITIES

18.1     Evidence that, simultaneously with drawdown of the first Advance, all
         outstandings in respect of the SIBV $500m Facility will be reduced to
         zero and such facility finally and irrevocably cancelled and that at
         that time all of the securities securing such facility will be finally
         and unconditionally released and discharged.

18.2     Evidence that the (euro)200,000,000 364 day unsecured revolving credit
         facility made available to Stena AB pursuant to the facility agreement
         dated 25 September 2001 made between (1) Stena AB as borrower, (2) the
         banks and financial institution defined therein as "Banks" as lenders,
         (3) the Co-Arrangers as arrangers and (4) Svenska Handelsbanken AB
         (publ) as agent has expired or been cancelled and that all outstandings
         thereunder (if any) have been repaid in full.

19       INTERCREDITOR AGREEMENT

         An original of the SIBV $275m Facility Intercreditor Agreement executed
         by each of the parties thereto.

20       NOTICE OF PREPAYMENT OF STENA TAY NOTES

         Evidence that Stena Tay Limited has given thirty (30) days irrevocable
         notice in writing to prepay all of the Stena Tay Notes in accordance
         with the Stena Tay Note Agreement.

                                      189
<PAGE>

PART 2 - STENA TAY REQUIREMENTS

1        SHIPOWNER'S GUARANTEE

         An original Shipowner's Guarantee executed by Stena Tay Limited.

2        M.V. "STENA TAY"

         2.1 Such evidence as the Agent may require in respect of m.v. "STENA
         TAY" that such Ship is:-

         (A)    registered in the sole name of Stena Tay Limited free from all
                Liens except for Permitted Ship Liens;

         (B)    classified 1A1 with its Classification Society;

         (C)    technically managed by its Approved Manager (if any); and

         (D)    (together with its operator) compliant with the requirements of
                the ISM Code.

2.2      Written confirmation from the insurance brokers and the managers of any
         protection and indemnity or war risks association through whom any
         Insurances of m.v. "STENA TAY" have been placed that (i) they will each
         issue a letter of undertaking in a form acceptable to the Agent upon
         receipt of the Notice(s) of Assignment of Insurances relating to such
         Ship and (ii) that they have not received notice of any prior
         assignment of such Insurances other than pursuant to an assignment
         securing the Stena Tay Notes.

2.3      Originals of the Security Documents to be entered into in respect m.v.
         "STENA TAY" duly executed by the Security Parties which are party
         thereto together with all relevant notices, acknowledgements and other
         ancillary documents to be executed thereunder or pursuant thereto,
         namely:-

         (A)    a first priority statutory ship mortgage thereon incorporating
                the text set out in Schedule 3 to the Agreed Form Certificate
                executed by Stena Tay Limited;

         (B)    a Deed of Covenant and Notices of Assignment of Insurances in
                the form of Schedule 1 thereto executed by Stena Tay Limited in
                respect thereof;

         (C)    the Charterer's Insurance Assignment (if any) executed by any
                Stena Charterer of such Ship;

         (D)    the Charterer's Subordination Undertaking (if any) executed by
                any Stena Charterer of such Ship;

         (E)    the Manager's Subordination Undertaking (if any) executed by
                any Approved Manager of such Ship.

2.4      Evidence that the relevant mortgage in favour of the Security Agent
         m.v. "STENA TAY" has been registered against such Ship at the
         appropriate ship registry with first priority.

3        CONSTITUTIONAL DOCUMENTS

         Certified copies of the Certificate of Incorporation and Memorandum and
         Articles of Association or equivalent constitutive documents of Stena
         Tay Limited.

                                      190
<PAGE>

4        CORPORATE AUTHORISATIONS

4.1      Certified copies of resolutions of Stena Tay Limited approving the
         Security Documents to which it is a party and approving the
         transactions contemplated thereby and authorising the execution of such
         documents by an officer or attorney of Stena Tay Limited.

4.2      Original or certified copies of the powers of attorney, if any, issued
         pursuant to the resolutions referred to in paragraph 4.1 above.

5        CERTIFICATE OF INCUMBENCY

         Certified copies of a certificate of incumbency or extract from the
         commercial register in respect of Stena Tay Limited.

6        CONSENTS AND APPROVALS

         Such evidence as the Agent may require that all such consents have been
         obtained as may be required from any authority by Stena Tay Limited for
         the execution of and performance by it of its obligations under those
         of the Security Documents to which it is a party.

7        LEGAL OPINIONS

         Legal opinions in form and substance acceptable to the Agent (or
         confirmation satisfactory to the Agent that such legal opinions will be
         issued in form and substance acceptable to it) from such of the law
         firms mentioned in paragraph 12, Part 1 of this Schedule 8 as the Agent
         may reasonably require, in each case relating to Stena Tay Limited,
         m.v. "STENA TAY" and/or the Security Documents relating thereto.

8        PROCESS AGENT

         Written confirmation from Stena (UK) Limited that it will act as the
         process agent for service of process in England of Stena Tay Limited.

9        COMMERCIAL DOCUMENTS

         Certified copies of the Commercial Documents, if any, relating
         specifically to m.v. "STENA TAY".

                                      191
<PAGE>

                                   SCHEDULE 9

                          FORM OF TRANSFER CERTIFICATE
                          (referred to in Clause 24.3)

                              Transfer Certificate

Banks are advised not to employ Transfer Certificates or otherwise to assign or
transfer interests in the Facility Agreement without further ensuring that the
transaction complies with all applicable laws and regulations, including the
Financial Services Act 1986 and regulations made thereunder and similar statutes
which may be in force in other jurisdictions

To:               Svenska Handelsbanken AB (publ), as agent on its own behalf
                  and for and on behalf of the Borrower, the Security Agent, the
                  Issuing Banks, the Standby Lender, the Banks, the Co-Arrangers
                  and Stena AB defined in the Facility Agreement referred to
                  below.

Attention:        RVIC STBNL 675
                                                                          o 20 o

This certificate ("TRANSFER CERTIFICATE") relates to a US$600,000,000 facility
agreement dated 6 November 2002 (as amended, novated and/or restated from time
to time the "FACILITY AGREEMENT") and made between (1) Stena International B.V.
(the "BORROWER"), (2) J. P. Morgan plc, Nordea Bank Sverige AB (publ) and
Svenska Handelsbanken AB (publ) as Co-Arrangers, (3) the banks and financial
institutions defined therein as banks (the "BANKS"), (4) Nordea Bank Sverige AB
(publ) and JPMorgan Chase Bank as Issuing Banks, (5) Svenska Handelsbanken AB
(publ) as Standby Lender, (6) Svenska Handelsbanken AB (publ) as Agent, (7)
Svenska Handelsbanken AB (publ) as Security Agent and (8) Stena AB (publ.) as
guarantor for a facility of up to $600,000,000. Terms defined in the Facility
Agreement shall, unless otherwise defined herein, have the same meanings herein
as therein.

In this Certificate:

the "TRANSFEROR" means [FULL NAME] of [LENDING OFFICE]; and

the "TRANSFEREE" means [FULL NAME] of [LENDING OFFICE].

1        The Transferor as beneficial owner assigns to the Transferee absolutely
         all rights and interests (present, future or contingent) which the
         Transferor has as Bank under or by virtue of the Facility Agreement and
         all the Security Documents in relation to [ ] per centum ([ ]%) of the
         Outstandings of the Transferor (or its predecessors in title) which are
         set out below:-

         DATE OF CONTRIBUTION               AMOUNT                 MATURITY DATE



         OUTSTANDING GUARANTEE AMOUNTS


                                      192
<PAGE>

2        By virtue of this Transfer Certificate and Clause 24 of the Facility
         Agreement, the Transferor is discharged [entirely from its Available
         Commitment which amounts to $[        ]] [from [    per centum ([   ]%)
         of its Available Commitment, which percentage represents $[       ]].

3        [The Transferee acknowledges that the Contribution of the Transferor
         referred to in Clause 1 above relates to Advances having Maturity Dates
         which fall after the date hereof which have been funded as to its
         relevant portion by the Transferor and in respect of which the
         Transferor has incurred and continues to incur funding costs at an
         annual rate of interest per annum approximate to the relevant rate of
         LIBOR for each such Advance as determined by the Agent prior to the
         drawdown thereof. In consider of the Transferor agreeing to execute
         this Transfer Certificate in favour of the Transferee, the Transferee
         undertakes that upon the Maturity Date of each such Advance, the
         Transferee will pay to the Transferor a sum in Dollars for value on
         such Maturity Date equal to the aggregate of:-

         (A)    the amount of principal repaid to the Transferee under the
                Facility Agreement in respect of the relevant portion of such
                Advance transferred by the Transferor to the Transferee
                hereunder;

         (B)    the amount of all interest earned and received by the Transferee
                under the Facility Agreement in respect of the relevant portion
                of such Advance transferred by the Transferor to the Transferee
                hereunder which is attributable to LIBOR (i.e. so that it
                excludes that part of such interest which is attributable to the
                Margin); and

         (C)    the amount of all interest earned and received by the Transferee
                under the Facility Agreement in respect of the relevant portion
                of such Advance transferred by the Transferor to the Transferee
                hereunder which is earned during the period from its drawdown
                date up to (but not including) the date of this Transfer
                Certificate and which is attributable to the Margin.

         By its execution and delivery of this Transfer Certificate the
         Transferee hereby irrevocably and unconditionally authorises and
         instructs the Agent to effect on its behalf the payments to be made to
         the Transferor as referred to in this Clause from the corresponding
         payments of interest and repayment of principal received by it on
         behalf of the Banks under the Facility Agreement.]

4        The Transferee hereby requests the Borrower, the Agent, the Security
         Agent, the Issuing Banks, the Standby Lender, the Banks and Stena AB to
         accept the executed copies of this Transfer Certificate as being
         delivered pursuant to and for the purposes of Clause 24.3 of the
         Facility Agreement so as to take effect in accordance with the terms
         thereof on [DATE OF TRANSFER].

5        The Transferee:-

         (A)    confirms that it has received a copy of the Facility Agreement
                and the Security Documents together with such other documents
                and information as it has required in connection with the
                transaction contemplated thereby;

         (B)    confirms that it has not relied and will not hereafter rely on
                the Transferor, the Agent or the Security Agent to check or
                enquire on its behalf into the legality, validity,
                effectiveness, adequacy, accuracy or completeness of the
                Facility

                                      193
<PAGE>

                Agreement, any of the Security Documents or any such documents
                or information;

         (C)    agrees that it has not relied and will not rely on the
                Transferor, the Agent, the Security Agent, the Issuing Banks,
                the Standby Lender, the Co-Arrangers or the Banks to assess or
                keep under review on its behalf the financial condition,
                creditworthiness, condition, affairs, status or nature of the
                Borrower or any other Security Party (save as otherwise
                expressly provided therein);

         (D)    warrants that it has power and authority to become a party to
                the Facility Agreement and has taken all necessary action to
                authorise execution of this Transfer Certificate and to obtain
                all necessary approvals and consents to the assumption of its
                obligations under the Facility Agreement and the Security
                Documents; and

         (E)    if not already a Bank, appoints the Agent to act as its agent
                and the Security Agent to act as its trustee as provided in the
                Facility Agreement and the Security Documents and agrees to be
                bound by the terms of the Facility Agreement.

6        The Transferor:-

         (A)    warrants to the Transferee that it has full power to enter into
                this Transfer Certificate and has taken all corporate action
                necessary to authorise it to do so;

         (B)    warrants to the Transferee that this Transfer Certificate is
                binding on the Transferor under the laws of England, the country
                in which the Transferor is incorporated and the country in which
                its lending office is located; and

         (C)    agrees that it will, at its own expense, execute any documents
                which the Transferee reasonably requests for perfecting in any
                relevant jurisdiction the Transferee's title under this Transfer
                Certificate or for a similar purpose.

7        The Transferee hereby undertakes with the Transferor and each of the
         other parties to the Facility Agreement and the other Security
         Documents that it will perform in accordance with its terms all those
         obligations which by the terms of the Facility Agreement and the other
         Security Documents will be assumed by it after delivery of the executed
         copies of this Transfer Certificate to the Agent and satisfaction of
         the conditions (if any) subject to which this Transfer Certificate is
         expressed to take effect.

8        By execution of this Transfer Certificate on their behalf by the Agent
         and in reliance upon the representations and warranties of the
         Transferee, the Borrower, Stena AB, the Agent, the Security Agent, the
         Issuing Banks, the Standby Lender, the Co-Arrangers and the Banks
         accept the Transferee as a party to the Facility Agreement and the
         Security Documents with respect to all those rights and/or obligations
         which by the terms of the Facility Agreement and the Security Documents
         will be assumed by the Transferee (including those about pro-rata
         sharing and the exclusion of liability on the part of, and the
         indemnification of, the Agent, the Co-Arrangers, the Security Agent,
         the Issuing Banks, the Standby Lender and the Banks as provided by the
         Agreement) after delivery of the executed copies of this Transfer
         Certificate to the Agent and satisfaction of the conditions (if any)
         subject to which this Transfer Certificate is expressed to take effect.

9        None of the Transferor, the Agent, the Security Agent, the Issuing
         Banks, the Standby Lender, the Co-Arrangers or the Banks:-

                                      194
<PAGE>

         (A)    makes any representation or warranty nor assumes any
                responsibility with respect to the legality, validity,
                effectiveness, adequacy or enforceability of the Facility
                Agreement or any of the Security Documents or any document
                relating thereto;

         (B)    assumes any responsibility for the financial condition of the
                Borrower or any other Security Party or any party to any such
                other document or for the performance and observance by the
                Borrower or any other Security Party or any party to any such
                other document (save as otherwise expressly provided therein)
                and any and all such conditions and warranties, whether express
                or implied by law or otherwise, are hereby excluded (except as
                aforesaid).

10       The Transferor and the Transferee each undertake that they will on
         demand fully indemnify the Agent and the Security Agent in respect of
         any claim, proceeding, liability or expense which relates to or results
         from this Transfer Certificate or any matter concerned with or arising
         out of it unless caused by the Agent's or Security Agent's gross
         negligence or wilful misconduct, as the case may be.

11       The agreements and undertakings of the Transferee in this Transfer
         Certificate are given to and for the benefit of and made with each of
         the other parties to the Facility Agreement and the Security Documents.

12       This Transfer Certificate shall be governed by, and construed in
         accordance with, English law.

          Transferor                              Transferee
          [INSERT TRANSFEROR'S NAME]              [INSERT TRANSFEREE'S NAME]
          By:                                     By:
          Dated:                                  Dated:


          AGENT
          Agreed for and on behalf of itself as Agent, the Co-Arrangers, the
          Security Agent, the Issuing Banks, the Standby Lender, the Banks,
          the Borrower, Stena AB (publ.) and each other Security Party.



          SVENSKA HANDELSBANKEN AB (PUBL)
          By:
          Dated:


NOTE:     The execution of this Transfer Certificate alone may not transfer
          a proportionate share of the Transferor's interest in the security
          constituted by the Security Documents in the Transferor's or
          Transferee's jurisdiction. It is the responsibility of each
          individual Bank to ascertain whether any other documents are
          required to perfect a transfer of such a share in the Transferor's
          interest in such security in any such jurisdiction and, if so, to
          seek appropriate advice and arrange for execution of the same.

                                      195
<PAGE>

                                  THE SCHEDULE


Outstanding Contributions of Transferor : $ [          ]

Available Commitment of Transferor : $ [            ]

Portion Transferred : [                      ]%


                      ADMINISTRATIVE DETAILS OF TRANSFEREE

Name of Transferee:

Lending Office:

Contact person
(Loan Administration Department):

Telephone:
Fax:


Contact person
(Credit Administration Department):

Telephone:
Fax:

Account for payments:

                                      196
<PAGE>

                                   SCHEDULE 10

               SPECIMEN CHARTER COVENANTS AND LOSS PAYABLE CLAUSES


















                                      197
<PAGE>

                                   SCHEDULE 11

                  FORM OF FREE NET WORTH COMPLIANCE CERTIFICATE

                   OFFICER'S CERTIFICATE ISSUED PURSUANT TO A
              $600,000,000 FACILITY AGREEMENT DATED 6 NOVEMBER 2002
                           (THE "FACILITY AGREEMENT")


I, [O], the [Chief Financial Officer/DESCRIBE OFFICE] of Stena AB (publ.),
hereby certify that:-

1.   Attached hereto is a statement of the respective amounts of:-

     o    Appraised Value of Restricted Group Assets

     o    Secured Debt

     o    Strategic Investments

     o    Cash and Marketable Securities

     o    Other Assets and Working Capital

     o    Available Asset Value

     o    Unsecured Debt

     as at [30 June/31 December/OTHER [YEAR]] (the "REFERENCE DATE"), determined
     in accordance with Clause 14.21 of the Facility Agreement.

2.   As at the Reference Date, the Free Net Worth was $[INSERT].

3.   Attached hereto is a statement of the amounts of the values of the assets
     of the Stena AB Group determined in accordance with Clause 14.21 of the
     Facility Agreement for the purpose of calculating the Available Asset Value
     as at the Reference Date.

Terms used herein and not otherwise defined herein shall have the meanings set
forth in the Facility Agreement. This certificate is rendered pursuant to Clause
14.2(F) of the Facility Agreement.

IN WITNESS WHEREOF, the undersigned has set his hand this O day of O [20O].

STENA AB (PUBL.)

By: ...................................
[Chief Financial Officer/INSERT OFFICE]

                                      198
<PAGE>

                                   SCHEDULE 12

                       FORM OF QUIET ENJOYMENT UNDERTAKING

To:      [Name of Addressee]

                                                                          [Date]


We, Svenska Handelsbanken AB (publ) of SE-405 40 Goteborg, Sweden acknowledge
that we have reviewed a copy of the [describe contract] (the "CONTRACT") in
respect of the Drilling Unit [name] (the "UNIT") and are fully aware of all its
terms and conditions.

In consideration of your entering into the Contract and certain related
agreements, we hereby irrevocably and unconditionally undertake to you and
promise that so long as you shall retain any interest in the Contract, we shall
not exercise any rights as mortgagee in relation to the Unit, including any
rights to take possession, or otherwise seek to enforce such rights as we have
at any time where such action may affect in any manner your free and
uninterrupted use of the Unit in accordance with the terms of the Contract.

This undertaking shall be governed and construed in accordance with the laws of
England and Wales and we submit to the exclusive jurisdiction of the courts in
London for all purposes in connection with this undertaking.


SIGNED  for an on behalf of
SVENSKA HANDELSBANKEN AB (PUBL)

/s/ Sten-Olof Hagman

                                      199
<PAGE>

THE BORROWER

SIGNED AND DELIVERED AS A DEED by                             )
/s/ Carl Larsson                                               )
attorney-in-fact for and on behalf of                         )
STENA INTERNATIONAL B.V.                                      )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


THE AGENT AND SECURITY AGENT

SIGNED AND DELIVERED AS A DEED by                             )
/s/ Sten-Olof Hagman                                          )
attorney-in-fact for and on behalf of                         )
SVENSKA HANDELSBANKEN AB (PUBL)                               )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


THE BANKS AND CO-ARRANGERS

SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
for and on behalf of                                          )
J.P. MORGAN PLC                                               )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
NORDEA BANK SVERIGE AB (PUBL)                                 )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ Sten-Olof Hagman                                          )
attorney-in-fact for and on behalf of                         )
SVENSKA HANDELSBANKEN AB (PUBL)                               )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )



                                      200
<PAGE>

SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
for and on behalf of                                          )
JPMORGAN CHASE BANK                                           )
by its duly authorised signatory                              )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ Simon Deefholts                                           )
for and on behalf of                                          )
HSBC BANK PLC                                                 )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
LANDESBANK SCHLESWIG-HOLSTEIN                                 )
GIROZENTRALE                                                  )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
THE GOVERNOR AND COMPANY                                      )
OF THE BANK OF SCOTLAND                                       )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
DEN NORSKE BANK ASA                                           )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


                                      201
<PAGE>

SIGNED AND DELIVERED AS A DEED by                             )
/s/ David Sparkes                                             )
for and on behalf of                                          )
SCOTIABANK EUROPE PLC                                         )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester

Attorney-in-fact for and on behalf of                         )
SKANDINAVISKA ENSKILDA                                        )
BANKEN AB (PUBL)                                              )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
ABN AMRO BANK N.V.                                            )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
NEDSHIP BANK N.V.                                             )
acting through its Norwegian branch                           )
NEDSHIP BANK (NORDIC) acting by                               )
/s/ John Forrester                                            )
as its duly authorised attorney-in-fact                       )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ Simon Booth                                               )
for and on behalf of                                          )
CITIBANK, N.A.                                                )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


                                      202
<PAGE>

SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
DEUTSCHE BANK AG IN HAMBURG                                   )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


THE STANDBY LENDER

SIGNED AND DELIVERED AS A DEED by                             )
/s/ Sten-Olof Hagman                                          )
attorney-in-fact for and on behalf of                         )
SVENSKA HANDELSBANKEN AB (PUBL)                               )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


THE ISSUING BANKS

SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
attorney-in-fact for and on behalf of                         )
NORDEA BANK SVERIGE AB (PUBL)                                 )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


SIGNED AND DELIVERED AS A DEED by                             )
/s/ John Forrester                                            )
for and on behalf of                                          )
JPMORGAN CHASE BANK                                           )
by its authorised signatory                                   )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )


STENA AB

SIGNED AND DELIVERED AS A DEED by                             )
/s/ Svante Carlsson                                           )
attorney-in-fact for and on behalf of                         )
STENA AB (PUBL.)                                              )
in the presence of:- /s/ N. Barber                            )
                     Trainee Solicitor                        )
                     Stephenson Harwood                       )
                     One, St. Paul's Churchyard               )
                     London                                   )
                     EC4M 8SH                                 )



                                      203