Exhibit 10.102


 


(Multicurrency-Cross Border)


 


ISDA®


International Swaps & Derivatives Association, Inc.


 


MASTER AGREEMENT


dated as of 12 December 2005


 


The Royal Bank of Scotland plc (“Party A”) and
Arlington Tankers Ltd. (“Party B”)


 


have
entered and/or anticipate entering into one or more transactions (each a “Transaction”)
that are or will be governed by this Master Agreement, which includes the
schedule (the “Schedule”), and the documents and other confirming evidence
(each a “Confirmation”) exchanged between the parties confirming those
Transactions.


 


Accordingly,
the parties agree as follows:-


 


1.           Interpretation


 


(a)          Definitions. The terms
defined in Section 14 and in the Schedule will have the meanings therein
specified for the purpose of this Master Agreement.


 


(b)          Inconsistency. In the event of
any inconsistency between the provisions of the Schedule and the other
provisions of this Master Agreement, the Schedule will prevail. In the event of
any inconsistency between the provisions of any Confirmation and this Master
Agreement (including the Schedule), such Confirmation will prevail for the
purpose of the relevant Transaction.


 


(c)           Single Agreement. All Transactions
are entered into in reliance on the fact that this Master Agreement and all
Confirmations form a single agreement between the parties (collectively
referred to as this “Agreement”), and the parties would not otherwise enter
into any Transactions.


 


2.             Obligations


 


(a)           General
Conditions.


 


(i)      Each party will make each
payment or delivery specified in each Confirmation to be made by it, subject to
the other provisions of this Agreement.


 


(ii)     Payments under this Agreement
will be made on the due date for value on that date in the place of the account
specified in the relevant Confirmation or otherwise pursuant to this Agreement,
in freely transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.


 


(iii)    Each obligation of each party
under Section 2(a)(i) is subject to (1) the condition precedent
that no Event of Default or Potential Event of Default with respect to the
other party has occurred and is continuing, (2) the condition precedent
that no Early Termination Date in respect of the relevant Transaction has
occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.


 


Copyright © 1992 by International Swaps & Derivatives
Association, Inc.


 

















 


(b)           Change of
Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.


 


(c)           Netting. If on any date
amounts would otherwise be payable:-


 


(i) in the same currency; and


 


(ii) in
respect of the same Transaction,


 


by
each party to the other, then, on such date, each party’s obligation to make
payment of any such amount will be payable by one party exceeds the aggregate
amount that would otherwise have been payable by the other party, replaced by
an obligation upon the party by whom the larger aggregate amount would have
been payable to pay to the other party the excess of the larger aggregate
amount over the smaller aggregate amount.


 


The
parties may elect in respect of two or more Transactions that a net amount will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are payable in respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii) above will
not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above
will not, or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.


 


(d)          Deduction
or Withholding for Tax.


 


(i) Gross-Up. All payments under this
Agreement will be made without any deduction or withholding for or on account
of any Tax unless such deduction or withholding is required by any applicable
law, as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required to deduct or withhold,
then that party (“X”) will:-


 


(1)   promptly notify the other
party (“Y”) of such requirement;


 


(2)   pay to the relevant
authorities the full amount required to be deducted or withheld (including the
full amount required to be deducted or withheld from any additional amount paid
by X to Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or receiving notice
that such amount has been assessed against Y;


 


(3)   promptly forward to Y an
official receipt (or a certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such authorities; and


 


(4)     if such Tax is an
Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise
entitled under this Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However, X will
not he required to pay any additional amount to Y to the extent that it would
not be required to be paid but for:-


 


(A)  the failure by Y to comply
with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or


 


(B)   the failure of a
representation made by Y pursuant to Section 3(f) to be accurate and
true unless such failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of competent jurisdiction,
on or after the date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.


 


2

















 


(ii) Liability. If:-


 


(1)  X is required by any
applicable law, as modified by the practice of any relevant governmental
revenue authority, to make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under Section 2(d)(i)(4);


 


(2)  X does not so deduct or
withhold; and


 


(3)  a liability resulting from
such Tax is assessed directly against X, then,


 


except
to the extent Y has satisfied or then satisfies the liability resulting from
such Tax, Y will promptly pay to X the amount of such liability (including any
related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).


 


(e)           Default
Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment obligation
will, to the extent permitted by law and subject to Section 6(c), be
required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation of
an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.


 


3.               Representations


 


Each
party represents to the other party (which representations will be deemed to be
repeated by each party on each date on which a Transaction is entered into and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-


 


(a)           Basic
Representations.


 


(i)  Status. It is duly
organised and validly existing under the laws of the jurisdiction of its
organisation or incorporation and, if relevant under such laws, in good
standing;


 


(ii)    Powers. It has the power
to execute this Agreement and any other documentation relating to this
Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a party and
has taken all necessary action to authorise such execution, delivery and
performance;


 


(iii)  No
Violation or Conflict. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other agency of
government applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets;


 


(iv)   Consents. All governmental
and other consents that are required to have been obtained by it with respect
to this Agreement or any Credit Support Document to which it is a party have
been obtained and are in full force and effect and all conditions of any such
consents have been complied with; and


 


(v)    Obligations
Binding. Its obligations under this Agreement and any Credit
Support Document to which it is a party constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to
applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws
affecting creditors’ rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether enforcement
is sought in a proceeding in equity or at law)).


 

















 


(b)          Absence of Certain Events. No Event of
Default or Potential Event of Default or, to its knowledge, Termination Event
with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to which it is
a party.


 


(c)           Absence of Litigation. There is not
pending or, to its knowledge, threatened against it or any of its Affiliates
any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is
likely to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its ability
to perform its obligations under this Agreement or such Credit Support
Document.


 


(d)          Accuracy of Specified
Information. All applicable information that is furnished in
writing by or on behalf of it to the other party and is identified for the
purpose of this Section 3(d) in the Schedule is, as of the date of
the information, true, accurate and complete in every material respect.


 


(e)           Payer Tax Representation. Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(e) is accurate and true.


 


Payee Tax Representations. Each representation specified
in the Schedule as being made by it for the purpose of this Section 3(f) is
accurate and true.


 


4.             Agreements


 


Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which
it is a party:-


 


(a)           Furnish
Specified Information. It will deliver to the other party or, in certain
cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-


 


(i)    any forms, documents or
certificates relating to taxation specified in the Schedule or any
Confirmation;


 


(ii)   any other documents specified
in the Schedule or any Confirmation; and


 


(iii) upon
reasonable demand by such other party, any form or document that may be
required or reasonably requested in writing in order to allow such other party
or its Credit Support Provider to make a payment under this Agreement or any
applicable Credit Support Document without any deduction or withholding for or
on account of any Tax or with such deduction or withholding at a reduced rate
(so long as the completion, execution or submission of such form or document
would not materially prejudice the legal or commercial position of the party in
receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,


 


in
each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.


 


(b)           Maintain
Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to he obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.


 


(c)           Comply with
Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.


 


(d)           Tax
Agreement. It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true
promptly upon learning of such failure.


 


(e)           Payment of
Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,


 

















 


organised,
managed and controlled, or considered to have its seat, or in which a branch or
office through which it is acting for the purpose of this Agreement is located
(“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp
Tax levied or imposed upon the other party or in respect of the other party’ s
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.


 


5.            Events of Default and Termination
Events


 


(a)           Events of
Default. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an “Event of Default”) with respect to such party:-


 


(i) Failure to Pay or Deliver. Failure by the
party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is given to
the party;


 


(ii) Breach of Agreement. Failure by the party
to comply with or perform any agreement or obligation (other than an obligation
to make any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if such
failure is not remedied on or before the thirtieth day after notice of such
failure is given to the party;


 


(iii) Credit Support Default.


 


(1)  Failure by the party or any
Credit Support Provider of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in accordance with any
Credit Support Document if such failure is continuing after any applicable
grace period has elapsed;


 


(2)  the expiration or termination
of such Credit Support Document or the failing or ceasing of such Credit
Support Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of the other
party; or


 


(3)  the party or such Credit
Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity of, such Credit Support Document;


 


(iv) Misrepresentation. A representation (other than
a representation under Section 3(e) or (f)) made or repeated or
deemed to have been made or repeated by the party or any Credit Support
Provider of such party in this Agreement or any Credit Support Document proves
to have been incorrect or misleading in any material respect when made or
repeated or deemed to have been made or repeated;


 


(v) Default under Specified
Transaction. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party (I) defaults under a
Specified Transaction and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified Transaction, (2) defaults,
after giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction (or
such default continues for at least three Local Business Days if there is no
applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified Transaction
(or such action is taken by any person or entity appointed or empowered to
operate it or act on its behalf);


 


(vi) Cross Default. If “Cross
Default” is specified in the Schedule as applying to the party, the occurrence
or existence of ( I) a default, event of default or other similar condition or
event (however


 

















 


described)
in respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually or
collectively) in an aggregate amount of not less than the applicable Threshold
Amount (as specified in the Schedule) which has resulted in such Specified
Indebtedness becoming, or becoming capable at such time of being declared, due
and payable under such agreements or instruments, before it would otherwise
have been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or collectively) in
making one or more payments on the due date thereof in an aggregate amount of
not less than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or grace
period);


 


(vii) Bankruptcy. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party:-


 


(1) is
dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation, and, in the case
of any such proceeding or petition instituted or presented against it, such
proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for
its winding-up or liquidation or (B) is not dismissed, discharged, stayed
or restrained in each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a consolidation, amalgamation
or merger); (6) seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or substantially
all its assets or has a distress, execution, attachment, sequestration or other
legal process levied, enforced or sued on or against all or substantially all
its assets and such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case within 30 days
thereafter; (8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or


 


(viii) Merger Without Assumption. The party or
any Credit Support Provider of such party consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all its assets to,
another entity and, at the time of such consolidation, amalgamation, merger or
transfer:-


 


(I) the
resulting, surviving or transferee entity fails to assume all the obligations
of such party or such Credit Support Provider under this Agreement or any
Credit Support Document to which it or its predecessor was a party by operation
of law or pursuant to an agreement reasonably satisfactory to the other party
to this Agreement; or


 


(2) the
benefits of any Credit Support Document fail to extend (without the consent of
the other party) to the performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.


 


(b)           Termination
Events. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified
in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event


 

















 


Upon
Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:-


 


(i) Illegality. Due to the adoption of, or
any change in, any applicable law after the date on which a Transaction is
entered into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes unlawful (other
than as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):-


 


(1)  to perform any absolute or
contingent obligation to make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or


 


(2)  to perform, or for any Credit
Support Provider of such party to perform, any contingent or other obligation
which the party (or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;


 


(ii) Tax Event. Due to (x) any action
taken by a taxing authority, or brought in a court of competent jurisdiction,
on or after the date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party to this
Agreement) or (y) a Change
in Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled Payment
Date (1) be required to pay to the other party an additional amount in
respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount is required to be deducted or withheld for or on
account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) and no additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));


 


(iii) Tax Event Upon Merger. The party (the “Burdened
Party”) on the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive
a payment from which an amount has been deducted or withheld for or on account
of any Indemnifiable Tax in respect of which the other party is not required to
pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or
(B)), in either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where such action does
not constitute an event described in Section 5(a)(viii);


 


(iv) Credit Event Upon Merger. If “Credit Event
Upon Merger” is specified in the Schedule as applying to the party, such party
(“X”), any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not constitute
an event described in Section 5(a)(viii) but the creditworthiness of
the resulting, surviving or transferee entity is materially weaker than that of
X, such Credit Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its successor or
transferee, as appropriate, will be the Affected Party); or


 


(v) Additional Termination Event. If any “Additional
Termination Event” is specified in the Schedule or any Confirmation as
applying, the occurrence of such event (and, in such event, the Affected Party
or Affected Parties shall be as specified for such Additional Termination Event
in the Schedule or such Confirmation).


 


(c)           Event of Default and
Illegality. If an event or circumstance which would otherwise
constitute or give rise to an Event of Default also constitutes an Illegality,
it will be treated as an Illegality and will not constitute an Event of
Default.


 

















 


6.               Early Termination


 


(a)         Right to
Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the “Defaulting Party”) has occurred and is
then continuing, the other party (the “Non-defaulting Party”) may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, “Automatic Early Termination” is specified in the Schedule as applying
to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or,
to the extent analogous thereto, (8), and as of the time immediately preceding
the institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous
thereto, (8).


 


(b)         Right to
Terminate Following Termination Event.


 


(i)          Notice. If a Termination
Event occurs, an Affected Party will, promptly upon becoming aware of it,
notify the other party, specifying the nature of that Termination Event and
each Affected Transaction and will also give such other information about that
Termination Event as the other party may reasonably require.


 


(ii)        Transfer to
Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon
Merger occurs and the Burdened Party is the Affected Party, the Affected Party
will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.


 


If
the Affected Party is not able to make such a transfer it will give notice to
the other party to that effect within such 20 day period, whereupon the other
party may effect such a transfer within 30 days after the notice is given under
Section 6(b)(i).


 


Any
such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party’s policies in effect at such
time would permit it to enter into transactions with the transferee on the
terms proposed.


 


(iii)       Two
Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will use all
reasonable efforts to reach agreement within 30 days after notice thereof is
given under Section 6(b)(i) on action to avoid that Termination
Event.


 


(iv)        Right to
Terminate. If:-


 


(1)  a transfer under Section 6(b)(ii) or
an agreement under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or


 


(2)  an Illegality under Section 5(b)(i)(2),
a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the Affected Party,


 


either
party in the case of an Illegality, the Burdened Party in the case of a Tax
Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may, by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then


 

















 


continuing,
designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.


 


(c)           Effect of Designation.


 


(i)   If notice designating an
Early Termination Date is given under Section 6(a) or (b), the Early
Termination Date will occur on the date so designated, whether or not the
relevant Event of Default or Termination Event is then continuing.


 


(ii)  Upon the occurrence or
effective designation of an Early Termination Date, no further payments or
deliveries under Section 2(a)(i) or 2(e) in respect of the
Terminated Transactions will be required to be made, but without prejudice to
the other provisions of this Agreement. The amount, if any, payable in respect
of an Early Termination Date shall be determined pursuant to Section 6(e).


 


(d)           Calculations.


 


(i)          Statement. On or as soon as
reasonably practicable following the occurrence of an Early Termination Date,
each party will make the calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the
relevant account to which any amount payable to it is to be paid. In the
absence of written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such quotation.


 


(ii)        Payment
Date. An amount calculated as being due in respect of any Early Termination
Date under Section 6(e) will be payable on the day that notice of the
amount payable is effective (in the case of an Early Termination Date which is
designated or occurs as a result of an Event of Default and on the day which is
two Local Business Days after the day on which notice of the amount payable is
effective (in the case of an Early Termination Date which is designated as a
result of a Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well as
after judgment) in the Termination Currency, from (and including) the relevant
Early Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.


 


(e)           Payments on
Early Termination. If an Early Termination Date occurs, the following
provisions shall apply based on the parties’ election in the Schedule of a
payment measure, either “Market Quotation” or “Loss”, and a payment method,
either the “First Method” or the “Second Method”. If the parties fail to
designate a payment measure or payment method in the Schedule, it will be
deemed that “Market Quotation” or the “Second Method”, as the case may be,
shall apply. The amount, if any, payable in respect of an Early Termination
Date and determined pursuant to this Section will be subject to any
Set-off.


 


(i) Events of Default. If the Early Termination Date
results from an Event of Default:-


 


(1) First
Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the Settlement
Amount (determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party.


 


(2) First
Method and Loss. If the First Method and Loss apply, the Defaulting
Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party’s Loss in respect of this Agreement.


 


(3) Second
Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum of
the Settlement Amount (determined by the


 

















 


Non-defaulting
Party) in respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the Non-defaulting Party
will pay the absolute value of that amount to the Defaulting Party.


 


(4) Second
Method and Loss. If the Second Method and Loss apply, an amount will
be payable equal to the Non-defaulting Party’s Loss .in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay
it to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.


 


(ii) Termination
Events. If the Early Termination Date results from a
Termination Event:-


 


(1) One
Affected Party. If there is one Affected Party, the amount payable
will be determined in accordance with Section 6(e)(i)(3), if Market
Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in
either case, references to the Defaulting Party and to the Non-defaulting Party
will be deemed to be references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss applies and fewer than all
the Transactions are being terminated, Loss shall be calculated in respect of
all Terminated Transactions.


 


(2) Two
Affected Parties. If there are two Affected Parties:-


 


(A)  if Market Quotation applies, each party will
determine a Settlement Amount in respect of the Terminated Transactions, and an
amount will be payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party with the higher
Settlement Amount (“X”) and the Settlement Amount of the party with the lower
Settlement Amount (“Y”) and (b) the
Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y; and


 


(B)  if Loss applies, each party
will determine its Loss in respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all Terminated Transactions)
and an amount will be payable equal to one-half of the difference between the
Loss of the party with the higher Loss (“X”) and the Loss of the party with the
lower Loss (“Y”).


 


If
the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.


 


(iii) Adjustment
for Bankruptcy. In circumstances where an Early Termination Date
occurs because “Automatic Early Termination” applies in respect of a party, the
amount determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement (and retained by
such other party) during the period from the relevant Early Termination Date to
the date for payment determined under Section 6(d)(ii).


 


(iv) Pre-Estimate.
The parties agree that if Market Quotation applies an amount recoverable
under this Section 6(e) is a reasonable pre-estimate of loss and not
a penalty. Such amount is payable for the loss of bargain and the loss of
protection against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any additional damages as a
consequence of such losses.


 
















 


7.             Transfer


 


Subject
to Section 6(b)(ii), neither this Agreement nor any interest or obligation
in or under this Agreement may be transferred (whether by way of security or
otherwise) by either party without the prior written consent of the other
party, except that:-


 


(a)             a party may make
such a transfer of this Agreement pursuant to a consolidation or amalgamation
with, or merger with or into, or transfer of all or substantially all its
assets to, another entity (but without prejudice to any other right or remedy
under this Agreement); and


 


(b)             a party may make
such a transfer of all or any part of its interest in any amount payable to it
from a Defaulting Party under Section 6(e).


 


Any
purported transfer that is not in compliance with this Section will be
void.


 


8.                Contractual
Currency


 


(a)          Payment
in the Contractual Currency. Each payment under this
Agreement will be made in the relevant currency specified in this Agreement for
that payment (the “Contractual Currency”). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required
to make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.


 


(b)          Judgments.
To the extent permitted by applicable law, if any judgment or order
expressed in a currency other than the Contractual Currency is rendered (i) for
the payment of any amount owing in respect of this Agreement, (ii) for the
payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for
the payment of any amount described in (i) or (ii) above, the party
seeking recovery, after recovery in full of the aggregate amount to which such
party is entitled pursuant to the judgment or order, will be entitled to
receive immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term “rate of exchange” includes, without limitation, any premiums
and costs of exchange payable in connection with the purchase of or conversion
into the Contractual Currency.


 


(c)           Separate
Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.


 


(d)          Evidence
of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.


 

















 


9.              Miscellaneous


 


(a)           Entire Agreement. This Agreement
constitutes the entire agreement and understanding of the parties with respect
to its subject matter and supersedes all oral communication and prior writings
with respect thereto.


 


(b)           Amendments. No amendment, modification or
waiver in respect of this Agreement will be effective unless in writing
(including a writing evidenced by a facsimile transmission) and executed by
each of the parties or confirmed by an exchange of telexes or electronic
messages on an electronic messaging system.


 


(c)           Survival
of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.


 


(d)           Remedies Cumulative. Except as provided in
this Agreement, the rights, powers, remedies and privileges provided in this
Agreement are cumulative and not exclusive of any rights, powers, remedies and
privileges provided by law.


 


(e)           Counterparts
and Confirmations.


 


(i)   This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.


 


(ii)  The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and may
be executed and delivered in counterparts (including by facsimile transmission)
or be created by an exchange of telexes or by an exchange of electronic
messages on an electronic messaging system, which in each case will be
sufficient for all purposes to evidence a binding supplement to this Agreement.
The parties will specify therein or through another effective means that any
such counterpart, telex or electronic message constitutes a Confirmation.


 


(f)            No Waiver of Rights. A failure or
delay in exercising any right, power or privilege in respect of this Agreement
will not be presumed to operate as a waiver, and a single or partial exercise
of any right, power or privilege will not be presumed to preclude any
subsequent or further exercise, of that right, power or privilege or the
exercise of any other right, power or privilege.


 


(g)           Headings. The headings
used in this Agreement are for convenience of reference only and are not to affect
the construction of or to be taken into consideration in interpreting this
Agreement.


 


10.             Offices;
Multibranch Parties


 


(a)           If Section 10(a) is
specified in the Schedule as applying, each party that enters into a
Transaction through an Office other than its head or home office represents to
the other party that, notwithstanding the place of booking office or
jurisdiction of incorporation or organisation of such party, the obligations of
such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.


 


(b)           Neither party may
change the Office through which it makes and receives payments or deliveries
for the purpose of a Transaction without the prior written consent of the other
party.


 


(c)           If a party is
specified as a Multibranch Party in the Schedule, such Multibranch Party may
make and receive payments or deliveries under any Transaction through any
Office listed in the Schedule, and the Office through which it makes and
receives payments or deliveries with respect to a Transaction will be specified
in the relevant Confirmation.


 


11.           Expenses


 


A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document


 

















 


to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.


 


12.           Notices


 


(a)           Effectiveness.
Any notice or other communication in respect of this Agreement may
be given in any manner set forth below (except that a notice or other communication
under Section 5 or 6 may not be given by facsimile transmission or
electronic messaging system) to the address or number or in accordance with the
electronic messaging system details provided (see the Schedule) and will be
deemed effective as indicated:-


 


(i)    if in writing and delivered in person or by courier, on the date
it is delivered;


 


(ii)   if sent by telex, on the
date the recipient’ s answerback is received;


 


(iii)  if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it being
agreed that the burden of proving receipt will be on the sender and will not be
met by a transmission report generated by the sender’s facsimile machine);


 


(iv)  if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or


 


(v)   if sent by electronic messaging system, on the date that
electronic message is received, unless the date of that delivery (or attempted
delivery) or that receipt, as applicable, is not a Local Business Day or that
communication is delivered (or attempted) or received, as applicable, after the
close of business on a Local Business Day, in which case that communication
shall be deemed given and effective on the first following day that is a Local
Business Day.


 


(b)           Change
of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.


 


13.              Governing
Law and Jurisdiction


 


(a)           Governing
Law. This Agreement will be governed by and construed in accordance with the
law specified in the Schedule.


 


(b)           Jurisdiction. With respect to any suit,
action or proceedings relating to this Agreement (“Proceedings”), each party
irrevocably:-


 


(i)   submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if this
Agreement is expressed to be governed by the laws of the State of New York; and


 


(ii)  waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives the
right to object, with respect to such Proceedings, that such court does not
have any jurisdiction over such party.


 


Nothing
in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English
law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of Proceedings
in any other jurisdiction.


 


(c)           Service
of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any


 

















 


reason
any party’s Process Agent is unable to act as such, such party will promptly
notify the other party and within 30 days appoint a substitute process agent
acceptable to the other party. The parties irrevocably consent to service of
process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.


 


(d)           Waiver of Immunities. Each party
irrevocably waives, to the fullest extent permitted by applicable law, with
respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief
by way of injunction, order for specific performance or for recovery of
property, (iv) attachment of its assets (whether before or after judgment)
and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.


 


14.           Definitions


 


As
used in this Agreement:-


 


“Additional Termination Event” has the meaning
specified in Section 5(b). 


 


“Affected Party” has the meaning specified in Section 5(b).


 


“Affected Transactions” means (a) with respect
to any Termination Event consisting of an Illegality, Tax Event or Tax Event
Upon Merger, all Transactions affected by the occurrence of such Termination
Event and (b) with respect to any other Termination Event, all
Transactions.


 


“Affiliate” means, subject to the
Schedule, in relation to any person, any entity controlled, directly or
indirectly, by the person, any entity that controls, directly or indirectly,
the person or any entity directly or indirectly under common control with the
person. For this purpose, “control” of any entity or person means ownership of
a majority of the voting power of the entity or person.


 


“Applicable Rate” means:-


 


(a)  in respect of obligations
payable or deliverable (or which would have been but for Section 2(a)(iii))
by a Defaulting Party, the Default Rate;


 


(b) in respect of an obligation to
pay an amount under Section 6(e) of either party from and after the
date (determined in accordance with Section 6(d)(ii)) on which that amount
is payable, the Default Rate;


 


(c)  in respect of all other
obligations payable or deliverable (or which would have been but for Section 2(a)(iii))
by a Non-defaulting Party, the Non-default Rate; and


 


(d) in all other cases, the
Termination Rate.  


 


“Burdened Party” has the meaning specified in Section 5(b).


 


“Change in Tax Law” means the enactment,
promulgation, execution or ratification of, or any change in or amendment to,
any law (or in the application or official interpretation of any law) that
occurs on or after the date on which the relevant Transaction is entered into.


 


“consent” includes a consent, approval,
action, authorisation, exemption, notice, filing, registration or exchange
control consent.


 


“Credit Event Upon Merger” has the meaning specified in Section 5(b).


 


“Credit Support Document” means any agreement or
instrument that is specified as such in this Agreement. 


 


“Credit Support Provider” has the meaning specified in
the Schedule.


 


“Default Rate” means a rate per annum equal
to the cost (without proof or evidence of any actual cost) to the relevant
payee (as certified by it) if it were to fund or of funding the relevant amount
plus 1% per annum.


 

















 


“Defaulting Party” has the meaning specified in Section 6(a).


 


“Early Termination Date” means the date
determined in accordance with Section 6(a) or 6(b)(iv). 


 


“Event of Default” has the meaning specified in Section 5(a) and,
if applicable, in the Schedule. 


 


“Illegality” has the meaning specified in Section 5(b).


 


“lndemnifiable Tax” means any Tax other than a
Tax that would not be imposed in respect of a payment under this Agreement but
for a present or former connection between the jurisdiction of the government
or taxation authority imposing such Tax and the recipient of such payment or a
person related to such recipient (including, without limitation, a connection
arising from such recipient or related person being or having been a citizen or
resident of such jurisdiction, or being or having been organised, present or
engaged in a trade or business in such jurisdiction, or having or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such recipient or related person
having executed, delivered, performed its obligations or received a payment
under, or enforced, this Agreement or a Credit Support Document).


 


“law” includes any treaty, law, rule or
regulation (as modified, in the case of tax matters, by the practice of any
relevant governmental revenue authority) and “lawful” and “unlawful” will be
construed accordingly.


 


“Local Business Day” means, subject to the
Schedule, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) (a) in
relation to any obligation under Section 2(a)(i), in the place(s) specified
in the relevant Confirmation or, if not so specified, as otherwise agreed by
the parties in writing or determined pursuant to provisions contained, or
incorporated by reference, in this Agreement, (b) in relation to any other
payment, in the place where the relevant account is located and, if different,
in the principal financial centre, if any, of the currency of such payment, (c) in
relation to any notice or other communication, including notice contemplated
under Section 5(a)(i), in the city specified in the address for notice
provided by the recipient and, in the case of a notice contemplated by Section 2(b),
in the place where the relevant new account is to be located and (d) in
relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.


 


“Loss” means, with respect to this
Agreement or one or more Terminated Transactions, as the case may be, and a
party, the Termination Currency Equivalent of an amount that party reasonably
determines in good faith to be its total losses and costs (or gain, in which
case expressed as a negative number) in connection with this Agreement or that
Terminated Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of such
party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related
trading position (or any gain resulting from any of them). Loss includes losses
and costs (or gains) in respect of any payment or delivery required to have
been made (assuming satisfaction of each applicable condition precedent on or
before the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.
Loss does not include a party’s legal fees and out-of-pocket expenses referred
to under Section 11. A party will determine its Loss as of the relevant
Early Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.


 


“Market Quotation” means, with respect to one or
more Terminated Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-makers. Each
quotation will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a positive
number) in consideration of an agreement between such party (taking into
account any existing Credit Support Document with respect to the obligations of
such party) and the quoting Reference Market-maker to enter into a transaction
(the “Replacement Transaction”) that would have the effect of preserving for
such party the economic equivalent of any payment or delivery (whether the
underlying obligation was absolute or contingent and assuming the satisfaction
of each applicable condition precedent by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions that
would, but for the occurrence of the relevant Early Termination Date, have


 

















 


been
required after that date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as
of the same day and time (without regard to different time zones) on or as soon
as reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e),
and, if each party is so obliged, after consultation with the other. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such quotations are provided, the Market
Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that the Market Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.


 


“Non-default Rate” means a rate per annum equal
to the cost (without proof or evidence of any actual cost) to the
Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.


 


“Non-defaulting Party” has the meaning specified in Section 6(a).


 


“Office” means a branch or office of a
party, which may be such party’s head or home office.


 


“Potential Event of Default” means any event
which, with the giving of notice or the lapse of time or both, would constitute
an Event of Default.


 


“Reference Market-makers” means four
leading dealers in the relevant market selected by the party determining a
Market Quotation in good faith (a) from among dealers of the highest
credit standing which satisfy all the criteria that such party applies
generally at the time in deciding whether to offer or to make an extension of
credit and (b) to the extent practicable, from among such dealers having
an office in the same city.


 


“Relevant Jurisdiction” means, with
respect to a party, the jurisdictions (a) in which the party is
incorporated, organised, managed and controlled or considered to have its seat,
(b) where an Office through which the party is acting for purposes of this
Agreement is located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.


 


“Scheduled Payment Date” means a date on
which a payment or delivery is to be made under Section 2(a){ i) with
respect to a Transaction.


 


“Set-off means set-off, offset,
combination of accounts, right of retention or withholding or similar right or
requirement to which the payer of an amount under Section 6 is entitled or
subject (whether arising under this Agreement, another contract, applicable law
or otherwise) that is exercised by, or imposed on, such payer.


 


“Settlement Amount” means, with respect to a
party and any Early Termination Date, the sum of:-


 


(a)          the Termination Currency
Equivalent of the Market Quotations (whether positive or negative) for each
Terminated Transaction or group of Terminated Transactions for which a Market
Quotation is determined; and


 


(b)         such party’s Loss
(whether positive or negative and without reference to any Unpaid Amounts) for
each Terminated Transaction or group of Terminated Transactions for which a
Market Quotation cannot be determined or would not (in the reasonable belief of
the party making the determination) produce a commercially reasonable result.


 


“Specified Entity” has the meaning specified in
the Schedule.


 

















 


“Specified Indebtedness” means, subject
to the Schedule, any obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) in respect of borrowed money.


 


“Specified Transaction” means, subject
to the Schedule, (a) any transaction (including an agreement with respect
thereto) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such party or any applicable
Specified Entity of such party) and the other party to this Agreement (or any
Credit Support Provider of such other party or any applicable Specified Entity
of such other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option with respect to
any of these transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or
the relevant confirmation.


 


“Stamp Tax” means any stamp,
registration, documentation or similar tax.


 


“Tax” means any present or future
tax, levy, impost, duty, charge, assessment or fee of any nature (including
interest, penalties and additions thereto) that is imposed by any government or
other taxing authority in respect of any payment under this Agreement other
than a stamp, registration, documentation or similar tax.


 


“Tax Event” has the meaning specified in Section 5(b).


 


“Tax Event Upon Merger” has the meaning specified in Section 5(b).


 


“Terminated Transactions” means with respect to any
Early Termination Date (a) if resulting from a Termination Event, all
Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of
the notice designating that Early Termination Date (or, if “Automatic Early
Termination” applies, immediately before that Early Termination Date).


 


“Termination Currency” has the meaning specified in
the Schedule.


 


“Termination Currency Equivalent” means, in
respect of any amount denominated in the Termination Currency, such Termination
Currency amount and, in respect of any amount denominated in a currency other
than the Termination Currency (the “Other Currency”), the amount in the
Termination Currency determined by the party making the relevant determination
as being required to purchase such amount of such Other Currency as at the
relevant Early Termination Date, or, if the relevant Market Quotation or Loss
(as the case may be), is determined as of a later date, that later date, with
the Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in
the city in which such foreign exchange agent is located) on such date as would
be customary for the determination of such a rate for the purchase of such
Other Currency for value on the relevant Early Termination Date or that later
date. The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party
and otherwise will be agreed by the parties.


 


“Termination Event” means an Illegality, a Tax
Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit
Event Upon Merger or an Additional Termination Event.


 


“Termination Rate” means a rate per annum equal
to the arithmetic mean of the cost (without proof or evidence of any actual
cost) to each party (as certified by such party) if it were to fund or of
funding such amounts.


 


“Unpaid Amounts” owing to any party means,
with respect to an Early Termination Date, the aggregate of (a) in respect
of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on
or prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for
each obligation under Section 2(a)(i) which was (or would have been
but for Section 2(a)(iii)) required to be settled by delivery to such
party on or prior to such Early Termination Date and which has not been so
settled as at such Early Termination Date, an amount equal to the fair market
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (hut excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of


 

















 


daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged
to make the determination under Section 6(e) or, if each party is so
obliged, it shall be the average of the Termination Currency Equivalents of the
fair market values reasonably determined by both parties.


 


IN WITNESS WHEREOF the
parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.


 


 


	
  The
  Royal Bank of Scotland plc

  	
  Arlington Tankers Ltd.

  
	
  (Name
  of Party A)

  	
  (Name
  of Party B)

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Graham Locker

  	
   

  	
  By: 

  	
  /s/ Edward Terino

  
	
  Name: Graham
  Locker

  	
  Name: Edward
  Terino

  
	
  Title:
  Attorney-in-fact

  	
  Title: Co-CEO
  and CFO

  
	
  Date:
  December 12, 2005

  	
  Date:
  December 12, 2005

  
					



 
















 


THIS IS AN IMPORTANT DOCUMENT: YOU SHOULD TAKE
INDEPENDENT LEGAL ADVICE

BEFORE SIGNING AND SIGN ONLY IF YOU WANT TO BE LEGALLY BOUND BY THE TERMS

OF THE DOCUMENT


 


SCHEDULE


 


to the


 


Master Agreement


 


dated as of 12 December 2005 between



The Royal Bank of Scotland plc (“Party A”)



and


 


Arlington Tankers Ltd. (“Party B”)



Part 1


 


Termination Provisions


 


(a)             “Specified Entity” means in
relation to Party A for the purpose of:-


 


Section 5(a)(v), (vi) and (vii)                                                       Not applicable


Section 5(b)(iv),


 


and in relation to Party B for the purpose of:-


 


Section 5(a)(v),


Section 5(a)(vi),                                                               Any
Affiliate of Party B


Section 5(a)(vii),


Section 5(b)(iv),


 


(b)                                 “Specified
Transaction” will have the meaning specified in Section 14 of this
Agreement.


 


(c)           The “Cross Default”
provisions of Section 5(a)(vi) will not apply to Party A.


 will apply to Party B.


 


If
such provisions apply:-


 


“Specified
Indebtedness” will have the meaning specified in Section 14 


 


“Threshold
Amount” means, in relation to Party B, zero.


 


(d)                                 The “Credit
Event Upon Merger” provisions of Section 5(b)(iv) will apply to Party
A. 


will apply to Party B.


 


(e)                                  The “Automatic
Early Termination” provision of Section 6(a) will not apply to either
Party A or Party B.


 


(f)                                    Payments on
Early Termination. For the purpose of Section 6(e) of this
Agreement:-


 

















 


(i)              Market Quotation
will apply.


 


(ii)             The Second Method
will apply.


 


(g)           “Termination
Currency” means such currency of any Transaction as may be selected by the
party which is not the Defaulting Party or the Affected Party as the case may
be if such currency is freely available and convertible or, if there are two
Affected Parties such currency as may be agreed between the parties if such
currency is freely available and, otherwise, United States Dollars.


 


(h)         Additional
Termination Event will apply.


 


The
following events shall constitute Additional Termination Events in relation to
Party B only:-


 


(a)                                  “Any
circumstances arise which, in the opinion of Party A, give reasonable grounds
for belief that Party B or any Credit Support Provider of Party B may not, or
may be unable to, perform its respective obligations under this Agreement or
the Credit Support Document.”


 


For
the purpose of the foregoing Additional Termination Events, Party B shall be
the Affected Party.


 


Part 2


 


Tax
Representations


 


(a)                                  Payer
Representations. For the purpose of Section 3(e) of this Agreement,
Party A and Party B will both make the following representation:-


 


It
is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of
this Agreement) to be made by it to the other party under this Agreement.


 


In
making this representation, it may rely on:-


 


(i)            the accuracy of any
representations made by the other party pursuant to Section 3(f) of
this Agreement;


 


(ii)                                  the satisfaction
of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement; and


 


(iii)                               the satisfaction
of the agreement of the other party contained in Section 4(d) of this
Agreement; 


 


provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material
prejudice to its legal or commercial position.


 


(b)            Payee
Representations. For the purpose of Section 3(f) of this Agreement:-


 


Party
A and Party B make no representation.


 


Part 3


 


Agreement to Deliver Documents


 


For
the purpose of Sections 4(a)(i) and (ii) of this Agreement, each
party agrees to deliver the following documents, as applicable:-


 

















 


(a)           Tax forms, documents
or certificates to be delivered:- Not applicable


 


(b)           Other documents to be
delivered where relevant are:-


 


	
  Party

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  required to

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Covered by

  
	
  deliver

  	
   

  	
  Form/Document/

  	
   

  	
   

  	
   

  	
  Section 3(d)

  
	
  document

  	
   

  	
  Certificate

  	
   

  	
  Date by which to be delivered

  	
   

  	
  Representation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party A/

  Party B

  	
   

  	
  Such
  evidence of the due authorisation of the person(s) signing this Agreement and
  each Confirmation on its behalf as the other party may reasonably request

  	
   

  	
  Date
  of execution of this Agreement and each relevant Confirmation

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A
  copy of the Memorandum and Articles of Association and Certification of
  Incorporation (or other constitutive documents) of Party B

  	
   

  	
  Date
  of execution of this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A
  copy of the resolution of the board of directors of Party B approving this
  Agreement and the Transactions contemplated hereby and authorising a
  specified person or persons to execute this Agreement and any Confirmation on
  behalf of Party B

  	
   

  	
  Date
  of execution of this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Copies
  of such statutory and/or regulatory consents, approvals and authorisations as
  may be necessa ry for Party B to enter into this Agreement and the
  Transactions contemplated hereby

  	
   

  	
  Date
  of execution of this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Confirmation
  in form and substance satisfactory to Party A that all conditions precedent
  relating to the Loan Facility (as defined in Section 14 pursuant to
  Part 5(f) of the Schedule to this Agreement) have been met in full
  (as set out in clause 9 of the Loan Facility)

  	
   

  	
  Date
  of execution of this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  The
  Credit Support Documents referred to in Part 4(f) of the Schedule
  to this Agreement duly executed by the parties thereto

  	
   

  	
  Date
  of execution of this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Legal
  opinions in form and substance satisfactory to Party A from solicitor(s)/law
  firm(s) approved by Party A

  	
   

  	
  Date
  of execution of this Agreement

  	
   

  	
  Yes

  



 

















 


	
  Party B

  	
   

  	
  A copy of the written
  acceptance by Party B’s Process Agent (as defined in Part 4(b) of
  the Schedule to this Agreement) of its appointment to receive for Party B and
  on behalf service of process in any Proceedings under this Agreements)

  	
   

  	
  Date of execution of
  this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  The annual financial
  statements of Party B

  	
   

  	
  Upon demand in respect
  of those which became publicly available as at the date hereof, as soon as
  possible, and in any event, within 120 days of the end of Party B’s financial
  year (or as soon as practicable after becoming publicly available)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A copy of the
  Memorandum and Articles of Association and Certificate of Incorporation (or
  other constitutive documents) of each Credit Support Provider of Party B

  	
   

  	
  Upon demand in respect
  of those which became publicly available prior to the date of this Agreement
  and, in respect of those statements, which are not publicly available)

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A copy of the
  Memorandum and Articles of Association and Certificate of incorporation (or
  other constitutive documents) of each Credit Support Providers of Party B

  	
   

  	
  Date of execution of
  this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A copy of the
  resolutions of the board of directors of each Credit Support Provider of
  Party B approving the Credit Support Document(s) and authorizing a
  specific person or persons to execute the Credit Support Document(s)

  	
   

  	
  Date of execution of
  this Agreement

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  The annual financial
  statements of each Credit Support provider of Party B

  	
   

  	
  Date of execution of
  this Agreement

  	
   

  	
  Yes

  



 

















 


Any
copy documents shall be certified by a competent senior official of Party B or
the respective Credit Support Provider of Party B, as the case
may be, as being correct, complete and in full force and effect as at a date no
earlier
than the date of this Agreement.


 


Part 4


 


Miscellaneous


 


(a)            Addresses for
Notices. For the purpose of Section 12(a) of this Agreement:-


 


Address
for notices or communications to Party A (other than for Section 5 or 6
Notices) to be sent to the address listed in the Confirmation provided by Party
A, or if prior to this Confirmation being received, to:-


 


	
  Address:

  	
   

  	
  The
  Royal Bank of Scotland plc

  
	
   

  	
   

  	
  c/o Financial Markets

  
	
   

  	
   

  	
  280 Bishopsgate

  
	
   

  	
   

  	
  London EC2M 4RB

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Swaps
  Administration

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No: 020 7085 5050

  
	
   

  
	
  Telephone
  No:020 7085 5000

  
	
   

  
	
  Address
  for notices or communications to Party A for Section 5 or 6:-

  
	
   

  
	
  Address:

  	
   

  	
  The
  Royal Bank of Scotland plc

  
	
   

  	
   

  	
  c/o
  Financial Markets

  
	
   

  	
   

  	
  135
  Bishopsgate, London EC2M 3UR

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Head
  of Legal, Financial Markets

  
	
   

  	
   

  	
   

  
	
  Facsimile
  No: 020 7085 8411

  
	
   

  
	
  Address
  for notices or communications to Party B:-

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   Arlington Tankers Ltd. 

  
	
   

  	
   

  	
  Hayward
  Building

  
	
   

  	
   

  	
  22
  Bermudian Road 

  
	
   

  	
   

  	
  Hamilton
  HM 1 I

  
	
   

  	
   

  	
  Bermuda

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile No: +1 441 292 4258 with copy always to
  +1 203 221 2763

  



 


(b)                                      Process Agent.
For the purpose of Section 13(c) of this Agreement:- 


 


Party A does not appoint a Process Agent.


 


Party
B appoints as its Process Agent [Conyers, Dill & Pearman, 34
Threadneedle Street, London EC2R 8AY, England]


 


(c)                                       Offices. The
provisions of Section 10(a) will not apply to this Agreement.


 


(d)                                      Multibranch
Party. For the purpose of Section 10(c) of this Agreement:-


 

















 


Neither
Party A nor Party B is a Multibranch Party.


 


(e)                                  Calculation
Agent. The Calculation Agent is Party A unless otherwise specified in a
Confirmation in relation to the relevant Transaction.


 


(f)                                    Credit Support
Document. Details of any Credit Support Document:-


 


Party
B’s obligations to Party A under this Agreement and all Transactions
contemplated hereby are secured by the Security Documents (as such term is
defined in the Loan Facility) each of which shall be deemed to be a Credit
Support Document for the purposes of this Agreement.


 


(g)                                 Credit Support
Provider. Credit Support Provider does not apply in relation to Party A.


 


(h)                                 Credit Support
Provider(s) mean(s), in relation to Party B, each party (other than Party
A) that executes and/or has obligations under the Security Documents (Security
Documents is not a defined term in the LA) as defined in Clause 1.2 of the Loan
Agreement.


 


(i)                                     Governing Law.
This Agreement will be governed by and construed in accordance with English
law.


 


Netting
of Payments. Sub-paragraph (ii) of Section 2(c) of this
Agreement will apply to all Transactions with effect from the date of this
Agreement, except as mutually agreed by Party A and Party B and detailed in the
relevant Confirmation(s) evidencing a Transaction or group(s) of
Transactions, as the case may be.


 


(k)                                  “Affiliate” will
have the meaning specified in Section 14 of this Agreement.


 

















 


Part 5

Other Provisions


 


(a)                                  2000 ISDA
Definitions. The 2000 Definitions published by ISDA (the “Definitions”) are
incorporated by reference herein. Any terms used and not otherwise defined
herein which are contained in the Definitions shall have the meaning set forth
therein.


 


(b)                                 Representations.
Section 3(a) of this Agreement is hereby amended by, firstly, the
deletion of the word “and” at the end of subsection (iv); secondly, the
substitution of a semi-colon for the full-stop at the end of subsection (v); and, thirdly,
the addition of the following subsections:-


 


“(vi) Capacity. It is acting as principal (and
not as agent or any other capacity, fiduciary or otherwise); and


 


(vii) Physical Delivery.
In respect of any physically-settled Transactions, it will, at the time of delivery,
be the legal and beneficial owner, free of liens and encumbrances, of any
securities or commodities, which it delivers to the other party.”


 


(c)                                  Relationship
Between Parties. Each party shall be deemed to represent to the other party on
the date on which it enters into a Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary for that Transaction):-


 


(i)                                     Non-Reliance. It
is acting for its own account, and it has made its own independent decisions to
enter into that Transaction and as to whether that Transaction is appropriate
or proper for it based upon its own judgment and upon advice from such advisors
as it has deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and explanations
related to the terms and conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall be deemed
to be assurance or guarantee as to the expected results of that Transaction.


 


(ii)                                  Assessment and
Understanding. It is capable of assessing and understanding (on its own behalf
or through independent professional advice), and understands and accepts, the
terms, conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the financial and other risks of that Transaction.


 


(iii)                               Status of
Parties. The other party is not acting as a fiduciary for or an advisor for it
in respect of that Transaction.


 


(d)             Set-off. The following
provision is incorporated as Section 6(f) of this Agreement:


 


“6(f) Any amount (the “Early Termination Amount”)
payable to one party (the Payee) by the other party (the Payer) under Section 6(e),
in circumstances where there is a Defaulting Party or one Affected Party, will,
at the option of the party (“X”) other than the Defaulting Party or the
Affected Party (and without prior notice to the Defaulting Party or the
Affected Party), be reduced by its set-off against any amount(s) (the “Other
Agreement Amount”) payable (whether at such time or in the future or upon the
occurrence of a contingency) by the Payee to the Payer (irrespective of the
currency, place of payment or booking office of the obligation) under any other
agreement(s) between the Payee and the Payer or instrument(s) or
undertaking(s) issued or executed by one party to, or in favour of the
other party (and the Other Agreement Amount will be discharged promptly and in
all respects to the extent it is so set-off). X will give notice to the other
party of any set-off effected under this Section 6(f).


 


For
this purpose, either the Early Termination Amount or the Other Agreement Amount
(or the relevant portion of such amounts) may be converted by X into the
currency in which the other is denominated at the rate of exchange at which
such party would be able acting in a reasonable manner and in good faith to
purchase the relevant amount of such currency.


 

















 


If
an obligation is unascertained X may in good faith estimate that obligation and
set-off in respect of the estimate subject to the relevant party accounting to
the other when the obligation is ascertained.


 


Nothing
herein shall be effective to create a charge or other security interest. In
addition the right of set-off detailed herein shall be without prejudice, and
in addition, to any right of set-off combination of accounts, lien or other
right to which any party is, at any time, otherwise entitled (whether by
operation of law, contract or otherwise)”.


 


(e)                                  Recording of
Conversations. Each party to this Agreement acknowledges and agrees to the tape
recording of conversations between the parties to this Agreement whether by one
or other or both the parties.


 


Loan
Facility. Section 14 of this Agreement is hereby amended by the
incorporation of the following Definition:-


 


““Loan
Facility” means the term loan facility of US$229,500,000 (Two hundred and
thirty five million United States Dollars) made available to Party B (as
borrower) by Party A (as lender) evidenced by a loan agreement dated (12 December 2005.)


 


All
terms and expressions incorporated into this Agreement, which are defined in
the Loan Facility, shall have the same meaning, mutatis mutandis, when used in
this Agreement.


 


(g)                             Security. Party
B irrevocably and unconditionally undertakes and confirms to Party A that the obligations
to Party A by Party B pursuant to this Agreement shall be secured by the
Security Documents as defined in clause 1.2 of the Loan Agreement.


 


(h)                             Default under
Loan Facility. In addition to the Events of Default set out in Section 5(a) of
this Agreement, in relation to Party B only, the occurrence or existence of any
of the events or circumstances included as an “Event of Default” in Clause 19
of the Loan Facility (whether or not the Loan Facility at the time of any such
occurrence or existence is still in force and effect or has been terminated or
amended or the indebtedness owed by Party B to Party A under the Loan Facility
has been repaid in full) shall constitute an Event of Default under this
Agreement, such that the provisions of the aforementioned clause 19 of the Loan
Facility shall be incorporated, mutatis mutandis, into this Agreement as if set
out in this Agreement in full.


 


(i)                                 Interest Periods
under the Loan Facility. In the event that the parties enter into a Transaction
for the specific purpose of hedging (either in whole or in part) Party B’s
indebtedness to Party A under the Loan Facility, where Party B (as borrower)
has the right to elect interest periods of a different duration, it is hereby
agreed that interest periods under the Loan Facility shall be of the same
duration as Calculation Periods in respect of the relevant Transaction, such
that interest payment dates under the Loan Facility shall coincide in all
respects with Payment Dates in respect of that Transaction. For this purpose,
both parties agree that payments due to or from each other pursuant to the
relevant Transactions may (if Party A so determines at its sole discretion) be
set off against payments due to or from each other pursuant to the Loan
Facility.


 


Furthermore,
whilst it is the intention of both parties that floating interest payments in
respect of a Transaction payable by Party A to Party B, as aforementioned,
shall always match (so far as reasonably possible) the interest rate payments
(less the applicable margin) due under the Loan Facility by Party B to Party A,
it is accepted and agreed by Party B that the conventions and practices in the
London Swap Market may be different to those in the London Interbank Market
and, in this connection, Party A shall only be liable to pay the floating rate
established in respect of a Transaction notwithstanding that it may not equate
exactly to the interest rate (less the applicable margin) payable by Party B under
the Loan Facility.


 


Any
specific provisions relating to the determination of interest rates in the
light of the foregoing paragraph shall be detailed in the Confirmation
evidencing a particular Transaction. 


 


Contracts
(Rights of Third Parties) Act 1999. No term of this Agreement is enforceable by
a person who is not a party to it.