Exhibit 10.63


 


$300,000,000


 


GENERAL MARITIME CORPORATION


 


12.00% Senior Notes due 2017


 


Purchase Agreement


 


November 6, 2009


 


J.P. Morgan Securities Inc.

As Representative of the

several Initial Purchasers listed

in Schedule 1 hereto


 


c/o J.P. Morgan Securities Inc.


270 Park Avenue

New York, New York 10017


 


Ladies and Gentlemen:


 


General Maritime
Corporation, a Marshall Islands
corporation (the “Company”), proposes to issue and sell to the several initial
purchasers listed in Schedule 1 hereto (the “Initial Purchasers”), for whom you
are acting as representative (the “Representative”), $300,000,000 principal
amount of its 12% Senior Notes due 2017 (the “Securities”).  The Securities will be issued pursuant to an
Indenture to be dated as of November 12, 2009 (the “Indenture”) among the
Company, the guarantors listed in Schedule 2 hereto (the “Subsidiary Guarantors”)
and The Bank of New York Mellon, as trustee (the “Trustee”), and will be
guaranteed on an unsecured senior basis by each of the Subsidiary Guarantors
(the “Subsidiary Guarantees”).


 


The Securities will be sold
to the Initial Purchasers without being registered under the Securities Act of
1933, as amended (the “Securities Act”), in reliance upon an exemption
therefrom.  The Company and the Subsidiary
Guarantors have prepared a preliminary offering memorandum dated October 30,
2009 (the “Preliminary Offering Memorandum”) and will prepare an offering
memorandum dated the date hereof (the “Offering Memorandum”) setting forth
information concerning the Company and the Securities.  Copies of the Preliminary Offering Memorandum
have been, and copies of the Offering Memorandum will be, delivered by the
Company to the Initial Purchasers pursuant to the terms of this Agreement.  The Company hereby confirms that it has
authorized the use of the Preliminary Offering Memorandum, the other Time of
Sale Information (as defined below) and the Offering Memorandum in connection
with the offering and resale of the Securities by the Initial Purchasers in the
manner contemplated by this Agreement. 
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Preliminary Offering Memorandum.  References herein to the Preliminary Offering
Memorandum, the Time of Sale Information and the Offering Memorandum shall be
deemed to refer to and include any document incorporated by reference therein.


 

















 


At or prior to the time when
sales of the Securities were first made (the “Time of Sale”), the following
information shall have been prepared (collectively, the “Time of Sale
Information”): the Preliminary Offering Memorandum, as supplemented and amended
by the written communications listed on Annex A hereto.


 


Holders of the Securities
(including the Initial Purchasers and their direct and indirect transferees)
will be entitled to the benefits of a Registration Rights Agreement, to be
dated the Closing Date (as defined below) and substantially in the form
attached hereto as Exhibit A (the “Registration Rights Agreement”),
pursuant to which the Company and the Subsidiary Guarantors will agree to file
one or more registration statements with the Securities and Exchange Commission
(the “Commission”) providing for the registration under the Securities Act of
the Securities or the Exchange Securities referred to (and as defined) in the
Registration Rights Agreement.


 


The Company and the Subsidiary Guarantors
hereby confirm their agreement with the several Initial Purchasers concerning
the purchase and resale of the Securities, as follows:


 


1.             Purchase
and Resale of the Securities.  (a) 
The Company agrees to issue and sell the Securities to the several Initial
Purchasers as provided in this Agreement, and each Initial Purchaser, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly,
to purchase from the Company the respective principal amount of Securities set
forth opposite such Initial Purchaser’s name in Schedule 1 hereto at a price
equal 95.762% of the principal amount thereof plus accrued interest, if any,
from November 12, 2009 to the Closing Date.  The Company will not be obligated to deliver
any of the Securities except upon payment for all the Securities to be
purchased as provided herein.


 


(b)           The Company understands that the
Initial Purchasers intend to offer the Securities for resale on the terms set
forth in each of the Time of Sale Information. 
Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that:


 


(i)            it is a qualified institutional buyer within the meaning
of Rule 144A under the Securities Act (a “QIB”) and an accredited investor
within the meaning of Rule 501(a) under the Securities Act;


 


(ii)           it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act (“Regulation D”) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act; and


 


(iii)          it has not solicited offers for, or offered or sold, and
will not solicit offers for, or offer or sell, the Securities as part of their
initial offering except:


 


(A)  within the United States to
persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A
under the Securities Act (“Rule 144A”) and in connection with each such
sale, it has taken or will take reasonable 


 


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steps
to ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A; or


 


(B)   in accordance with the
restrictions set forth in Annex C hereto.


 


(c)           Each Initial Purchaser acknowledges
and agrees that the Company and, for purposes of the opinions to be delivered
to the Initial Purchasers pursuant to Sections 6 (f)(i) and 6(g), counsel
for the Company and counsel for the Initial Purchasers, respectively, may rely
upon the accuracy of the representations and warranties of the Initial
Purchasers, and compliance by the Initial Purchasers with their agreements,
contained in paragraph (b) above (including Annex C hereto), and each
Initial Purchaser hereby consents to such reliance.


 


(d)           The Company acknowledges and agrees
that the Initial Purchasers may offer and sell Securities to or through any
affiliate of an Initial Purchaser and that any such affiliate may offer and
sell Securities purchased by it to or through any Initial Purchaser; provided
that any such affiliates of Initial Purchasers shall comply with the provisions
of Section 1(b) hereof.


 


(e)           The Company and the Subsidiary
Guarantors acknowledge and agree that the Initial Purchasers are acting solely
in the capacity of an arm’s length contractual counterparty to the Company and
the Subsidiary Guarantors with respect to the offering of Securities
contemplated hereby (including in connection with determining the terms of the
offering) and not as financial advisors or fiduciaries to, or agents of, the
Company, the Subsidiary Guarantors or any other person.  Additionally, neither the Representative nor
any other Initial Purchaser is advising the Company, the Subsidiary Guarantors
or any other person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction.  The Company
and the Subsidiary Guarantors shall consult with their own advisors concerning
such matters and shall be responsible for making their own independent
investigation and appraisal of the transactions contemplated hereby, and
neither the Representative nor any other Initial Purchaser shall have any
responsibility or liability to the Company or the Subsidiary Guarantors with
respect thereto. Any review by the Representative or any other Initial
Purchaser of the Company, the Subsidiary Guarantors, the transactions
contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Representative or such other Initial
Purchaser, as the case may be, and shall not be on behalf of the Company or the
Subsidiary Guarantors or any other person.


 


2.             Payment
and Delivery.  (a)  Payment for
and delivery of the Securities will be made at the offices of Simpson Thacher &
Bartlett LLP, 425 Lexington Avenue, New York, New York 10017 at 10:00 A.M.,
New York City time, on November 12, 2009, or at such other time or place
on the same or such other date, not later than the fifth business day
thereafter, as the Representative and the Company may agree upon in
writing.  The time and date of such
payment and delivery is referred to herein as the “Closing Date”.


 


(b)           Payment for the Securities shall be
made by wire transfer in immediately available funds to the account(s) specified
by the Company to the Representative against delivery to the nominee of The
Depository Trust Company (“DTC”), for the account of the Initial Purchasers, of
one or more global notes representing the Securities (collectively, the 


 


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“Global Note”), with any
transfer taxes payable in connection with the sale of the Securities duly paid
by the Company.  The Global Note will be
made available for inspection by the Representative not later than 1:00 P.M.,
New York City time, on the business day prior to the Closing Date.


 


3.             Representations
and Warranties of the Company and the Subsidiary Guarantors.  The Company and the Subsidiary Guarantors
jointly and severally represent and warrant to each Initial Purchaser that:


 


(a)           Preliminary
Offering Memorandum, Time of Sale
Information and Offering Memorandum. 
The Preliminary Offering Memorandum, as of its date, did not, the Time
of Sale Information, at the Time of Sale, did not, and at the Closing Date,
will not, and the Offering Memorandum, in the form first used by the Initial Purchasers
to confirm sales of the Securities and as of the Closing Date, will not,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company and the Subsidiary Guarantors make no representation or warranty with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum, the Time of Sale Information or the
Offering Memorandum.


 


(b)           Additional
Written Communications.   The Company
(including its agents and representatives, other than the Initial Purchasers in
their capacity as such) has not prepared, made, used, authorized, approved or
referred to and will not prepare, make, use, authorize, approve or refer to any
written communication that constitutes an offer to sell or solicitation of an
offer to buy the Securities (each such communication by the Company or its
agents and representatives (other than a communication referred to in clauses
(i), (ii) and (iii) below) an “Issuer Written Communication”) other
than (i) the Preliminary Offering Memorandum, (ii) the Offering
Memorandum, (iii) the documents listed on Annex A hereto, including a term
sheet substantially in the form of Annex B hereto, which constitute part of the
Time of Sale Information, and (iv) any electronic road show or other
written communications, in each case used in accordance with Section 4(c).  Each such Issuer Written Communication, when
taken together with the Time of Sale Information, did not, and at the Closing
Date will not, contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that
the Company makes no representation and warranty with respect to any statements
or omissions made in each such Issuer Written Communication in reliance upon
and in conformity with information relating to any Initial Purchaser furnished
to the Company in writing by such Initial Purchaser through the Representative
expressly for use in any Issuer Written Communication.


 


(c)           Incorporated
Documents.  The documents
incorporated by reference in each of the Time of Sale Information and the
Offering Memorandum, when filed with the Commission, conformed or will conform,
as the case may be, in all material respects to the requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and
regulations of the Commission thereunder.


 


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(d)           Financial
Statements.  (i) The
financial statements and the related notes thereto included or incorporated by
reference in each of the Time of Sale Information and the Offering Memorandum
present fairly the financial position of the Company and its subsidiaries as of
the dates indicated and the results of their operations and the changes in
their cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby; the other financial
information included or incorporated by reference in each of the Time of Sale
Information and the Offering Memorandum has been derived from the accounting
records of the Company and its subsidiaries and presents fairly in all material
respects the information shown thereby; and the pro forma financial information
and the related notes thereto included or incorporated by reference in each of
the Time of Sale Information and the Offering Memorandum has been prepared in
accordance with the Commission’s rules and guidance with respect to pro
forma financial information, and the assumptions underlying such pro forma
financial information are reasonable and are set forth in each of the Time of
Sale Information and the Offering Memorandum. (ii) The financial
statements and the related notes thereto of Arlington Tankers Ltd. (“Arlington”)
and its consolidated subsidiaries included or incorporated by reference in each
of the Time of Sale Information and the Offering Memorandum present fairly the
financial position of Arlington and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in their
cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods covered thereby; and the other
financial information of Arlington and its Consolidated Subsidiaries included
or incorporated by reference in each of the Time of Sale Information and the
Offering Memorandum has been derived from the accounting records of Arlington
and presents fairly in all material respects the information shown thereby.


 


(e)           No
Material Adverse Change. 
Since the date of the most recent financial statements of the Company
included or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum (i) there has not been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries, or
any dividend or distribution of any kind declared, set aside for payment, paid
or made by the Company on any class of capital stock, or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the business, properties, management, financial position or
results of operations of the Company and its subsidiaries taken as a whole; (ii) neither
the Company nor any of its subsidiaries has entered into any transaction or
agreement that is material to the Company and its subsidiaries taken as a whole
or incurred any liability or obligation, direct or contingent, that is material
to the Company and its subsidiaries taken as a whole; (iii) neither the
Company nor any of its subsidiaries has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute
or any action, order or decree of any court or arbitrator or governmental or
regulatory authority; (iv) there has not been a material loss (whether
actual or constructive or partial or total) of or to any of the vessels that
are described in the Time of the Sale Information and the Offering Memorandum
as owned or to be acquired by the Company or any Subsidiary Guarantor; and (v) no
such vessel has been arrested or requisitioned for title or hire; except in the
case of clauses (i) through (v) above as otherwise disclosed in each
of the Time of Sale Information and the Offering Memorandum.


 


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(f)            Organization
and Good Standing.  The
Company and each of its subsidiaries have been duly organized and are validly
existing and in good standing under the laws of their respective jurisdictions
of organization, are duly qualified to do business and are in good standing in
each jurisdiction in which their respective ownership or lease of property or
the conduct of their respective businesses requires such qualification, and
have all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged, except
where the failure to be so qualified, in good standing or have such power or
authority would not, individually or in the aggregate, have a material adverse
effect on the business, properties, management, financial position, results of
operations or prospects of the Company and its subsidiaries taken as a whole or
on the performance by the Company and the Subsidiary Guarantors of their
obligations under the Securities and the Subsidiary Guarantees, respectively (a
“Material Adverse Effect”).  The Company
does not own or control, directly or indirectly, any corporation, association
or other entity other than the subsidiaries listed on Schedule 3 hereto.


 


(g)           Capitalization.  The Company has an authorized capitalization
as set forth in each of the Time of Sale Information and the Offering
Memorandum under the heading “Capitalization” and all the outstanding shares of
capital stock or other equity interests of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company (except, in the case of any
foreign subsidiary, for directors’ qualifying shares or shares otherwise
required to be owned by other persons other than the Company pursuant to
applicable law), free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party, other
than those arising under the Company’s Credit Agreement, dated as of October 20,
2009 (as amended, supplemented or otherwise modified as of the date hereof, the
“Credit Agreement”), and Arlington’s Loan Agreement, dated as of December 12,
2005, or otherwise as described in each of the Time of Sale Information and the
Offering Memorandum.


 


(h)           Due
Authorization.  The Company
and each of the Subsidiary Guarantors have full right, power and authority to
execute and deliver this Agreement, the Securities, the Subsidiary Guarantees,
the Indenture, the Exchange Securities and the Registration Rights Agreement
(collectively, the “Transaction Documents”), as applicable, and to perform
their respective obligations hereunder and thereunder; and all action required
to be taken for the due and proper authorization, execution and delivery of
each of the Transaction Documents and the consummation of the transactions
contemplated thereby has been duly and validly taken.


 


(i)            The
Indenture.  The Indenture has
been duly authorized by the Company and each of the Subsidiary Guarantors and,
when duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of the
Company and each of the Subsidiary Guarantors enforceable against the Company
and each of the Subsidiary Guarantors in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability (regardless of whether enforcement is
considered in a proceeding in equity or at law) (collectively, the “Enforceability
Exceptions”) and on the Closing Date, the Indenture will conform in all
material respects to the requirements of the Trust Indenture Act of 1939, as
amended (the “Trust Indenture Act”), and the rules and regulations of the
Commission applicable to an indenture that is qualified thereunder.


 


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(j)            The
Securities and the Subsidiary Guarantees.  The Securities have been duly authorized by
the Company and, when duly executed, authenticated, issued and delivered as
provided in the Indenture and paid for as provided herein, will be duly and
validly issued and outstanding and will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with
their terms, subject to the Enforceability Exceptions, and will be entitled to
the benefits of the Indenture; and the Subsidiary Guarantees have been duly
authorized by each of the Subsidiary Guarantors and, when the Securities have
been duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be valid and legally binding
obligations of each of the Subsidiary Guarantors, enforceable against each of
the Subsidiary Guarantors in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.


 


(k)           Purchase and Registration
Rights Agreements.  This
Agreement has been duly authorized, executed and delivered by the Company and
each of the Subsidiary Guarantors; and the Registration Rights Agreement has
been duly authorized by the Company and each of the Subsidiary Guarantors and
on the Closing Date will be duly executed and delivered by the Company and each
of the Subsidiary Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and legally binding agreement of the Company and each of the Subsidiary
Guarantors enforceable against the Company and each of the Subsidiary
Guarantors in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution thereunder may
be limited by applicable law and public policy.


 


(l)            The Exchange Securities.  On the Closing Date, the Exchange Securities
(including the related guarantees) will have been duly authorized by the Company and
each of the Subsidiary Guarantors and, when duly executed, authenticated, issued and
delivered as contemplated by the Registration Rights Agreement, will be duly
and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company, as issuer, and each of the Subsidiary Guarantors, as guarantor,
enforceable against the Company and each of the Subsidiary Guarantors in
accordance with their terms, subject to the Enforceability Exceptions, and will
be entitled to the benefits of the Indenture.


 


(m)          Descriptions
of the Transaction Documents.  Each Transaction Document conforms in all
material respects to the description thereof contained in each of the Time of
Sale Information and the Offering Memorandum.


 


(n)           No
Violation or Default.  Neither
the Company nor any of its subsidiaries is (i) in violation of its charter
or by-laws or similar organizational documents; (ii) in default, and no event
has occurred that, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject; or (iii) in violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (ii) and



 


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(iii) above, for any
such default or violation that would not, individually or in the aggregate,
have a Material Adverse Effect.


 


(o)           No
Conflicts.  The execution,
delivery and performance by the Company and each of the Subsidiary Guarantors
of each of the Transaction Documents to which each is a party, the issuance and
sale of the Securities, the issuance of the Subsidiary Guarantees and
compliance by the Company and each of the Subsidiary Guarantors with the terms
thereof and the consummation of the transactions contemplated by the Transaction
Documents will not (i) conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws or similar organizational
documents of the Company or any of its subsidiaries or (iii) result in the
violation of any law or statute or any judgment, order, rule or regulation
of any court or arbitrator or governmental or regulatory authority, except, in
the case of clauses (i) and (iii) above, for any such conflict,
breach, violation, default, lien, charge or encumbrance that would not,
individually or in the aggregate, have a Material Adverse Effect.


 


(p)           No
Consents Required.  No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company and each of the Subsidiary Guarantors of each of the Transaction
Documents to which each is a party, the issuance and sale of the Securities,
the issuance of the Subsidiary Guarantees and compliance by the Company and
each of the Subsidiary Guarantors with the terms thereof and the consummation
of the transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (i) under applicable state securities laws in
connection with the purchase and resale of the Securities and the Subsidiary
Guarantees by the Initial Purchasers and (ii) with respect to the Exchange
Securities (including the related guarantees) under the Securities Act, the Trust Indenture Act
and applicable state securities laws as contemplated by the Registration Rights
Agreement.


 


(q)           Legal
Proceedings.  Except as described in each of the Time of
Sale Information and the Offering Memorandum, there are no legal, governmental
or regulatory investigations, actions, suits or proceedings pending to which
the Company or any of its subsidiaries is or may be a party or to which any
property of the Company or any of its subsidiaries is or may be the subject
that, individually or in the aggregate, if determined adversely to the Company
or any of its subsidiaries, could reasonably be expected to have a Material
Adverse Effect; and, to the knowledge of the Company and the Subsidiary
Guarantors, no such investigations, actions, suits or proceedings are
threatened or contemplated by any governmental or regulatory authority or
others.


 


(r)            Independent
Accountants.  Deloitte &
Touche LLP, who have
certified certain financial statements of the Company and its subsidiaries, are
an independent public accountants with respect to the Company and its
subsidiaries within the applicable rules and regulations 


 


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adopted by the Commission and
the Public Company Accounting Oversight Board (United States) and as required
by the Securities Act.  MSPC Certified
Public Accountants and Advisors, P.C., who have certified certain financial statements
of Arlington and its Subsidiaries, were at all relevant times independent
public accountants with respect to Arlington and its subsidiaries within the
applicable rules and regulations adopted by the Commission and the Public
Company Accounting Oversight Board (United States) and as required by the
Securities Act.


 


(s)           Title
to Real and Personal Property.  The Company and its subsidiaries have good
and marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real and personal property that are material to the
respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances,
claims and defects and imperfections of title except
those that (i) do not materially interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries or (ii) could
not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.


 


(t)            Title
to Intellectual Property.  The Company and its subsidiaries own or possess
adequate rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures) necessary for the conduct of their respective
businesses; and the Company and its subsidiaries have not received any notice
of any claim of infringement of or conflict with any such rights of others
which, individually or in aggregate, would reasonably be expected to have a
Material Adverse Effect.


 


(u)           No
Undisclosed Relationships.  No relationship, direct or indirect, exists
between or among the Company or any of its subsidiaries, on the one hand, and
the directors, officers, stockholders, customers or suppliers of the Company or
any of its subsidiaries, on the other, that 
would be required by the Securities Act to be described in a
registration statement to be filed with the Commission and that is not so
described in each of the Time of Sale Information and the Offering Memorandum.


 


(v)           Investment
Company Act.  Neither the Company nor any of its
subsidiaries is and, after giving effect to the offering and sale of the
Securities and the application of the proceeds thereof as described in each of
the Time of Sale Information and the Offering Memorandum, none of them will be
an “investment company” or an entity “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, “Investment Company Act”).


 


(w)          Taxes.  Except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, the Company and its subsidiaries have paid all
federal, state, local and foreign taxes and filed all tax returns required to
be paid or filed through the date hereof or have established adequate reserves
for the payment thereof; and, except as otherwise disclosed in the each of the
Offering Memorandum and the Time of Sale Information, there is no tax
deficiency that has been, or would reasonably be expected to be, asserted
against the Company or any of its subsidiaries
or any of their respective properties or assets that would, individually or in the aggregate, have a Material Adverse Effect. All material tax liabilities
have 


 


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been adequately provided for in
the financial statements of the Company to the extent required under generally accepted accounting principles and the Securities Act and Exchange Act.


 


(x)            Stamp and Transfer
Taxes.  Except as set forth in
each of the Time of Sale Information and the Offering Memorandum, with respect
to non-residents of the Marshall Islands, there are no stamp or other issuance
or transfer taxes or duties and no capital gains, income, withholding or other
taxes payable to the Marshall Islands or any political subdivision or taxing
authority thereof or therein in connection with (i) the delivery of the
Securities by the Company to the Initial Purchasers in the manner contemplated
by this Agreement; (ii) payments of the principal, interest and other
amounts in respect of the Securities to holders of the Securities; or (iii) the
sale and delivery of the Securities by the Initial Purchasers to subsequent
purchasers thereof in accordance with the terms of this Agreement.


 


(y)           Taxation in the
Marshall Islands.  None of the
holders of the Securities, any of the Initial Purchasers or the Trustee will be
deemed resident, domiciled, carrying on business or subject to taxation in the
Marshall Islands on an overall income basis solely by the execution, delivery,
performance or enforcement of the Transaction Documents or the issuance or sale
of the Securities or by virtue of the ownership or transfer of Securities or
the receipt of payments thereon.


 


(z)            Licenses
and Permits.  The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local
or foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in each of the Time of Sale Information and
the Offering Memorandum, except where the failure to possess or make the same
would not, individually or in the aggregate, have a Material Adverse Effect;
and, except as described in each of the Time of Sale Information and the
Offering Memorandum, neither the Company nor any of its subsidiaries has
received notice of any revocation or modification of any such license,
certificate, permit or authorization or has any reason to believe that any such
license, certificate, permit or authorization will not be renewed in the
ordinary course, which could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.


 


(aa)         No
Labor Disputes.  No labor disturbance by or dispute with
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the Company and each of the Subsidiary Guarantors, is contemplated or
threatened, in each case that would reasonably be expected, individually or in
the aggregate,  to have a Material
Adverse Effect.


 


(bb)         Compliance
With Environmental Laws.  Except as described in each of the Time of
Sale Information and the Offering Memorandum, (i) the Company and its
subsidiaries (i) are in compliance with, and have not violated, any and
all applicable federal, state, local and foreign and international laws, rules,
regulations, decisions and orders relating to the protection of human health
and safety, the environment or natural resources or to hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, “Environmental
Laws”); (ii) have received and are in compliance with all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses; and (iii) have not received
notice of any actual or potential liability under or relating to any
Environmental Laws, 


 


10

















 


including for the investigation
or remediation of any disposal or release of hazardous or toxic substances or
wastes, pollutants or contaminants, except in any such case for any such
failure to comply with, or failure to receive required permits, licenses or
approvals, or liability, as would not, individually or in the aggregate, have a
Material Adverse Effect. Except as described in each of the Time of Sale
Information and the Offering Memorandum, there are no proceedings that are
pending or, to the knowledge of the Company or the Subsidiary Guarantors,
contemplated against the Company or any of its subsidiaries under any
Environmental Laws in which a governmental entity is also a party, other than
such proceedings regarding which it is reasonably believed no monetary
sanctions of $100,000 or more will be imposed, and none of the Company and its subsidiaries
anticipates material capital expenditures relating to any Environmental Laws.


 


(cc)         Compliance
With ERISA.  Each employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), for which the Company or any member of its
Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the “Code”)) would have any
liability (each, a “Plan”)  has been
maintained in compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including but not limited to
ERISA and the Code, except where the failure to be in compliance would not,
individually or in the aggregate,  have a
Material Adverse Effect; no “reportable event” (within the meaning of Section 4043(c) of
ERISA) has occurred or is reasonably expected to occur and no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, has occurred with respect to any such Plan excluding transactions
effected pursuant to a statutory or administrative exemption; for each such
Plan that is subject to the funding rules of Section 412 of the Code or
Section 302 of ERISA, no Plan has failed, or is reasonably expected to
fail, to satisfy the minimum funding standards (within the meaning of Section 302
of ERISA or Section 412 of the Code), whether or not waived, and the fair
market value of the assets of each such Plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such Plan determined based on those actuarial assumptions used to
fund such Plan;  neither the Company or
any member of its Controlled Group has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA (other than contributions to the
plan or premiums to the PBGC in the ordinary course and without default) in
respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(c)(3) of
ERISA); and each Plan that is intended to be qualified under Section 401(a) of
the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.


 


(dd)         Disclosure
Controls.  The Company and its subsidiaries maintain an
effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated and
communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure. 
The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule 13a-15
of the Exchange Act.


 


11
















 


(ee)         Accounting
Controls.  The Company and its subsidiaries maintain
systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of
the Exchange Act) that comply with the requirements of the Exchange Act and
have been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.  The Company and its subsidiaries maintain
internal accounting controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access
to assets is permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences. 
Except as disclosed in each of the Time of Sale Information and the
Offering Memorandum, there are no material weaknesses or significant
deficiencies in the Company’s internal controls.


 


(ff)           Insurance.  The Company and its
subsidiaries have insurance covering their respective properties, operations,
personnel and businesses, including protection and indemnity and business
interruption insurance, which insurance is in amounts and insures against such
losses and risks as are adequate to protect the Company and its subsidiaries
and their respective businesses as consistent with industry practice; and
neither the Company nor any of its subsidiaries has (i) received notice
from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance or (ii) any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


(gg)         No
Unlawful Payments.  Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company and each of the Subsidiary
Guarantors, any director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its subsidiaries has (i) used
any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment.


 


(hh)         Compliance
with Money Laundering Laws.  The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the Currency
and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect 


 


12

















 


to the Money Laundering Laws is
pending or, to the knowledge of the Company and the Subsidiary Guarantors,
threatened.


 


(ii)           Compliance
with OFAC.  None of the Company, any of its subsidiaries
or, to the knowledge of the Company and the Subsidiary Guarantors, any
director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”);
and the Company will not directly or indirectly use the proceeds of the
offering of the Securities hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.


 


(jj)           Solvency.  On and immediately
after the Closing Date, the Company and each of the Subsidiary Guarantors
(after giving effect to the issuance of the Securities and the Subsidiary
Guarantors and the other transactions related thereto as described in each of
the Time of Sale Information and the Offering Memorandum) will be Solvent.  As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (i) the
present fair market value (or present fair saleable value) of the assets of the
Company and the Subsidiary Guarantors are not less than the total amount
required to pay the liabilities of the Company and the Subsidiary Guarantors on
their total existing debts and liabilities (including contingent liabilities)
as they become absolute and matured; (ii) the Company and the Subsidiary
Guarantors are able to realize upon their assets and pay their debts and other
liabilities, contingent obligations and commitments as they mature and become
due in the normal course of business; (iii) assuming consummation of the
issuance of the Securities and the Subsidiary Guarantees as contemplated by
this Agreement, the Time of Sale Information and the Offering Memorandum, the
Company and the Subsidiary Guarantors are not incurring debts or liabilities
beyond their ability to pay as such debts and liabilities mature; (iv) the
Company and the Subsidiary Guarantors are not engaged in any business or
transaction, and do not propose to engage in any business or transaction, for which
their property would constitute unreasonably small capital after giving due
consideration to the prevailing practice in the industry in which the Company
and the Subsidiary Guarantors are engaged; and (v) the Company and the
Subsidiary Guarantors are not a defendant in any civil action that would result
in a judgment that the Company and the Subsidiary Guarantors are or would
become unable to satisfy.


 


(kk)         No
Restrictions on Subsidiaries.  Except as described in each of the Time of
Sale Information and the Offering Memorandum, no subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any dividends to
the Company, from making any other distribution on such subsidiary’s capital
stock, from repaying to the Company any loans or advances to such subsidiary
from the Company or from transferring any of such subsidiary’s properties or
assets to the Company or any other subsidiary of the Company.


 


(ll)           No
Broker’s Fees.  Neither the Company nor any of its
subsidiaries is a party to any contract agreement or understanding with any
person (other than this Agreement) that would give rise to a valid claim
against any of them or any Initial Purchaser for a brokerage commission, finder’s
fee or like payment in connection with the offering and sale of the Securities.


 


13

















 


(mm)       Rule 144A Eligibility.  On the Closing Date, neither the Securities
nor any of the Subsidiary Guarantees will be of the same class as securities
listed on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in an automated inter-dealer quotation system; and each
of the Preliminary Offering Memorandum and the Offering Memorandum, as of its
respective date, contains or will contain all the information that, if
requested by a prospective purchaser of the Securities, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4) under
the Securities Act.


 


(nn)         No
Integration.  Neither the
Company nor any of its affiliates (as defined in Rule 501(b) of
Regulation D) has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act), that is or will be integrated with the sale of
the Securities in a manner that would require registration of the Securities
under the Securities Act.


 


(oo)         No General
Solicitation or Directed Selling Efforts.  None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no representation is made) has (i) solicited
offers for, or offered or sold, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engaged in any
directed selling efforts within the meaning of Regulation S under the
Securities Act (“Regulation S”), and all such persons have complied with the
offering restrictions requirement of Regulation S.


 


(pp)         Securities
Law Exemptions.  Assuming the
accuracy of the representations and warranties of the Initial Purchasers
contained in Section 1(b) (including Annex C hereto) and their
compliance with their agreements set forth therein, it is not necessary, in
connection with the issuance and sale of the Securities to the Initial
Purchasers and the offer, resale and delivery of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act.


 


(qq)         No
Stabilization.  Neither the Company nor any of the Subsidiary
Guarantors has taken, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any stabilization or manipulation
of the price of the Securities.


 


(rr)           Margin Rules.  Neither the issuance, sale and delivery of
the Securities nor the application of the proceeds thereof by the Company as
described in each of the Time of Sale Information and the Offering Memorandum
will violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System or any other regulation of such Board of Governors.


 


(ss)         Forward-Looking
Statements.  No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) included or incorporated by reference in each of the Time of Sale
Information or the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.


 


14

















 


(tt)           Statistical and Market
Data.  Nothing has come to the
attention of the Company that has caused the Company to believe that the
statistical and market-related data included or incorporated by reference in
each of the Time of Sale Information and the Offering Memorandum is not based
on or derived from sources that are reliable and accurate in all material
respects.


 


(uu)         Sarbanes-Oxley
Act.  There is and has been no failure on the part
of the Company or, to the knowledge of the Company, any of the Company’s
directors or officers, in their capacities as such, to comply in all material
respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.


 


(vv)         Vessels.  Each of the vessels
owned by the Company or one of its subsidiaries has been duly registered in the
name of the subsidiary of the Company that owns it under the laws and
regulations and the flag of the nation of its registration and no other action
is necessary to establish and perfect such subsidiary’s title to and interest
in such vessels as against any charterer or third party.


 


4.             Further
Agreements of the Company and the Subsidiary Guarantors.  The Company and each of the Subsidiary
Guarantors jointly and severally covenant and agree with each Initial Purchaser
that:


 


(a)           Delivery
of Copies.  The Company will
deliver, without charge, to the Initial Purchasers as many copies of the
Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer
Written Communication and the Offering Memorandum (including all amendments and
supplements thereto) as the Representative may reasonably request.


 


(b)           Offering
Memorandum, Amendments or Supplements.  Before
finalizing the Offering Memorandum or making or distributing any amendment or
supplement to any of the Time of Sale Information or the Offering Memorandum or
filing with the Commission any document that will be incorporated by reference
therein, the Company will furnish to the Representative and counsel for the
Initial Purchasers a copy of the proposed Offering Memorandum or such amendment
or supplement or document to be incorporated by reference therein for review,
and will not distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which the
Representative reasonably objects.


 


(c)           Additional
Written Communications.  Before
making, preparing, using, authorizing, approving or referring to any Issuer
Written Communication, the Company will furnish to the Representative and
counsel for the Initial Purchasers a copy of such proposed written communication
for review and will not make, prepare, use, authorize, approve or refer to any
such written communication to which the Representative reasonably objects.


 


(d)           Notice
to the Representative.  The
Company will advise the Representative promptly, and confirm such advice in
writing, (i) of the issuance by any governmental or regulatory authority
of any order preventing or suspending the use of any of the Time of Sale 


 


15

















 


Information, any Issuer Written Communication
or the Offering Memorandum or the initiation or threatening of any proceeding
for that purpose; (ii) of the occurrence of any event at any time prior to
the completion of the initial offering of the Securities as a result of which
any of the Time of Sale Information, any Issuer Written Communication or the
Offering Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing when such Time of Sale Information, Issuer Written Communication or
the Offering Memorandum is delivered to a purchaser, not misleading; and (iii) of
the receipt by the Company of any notice with respect to any suspension of the
qualification of the Securities for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and the Company
will use its reasonable best efforts to prevent the issuance of any such order
preventing or suspending the use of any of the Time of Sale Information, any
Issuer Written Communication or the Offering Memorandum or suspending any such
qualification of the Securities and, if any such order is issued, will obtain
as soon as possible the withdrawal thereof.


 


(e)           Time
of Sale Information.  If at
any time prior to the Closing Date (i) any event shall occur or condition
shall exist as a result of which any of the Time of Sale Information as then
amended or supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (ii) it is necessary to amend or supplement any of the Time
of Sale Information to comply with law, the Company will immediately notify the
Initial Purchasers thereof and forthwith prepare and, subject to paragraph (b) above,
furnish to the Initial Purchasers such amendments or supplements to any of the
Time of Sale Information (or any document to be filed with the Commission and
incorporated by reference therein) as may be necessary so that the statements
in any of the Time of Sale Information as so amended or supplemented will not,
in light of the circumstances under which they were made, be misleading or so
that any of the Time of Sale Information will comply with law.


 


(f)            Ongoing
Compliance of the Offering Memorandum.  If at any time prior to the completion of the
initial offering of the Securities (i) any event shall occur or condition
shall exist as a result of which the Offering Memorandum as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in the
light of the circumstances existing when the Offering Memorandum is delivered
to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with law, the Company will
immediately notify the Initial Purchasers thereof and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (including such document to be incorporated by reference therein)
will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with law.


 


(g)           Blue
Sky Compliance.  The Company
will qualify the Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions as the Representative shall reasonably 


 


16

















 


request and will continue such
qualifications in effect so long as required for the offering and resale of the
Securities; provided that neither the Company nor any of the Subsidiary Guarantors
shall be required to (i) qualify as a foreign corporation or other entity
or as a dealer in securities in any such jurisdiction where it would not
otherwise be required to so qualify, (ii) file any general consent to
service of process in any such jurisdiction or (iii) subject itself to
taxation in any such jurisdiction if it is not otherwise so subject.


 


(h)           Clear
Market.  During the period
from the date hereof through and including the date that is 180 days after the
date hereof, the Company and each of the Subsidiary Guarantors will not,
without the prior written consent of the Representative, offer, pledge, sell,
contract to sell or otherwise dispose of any debt securities issued or
guaranteed by the Company or any of the Subsidiary Guarantors with terms
substantially similar to the Securities (other than the Securities sold
hereunder and any Exchange Securities).


 


(i)            Supplying
Information.  While the
Securities remain outstanding and are “restricted securities” within the
meaning of Rule 144(a)(3) under the Securities Act, the Company and
each of the Subsidiary
Guarantors will, during any period in
which the Company is not subject to and in compliance with Section 13 or
15(d) of the Exchange Act, furnish reasonably promptly to holders of the Securities
and prospective purchasers of the Securities designated by such holders, upon
the request of such holders or such prospective purchasers, the information
required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.


 


(k)           DTC.   The Company will assist the Initial
Purchasers in arranging for the Securities to be eligible for clearance and
settlement through DTC.


 


(l)            No Resales by the Company. 
Until completion of the exchange offer (or the first anniversary of the
date on which the shelf registration statement became effective) pursuant to
the Registration Rights Agreement, the Company will not, and will not permit
any of its affiliates (as defined in Rule 144 under the Securities Act)
to, resell any of the Securities that have been acquired by any of them, except
for Securities purchased by the Company or any of its affiliates and resold in
a transaction registered under the Securities Act.


 


(m)          No
Integration.  Neither the
Company nor any of its affiliates (as defined in Rule 501(b) of
Regulation D) will, directly or through any agent, sell, offer for sale,
solicit offers to buy or otherwise negotiate in respect of, any security (as
defined in the Securities Act), that is or will be integrated with the sale of
the Securities in a manner that would require registration of the Securities
under the Securities Act.


 


(n)           No General
Solicitation or Directed Selling Efforts.  None of the Company or any of its affiliates
or any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no covenant is given) will (i) solicit offers for,
or offer or sell, the Securities by means of any form of general solicitation
or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engage in any
directed selling efforts within the meaning of Regulation S, and all such
persons will comply with the offering restrictions requirement of Regulation S.


 


17

















 


(j)            Use
of Proceeds.  The Company will
apply the net proceeds from the sale of the Securities as described in each of
the Preliminary Offering Memorandum, the other Time of Sale Information and the
Offering Memoradum under the heading “Use of proceeds”.


 


(k)           No Stabilization.  Neither the Company nor any of the Subsidiary
Guarantors will take, directly or indirectly, any action designed to or that
could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Securities.


 


5.             Certain
Agreements of the Initial Purchasers. 
Each Initial Purchaser hereby represents and agrees that it has not and
will not use, authorize use of, refer to, or participate in the planning for use
of, any written communication that constitutes an offer to sell or the
solicitation of an offer to buy the Securities other than (i) the
Preliminary Offering Memorandum and the Offering Memorandum, (ii) a
written communication that contains no “issuer information” (as defined in Rule 433(h)(2) under
the Securities Act) that was not included (including through incorporation by
reference) in the Preliminary Offering Memorandum or the Offering Memorandum, (iii) any
written communication listed on Annex A or prepared pursuant to Section 4(c) above
(including any electronic road show) or otherwise substantially consistent with
Annex B, (iv) any written communication prepared by such Initial Purchaser
and approved by the Company in advance in writing or (v) any written
communication relating to or that contains the terms of the Securities and/or
other information that was included (including through incorporation by
reference) in the Preliminary Offering Memorandum or the Offering Memorandum.


 


6.             Conditions
of Initial Purchasers’ Obligations. 
The obligation of each Initial Purchaser to purchase Securities on the
Closing Date as provided herein is subject to the performance by the Company
and each of the Subsidiary Guarantors of their respective covenants and other
obligations hereunder and to the following additional conditions:


 


(a)           Representations
and Warranties.  The
representations and warranties of the Company and the Subsidiary Guarantors
contained herein shall be true and correct on the date hereof and on and as of
the Closing Date; and the statements of the Company, the Subsidiary Guarantors
and their respective officers made in any certificates delivered pursuant to
this Agreement shall be true and correct on and as of the Closing Date.


 


(b)           No
Downgrade.  Subsequent to the
earlier of (A) the Time of Sale and (B) the execution and delivery of
this Agreement, (i) no downgrading shall have occurred in the rating
accorded the Securities or any other debt securities or preferred stock issued
or guaranteed by the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization”, as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act
and (ii) no such organization shall have publicly announced that it has
under surveillance or review, or has changed its outlook with respect to, its
rating of the Securities or of any other debt securities or preferred stock
issued or guaranteed by the Company or any of its subsidiaries (other than an
announcement with positive implications of a possible upgrading).


 


(c)           No
Material Adverse Change.  No
event or condition of a type described in Section 3(e) hereof shall
have occurred or shall exist, which event or condition is not described in each
of the Time of Sale Information (excluding any amendment or supplement thereto)
and 


 


18

















 


the Offering Memorandum
(excluding any amendment or supplement thereto) and the effect of which in the
judgment of the Representative makes it impracticable or inadvisable to proceed
with the offering, sale or delivery of the Securities on the terms and in the
manner contemplated by this Agreement, the Time of Sale Information and the
Offering Memorandum.


 


(d)           Officer’s
Certificate.  The
Representative shall have received on and as of the Closing Date a certificate
of an executive officer of the Company who has specific knowledge of the
Company’s financial matters and is reasonably satisfactory to the
Representative (i) confirming that such officer has carefully reviewed the
Time of Sale Information and the Offering Memorandum and, to the knowledge of
such officer, the representations set forth in Sections 3(a) and 3(b) hereof
are true and correct, (ii) confirming that the other representations and
warranties of the Company and the Subsidiary Guarantors in this Agreement are
true and correct and that the Company and the Subsidiary Guarantors have
complied with all agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date and (iii) to
the effect set forth in paragraphs (b) and (c) above.


 


(e)           Comfort
Letters.  (i) On the date
of this Agreement and on the Closing Date, Deloitte &
Touche LLP shall have furnished to the
Representative, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representative, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain
financial information of the Company and its consolidated subsidiaries
contained or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum; provided that the letter delivered on the
Closing Date shall use a “cut-off” date no more than three business days prior
to the Closing Date; and (ii) on the date of this Agreement and on the
Closing Date, MSPC Certified Public Accountants and Advisors, P.C. shall have
furnished to the Representative, at the request of the Company, letters, dated
the respective dates of delivery thereof and addressed to the Initial
Purchasers, in form and substance reasonably satisfactory to the
Representative, containing statements and information of the type customarily
included in accountants’ “comfort letters” to underwriters with respect to the
financial statements and certain financial information of Arlington and its consolidated
subsidiaries incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum; provided that the letter delivered on the
Closing Date shall use a “cut-off” date no more than three business days prior
to the Closing Date.


 


(f)            Opinion
and 10b-5 Statement of Counsel for the Company. 
(i) Kramer Levin Naftalis & Frankel LLP, U.S.
counsel for the Company and the Subsidiary Guarantors, shall have furnished to
the Representative, at the request of the Company, their written opinions and
10b-5 statement, dated the Closing Date and addressed to the Initial
Purchasers, in form and substance reasonably satisfactory to the
Representative, to the effect substantially as set forth in Annex D-1 hereto; (ii) Reeder &
Simpson P.C., Marshall Islands counsel for the Company and the Subsidiary
Guarantors, shall have furnished to the Representative, at the request of the
Company, their written opinions, dated the Closing Date and addressed to the
Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, to the effect substantially as set forth in Annex D-2 hereto; (iii) George
E. Henries, Esq., Liberia counsel for the Company, shall have furnished to
the Representative, at the request of the Company and the Subsidiary
Guarantors, his written opinions, dated the Closing Date and addressed to the
Initial Purchasers, 


 


19

















 


in form and substance reasonably
satisfactory to the Representative, to the effect substantially as set forth in
Annex D-3 hereto; (iv) Appleby Global, Bermuda counsel for the Company and
the Subsidiary Guarantors, shall have furnished to the Representative, at the
request of the Company, their written opinions, dated the Closing Date and
addressed to the Initial Purchasers, in form and substance reasonably
satisfactory to the Representative, to the effect substantially as set forth in
Annex D-4 hereto; (v) Allen and Gledhill LLP, Singapore counsel for the
Company and the Subsidiary Guarantors, shall have furnished to the
Representative, at the request of the Company, their written opinions, dated
the Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, to the effect substantially as
set forth in Annex D-5 hereto; (vi) Albuquerque & Associados,
Portuguese counsel for the Company and the Subsidiary Guarantors, shall have
furnished to the Representative, at the request of the Company, their written
opinions, dated the Closing Date and addressed to the Initial Purchasers, in
form and substance reasonably satisfactory to the Representative, to the effect
substantially as set forth in Annex D-6 hereto; (vii) Goltsblat BLP,
Russia counsel for the Company and the Subsidiary Guarantors, shall have
furnished to the Representative, at the request of the Company, their written
opinions, dated the Closing Date and addressed to the Initial Purchasers, in
form and substance reasonably satisfactory to the Representative, to the effect
substantially as set forth in Annex D-7 hereto; and (viii) Seward &
Kissel LLP, special counsel to the Company, shall have furnished to the
Representative, at the request of the Company, their written opinions, dated
the Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, to the effect substantially as
set forth in Annex D-8 hereto.


 


(g)           Opinion
and 10b-5 Statement of Counsel for the Initial Purchasers.  The Representative shall have received on and
as of the Closing Date an opinion and 10b-5 statement of Simpson Thacher &
Bartlett LLP, counsel for the Initial Purchasers, with respect to such matters
as the Representative may reasonably request, and such counsel shall have
received such documents and information as they may reasonably request to
enable them to pass upon such matters.


 


(h)           No
Legal Impediment to Issuance. 
No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal, state or
foreign governmental or regulatory authority that would, as of the Closing
Date, prevent the issuance or sale of the Securities or the issuance of the
Subsidiary Guarantees; and no injunction or order of any federal, state or
foreign court shall have been issued that would, as of the Closing Date,
prevent the issuance or sale of the Securities or the issuance of the
Subsidiary Guarantees.


 


(i)            Good
Standing.  The Representative
shall have received on and as of the Closing Date satisfactory evidence of the
good standing of the Company and its subsidiaries, in their respective
jurisdictions of organization and their good standing in such other
jurisdictions as the Representative may reasonably request, in each case in
writing or any standard form of telecommunication from the appropriate
governmental authorities of such jurisdictions.


 


(j)            Registration
Rights Agreement.  The Initial
Purchasers shall have received a counterpart of the Registration Rights
Agreement that shall have been executed and delivered by a duly authorized
officer of the Company and each of the Subsidiary Guarantors.


 


(k)           DTC.  The Securities shall be eligible for
clearance and settlement through DTC.


 


20

















 


(l)            Amendment
to Amended and Restated Credit Agreement.  The amendment, dated as of October 27,
2009, to the Company’s Amended and Restated Credit Agreement as described in
each of the Time of Sale Information and the Offering Memorandum, shall become
effective as of the Closing Date and upon consummation of the transactions
contemplated hereby.


 


(m)          Additional Documents.  On or prior to the Closing Date, the Company
and the Subsidiary Guarantors shall have furnished to the Representative such
further certificates and documents as the Representative may reasonably
request.


 


All opinions, letters, certificates and
evidence mentioned above or elsewhere in this Agreement shall be deemed to be
in compliance with the provisions hereof only if they are in form and substance
reasonably satisfactory to counsel for the Initial Purchasers.


 


7.             Indemnification
and Contribution.


 


(a)           Indemnification
of the Initial Purchasers. 
The Company and each of the Subsidiary Guarantors jointly and severally
agree to indemnify and hold harmless each Initial Purchaser, its affiliates,
directors and officers and each person, if any, who controls such Initial
Purchaser within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, reasonable legal fees and other
expenses incurred in connection with any suit, action or proceeding or any
claim asserted, as such fees and expenses are incurred), joint or several, that
arise out of, or are based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum,
any of the other Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum (or any amendment or supplement thereto), or any
omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, in each case except insofar as such
losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use therein.


 


(b)           Indemnification
of the Company and the Subsidiary Guarantors.  Each Initial Purchaser agrees, severally and
not jointly, to indemnify and hold harmless the Company, each of the Subsidiary
Guarantors, each of their respective directors and officers and each person, if
any, who controls the Company or any of the Subsidiary Guarantors within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a) above,
but only with respect to any losses, claims, damages or liabilities that arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum, any of the other Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum (or
any amendment or supplement thereto), it being understood and agreed that the
only such information consists of the following: the third and fourth sentences
of the fourteenth paragraph and the sixteenth paragraph.


 


21
















 


(c)           Notice
and Procedures.  If any suit,
action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any person in respect of
which indemnification may be sought pursuant to either paragraph (a) or (b) above,
such person (the “Indemnified Person”) shall promptly notify the person against
whom such indemnification may be sought (the “Indemnifying Person”) in writing;
provided that the failure to notify the Indemnifying Person shall not relieve
it from any liability that it may have under paragraph (a) or (b) above
except to the extent that it has been materially prejudiced (through the
forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have to an Indemnified Person
otherwise than under paragraph (a) or (b) above.  If any such proceeding shall be brought or
asserted against an Indemnified Person and it shall have notified the
Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not, without the
consent of the Indemnified Person, be counsel to the Indemnifying Person) to
represent the Indemnified Person and any others entitled to indemnification
pursuant to Section 7 that the Indemnifying Person may designate in such
proceeding and shall pay the fees and expenses of counsel related to such
proceeding, as incurred.  In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall
have mutually agreed to the contrary; (ii) the Indemnifying Person has
failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. 
It is understood and agreed that the Indemnifying Person shall not, in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred.  Any such separate firm for any Initial
Purchaser, its affiliates, directors and officers and any control persons of
such Initial Purchaser shall be designated in writing by J.P. Morgan Securities
Inc. and any such separate firm for the Company, the Subsidiary Guarantors,
their respective directors, officers and any control persons of the Company and
the Subsidiary Guarantors shall be designated in writing by the Company.  The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the Indemnifying Person agrees to indemnify each Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.  No Indemnifying Person shall, without the
written consent of the Indemnified Person, effect any settlement of any pending
or threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional
release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are
the subject matter of such proceeding and (y) does not include any
statement as to or any admission of fault, culpability or a failure to act by
or on behalf of any Indemnified Person.


 


22

















 


(d)           Contribution.  If the indemnification provided for in
paragraphs (a) and (b) above is unavailable to an Indemnified Person
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each Indemnifying Person under such paragraph, in
lieu of indemnifying such Indemnified Person thereunder, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and the Initial Purchasers on the other
from the offering of the Securities or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but
also the relative fault of the Company and the Subsidiary Guarantors on the one
hand and the Initial Purchasers on the other in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations.  The relative benefits received by the Company
and the Subsidiary Guarantors on the one hand and the Initial Purchasers on the
other shall be deemed to be in the same respective proportions as the net
proceeds (before deducting expenses) received by the Company from the sale of
the Securities and the total discounts and commissions received by the Initial
Purchasers in connection therewith, as provided in this Agreement, bear to the
aggregate offering price of the Securities. 
The relative fault of the Company and the Subsidiary Guarantors on the
one hand and the Initial Purchasers on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or any Subsidiary
Guarantor or by the Initial Purchasers and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.


 


(e)           Limitation
on Liability.  The Company,
the Subsidiary Guarantors and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by pro  rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above.  The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with any such
action or claim.  Notwithstanding the
provisions of this Section 7, in no event shall an Initial Purchaser be
required to contribute any amount in excess of the amount by which the total
discounts and commissions received by such Initial Purchaser with respect to
the offering of the Securities exceeds the amount of any damages that such
Initial Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission.    No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The Initial Purchasers’ obligations to contribute pursuant to this Section 7
are several in proportion to their respective purchase obligations hereunder
and not joint.


 


(f)            Non-Exclusive Remedies.  The remedies provided for in this Section 7
are not exclusive and shall not limit any rights or remedies that may otherwise
be available to any Indemnified Person at law or in equity.


 


23

















 


8.             Effectiveness
of Agreement.  This Agreement shall
become effective upon  the execution and
delivery hereof by the parties hereto.


 


9.             Termination.  This Agreement may be terminated in the
absolute discretion of the Representative, by notice to the Company, if after
the execution and delivery of this Agreement and on or prior to the Closing
Date (i) trading generally shall have been suspended or materially limited
on the New York Stock Exchange or the over-the-counter market; (ii) trading
of any securities issued or guaranteed by the Company or any of the Subsidiary
Guarantors shall have been suspended on any exchange or in any over the counter
market; (iii) a general moratorium on commercial banking activities shall
have been declared by federal or New York State authorities; or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis, either within or outside the
United States, that, in the judgment of the Representative, is material and
adverse and makes it impracticable or inadvisable to proceed with the offering,
sale or delivery of the Securities on the terms and in the manner contemplated
by this Agreement, the Time of Sale Information and the Offering Memorandum.


 


10.           Defaulting
Initial Purchaser.  (a)  If, on
the Closing Date, any Initial Purchaser defaults on its obligation to purchase
the Securities that it has agreed to purchase hereunder, the non-defaulting
Initial Purchasers may in their discretion arrange for the purchase of such
Securities by other persons satisfactory to the Company on the terms contained
in this Agreement.  If, within 36 hours
after any such default by any Initial Purchaser, the non-defaulting Initial
Purchasers do not arrange for the purchase of such Securities, then the Company
shall be entitled to a further period of 36 hours within which to procure other
persons satisfactory to the non-defaulting Initial Purchasers to purchase such
Securities on such terms.  If other
persons become obligated or agree to purchase the Securities of a defaulting
Initial Purchaser, either the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to five full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel
for the Initial Purchasers may be necessary in each of the Time of Sale
Information, the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Time of Sale Information or the Offering Memorandum that effects any such
changes.  As used in this Agreement, the
term “Initial Purchaser” includes, for all purposes of this Agreement unless
the context otherwise requires, any person not listed in Schedule 1 hereto
that, pursuant to this Section 10, purchases Securities that a defaulting
Initial Purchaser agreed but failed to purchase.


 


(b)           If, after giving effect to any
arrangements for the purchase of the Securities of a defaulting Initial
Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and the
Company as provided in paragraph (a) above, the aggregate principal amount
of such Securities that remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Initial Purchaser to purchase the
principal amount of Securities that such Initial Purchaser agreed to purchase
hereunder plus such Initial Purchaser’s pro  rata share (based on
the principal amount of Securities that such Initial Purchaser agreed to
purchase hereunder) of the Securities of such defaulting Initial Purchaser or
Initial Purchasers for which such arrangements have not been made.


 


24

















 


(c)           If, after giving effect to any
arrangements for the purchase of the Securities of a defaulting Initial
Purchaser or Initial Purchasers by the non-defaulting Initial Purchasers and
the Company as provided in paragraph (a) above, the aggregate principal
amount of such Securities that remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities, or if the Company shall not
exercise the right described in paragraph (b) above, then this Agreement
shall terminate without liability on the part of the non-defaulting Initial
Purchasers.  Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the
part of the Company or the Subsidiary Guarantors, except that the Company and
the Subsidiary Guarantors will continue to be liable for the payment of
expenses as set forth in Section 11 hereof and except that the provisions
of Section 7 hereof shall not terminate and shall remain in effect.


 


(d)           Nothing contained herein shall
relieve a defaulting Initial Purchaser of any liability it may have to the
Company, the Subsidiary Guarantors or any non-defaulting Initial Purchaser for
damages caused by its default.


 


11.           Payment
of Expenses. (a)  Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company and each
of the Subsidiary Guarantors jointly and severally agree to pay or cause to be
paid all costs and expenses incident to the performance of their respective
obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the
Securities and the Subsidiary Guarantees and any taxes payable in that
connection; (ii) the costs incident to the preparation and printing of the
Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer
Written Communication and the Offering Memorandum (including any amendment or
supplement thereto) and the distribution thereof; (iii) the costs of
reproducing and distributing each of the Transaction Documents; (iv) the
fees and expenses of the Company’s and the Subsidiary Guarantors’ counsel and
independent accountants; (v) the fees and expenses incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the
Representative may designate and the preparation, printing and distribution of
a Blue Sky Memorandum (including the related reasonable fees and expenses of
counsel for the Initial Purchasers); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the
Trustee and any paying agent (including related fees and expenses of any
counsel to such parties); (viii) all expenses and application fees
incurred in connection with the application for the approval of the Securities
for book-entry transfer by DTC; and (ix) all expenses incurred by the
Company in connection with any “road show” presentation to potential investors
provided that notwithstanding clause (ix) above, the Initial Purchasers
shall pay one-half of the expenses associated with any airplane which is used
for the purposes of such “road show” presentations.


 


(b)           If (i) this Agreement is
terminated pursuant to Section 9, (ii), the Company for any reason fails
to tender the Securities for delivery to the Initial Purchasers or (iii) the
Initial Purchasers decline to purchase the Securities because any of the
conditions set forth in Section 6 of this Agreement has not been
satisfied, the Company and the Subsidiary Guarantors jointly and severally
agree to reimburse the Initial Purchasers for all out-of-pocket costs and
expenses (including the fees and expenses of their counsel) reasonably incurred
by the Initial Purchasers in connection with this Agreement and the offering
contemplated hereby.


 


25

















 


12.           Persons
Entitled to Benefit of Agreement. 
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and any controlling persons
referred to herein, and the affiliates, the officers and directors of each
Initial Purchaser referred to in Section 7 hereof.  Nothing in this Agreement is intended or
shall be construed to give any other person any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.  No purchaser of Securities from
any Initial Purchaser shall be deemed to be a successor merely by reason of
such purchase.


 


13.           Survival.  The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company, the
Subsidiary Guarantors and the Initial Purchasers and the provisions set forth
in Section 11(b), 12 and 15 hereof, contained in this Agreement or made by
or on behalf of the Company, the Subsidiary Guarantors or the Initial
Purchasers pursuant to this Agreement or any certificate delivered pursuant
hereto shall survive the delivery of and payment for the Securities and shall
remain in full force and effect, regardless of any termination of this
Agreement or any investigation made by or on behalf of the Company or the
Initial Purchasers.


 


14.           Certain
Defined Terms.  For purposes of this
Agreement, (a) except where otherwise expressly provided, the term “affiliate”
has the meaning set forth in Rule 405 under the Securities Act; (b) the
term “business day” means any day other than a day on which banks are permitted
or required to be closed in New York City; (c) the term “subsidiary” has
the meaning set forth in Rule 405 under the Securities Act and (d) the
term “written communication” has the meaning set forth in Rule 405 under
the Securities Act.


 


15.           Miscellaneous.  (a)  Authority
of the Representative.  Any
action by the Initial Purchasers hereunder may be taken by J.P. Morgan
Securities Inc., on behalf of the Initial Purchasers, and any such action taken
by J.P. Morgan Securities Inc. shall be binding upon the Initial Purchasers.


 


(b)           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted and confirmed by any standard form of
telecommunication.  Notices to the
Initial Purchasers shall be given to the Representative c/o J.P. Morgan
Securities Inc., 270 Park Avenue, New York, New York 10017 (fax: 212-270-1063),
Attention: Lawrence Landry.  Notices to
the Company and the Subsidiary Guarantors shall be given to them at General
Maritime Corporation, 299 Park Avenue, 2nd Floor, New York, NY
10171, (fax: 212-763-5607; Attention: Jeffrey D. Pribor.


 


(c)           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.


 


(d)           Submission of Jurisdiction. 
Each of the Company and the
Subsidiary Guarantors hereby submits to the non-exclusive jurisdiction of the
U.S. federal and state courts in the Borough of Manhattan in New York City in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. The Company and the Subsidiary Guarantors
irrevocably waive, to the fullest extent permitted by law, any objection to any
suit, action, or proceeding that may be brought in connection with this
Agreement in such courts whether on the grounds of venue, residence or domicile
or on the ground that any such suit, 


 


26

















 


action or proceeding has been
brought in an inconvenient forum.  Each
of the Company and the Subsidiary Guarantors irrevocably appoints Corporation
Service Company, as its authorized agent in the Borough of Manhattan in New
York City upon which process may be served in any such suit, action or
proceeding, and agrees that service of process upon such agent, and written
notice of said service to the Company or any of the Subsidiary Guarantor, as
applicable, by the person serving the same to the address provided in Section 15(b),
shall be deemed in every respect effective service of process upon the Company
or any of the Subsidiary Guarantors, as applicable, in any such suit, action or
proceeding. Each of the Company and the Subsidiary Guarantors further agrees to
take any and all action as may be necessary to maintain such designation and
appointment of such agent in full force and effect for a period of nine years
from the date of this Agreement. Nothing in this Section 15(d) shall
affect the right of any party to serve legal process in any other manner
permitted by law or affect the right of any party to bring any suit, action or
proceeding against any other party or its property in the courts of other
jurisdictions.


 


(e)           Judgment Currency.
Each of the Company and the Subsidiary
Guarantors agrees, jointly and
severally, to indemnify each Initial
Purchaser, its affiliates, directors and officers and each person, if any, who
controls such Initial Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any loss incurred, as incurred, as a result of any
judgment being given in connection with this Agreement for which
indemnification is provided by any such person and any such judgment or order
being paid in a currency (the “Judgment Currency”)  other than U.S. dollars as a result of any variation as
between (i) the spot rate of exchange in New York at which the Judgment
Currency would have been convertible into U.S. dollars as of the date such
judgment or order is entered, and (ii) the spot rate of exchange at which
the indemnified party is first able to purchase U.S. dollars with the amount of
Judgment Currency actually received by the indemnified party. The foregoing
indemnity shall constitute a separate and independent, several and not joint,
obligation of the Company and the Subsidiary Guarantors, on the one hand, and
each Initial Purchaser, on the other, and shall continue in full force and effect
notwithstanding any such judgment or order. The term “spot rate of exchange”  shall include any premiums and costs of
exchange payable in connection with the purchase of, or conversion or, the
relevant currency.


 


(f)            Counterparts.
This Agreement may be signed in counterparts (which may include counterparts
delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same
instrument.


 


(g)           Amendments
or Waivers.  No amendment or
waiver of any provision of this Agreement, nor any consent or approval to any
departure therefrom, shall in any event be effective unless the same shall be
in writing and signed by the parties hereto.


 


(h)           Headings.  The headings herein are included for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.


 


27
















 


If the foregoing is in accordance with your
understanding, please indicate your acceptance of this Agreement by signing in
the space provided below.


 


 


	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  GENERAL
  MARITIME CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  John C. Georgiopoulos

  
	
   

  	
   

  	
  Name:
  

  	
  John
  C. Georgiopoulos

  
	
   

  	
   

  	
  Title:
  

  	
  EVP,
  Treasurer and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  Subsidiary Guarantors:

  
	
   

  	
   

  
	
   

  	
  GENERAL MARITIME
  SUBSIDIARY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Jeffrey D. Pribor

  
	
   

  	
   

  	
  Name:
  

  	
  Jeffrey
  D. Pribor

  
	
   

  	
   

  	
  Title:
  

  	
  President

  
	
   

  	
   

  
	
   

  	
  GENERAL MARITIME
  MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Milton H. Gonzales

  
	
   

  	
   

  	
  Name:
  

  	
  Milton
  H. Gonzales

  
	
   

  	
   

  	
  Title:
  

  	
  Manager
  and Technical Director

  
					



 

















 


	
   

  	
  GMR AGAMEMNON LLC

  
	
   

  	
  GMR AJAX LLC

  
	
   

  	
  GMR
  ALEXANDRA LLC

  
	
   

  	
  GMR
  ARGUS LLC

  
	
   

  	
  GMR CHARTERING LLC

  
	
   

  	
  GMR CONSTANTINE LLC

  
	
   

  	
  GMR DAPHNE LLC

  
	
   

  	
  GMR DEFIANCE LLC

  
	
   

  	
  GMR ELEKTRA LLC

  
	
   

  	
  GMR GEORGE T LLC

  
	
   

  	
  GMR GULF LLC

  
	
   

  	
  GMR HARRIET G. LLC

  
	
   

  	
  GMR HOPE LLC

  
	
   

  	
  GMR HORN LLC

  
	
   

  	
  GMR KARA G LLC

  
	
   

  	
  GMR MINOTAUR LLC

  
	
   

  	
  GMR ORION LLC

  
	
   

  	
  GMR PHOENIX LLC

  
	
   

  	
  GMR PRINCESS LLC

  
	
   

  	
  GMR PROGRESS LLC

  
	
   

  	
  GMR REVENGE LLC

  
	
   

  	
  GMR ST. NIKOLAS LLC

  
	
   

  	
  GMR SPYRIDON LLC

  
	
   

  	
  GMR STRENGTH LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  John C. Georgiopoulos

  
	
   

  	
   

  	
  Name:
  

  	
  John
  C. Georgiopoulos

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
  ARLINGTON TANKERS LTD.

  
	
   

  	
  VISION LTD.

  
	
   

  	
  VICTORY LTD.

  
	
   

  	
  COMPANION LTD.

  
	
   

  	
  COMPATRIOT LTD.

  
	
   

  	
  CONCORD LTD.

  
	
   

  	
  CONSUL LTD.

  
	
   

  	
  CONCEPT LTD.

  
	
   

  	
  CONTEST LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  John C. Georgiopoulos

  
	
   

  	
   

  	
  Name:
  

  	
  John
  C. Georgiopoulos

  
	
   

  	
   

  	
  Title:

  	
  Director

  
					



 


[Signature
page to the Purchase Agreement]


 

















 


	
   

  	
  GENERAL
  MARITIME MANAGEMENT

  (PORTUGAL) LDA.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Rui Jorge Pais Pereira

  
	
   

  	
   

  	
  Name:
  Rui Jorge Pais Pereira

  
	
   

  	
   

  	
  Title:
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL
  MARITIME MANAGEMENT

  (PORTUGAL) LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Rui Jorge Pais Pereira

  
	
   

  	
   

  	
  Name:
  Rui Jorge Pais Pereira

  
	
   

  	
   

  	
  Title:
  Manager

  
				



 


[Signature
page to the Purchase Agreement]


 

















 


	
   

  	
  THE
  COMMON SEAL of

  GENERAL MARITIME CREWING PTE. LTD.

  was hereunto affixed by

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/
  James Edward Paisley

  
	
   

  	
   

  	
  James
  Edward Paisley

  
	
   

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/
  Cher Choon Teck

  
	
   

  	
   

  	
  Cher
  Choon Teck

  
	
   

  	
   

  	
  Secretary

  



 


[Signature
page to the Purchase Agreement]


 

















 


	
   

  	
  LIMITED “GENERAL MARITIME CREWING”

  (RUSSIA CORPORATION)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Gennadiy Liventsov

  
	
   

  	
   

  	
   

  	
  Name:
  Gennadiy Liventsov

  
	
   

  	
   

  	
   

  	
  Title:
  Director

  



 


[Signature
page to the Purchase Agreement]


 

















 


	
  Accepted:
  November 5, 2009

  
	
   

  
	
   

  
	
  J.P.
  MORGAN SECURITIES INC.

  
	
   

  
	
  For
  itself and on behalf of the

  several Initial Purchasers listed

  in Schedule 1 hereto.

  
	
   

  
	
   

  
	
  By

  	
  /s/
  Stathis Karanikolaidis

  	
   

  
	
   

  
	
  Authorized
  Signatory

  
	
   

  
	
  Stathis
  Karanikolaidis

  
	
  Executive Director

  



 


[Signature
page to the Purchase Agreement]


 
















 


Schedule 1


 


	
  Initial
  Purchaser

  	
   

  	
  Principal Amount

  	
   

  
	
  J.P. Morgan Securities Inc.

  	
   

  	
  $

  	
  111,000,000

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  	
  105,000,000

  	
   

  
	
  Citigroup Global Markets Inc.

  	
   

  	
  18,000,000

  	
   

  
	
  RBS Securities Inc.

  	
   

  	
  18,000,000

  	
   

  
	
  Credit Suisse
  Securities (USA) LLC

  	
   

  	
  13,500,000

  	
   

  
	
  Jefferies & Company, Inc.

  	
   

  	
  13,500,000

  	
   

  
	
  UBS Securities LLC

  	
   

  	
  13,500,000

  	
   

  
	
  DnB NOR Markets, Inc.

  	
   

  	
  7,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  300,000,000

  	
   

  



 


S-1

















 


Schedule 2


 


Subsidiaries Guarantors


 


General Maritime Subsidiary
Corporation


General Maritime Management
LLC


General
Maritime Management (Portugal) LDA.


General
Maritime Management (Portugal) Limitada


General
Maritime Crewing Pte Ltd. (Singapore Corporation)


General
Maritime Crewing Ltd. (Russia Corporation)


GMR Agamemnon LLC


GMR Ajax LLC


GMR
Alexandra LLC


GMR
Argus LLC


GMR Chartering LLC


GMR Constantine LLC


GMR Daphne


GMR Defiance LLC


GMR Electra


GMR George T


GMR Gulf LLC


GMR Harriet G. LLC


GMR Hope LLC


GMR Horn LLC


GMR Kara G LLC


GMR Minotaur LLC


GMR Orion LLC


GMR Phoenix LLC


GMR Princess LLC


GMR Progress LLC


GMR Revenge LLC


GMR St. Nikolas LLC


GMR Spyridon LLC


GMR Strength LLC


Arlington Tankers Ltd.


Vision Ltd.


Victory Ltd.


Companion Ltd.


Compatriot Ltd.


Concord Ltd.


Consul Ltd.


Concept Ltd.


Contest Ltd.


 


S-2

















 


Schedule 3


 


Subsidiaries


 


General Maritime Subsidiary
Corporation


General Maritime Management
LLC


General Maritime Management
(UK) LLC


General Maritime Management
(Hellas) Ltd.


General Maritime Management
(Portugal) LDA.


General Maritime Management
(Portugal) Limitada


General Maritime Crewing Pte
Ltd. (Singapore Corporation)


General Maritime Crewing
Ltd. (Russia Corporation)


GMR Administration Corp.


GMR Agamemnon LLC


GMR
Ajax LLC


GMR
Alexandra LLC


GMR Argus LLC


GMR Chartering LLC


GMR Constantine LLC


GMR Daphne


GMR Defiance LLC


GMR Electra


GMR
George T


GMR GP
LLC


GMR Gulf LLC


GMR Harriet G. LLC


GMR Hope LLC


GMR Horn LLC


GMR Kara G LLC


GMR Limited LLC


GMR Minotaur LLC


GMR Orion LLC


GMR Phoenix LLC


GMR Princess LLC


GMR Progress LLC


GMR Revenge LLC


GMR St. Nikolas LLC


GMR Spyridon LLC


GMR Star LLC


GMR Strength LLC


GMR Trader LLC


GMR Trust LLC


Arlington Tankers Ltd.


Vision Ltd.


Victory Ltd.


Companion Ltd.


Compatriot Ltd.


Concord Ltd.


Consul Ltd.


Concept Ltd.


Contest Ltd.


Arlington Tankers, LLC


 


S-3

















 


Annex A


 


Additional Time of Sale Information


 


1.   Term sheet containing the terms of the
securities, substantially in the form of Annex B.


 


A
















 


Annex B


 


	
  Supplement,
  dated November 6, 2009, to

  	
   

  	
  Strictly confidential

  
	
  Preliminary
  offering memorandum, dated October 30, 2009

  	
   

  	
   

  



 


General Maritime
Corporation


$300,000,000 12.0% Senior
Notes due 2017


 


This
Supplement is qualified in its entirety by reference to the Preliminary
Offering Memorandum.  The information in
this Supplement supplements the Preliminary Offering Memorandum and supersedes
the information in the Preliminary Offering Memorandum to the extent it is
inconsistent with the information in the Preliminary Offering Memorandum .  Capitalized terms used in this Supplement but
not defined have the meanings given them in the Preliminary Offering
Memorandum.


 


The notes have not been
registered under the Securities Act of 1933, as amended, or the securities laws
of any other place.  We are offering the
notes only to qualified institutional buyers under Rule 144A and to
non-U.S. persons outside the United States under Regulation S.


 


This material is confidential and is for your
information only and is not intended to be used by anyone other than you.  This information does not purport to be a
complete description of the Notes or the offering.  Please refer to the Preliminary Offering
Memorandum for a complete description.


 


Pricing Term Sheet:


 




	
  Issuer:

  	
   

  	
  General Maritime
  Corporation

  
	
  Size:

  	
   

  	
  $300,000,000

  
	
  Maturity:

  	
   

  	
  November 15, 2017

  
	
  Coupon:

  	
   

  	
  12.0%

  
	
  Price:

  	
   

  	
  97.512% of face amount

  
	
  Yield to Maturity:

  	
   

  	
  12.50%

  
	
  Spread to Benchmark
  Treasury:

  	
   

  	
  + 922  basis points

  
	
  Benchmark Treasury:

  	
   

  	
  UST 4.25% due
  11/15/2017

  
	
  Interest Payment Dates:

  	
   

  	
  May 15 and
  November 15 of each year, commencing on May 15, 2010

  
	
  Record Dates:

  	
   

  	
  May 1 and
  November 1

  
	
  Gross Proceeds:

  	
   

  	
  $292,536,000

  
	
  Optional Redemption
  Provisions:

  	
   

  	
   

  
	
  First
  Call Date:

  	
   

  	
  November 15, 2013

  
	
  Redemption
  Prices:

  	
   

  	
   

  
	
   

  	
   

  	
  Commencing
  November 15, 2013:

  	
  106.000%

  
	
   

  	
   

  	
  Commencing
  November 15, 2014:

  	
  103.000%

  
	
   

  	
   

  	
  Commencing
  November 15, 2015 and thereafter:  100.000%

  	
   

  
	
  Make-Whole
  Call:

  	
   

  	
  Before the first call
  date at a discount rate of Treasury plus 50 basis points

  
	
  Equity
  Clawback:

  	
   

  	
  Prior to 2012, up to
  35% may be redeemed at 112.000%

  
	
  Tax
  Redemption:

  	
   

  	
  In the event of certain
  changes in tax law, at 100%

  






 


B-1

















 




	
  Change of Control:

  	
   

  	
  Put at 101%

  
	
  Trade Date:

  	
   

  	
  November 6, 2009

  
	
  Settlement:

  	
   

  	
  T+3; November 12,
  2009

  
	
  Denominations:

  	
   

  	
  $2,000 and integral
  multiples of $1,000 in excess thereof

  
	
  CUSIP/ISIN:

  	
   

  	
  Rule 144A:
  370290AD0 / US370290AD01  

  
	
   

  	
   

  	
  Regulation S: Y2693RAA9
  / USY2693RAA96

  
	
  Form of Offering:

  	
   

  	
  Rule 144A/
  Regulation S with registration rights

  
	
  Ratings:

  	
   

  	
  Moody’s: B3 

  
	
   

  	
   

  	
  S&P: B

  
	
  Joint Book-Running
  Managers:

  	
   

  	
  J.P. Morgan Securities
  Inc. 

  
	
   

  	
   

  	
  Goldman,
  Sachs & Co.

  
	
  Co-Managers:

  	
   

  	
  Citigroup Global
  Markets Inc.  

  
	
   

  	
   

  	
  Credit Suisse Securities (USA) LLC  

  
	
   

  	
   

  	
  DnB NOR
  Markets, Inc.  

  
	
   

  	
   

  	
  Jefferies &
  Company, Inc.  

  
	
   

  	
   

  	
  RBS Securities Inc.  

  
	
   

  	
   

  	
  UBS Securities LLC

  






 


Changes from Preliminary Offering Memorandum:


 


Additional
Changes to the Description of Notes:


 


The
following are changes to the terms of the indenture governing the Notes
described in the Preliminary Offering Memorandum.


 


A.  Limitation on Indebtedness. 
The first paragraph under “Limitation on indebtedness” shall be replaced
with the following:


 


“The Company will not, and will not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness; provided, however,
that the Company and the Subsidiary Guarantors may Incur Indebtedness if on the
date thereof (1) the Consolidated Coverage Ratio for the Company and its
Restricted Subsidiaries is at least 2.25 to 1.00.”


 


B.  Limitation on Restricted Payments. 
Clause (14) of the second paragraph under “Limitation on restricted
payments” shall be replaced with the following:


 


“14) so long as no default has occurred and is
continuing, Restricted Payments (other than purchases, redemptions or other
acquisitions of any Capital Stock that is restricted under clause (2) of
the preceding paragraph) in an amount not to exceed $30.0 million; provided that the amount of such
Restricted Payments will be included in subsequent calculations of the amount
of Restricted Payments.”


 


C.  Permitted Liens.  Clause (2) of
the definition of “Permitted Liens” shall be replaced with the following:


 


“(2) (X) Liens securing Indebtedness
incurred in compliance with the first paragraph or clause 13 of the second
paragraph of “Certain covenants—Limitation on indebtedness” with respect to any
existing Vessel (which term, for purposes of this clause (2), shall include the
Capital Stock of a Person substantially all of the assets of which is a Vessel
and any Related Assets, as the context may require) of such Person provided, however,
that the principal amount of Indebtedness secured by such a Lien shall not
exceed 65% of the fair market value of such Vessel, determined based upon the
average of written appraisals of three Independent Appraisers, and (Y) Liens
securing Indebtedness incurred to finance the construction, purchase or lease
of, or repairs, improvements or additions to, property of such Person,
including a Vessel; provided, however, as to this clause (Y), (A) subject
to clause (B) below, in the case of a Vessel, (i) except as provided
in clauses (ii), (iii) and (iv) below, the principal amount of
Indebtedness secured by such a Lien does not exceed (x) with respect to
Indebtedness Incurred to finance the construction of such Vessel, 65% of the
sum of (1) the contract price pursuant to the Vessel Construction Contract
for such Vessel and (2) any other Ready for Sea Cost for such Vessel, and (y) with
respect to Indebtedness Incurred 


 


B-2

















 


to finance the acquisition of such Vessel, 65% of the
sum of (1) the contract price for the acquisition of such Vessel and (2) any
other Ready for Sea Cost of such Vessel, (ii) in the case of Indebtedness
that matures within nine months after the Incurrence of such Indebtedness
(other than any Refinancing Indebtedness of such Indebtedness that matures
within nine months or Indebtedness that matures within one year prior to the
Stated Maturity of the Notes), the principal amount of Indebtedness secured by
such a Lien shall not exceed 65% of the fair market value, as determined in
good faith by the Board of Directors, of such Vessel at the time such Lien is
incurred, (iii) in the case of a Sale/Leaseback Transaction, the principal
amount of Indebtedness secured by such a Lien shall not exceed 65% of the fair
market value, as determined in good faith by the Board of Directors, of such
Vessel at the time such Lien is incurred and (iv) in the case of
Indebtedness representing Capitalized Lease Obligations relating to a Vessel,
the principal amount of Indebtedness secured by such a Lien shall not exceed
65% of the sum of (1) the fair market value, as determined in good faith
by the Board of Directors, of such Vessel at the time such Lien is incurred and
(2) any Ready for Sea Cost for such Vessel and (B) in the case of
Additional Assets acquired directly or indirectly from Net Available Cash
pursuant to the covenant described under “Certain covenants—Limitation on sales
of assets and subsidiary stock,” the principal amount of Indebtedness secured
by such a Lien does not exceed the lesser of (i) 65% of the contract price
for the acquisition of such Additional Asset and (ii) the contract price
for the acquisition of such Additional Asset less the Net Available Cash used
to acquire such Additional Asset; provided
further, however, as
to this clause (Y), that such Lien may not extend to any other property owned
by such Person or any of its Subsidiaries at the time the Lien is Incurred and
the Indebtedness (other than any interest thereon) secured by the Lien may not
be Incurred more than 180 days after the later of the acquisition, completion
of construction, repair, improvement, addition or commencement of full
operation of the property subject to the Lien;”


 


Additional
Information:


 


A.  Industry Overview


 


The International Energy
Agency is scheduled to release its annual World Energy Outlook report on November 10th.   We cannot provide any assurances as to the
International Energy Agency’s new forecast for global oil demand, including
potential substantial downward revisions from its prior forecast.


 


B.  As Adjusted Data


 


The as adjusted data
included in the Preliminary Offering Memorandum is being updated below to
reflect the actual terms of the notes.


 


As Adjusted Financial Data:


 


	
  As
  adjusted financial data(1)

  	
   

  	
  Twelve months ended September 30, 2009

  	
   

  
	
  Cash paid for interest
  (net of amount capitalized)

  	
   

  	
  77.9 million

  	
   

  
	
  Total debt

  	
   

  	
  986.0 million

  	
   

  
	
  Ratio of total debt to
  adjusted EBITDA

  	
   

  	
  5.0x

  	
   

  
	
  Ratio of Adjusted
  EBITDA to cash paid for interest (net of amount capitalized)

  	
   

  	
  2.5x

  	
   

  



 






(1) As
adjusted financial data takes into effect this offering, the use of proceeds
therefrom as described in “Use of proceeds” and the amendment to our 2005
credit facility as described in “Description of other indebtedness” as if they
had occurred at the beginning of the period based on the following assumptions:
(i) the notes were issued at the beginning of the period with an interest
rate of 12.0%; and (ii) the borrowings under our 2005 credit facility
accrued interest at an assumed rate of 2.78% per year, which is equivalent to
LIBOR plus 2.50%, the interest rate applicable under our 2005 credit facility
as amended, as of the date hereof, and includes the effect of five interest
rate swaps, as described in “Management’s discussion and analysis of financial
contributions and results of operations— Liquidity and capital resources”, with
a notional amount aggregating $579.5 million with a weighted average fixed rate
of 4.22% per year. Actual interest rates could vary significantly from the
assumed interest rates.


 


B-3

















 


Core Fixed Costs Estimates:


 


Time charter contracted
revenue for 2009 is currently $240 million and the contracted revenue for 2010
is currently $110 million, representing 65% of our estimated core fixed costs
for 2010 (taking into account the effects of this offering and the amendment to
our credit facility).


 


Based on our estimates
and assumptions described in “Management’s discussion and analysis of financial
condition and results of operations” and (i) after giving effect to the
issuance of notes in this offering at an interest rate of 12.0%; (ii) assuming
repricing of our 2005 credit facility from current LIBOR plus 100 basis points
to LIBOR plus 250 basis points; (iii) assuming that all excess cash (net
of proceeds used for general corporate purposes as described under “Use of
proceeds”) above the minimum cash balance required to be maintained under our
2005 credit facility will be used to pay down debt and (iv) assuming that
a portion of the proceeds of this offering are used to repay our RBS credit
facility in full and to repay $40 million of debt under our 2005 credit
facility as described in “Use of proceeds”, we estimate core fixed cost for
2010 to be approximately $170.0 million.


 


Other Commitments:


 


The
following is a tabular summary of our future contractual obligations as of June 30,
2009 as adjusted to reflect the issuance of notes in this offering and the
repayment in full of the RBS credit facility and a $40 million portion of the
2005 credit facility using proceeds from this offering as described in “Use of
proceeds” (dollars in millions):


 


As
adjusted


 


	
   

  	
   

  	
  Total

  	
   

  	
  2009(1)

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  2013

  	
   

  	
  Thereafter

  	
   

  
	
  2005
  Credit Facility

  	
   

  	
  $

  	
  671.0

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  21.3

  	
   

  	
  $

  	
  649.7

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  RBS
  Credit Facility

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Senior
  Notes due 2017

  	
   

  	
  300.0

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  300.0

  	
   

  
	
  Interest
  expense(2)

  	
   

  	
  404.0

  	
   

  	
  39.9

  	
   

  	
  78.0

  	
   

  	
  64.6

  	
   

  	
  57.7

  	
   

  	
  37.8

  	
   

  	
  126.0

  	
   

  
	
  Senior
  officer employment agreements

  	
   

  	
  1.9

  	
   

  	
  0.7

  	
   

  	
  0.6

  	
   

  	
  0.6

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Severance
  to former President and CEO

  	
   

  	
  22.0

  	
   

  	
  22.0

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Ship
  management agreements

  	
   

  	
  21.1

  	
   

  	
  9.1

  	
   

  	
  9.4

  	
   

  	
  2.6

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  Office
  leases

  	
   

  	
  17.3

  	
   

  	
  0.9

  	
   

  	
  1.7

  	
   

  	
  1.6

  	
   

  	
  1.5

  	
   

  	
  1.4

  	
   

  	
  10.2

  	
   

  
	
  Total
  commitments

  	
   

  	
  $

  	
  1,437.3

  	
   

  	
  $

  	
  72.6

  	
   

  	
  $

  	
  89.7

  	
   

  	
  $

  	
  90.7

  	
   

  	
  $

  	
  708.9

  	
   

  	
  $

  	
  39.2

  	
   

  	
  $

  	
  436.2

  	
   

  



 






(1)        Denotes
the six month period from July 1, 2009 to December 31, 2009.


 


(2)        The notes
are assumed to have been issued as of June 30, 2009. Future interest
payments on our 2005 credit facility are based on an outstanding balance of
$671.0 million (which reflects the repayment of $40 million in debt thereunder
with the proceeds of the offering) using a current 3-month LIBOR rate of 0.625%
plus a margin over LIBOR of 2.5%, and adjusted for quarterly cash settlements
of our interest rate swaps with a notional amount aggregating $579.5 million
with a weighted average fixed rate of 4.22% per year. The amount also includes
a 0.875% commitment fee we are required to pay on the unused portion of our
2005 credit facility. Pursuant to the amendment to our credit agreement which
will take effect upon the consummation of the offering of notes contemplated
hereby, the interest rate on our 2005 credit facility will increase from LIBOR
+ 100 basis points to LIBOR + 250 basis points.


 


B-4

















 


Annex C


 


Restrictions on Offers and Sales Outside the United States


 


In connection with offers and sales of Securities outside the United
States:


 


(a)           Each Initial
Purchaser acknowledges that the Securities have not been registered under the
Securities Act and may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except pursuant to an exemption
from, or in transactions not subject to, the registration requirements of the
Securities Act.


 


(b)           Each Initial
Purchaser, severally and not jointly, represents, warrants and agrees that:


 


(i)            Such Initial
Purchaser has offered and sold the Securities, and will offer and sell the
Securities, (A) as part of their distribution at any time and (B) otherwise
until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date, only in accordance with Regulation S under the
Securities Act (“Regulation S”) or Rule 144A or any other available
exemption from registration under the Securities Act.


 


(ii)           None of such
Initial Purchaser or any of its affiliates or any other person acting on its or
their behalf has engaged or will engage in any directed selling efforts with
respect to the Securities, and all such persons have complied and will comply
with the offering restrictions requirement of Regulation S.


 


(iii)          At or prior to the
confirmation of sale of any Securities sold in reliance on Regulation S, such
Initial Purchaser will have sent to each distributor, dealer or other person
receiving a selling concession, fee or other remuneration that purchase
Securities from it during the distribution compliance period a confirmation or
notice to substantially the following effect:


 


“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering of the
Securities and the date of original issuance of the Securities, except in
accordance with Regulation S or Rule 144A or any other available exemption
from registration under the Securities Act. 
Terms used above have the meanings given to them by Regulation S.”


 


(iv)          Such Initial
Purchaser has not and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company.


 


Terms used in paragraph (a) and this paragraph (b) and not
otherwise defined in this Agreement have the meanings given to them by
Regulation S.


 


(c)           Each Initial Purchaser,
severally and not jointly, represents, warrants and agrees that:


 


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(i)            it
has only communicated or caused to be communicated and will only communicate or
cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of Section 21 of the United Kingdom Financial
Services and Markets Act 2000 (the “FSMA”)) received by it in connection with
the issue or sale of any Securities in circumstances in which Section 21(1) of
the FSMA does not apply to the Company or the Subsidiary Guarantors; and


 


(ii)           it
has complied and will comply with all applicable provisions of the FSMA with
respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom.


 


(d)           Each Initial Purchaser acknowledges
that no action has been or will be taken by the Company that would permit a
public offering of the Securities, or possession or distribution of any of the
Time of Sale Information, the Offering Memorandum, any Issuer Written
Communication or any other offering or publicity material relating to the
Securities, in any country or jurisdiction where action for that purpose is
required.


 


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