EX-10.4






Exhibit 10.4




Date 16 December 2008




ARLINGTON TANKERS LTD.

as Borrower




- and -




THE ROYAL BANK OF SCOTLAND plc

as Lender




 






AMENDED AND RESTATED LOAN AGREEMENT




 






(amended and restated pursuant to the terms of a Consent

and Amending Agreement dated 16 December 2008)




relating to

a US$229,500,000 facility




to (i) finance the whole of the acquisition cost of m.t’s “STENA

CONTEST” and “STENA CONCEPT”, (ii) to refinance existing

indebtedness relating to m.t’s “STENA VISION”, “STENA VICTORY”,

“STENA COMPANION”, “STENA COMPATRIOT”, “STENA CONCORD” and 
“STENA
CONSUL” and (iii) for general corporate purposes




Watson, Farley & Williams

London




 









 





INDEX




	 	 	 	 	 	 	 
	Clause	 	Page	 
	1

	 	INTERPRETATION
	 	 	1	 
	 


	2

	 	FACILITY
	 	 	18	 
	 


	3

	 	DRAWDOWN
	 	 	18	 
	 


	4

	 	INTEREST
	 	 	19	 
	 


	5

	 	INTEREST PERIODS
	 	 	20	 
	 


	6

	 	DEFAULT INTEREST
	 	 	21	 
	 


	7

	 	REPAYMENT AND PREPAYMENT
	 	 	22	 
	 


	8

	 	MISMATCH BETWEEN LOAN AND TRANSACTIONS
	 	 	23	 
	 


	9

	 	CONDITIONS PRECEDENT
	 	 	25	 
	 


	10

	 	REPRESENTATIONS AND WARRANTIES
	 	 	26	 
	 


	11

	 	GENERAL UNDERTAKINGS
	 	 	29	 
	 


	12

	 	CORPORATE UNDERTAKINGS
	 	 	32	 
	 


	13

	 	INSURANCE
	 	 	34	 
	 


	14

	 	SHIP COVENANTS
	 	 	38	 
	 


	15

	 	SECURITY COVER
	 	 	41	 
	 


	16

	 	PAYMENTS AND CALCULATIONS
	 	 	42	 
	 


	17

	 	APPLICATION OF RECEIPTS
	 	 	43	 
	 


	18

	 	APPLICATION OF EARNINGS
	 	 	44	 
	 


	19

	 	EVENTS OF DEFAULT
	 	 	44	 
	 


	20

	 	FEES AND EXPENSES
	 	 	49	 
	 


	21

	 	INDEMNITIES
	 	 	50	 
	 


	22

	 	NO SET-OFF OR TAX DEDUCTION
	 	 	51	 
	 


	23

	 	ILLEGALITY, ETC
	 	 	52	 
	 


	24

	 	INCREASED COSTS
	 	 	52	 
	 


	25

	 	SET-OFF
	 	 	54	 
	 


	26

	 	TRANSFERS AND CHANGES IN LENDING OFFICE
	 	 	54	 






 









 






	 	 	 	 	 	 	 
	Clause	 	Page	 
	27

	 	VARIATIONS AND WAIVERS
	 	 	55	 
	 


	28

	 	NOTICES
	 	 	56	 
	 


	29

	 	SUPPLEMENTAL
	 	 	57	 
	 


	30

	 	LAW AND JURISDICTION
	 	 	57	 
	 


	SCHEDULE 1 DRAWDOWN NOTICE	 	 	59	 
	 


	SCHEDULE 2 CONDITION PRECEDENT DOCUMENTS	 	 	60	 
	 


	EXECUTION PAGE	 	 	68	 







 









 







THIS
AGREEMENT as amended and restated is made on 16 December 2008



BETWEEN





	(1)	 	ARLINGTON TANKERS LTD. a company incorporated Bermuda whose registered office is at Cannon’s
Court, 22 Victoria Street, Hamilton HM12, Bermuda (the “Borrower”) and
	 
	(2)	 	THE ROYAL BANK OF SCOTLAND plc acting through its office at Shipping Business Centre, 5-10
Great Tower Street, London EC3P 3HX, England (the “Lender”)





BACKGROUND



The Lender has agreed to make available to the Borrower a facility of up to $229,500,000 in up to 3
Advances for the purpose of (a) financing the whole of the purchase price of m.t’s. “STENA CONTEST”
and “STENA CONCEPT”, (b) refinancing the Existing Indebtedness relating to m.t’s. “STENA VISION”,
“STENA VICTORY”, “STENA COMPANION”, “STENA COMPATRIOT”, “STENA CONCORD” and “STENA CONSUL”, and (c)
general corporate purposes of the Borrower and the Group.



IT IS AGREED as follows:





	1	 	INTERPRETATION
	 
	1.1	 	Definitions. Subject to Clause 1.5, in this Agreement:
	 
	 	 	“Account Balance” means, in relation to the Operating Account, the amount for the time being
standing to the credit of the Operation Account;
	 
	 	 	“Accounting Information” means the quarterly financial statements and/or the annual audited
financial statements to be provided by the Borrower to the Lender in accordance with this
Agreement;
	 
	 	 	“Accounting Period” means each consecutive period of approximately 3 months falling during
the Loan Period (ending on the last day in March, June, September and December of each year)
for which quarterly Accounting Information is required to be delivered pursuant to this
Agreement;
	 
	 	 	“Accounts Security Deed” means a deed creating security in favour of the Lender in respect
of the Operating Account, in such form as the Lender may approve or require;
	 
	 	 	“Advance” means the principal amount of each borrowing by the Borrower under this Agreement;
	 
	 	 	“Affiliate” means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a director or
officer of such Person. For purposes of this definition, the term “control” (including the
terms “controlling”, “controlled by” and “under common control with”) of a Person means the
possession, direct or indirect, of the power to vote 50 per cent. or more of the voting
stock, membership or partnership interests, or other similar interests of such Person or to
direct or cause direction of the management and policies of such Person, whether through the
ownership of voting stock, membership or partnership interests, or other similar interests,
by contract or otherwise.
	 
	 	 	“Amalgamation” means the amalgamation pursuant to the Bermuda Companies Act 1981 of the
Borrower and Archer Amalgamation Limited;




 









 






	 	 	“Approved Classification Society” means a classification society which is a member of IACS;
	 
	 	 	“Approved Manager” means Northern Marine Management Ltd whose registered office is at 2
Central Avenue, Clydebank, Scotland, G81 2QR, General Maritime Management LLC or, where the
context requires, any other company which the Lender may approve from time to time as the
technical and/or commercial manager of a Ship;
	 
	 	 	“Availability Period” means the period commencing on the date of this Agreement and ending
on:






	 	(a)	 	31 January 2006 (or such later date as the Lender may agree with the Borrower);
or
	 
	 	(b)	 	if earlier, the final Drawdown Date or the date on which the Lender’s
obligation to make the Loan is cancelled or terminated;






	 	 	“Borrower Parent” means General Maritime Corporation (previously called Galileo Holding
Corporation), a corporation incorporated in the Republic of the Marshall Islands;
	 
	 	 	“Business Day” means a day on which banks are open in London and, in respect of a day on
which a payment is required to be made under a Finance Document, also in New York City;
	 
	 	 	“Calculation Period” means the period commencing on the date on which the last payment or
delivery has been made under Section 2(a)(i) of the Master Agreement with respect to a
Transaction (or in the case of the first such period the date the relevant Transaction has
been entered into) and ending on the next date upon which such a payment or delivery is to
be made;
	 
	 	 	“Change of Control” means the occurrence of any of the following:






	 	(a)	 	the Borrower ceasing directly to own 100 per cent. of the shares of any of the
Guarantors;
	 
	 	(b)	 	the Borrower Parent ceasing directly to own 100 per cent. of the shares of the
Borrower; or
	 
	 	(c)	 	a person or group (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) at any time becoming the owner, directly
or indirectly, beneficially or of record, shares representing 50 per cent. or more of
the outstanding voting or economic equity interests of the Borrower Parent ;






	 	 	“Charter Assignment” means, in relation to a Ship, an assignment of the rights of the
Guarantor owning that Ship under the relevant Charter, Charter Guarantee, Management
Agreement, Off-Hire Guarantee and (where applicable) Charter Substitution Agreement, in such
form as the Lender may approve or require, and in the plural means all of them;
	 
	 	 	“Charter” means:






	 	(a)	 	in relation to “STENA CONTEST”, the time charterparty entered into or to be
entered into between Contest and Stena Bulk;
	 
	 	(b)	 	in relation to “STENA CONCEPT”, the time charterparty entered into or to be
entered into between Concept and Stena Bulk;
	 
	 	(c)	 	in relation to “STENA VISION”, the time charterparty dated 20 October 2004 and
entered into between Vision and CV-MAX I, as amended;




2









 






	 	(d)	 	in relation to “STENA VICTORY”, the time charterparty dated 20 October 2004 and
entered into between Victory and CV-MAX II, as amended;
	 
	 	(e)	 	in relation to “STENA COMPANION”, the time charterparty dated 20 October 2004
and entered into between Companion and Stena Bulk, as amended;
	 
	 	(f)	 	in relation to “STENA COMPATRIOT”, the time charterparty dated 20 October 2004
and entered into between Compatriot and Stena Bulk, as amended;
	 
	 	(g)	 	in relation to “STENA CONCORD”, the time charterparty dated 20 October 2004 and
entered into between Concord and Stena Bulk, as amended; and
	 
	 	(h)	 	in relation to “STENA CONSUL”, the time charterparty dated 20 October 2004 and
entered into between Consul and Stena Bulk, as amended,






	 	 	and, in the singular, means any of them;
	 
	 	 	“Charter Guarantee” means, in relation to a Charter, a guarantee of the Charterer’s
obligations under the Charter, in favour of the relevant Charter Guarantor and issued by the
relevant Charter Guarantor, in such form as the Lender may approve or require;
	 
	 	 	“Charter Guarantor” means:






	 	(a)	 	in relation to “STENA VISION” and “STENA VICTORY”, Concordia Maritime AB; and
	 
	 	(b)	 	in relation to “STENA COMPANION”, “STENA COMPATRIOT”, “STENA CONCORD”, “STENA
CONSUL”, “STENA CONTEST” and “STENA CONCEPT”, Stena AB;






	 	 	“Charter Substitution Agreement” means, in relation to each of “STENA VISION” and “STENA
VICTORY”, an agreement entered into between Stena AB and the relevant Guarantor whereby
Stena AB undertakes that in certain circumstances it will procure that Stena Bulk AB enters
into a replacement time charter in respect of the relevant Ship (the obligations of Stena
Bulk AB thereunder to be guaranteed by Stena AB), in such form as the Lender may approve or
require, and in the plural means both of them;
	 
	 	 	“Charterer” means:






	 	(a)	 	in relation to “STENA VISION”, CV-MAX I;
	 
	 	(b)	 	in relation to “STENA VICTORY”, CV-MAX II; and
	 
	 	(c)	 	in relation to each of “STENA COMPANION”, “STENA COMPATRIOT”, “STENA CONCORD”,
“STENA CONSUL”, “STENA CONTEST” and “STENA CONCEPT”, Stena Bulk,






	 	 	and, in the plural, means all of them;
	 
	 	 	“CM V-Max I” means CM V-MAX I Limited, a company incorporated and existing under the laws of
Bermuda and having its registered address at Clarendon House, 2 Church Street, Hamilton
HM11, Bermuda:
	 
	 	 	“CM V-Max II” means CM V-MAX II Limited, a company incorporated and existing under the laws
of Bermuda and having its registered address at Clarendon House, 2 Church Street, Hamilton
HM11, Bermuda:




3









 






	 	 	“Commitment” means the obligation of the Lender to advance the Loan to the Borrower under
this Agreement, as the same may be reduced, terminated or cancelled in accordance with or
pursuant to this Agreement;
	 
	 	 	“Companion” means Companion Ltd., a company incorporated and existing under the laws of
Bermuda and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton
HM12, Bermuda;
	 
	 	 	“Compatriot” means Compatriot Ltd., a company incorporated and existing under the laws of
Bermuda and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton
HM12, Bermuda;
	 
	 	 	“Concept” means Concept Ltd., a company incorporated and existing under the laws of Bermuda
and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton HM12,
Bermuda;
	 
	 	 	“Concord” means Concord Ltd., a company incorporated and existing under the laws of Bermuda
and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton HM12,
Bermuda;
	 
	 	 	“Consul” means Consul Ltd., a company incorporated and existing under the laws of Bermuda
and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton HM12,
Bermuda;
	 
	 	 	“Contest” means Contest Ltd., a company incorporated and existing under the laws of Bermuda
and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton HM12,
Bermuda;
	 
	 	 	“Contractual Currency” has the meaning given in Clause 21.4;
	 
	 	 	“Credit Support Document” has the meaning given to that expression in section 14 of the
Master Agreement;
	 
	 	 	“Credit Support Provider” has the meaning given to that expression in section 14 of the
Master Agreement;
	 
	 	 	“Current Assets” means, in respect of each Accounting Period, the aggregate of the cash and
marketable securities, trade and other receivables from persons other than a member of the
Group realisable within one year, inventories and prepaid expenses which are to be charged
to income within one year less any doubtful debts and any discounts or allowances given as
stated in the then most recent Accounting Information;
	 
	 	 	“Current Liabilities” means, in respect of each Accounting Period, the aggregate amount of
trade and other creditors in respect of operating items payable within one year, (excluding
the Loan), including any accrued interest as stated in the most recent Accounting
Information;
	 
	 	 	“Debt” means in relation to any member of the Group (the “debtor”);






	 	(a)	 	Financial Indebtedness of the debtor;
	 
	 	(b)	 	liability for any creditor to the debtor from a supplier of goods or services
or under any instalment purchase or payment plan or other similar arrangement;
	 
	 	(c)	 	contingent liabilities of the debtor (including without limitation any taxes or
other payments under dispute) which have been or, under GAAP, should be recorded in the
notes to the Accounting Information;




4









 






	 	(d)	 	deferred tax of the debtor; and
	 
	 	(e)	 	liability under a guarantee, indemnity or similar obligation entered into by
the debtor in respect of a liability of other person who is not a member of the Group
which would fall within (a) to (d) if the references to the debtor referred to the
other person;






	 	 	“Deed of Covenant” means, in relation to a Ship, a deed of covenant collateral to the
Mortgage relating to that Ship, in such form as the Lender may approve or require, and in
the plural means all of them;
	 
	 	 	“Dollars” and “$” means the lawful currency for the time being of the United States of
America;
	 
	 	 	“Drawdown Date” means, in relation to each Advance, the date requested by the Borrower for
the Advance to be made, or (as the context requires) the date on which the Advance is
actually made;
	 
	 	 	“Drawdown Notice” means a notice in the form set out in Schedule 1 (or in any other form
which the Lender approves or reasonably requires);
	 
	 	 	“Early Termination Date” has the meaning given to that expression in section 14 of the
Master Agreement;
	 
	 	 	“Earnings” means, in relation to a Ship, all moneys whatsoever which are now, or later
become, payable (actually or contingently) and which arise out of the use or operation of
that Ship, including (but not limited to):






	 	(a)	 	all freight, hire and passage moneys, compensation payable to the Guarantor
owning the Ship in the event of requisition of the Ship for hire, remuneration for
salvage and towage services, demurrage and detention moneys and damages for breach (or
payments for variation or termination) of any charterparty or other contract for the
employment of the Ship;
	 
	 	(b)	 	all moneys which are at any time payable under Insurances in respect of loss of
earnings; and
	 
	 	(c)	 	if and whenever the Ship is employed on terms whereby any moneys falling within
paragraphs (a) or (b) are pooled or shared with any other person, that proportion of
the net receipts of the relevant pooling or sharing arrangement which is attributable
to the Ship;






	 	“Environmental Claim” means:






	 	(a)	 	any claim by any governmental, judicial or regulatory authority which arises
out of an Environmental Incident or an alleged Environmental Incident or which relates
to any Environmental Law; or
	 
	 	(b)	 	any claim by any other person which relates to an Environmental Incident or to
an alleged Environmental Incident,






	 	 	and “claim” means a claim for damages, compensation, fines, penalties or any other payment
of any kind, whether or not similar to the foregoing; an order or direction to take, or not
to take, certain action or to desist from or suspend certain action; and any form of
enforcement or regulatory action, including the arrest or attachment of any asset;




5









 






	 	 	“Environmental Incident” means:






	 	(a)	 	any release of Environmentally Sensitive Material from a Ship; or
	 
	 	(b)	 	any incident in which Environmentally Sensitive Material is released from a
vessel other than a Ship and which involves a collision between a Ship and such other
vessel or some other incident of navigation or operation, in either case, in connection
with which a Ship is actually or potentially liable to be arrested, attached, detained
or injuncted and/or a Ship and/or a Guarantor and/or any operator or manager of a Ship
is at fault or allegedly at fault or otherwise liable to any legal or administrative
action; or
	 
	 	(c)	 	any other incident in which Environmentally Sensitive Material is released
otherwise than from a Ship and in connection with which a Ship is actually or
potentially liable to be arrested and/or where a Guarantor and/or any operator or
manager of a Ship is at fault or allegedly at fault or otherwise liable to any legal or
administrative action;






	 	 	“Environmental Law” means any law relating to pollution or protection of the environment, to
the carriage of Environmentally Sensitive Material or to actual or threatened releases of
Environmentally Sensitive Material;
	 
	 	 	“Environmentally Sensitive Material” means oil, oil products and any other substance
(including any chemical, gas or other hazardous or noxious substance) which is (or is
capable of being or becoming) polluting, toxic or hazardous;
	 
	 	 	“Event of Default” means any of the events or circumstances described in Clause 19.1;
	 
	 	 	“Existing Indebtedness” means a principal amount of up to $135,000,000 owing by the Borrower
to the Existing Lenders under the Existing Loan Agreement;
	 
	 	 	“Existing Lenders” means the lenders under the Existing Loan Agreement;
	 
	 	 	“Existing Loan Agreement” means a loan agreement dated 2 November 2004 and entered into
between (i) the Borrower as borrower, (ii) Fortis Bank (Nederland) N.V. and HSBC Bank plc as
mandated lead arrangers, (iii) Fortis Bank (Nederland) N.V. as agent and security trustee,
(iv) the Existing Lenders, and (v) Fortis Bank (Nederland) N.V. and HSBC Bank plc as swap
providers, such indebtedness being secured on “STENA VISION”, “STENA VICTORY”, STENA
COMPANION”, “STENA COMPATRIOT”, “STENA CONCORD” AND “STENA CONSUL”;
	 
	 	 	“Existing Ships” means, together, “STENA VISION”, “STENA VICTORY”, “STENA COMPANION”, “STENA
COMPATRIOT”, “STENA CONCORD” and “STENA CONSUL” and , in the singular, means any of them;
	 
	 	 	“Fee Letter” means a letter dated on the date hereof issued by the Borrower to the Lender in
respect of fees payable to the Lender in relation to this Agreement;
	 
	 	 	“Finance Documents” means:






	 	(a)	 	this Agreement;
	 
	 	(b)	 	the Master Agreement;
	 
	 	(c)	 	the Guarantees;
	 
	 	(d)	 	the Mortgages;




6









 






	 	(e)	 	the Deeds of Covenant;
	 
	 	(f)	 	the General Assignments;
	 
	 	(g)	 	the Accounts Security Deed;
	 
	 	(h)	 	the Charter Assignments;
	 
	 	(i)	 	the Master Agreement Security Deed;
	 
	 	(j)	 	the Credit Support Documents; and
	 
	 	(k)	 	any other document (whether creating a Security Interest or not) which is
executed at any time by the Borrower, a Guarantor or any other person as security for,
or to establish any form of subordination or priorities arrangement in relation to, any
amount payable to the Lender under this Agreement and/or the Master Agreement and/or
any of the other documents referred to in this definition;






	 	 	“Financial Indebtedness” means, in relation to any member of the Group (the “debtor”), a
liability of the debtor:






	 	(a)	 	for principal, interest or any other sum payable in respect of any moneys
borrowed or raised by the debtor;
	 
	 	(b)	 	under any loan stock, bond, note or other security issued by the debtor;
	 
	 	(c)	 	under any acceptance credit, guarantee or letter of credit facility made
available to the debtor;
	 
	 	(d)	 	under a financial lease, a deferred purchase consideration arrangement (in each
case, other than in respect of assets or services obtained on normal commercial terms
in the ordinary course of business) or any other agreement having the commercial effect
of a borrowing or raising of money by the debtor;
	 
	 	(e)	 	under any foreign exchange transaction, interest or currency swap or any other
kind of derivative transaction entered into by the debtor or, if the agreement under
which any such transaction is entered into requires netting of mutual liabilities, the
liability of the debtor for the net amount; or
	 
	 	(f)	 	under a guarantee, indemnity or similar obligation entered into by the debtor
in respect of a liability of another person which would fall within (a) to (e) if the
references to the debtor referred to the other person;






	 	 	“GAAP” means accounting principles, concepts, bases and policies generally adopted and
accepted in the United States of America consistently applied;
	 
	 	 	“General Assignment” means, in relation to a Ship, a general assignment of the Earnings, the
Insurances and any Requisition Compensation relating to that Ship, in such form as the
Lender may approve or require, and in the plural means all of them;
	 
	 	 	“Group” means the Borrower and its subsidiaries (whether direct or indirect and including,
but not limited to, the Guarantors) from time to time during the Security Period and “member
of the Group” shall be construed accordingly;
	 
	 	 	“Guarantee” means, in relation to a Guarantor, a guarantee of the Borrower’s obligations
under this Agreement, the Master Agreement and the other Finance Documents to which the
Borrower is a party, issued by that Guarantor in favour of the Lender, in such form as the
Lender may approve or require, and in the plural means all of them;




7









 






	 	 	“Guarantors” means, together, Contest, Concept, Consul, Concord, Compatriot, Companion,
Victory and Vision, and in the singular means any of them;
	 
	 	 	“Insurances” means, in relation to a Ship:






	 	(a)	 	all policies and contracts of insurance, including entries of that Ship in any
protection and indemnity or war risks association, which are effected in respect of
that Ship, her Earnings or otherwise in relation to her; and
	 
	 	(b)	 	all rights and other assets relating to, or derived from, any of the foregoing,
including any rights to a return of a premium;






	 	 	“Interest Period” means a period determined in accordance with Clause 5.2;
	 
	 	 	“ISM Code” means, in relation to its application to each Guarantor, its Ship and its
operation:






	 	(a)	 	‘The International Management Code for the Safe Operation of Ships and for
Pollution Prevention’, currently known or referred to as the ‘ISM Code’, adopted by the
Assembly of the International Maritime Organisation by Resolution A.741(18) on 4
November 1993 and incorporated on 19 May 1994 into chapter IX of the International
Convention for the Safety of Life at Sea 1974 (SOLAS 1974); and
	 
	 	(a)	 	all further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of the
International Maritime Organisation or any other entity with responsibility for
implementing the ISM Code, including without limitation, the ‘Guidelines on
implementation or administering of the International Safety Management (ISM) Code by
Administrations’ produced by the International Maritime Organisations pursuant to
Resolution A.788(19) adopted on 25 November 1995,






	 	 	as the same may be amended, supplemented or replaced from time to time;
	 
	 	 	“ISM Code Documentation” includes:






	 	(a)	 	the document of compliance (DOC) and safety management certificate (SMC) issued
pursuant to the ISM Code in relation to the Ships or any or them within the periods
specified by the ISM Code; and
	 
	 	(b)	 	all other documents and data which are relevant to the ISM SMS and its
implementation and verification which the Lender may require; and
	 
	 	(c)	 	any other documents which are prepared or which are otherwise relevant to
establish and maintain the Ships’ or the Guarantors’ compliance with the ISM Code which
the Lender may require;






	 	 	“ISM SMS” means the safety management system for each Ship which is required to be
developed, implemented and maintained under the ISM Code;
	 
	 	 	“ISPS Code” means the International Ship and Port Facility Security Code constituted
pursuant to resolution A.924 (22) of the International Maritime Organisation (“IMO”) adopted
by a Diplomatic conference of the IMO on Maritime Security on 13 December 2002 and now set
out in Chapter XI-2 of the Safety of Life at Sea Convention (SOLAS) 1974 (as amended);




8









 






	 	 	“ISSC” means a valid and current International Ship Security Certificate issued under the
ISPS Code;
	 
	 	 	“Lender” means The Royal Bank of Scotland plc, a company incorporated in Scotland having its
registered office at 36 St. Andrew Square, Edinburgh EH2 2YB, Scotland acting through the
Shipping Business Centre at 5-10 Great Tower Street, London EC3P 3XH, England or through any
other branch notified to the Borrower from time to time pursuant to Clause 26.6 and includes
all persons directly or indirectly deriving title under it (whether by assignment,
amalgamation, operation of law or otherwise);
	 
	 	 	“Loan” means the principal amount for the time being advanced and outstanding under this
Agreement;
	 
	 	 	“Major Casualty” means, in relation to a Ship, any casualty to that Ship in respect of which
the claim or the aggregate of the claims against all insurers, before adjustment for any
relevant franchise or deductible, exceeds, in the case of “STENA VISION” or “STENA VICTORY”,
$5,000,000 and, in the case of each other Ship, $2,000,000 or, in either case, the
equivalent in any other currency;
	 
	 	 	“Management Agreement” means, in relation to each Ship, a management agreement entered into
or, as the case may be, to be entered into between the relevant Guarantor and the Approved
Manager, in such form as the Lender may approve or require, and in the plural means all of
them;
	 
	 	 	“Mandatory Cost Rate” means the percentage rate, which represents the cost to the Lender,
relative to the Loan, of compliance with the requirements of the Bank of England, the
Financial Services Authority or any other regulatory authority, as determined by the Lender
in accordance with the formula detailed in Schedule 4 hereto;
	 
	 	 	“Margin” means 1.25 per cent. per annum;
	 
	 	 	“Margin Stock” has the meaning specified in Regulation U of the Board of Governors of the
Federal Reserve System and any successor regulations thereto, as in effect from time to
time;
	 
	 	 	“Master Agreement” means the Master Agreement (on the 1992 ISDA (Multicurrency -
Crossborder) form as modified) made between the Lender and the Borrower of even date
herewith, and includes all transactions from time to time entered into and confirmations
from time to time exchanged under the Master Agreement and any amending, supplementing or
replacement agreements made from time to time;
	 
	 	 	“Master Agreement Liabilities” means, at any relevant time, all liabilities actual or
contingent, present or future, of the Borrower to the Lender under the Master Agreement;
	 
	 	 	“Master Agreement Security Deed” means the deed containing, inter alia, a charge in respect
of the Master Agreement executed or to be executed by the Borrower in favour of the Lender,
in such form as the Lender may approve or require;
	 
	 	 	“Minimum Security Cover Ratio” has the meaning given in Clause 15.1;
	 
	 	 	“MOAs” means, together, the STENA CONTEST MOA and the STENA CONCEPT MOA and, in the
singular, means either of them;
	 
	 	 	“Mortgage” means, in relation to a Ship, the first priority Bermudian ship mortgage on the
Ship, in such form as the Lender may approve or require, and in the plural means all of
them;




9









 






	 	 	“Negotiation Period” has the meaning given in Clause 4.7;
	 
	 	 	“New Owners” means, together, Contest and Concept, and in the singular means either of them;
	 
	 	 	“New Ships” means, together, “STENA CONTEST” and “STENA CONCEPT”, and in the singular, means
either of them;
	 
	 	 	“Off-hire Guarantee” means, in relation to each Ship, an agreement entered into or, as the
case may be, to be entered into between Stena AB and the relevant Guarantor whereby Stena AB
guarantees the obligations of the Approved Manager to make indemnification payments for
off-hire or reduced hire under the relevant Management Agreement, in such form as the Lender
may approve or require, and in the plural means all of them;
	 
	 	 	“Operating Account” means an account in the name of the Borrower with the Lender in London
designated “Arlington Tankers Ltd. - Operating Account ARLTAN-USD1”, or any other account
(with that or another office of the Lender) which is designated by the Lender as the
Operating Account for the purposes of this Agreement;
	 
	 	 	“Payment Currency” has the meaning given in Clause 21.4;
	 
	 	 	“Permitted Security Interests” means:






	 	(a)	 	Security Interests created by the Finance Documents;
	 
	 	(b)	 	liens for unpaid master’s and crew’s wages not more than 30 days overdue;
	 
	 	(c)	 	liens for salvage;
	 
	 	(d)	 	liens arising by operation of law for not more than 2 months’ prepaid hire
under any charter in relation to a Ship not prohibited by this Agreement;
	 
	 	(e)	 	liens for master’s disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary course of the
operation, repair or maintenance of a Ship, provided such liens do not secure amounts
more than 60 days overdue (unless the overdue amount is being contested by the Borrower
or the relevant Guarantor in good faith by appropriate steps) and subject, in the case
of liens for repair or maintenance, to Clause 14.12(h);
	 
	 	(f)	 	any other Security Interest which is not material (in the context of the value
of the relevant Ship) and for which adequate security has been provided so as to avoid
the risk of arrest of any of the Ships;






	 	 	“Person” means an individual, partnership, corporation (including a business trust), joint
stock company, limited liability company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency thereof.
	 
	 	 	“Pertinent Document” means:






	 	(a)	 	any Finance Document;
	 
	 	(b)	 	any policy or contract of insurance contemplated by or referred to in Clause 13
or any other provision of this Agreement or another Finance Document;




10









 






	 	(c)	 	any other document contemplated by or referred to in any Finance Document; and
	 
	 	(d)	 	any document which has been or is at any time sent by or to the Lender in
contemplation of or in connection with any Finance Document or any policy, contract or
document falling within paragraphs (b) or (c);






	 	 	“Pertinent Jurisdiction”, in relation to a company, means:






	 	(a)	 	England and Wales;
	 
	 	(b)	 	the country under the laws of which the company is incorporated or formed;
	 
	 	(c)	 	a country in which the company’s central management and control is or has
recently been exercised;
	 
	 	(d)	 	a country in which the overall net income of the company is subject to
corporation tax, income tax or any similar tax;
	 
	 	(e)	 	a country in which assets of the company (other than, in the case of each
Guarantor, transitory presence of its Ship in the normal course of trading) having a
substantial value are situated, in which the company maintains a permanent place of
business, or in which a Security Interest created by the company must or should be
registered in order to ensure its validity or priority; and
	 
	 	(f)	 	a country the courts of which have jurisdiction to make a winding up,
administration or similar order in relation to the company or which would have such
jurisdiction if their assistance were requested by the courts of a country referred to
in paragraphs (b) or (c) above;






	 	 	“Pertinent Matter” means:






	 	(a)	 	any transaction or matter contemplated by, arising out of, or in connection
with a Pertinent Document; or
	 
	 	(b)	 	any statement relating to a Pertinent Document or to a transaction or matter
falling within paragraph (a),






	 	 	and covers any such transaction, matter or statement, whether entered into, arising or made
at any time before the signing of this Agreement or on or at any time after that signing;
	 
	 	 	“Potential Event of Default” means an event or circumstance which, with the giving of any
notice, the lapse of time, a determination of the Lender and/or the satisfaction of any
other condition, would constitute an Event of Default;
	 
	 	 	“Qualifying Charter Date” means, at any time, a date on which each Ship then subject to a
Mortgage is subject to a time charter of at least 12 months remaining duration from and
including that date (ignoring any optional extensions in the discretion of the charterer);
	 
	 	 	“Quiet Enjoyment Agreement” means, in relation to a Ship, an agreement to be entered into
among the relevant Guarantor, the relevant Charterer, the Approved Manager and the Lender,
in such form as the Lender may approve or require, and in the plural means all of them;
	 
	 	 	“RBS LIBOR” means, for an Interest Period, the rate per annum at which deposits in Dollars
in an amount approximately equal to the Loan (or any part thereof) are (or would have been)
offered by the Lender to leading banks in the London Interbank Dollar Market




11









 






	 	 	at or about 11.00 a.m. (London time) on the second Business Day prior to the commencement of
such Interest Period for a period equal to such Interest Period and for delivery on the
first Business Day thereof;
	 
	 	 	“Receiving Bank” means American Express Bank Limited, 23rd Floor, American Express Tower,
200 Vesey Street, New York, NY — 10285-2300, U.S.A. or such other bank as may from time to
time be notified by the Lender to the Borrower;
	 
	 	 	“Recent Valuation” means a valuation of the Ships then subject to a Mortgage determined in
accordance with Clause 15.5 at a date not earlier than 14 days (or such longer period as the
Lender may agree in its discretion) before the date by reference to which the aggregate
value of the Ships is to be determined for the purposes of any applicable provision of this
Agreement;
	 
	 	 	“Relevant Interest Rate” means RBS LIBOR or, in the case where a Transaction is to be, or
has been, entered into under the Master Agreement and the Borrower has not made an election
pursuant to Clause 4.4(b), TELERATE;
	 
	 	 	“Relevant Person” has the meaning given in Clause 19.7;
	 
	 	 	“Repayment Date” means the date on which repayment of the Loan is required to be made in
accordance with Clause 7;
	 
	 	 	“Requisition Compensation” includes all compensation or other moneys payable by reason of
any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;
	 
	 	 	“SEC” means the United States Securities and Exchange Commission or any other governmental
authority of the United States of America at the time administrating the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended or the Securities Exchange
Act of 1934, as amended;
	 
	 	 	“Secured Liabilities” means all liabilities which the Borrower, the other Security Parties
or any of them have at the date of this Agreement or at any later time or times, under or in
connection with any Finance Document or any judgment relating to any Finance Document; and
for this purpose, there shall be disregarded any total or partial discharge of these
liabilities, or variation of their terms, which is effected by, or in connection with, any
bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any
country;
	 
	 	 	“Security Interest” means:






	 	(a)	 	a mortgage, charge (whether fixed or floating) or pledge, any maritime or other
lien or any other security interest of any kind;
	 
	 	(b)	 	the security rights of a plaintiff under an action in rem; and
	 
	 	(c)	 	any arrangement entered into by a person (A) the effect of which is to place
another person (B) in a position which is similar, in economic terms, to the position
in which B would have been had he held a security interest over an asset of A; but this
paragraph (c) does not apply to a right of set off or combination of accounts conferred
by the standard terms of business of a bank or financial institution;






	 	 	“Security Party” means the Borrower, each Guarantor, and any other person (except the
Lender) who, as a surety or mortgagor, as a party to any subordination or priorities
arrangement, or in any similar capacity, executes a document falling within the last
paragraph of the definition of “Finance Documents”;




12









 






	 	 	“Security Period” means the period commencing on the date of this Agreement and ending on
the date on which the Lender notifies the Borrower and the other Security Parties that:






	 	(a)	 	all amounts which have become due for payment by the Borrower or any other
Security Party under the Finance Documents have been paid;
	 
	 	(b)	 	no amount is owing or has accrued (without yet having become due for payment)
under any Finance Document;
	 
	 	(c)	 	neither the Borrower nor any other Security Party has any future or contingent
liability under Clause 20, 21 or 22 or any other provision of this Agreement or another
Finance Document; and
	 
	 	(d)	 	the Lender, acting reasonably, does not consider that there is a significant
risk that any payment or transaction under a Finance Document would be set aside, or
would have to be adjusted, in any present or possible future bankruptcy of the Borrower
or any other Security Party or in any present or possible future proceeding relating to
a Finance Document or any asset covered (or previously covered) by a Security Interest
created by a Finance Document;






	 	 	“Security to Exposure Ratio” means, from time to time, the ratio of (i) the aggregate
charter-free market value of the Ships (as determined in accordance with Clause 15.5) plus
the market value of any additional security for the time being actually provided to the
Lender pursuant to Clause 15.2 to (ii) the aggregate Loan and the Termination Amount;
	 
	 	 	“Seller” means:






	 	(d)	 	in relation to “STENA CONTEST”, Ocean Swift Ltd., a company incorporated in
Bermuda which has its registered office is at Clarendon House, 2 Church Street,
Hamilton HM11, Bermuda; and
	 
	 	(e)	 	in relation to “STENA CONCEPT”, Ocean Symphony Ltd., a company incorporated in
Bermuda which has its registered office is at Clarendon House, 2 Church Street,
Hamilton HM11, Bermuda,






	 	 	and in the singular means either of them;
	 
	 	 	“Ships” means, together:






	 	(f)	 	the 2005-built product tanker of 47,400 deadweight tons registered under
Bermudian flag in the ownership of Ocean Symphony Ltd. with the name “STENA CONCEPT”
and having IMO No. 9272204 to be sold to Concept pursuant to the STENA CONCEPT MOA and
registered under Bermudian flag in the ownership of Concept with the same name (“STENA
CONCEPT”);
	 
	 	(g)	 	the 2005-built product tanker of 47,171 deadweight tons registered under
Bermudian flag in the ownership of Ocean Swift Ltd. with the name “STENA CONTEST” and
having IMO No. 9272199 to be sold to Contest pursuant to the STENA CONTEST MOA and
registered under Bermudian flag in the ownership of Contest with the same name (“STENA
CONTEST”);
	 
	 	(h)	 	the 2001-built VLCC of 314,000 deadweight tons registered under Bermudian flag
in the ownership of Vision with the name of “STENA VISION” and having IMO No. 9205081
(“STENA VISION”);




13









 






	 	(i)	 	the 2001-built VLCC of 314,000 deadweight tons registered under Bermudian flag
in the ownership of Victory with the name of “STENA VICTORY” and having IMO No. 9205093
(“STENA VICTORY”);
	 
	 	(j)	 	the 2004-built Panamax Tanker of 72,000 deadweight tons registered under
Bermudian flag in the ownership of Companion with the name of “STENA COMPANION” and
having IMO No. 9255933 (“STENA COMPANION”);
	 
	 	(k)	 	the 2004-built Panamax Tanker of 72,000 deadweight tons registered under
Bermudian flag in the ownership of Compatriot with the name of “STENA COMPATRIOT” and
having IMO No. 9255945 (“STENA COMPATRIOT”);
	 
	 	(l)	 	the 2004-built Product Tanker of 47,400 deadweight tons registered under
Bermudian flag in the ownership of Concord with the name of “STENA CONCORD” and having
IMO No. 9258600 (“STENA CONCORD”);
	 
	 	(m)	 	the 2004-built Product Tanker of 47,000 deadweight tons registered under
Bermudian flag in the ownership of Consul with the name of “STENA CONSUL” and having
IMO No. 9258612 (“STENA CONSUL”),
	 
	 	 	 	and, in the singular, means any of them;






	 	 	“Stena Bulk” means Stena Bulk AB, a company incorporated and existing under the laws of
Sweden and having its registered office at Stena Terminal, S-405 19, Gothenburg, Sweden;
	 
	 	 	“STENA CONCEPT MOA” means the memorandum of agreement to be entered into between Concept and
Ocean Swift Ltd., pursuant to which Concept will buy and Ocean Swift Ltd. will sell “STENA
CONCEPT”;
	 
	 	 	“STENA CONTEST MOA” means the memorandum of agreement to be entered into between Contest and
Ocean Symphony Ltd., pursuant to which Contest will buy and Ocean Symphony Ltd. will sell
“STENA CONTEST”;
	 
	 	 	“Sub Charter” means:






	 	(a)	 	in relation to “STENA VISION”, the sub time charterparty dated 2 November 1998,
as amended by a side letter dated 20 October 2004, and entered into between CV-MAX I
and Sun International Limited;
	 
	 	(b)	 	in relation to “STENA VICTORY”, the sub time charterparty dated 2 November
1998, as amended by a side letter dated 20 October 2004, and entered into between
CV-MAX II and Sun International Limited;






	 	 	“TELERATE” means, for an Interest Period:






	 	(a)	 	the rate per annum equal to the offered quotation for deposits in Dollars for a
period equal to, or as near as possible equal to, the relevant Interest Period which
appears on Telerate Page 3750 at or about 11.00 a.m. (London time) on the second
Business Day prior to the commencement of that Interest Period (and, for the purposes
of this Agreement, “Telerate Page 3750” means the display designated as “page 3750” on
the Telerate Service or such other page as may replace Page 3750 on that service for
the purpose of displaying rates comparable to that rate or on such other service as may
be nominated by the British Bankers’ Association as the information vendor for the
purpose of displaying British Bankers’ Association Interest Settlement Rates for
Dollars); or




14









 






	 	(b)	 	if no rate is quoted on Telerate Page 3750, the rate per annum determined by
the Lender to be the rate per annum which leading banks in the London Interbank Market
offer for deposits in Dollars in the London Interbank Market at or about 11.00 a.m.
(London time) on the second Business Day prior to the commencement of that Interest
Period for a period equal to that Interest Period and for delivery on the first
Business Day of it;






	 	 	“Termination Amount” means such amount as determined by the Lender in its absolute
discretion as the amount due from the Borrower on terminating any Transaction under the
Master Agreement in the same manner as if it were a Terminated Transaction (as defined in
Section 14 of the Master Agreement) effected by the Lender after an Event of Default;
	 
	 	 	“Total Consolidated Assets” means, for an Accounting Period, the total assets or the Group
as shown in the most recent Accounting Information;
	 
	 	 	“Total Consolidated Liabilities” means, for an Accounting Period, the total liabilities
(including, for the avoidance of doubt, total shareholder’s equity) of the Group as shown in
the most recent Accounting Information;
	 
	 	 	“Total Loss” means, in relation to a Ship:






	 	(a)	 	actual, constructive, compromised, agreed or arranged total loss of that Ship;
	 
	 	(b)	 	any expropriation, confiscation, requisition or acquisition of that Ship,
whether for full consideration, a consideration less than its proper value, a nominal
consideration or without any consideration, which is effected by any government or
official authority or by any person or persons claiming to be or to represent a
government or official authority (excluding a requisition for hire for a fixed period
not exceeding 1 year without any right to an extension) unless it is within 1 month
redelivered to the relevant Guarantor’s full control;
	 
	 	(c)	 	any arrest, capture, seizure or detention of that Ship (including any hijacking
or theft) unless it is within 1 month redelivered to the relevant Guarantor’s full
control;






	 	 	“Total Loss Date” means, in relation to a Ship:






	 	(a)	 	in the case of an actual loss of that Ship, the date on which it occurred or,
if that is unknown, the date when that Ship was last heard of;
	 
	 	(b)	 	in the case of a constructive, compromised, agreed or arranged total loss of
that Ship, the earliest of:
	 
	 	(c)	 	the date on which a notice of abandonment is given to the insurers; and
	 
	 	(d)	 	the date of any compromise, arrangement or agreement made by or on behalf of
the relevant Guarantor with that Ship’s insurers in which the insurers agree to treat
that Ship as a total loss; and
	 
	 	(e)	 	in the case of any other type of total loss, on the date (or the most likely
date) on which it appears to the Lender, acting reasonably, that the event constituting
the total loss occurred;






	 	 	“Transaction” means a Transaction as defined in the introductory paragraph of the Master
Agreement;




15









 






	 	 	“Underlying Documents” means, together, the MOAs, the Charters, the Charter Guarantees, the
Management Agreements, the Off-hire Guarantees and the Charter Substitution Agreements and,
in the singular, means any of them;
	 
	 	 	“Value Adjusted Equity” means, in respect of any Accounting Period, an amount equal to the
Value Adjusted Total Assets less the Total Consolidated Liabilities;
	 
	 	 	“Value Adjusted Total Assets” means, in respect of any Accounting Period, an amount which is
equal to the Total Consolidated Assets of the Borrower less goodwill (if any), adjusted (in
the case of the Ships then subject to a Mortgage) to reflect the current market value of the
Ships then subject to a Mortgage (as determined in accordance with Clause 15.5 by valuations
made as close as is reasonably practicable to the date by reference to which a calculation
is to be made for the purposes of those provisions of this Agreement where this defined term
applies);
	 
	 	 	“Victory” means Victory Ltd., a company incorporated and existing under the laws of Bermuda
and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton HM12,
Bermuda;
	 
	 	 	“Vision” means Vision Ltd., a company incorporated and existing under the laws of Bermuda
and having its registered office at Cannon’s Court, 22 Victoria Street, Hamilton HM12,
Bermuda; and
	 
	 	 	“Working Capital” means, for any Accounting Period, Current Assets less Current Liabilities.
	 
	1.2	 	Construction of certain terms. In this Agreement:
	 
	 	 	“approved” means, for the purposes of Clause 13, approved in writing by the Lender;
	 
	 	 	“asset” includes every kind of property, asset, interest or right, including any present,
future or contingent right to any revenues or other payment;
	 
	 	 	“company” includes any partnership, joint venture and unincorporated association;
	 
	 	 	“consent” includes an authorisation, consent, approval, resolution, licence, exemption,
filing, registration, notarisation and legalisation;
	 
	 	 	“contingent liability” means a liability which is not certain to arise and/or the amount of
which remains unascertained;
	 
	 	 	“document” includes a deed; also a letter, fax or telex;
	 
	 	 	“excess risks” means the proportion of claims for general average, salvage and salvage
charges not recoverable under the hull and machinery policies in respect of the Ship in
consequence of its insured value being less than the value at which the Ship is assessed for
the purpose of such claims;
	 
	 	 	“expense” means any kind of cost, charge or expense (including all legal costs, charges and
expenses) and any applicable value added or other tax;
	 
	 	 	“law” includes any order or decree, any form of delegated legislation, any treaty or
international convention and any regulation or resolution of the Council of the European
Union, the European Commission, the United Nations or its security council;
	 
	 	 	“legal or administrative action” means any legal proceeding or arbitration and any
administrative or regulatory action or investigation;




16









 






	 	 	“liability” includes every kind of debt or liability (present or future, certain or
contingent), whether incurred as principal or surety or otherwise;
	 
	 	 	“months” shall be construed in accordance with Clause 1.3;
	 
	 	 	“obligatory insurances” means all insurances effected, or which the Borrower is obliged to
procure each Guarantor to effect, under Clause 13 or any other provision of this Agreement
or another Finance Document;
	 
	 	 	“parent company” has the meaning given in Clause 1.4;
	 
	 	 	“person” includes any company; any state, political sub-division of a state and local or
municipal authority; and any international organisation;
	 
	 	 	“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or
other document evidencing the contract of insurance or its terms;
	 
	 	 	“protection and indemnity risks” means the usual risks covered by a protection and indemnity
association managed in London, including pollution risks and the proportion (if any) of any
sums payable to any other person or persons in case of collision which are not recoverable
under the hull and machinery policies by reason of the incorporation in them of clause 1 of
the Institute Time Clauses (Hulls)(1/10/83) or (with respect to Insurances commencing on or
after 1/11/1995) clause 8 of the Institute Time Clauses (Hulls) (1/11/1995) or the Institute
Amended Running Down Clause (1/10/71) or any equivalent provision;
	 
	 	 	“regulation” includes any regulation, rule, official directive, request or guideline whether
or not having the force of law of any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other authority or organisation;
	 
	 	 	“subsidiary” has the meaning given in Clause 1.4;
	 
	 	 	“tax” includes any present or future tax, duty, impost, levy or charge of any kind which is
imposed by any state, any political sub-division of a state or any local or municipal
authority (including any such imposed in connection with exchange controls), and any
connected penalty, interest or fine; and
	 
	 	 	“war risks” includes the risk of mines and all risks excluded by clause 23 of the Institute
Time Clauses (Hulls)(1/10/83) or (with respect to Insurances commencing on or after
1/11/1995) clause 24 of the Institute Time Clauses (Hulls) (1/11/1995).
	 
	1.3	 	Meaning of “month“. A period of one or more “months” ends on the day in the relevant
calendar month numerically corresponding to the day of the calendar month on which the period
started (“the numerically corresponding day”), but:
	 
	(a)	 	on the Business Day following the numerically corresponding day if the numerically
corresponding day is not a Business Day or, if there is no later Business Day in the same
calendar month, on the Business Day preceding the numerically corresponding day; or
	 
	(b)	 	on the last Business Day in the relevant calendar month, if the period started on the last
Business Day in a calendar month or if the last calendar month of the period has no
numerically corresponding day,
	 
	 	 	and “month” and “monthly” shall be construed accordingly.




17









 






	1.4	 	Meaning of “subsidiary“. A company (S) is a subsidiary of another company (P) if:
	 
	(a)	 	a majority of the issued shares in S (or a majority of the issued shares in S which carry
unlimited rights to capital and income distributions) are directly or indirectly owned by P;
or
	 
	(b)	 	P has direct or indirect control over a majority of the voting rights attaching to the issued
 shares of S; or
	 
	(c)	 	P has the direct or indirect power to appoint or remove a majority of the directors of S; or
	 
	(d)	 	P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in
accordance with the wishes of P,
	 
	 	 	and any company of which S is a subsidiary is a parent company of S.

	 
	1.5 	 	General Interpretation. In this Agreement:
	 
	(a)	 	references to, or to a provision of, a Finance Document or any other document are references
to it as amended or supplemented, whether before the date of this Agreement or otherwise;
	 
	(b)	 	references to, or to a provision of, any law include any amendment, extension, re-enactment
or replacement, whether made before the date of this Agreement or otherwise;
	 
	(c)	 	words denoting the singular number shall include the plural and vice versa; and
	 
	(d)	 	Clauses 1.1 to 1.5 apply unless the contrary intention appears.
	 
	1.6	 	Headings. In interpreting a Finance Document or any provision of a Finance Document, all
clause, sub-clause and other headings in that and any other Finance Document shall be entirely
disregarded.
	 
	2	 	FACILITY
	 
	2.1	 	Amount of facility. Subject to the other provisions of this Agreement and in reliance (inter
alia) on the representations and warranties of the Borrower and the Guarantors set out in the
Finance Documents, the Lender shall make a loan facility not exceeding $229,500,000 available
to the Borrower in up to 3 Advances.
	 
	2.2	 	Purpose of Loan. The Borrower undertakes with the Lender to use the loan only for the
purpose stated in the preamble to this Agreement and in accordance with the provisions of
Clause 3.2.
	 
	3	 	DRAWDOWN
	 
	3.1	 	Request for Advance. Subject to the following conditions, the Borrower may request an
Advance to be made by ensuring that the Lender receives a completed Drawdown Notice not later
than 11.00 a.m. (London time) 2 Business Days prior to the intended Drawdown Date.
	 
	3.2	 	Availability. The conditions referred to in Clause 3.1 are that:
	 
	(a)	 	a Drawdown Date has to be a Business Day during the Availability Period;
	 
	(b)	 	the Loan shall be made in no more than 3 Advances as follows:




18









 












	 	(i)	 	an Advance in relation to the financing of the total purchase price of “STENA
CONCEPT” and, at the discretion of the Borrower, for its general corporate purposes
(the “STENA CONCEPT Advance”);
	 
	 	(ii)	 	an Advance in relation to the financing of the total purchase price of “STENA
CONTEST” and, at the discretion of the Borrower, for its general corporate purposes
(the “STENA CONTEST Advance”); and
	 
	 	(iii)	 	an Advance in relation to the refinancing of the Existing Indebtedness,
payments of accrued interest and costs and expenses in respect of the Existing
Indebtedness and, at the discretion of the Borrower, for its general corporate purposes
(the “Existing Indebtedness Advance”);






	(c)	 	the STENA CONCEPT Advance and the STENA CONTEST Advance shall not be made before the Existing
Indebtedness Advance; and
	 
	(d)	 	the aggregate of the Advances shall not exceed $229,500,000.
	 
	3.3	 	Drawdown Notice irrevocable. A Drawdown Notice must be signed by an officer of the Borrower;
and once served, a Drawdown Notice cannot be revoked without the prior consent of the Lender.
	 
	3.4	 	Disbursement of Advance. Subject to the provisions of this Agreement, the Lender shall on
each Drawdown Date make the relevant Advance to the Borrower; and payment to the Borrower
shall be made to the account or accounts which the Borrower specifies in the Drawdown Notice.
	 
	3.5	 	Disbursement of Advance to third party. The payment by the Lender under Clause 3.4 shall
constitute the making of the Advance (notwithstanding that the Borrower requests the Lender to
make payment direct to a third party such as a Seller or the Existing Lenders) and the
Borrower shall at that time become indebted, as principal and direct obligor, to the Lender in
an amount equal to the Advance.
	 
	4	 	INTEREST
	 
	4.1	 	Payment of normal interest. Subject to the provisions of this Agreement, interest on the
Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that
Interest Period.
	 
	4.2	 	Normal rate of interest. Subject to the provisions of this Agreement, the rate of interest
on the Loan in respect of an Interest Period shall be the aggregate of (a) the Margin, (b) the
Relevant Interest Rate for that Interest Period, and (c) the Mandatory Cost Rate.
	 
	4.3	 	Payment of accrued interest. In the case of an Interest Period longer than 3 months, accrued
interest shall be paid every 3 months during that Interest Period and on the last day of that
Interest Period.
	 
	4.4	 	Interest Rate when Transactions under Master Agreement.
	 
	(a)	 	In the event that a Transaction is to be entered into under the Master Agreement then
(subject to Clause 4.4(b) below) the Relevant Interest Rate for each and every Interest Period
applicable to that part of the Loan the subject of the Transaction (commencing with the first
Interest Period relating to such Transaction) shall be TELERATE.
	 
	(b)	 	The Borrower may elect for the Relevant Interest Rate for each and every Interest Period
applicable to that part of the Loan the subject of a Transaction (commencing with the first
Interest Period relating to such Transaction) to be RBS LIBOR rather than TELERATE provided
that such election (which shall be irrevocable) is notified in writing by the




19









 






	 	 	Borrower to the Lender not later than 11.00 a.m. (London time) 3 Business Days prior to the
commencement of such first Interest Period (or such other period as the Lender, in its sole
and absolute discretion, may agree).
	 
	4.5	 	Notification of market disruption. The Lender shall promptly notify the Borrower if for any
reason the Lender is unable to obtain Dollars in the London Interbank Market in order to fund
the Loan (or any part of it) during any Interest Period, stating the circumstances which have
caused such notice to be given.
	 
	4.6	 	Suspension of drawdown. If the Lender’s notice under Clause 4.5 is served before an Advance
is made, the Lender’s obligation to make that Advance shall be suspended while the
circumstances referred to in the Lender’s notice continue.
	 
	4.7	 	Negotiation of alternative rate of interest. If the Lender’s notice under Clause 4.5 is
served after an Advance is made, the Borrower and the Lender shall use reasonable endeavours
to agree, within the 30 days after the date on which the Lender serves its notice under Clause
4.5 (the “Negotiation Period”), an alternative interest rate or (as the case may be) an
alternative basis for the Lender to fund or continue to fund the Loan during the Interest
Period concerned.
	 
	4.8	 	Application of agreed alternative rate of interest. Any alternative interest rate or an
alternative basis which is agreed during the Negotiation Period shall take effect in
accordance with the terms agreed.
	 
	4.9	 	Alternative rate of interest in absence of agreement. If an alternative interest rate or
alternative basis is not agreed within the Negotiation Period, and the relevant circumstances
are continuing at the end of the Negotiation Period, then the Lender shall set an interest
period and interest rate representing the cost of funding of the Lender in Dollars (or in any
available currency) of the Loan plus the Margin and the Mandatory Cost Rate; and the procedure
provided for by this Clause 4.9 shall be repeated if the relevant circumstances are continuing
at the end of the interest period so set by the Lender.
	 
	4.10	 	Notice of prepayment. If the Borrower does not agree with an interest rate set by the Lender
under Clause 4.9, the Borrower may give the Lender not less than 15 Business Days’ notice of
its intention to prepay at the end of the interest period set by the Lender.
	 
	4.11	 	Prepayment. A notice under Clause 4.10 shall be irrevocable; and on the last Business Day of
the interest period set by the Lender, the Borrower shall prepay (without premium or penalty)
the Loan, together with accrued interest thereon at the applicable rate plus the Margin and
the Mandatory Cost Rate.
	 
	4.12	 	Application of prepayment. The provisions of Clause 7 shall apply in relation to the
prepayment.
	 
	5	 	INTEREST PERIODS
	 
	5.1	 	Commencement of Interest Periods. The first Interest Period applicable to an Advance shall
commence on the Drawdown Date in respect of that Advance and each subsequent Interest Period
shall commence on the expiry of the preceding Interest Period.
	 
	5.2	 	Duration of normal Interest Periods. Subject to Clauses 5.3 and 5.4, each Interest Period
shall be:
	 
	(a)	 	1, 3 or 6 months as notified by the Borrower to the Lender not later than 11.00 a.m. (London
time) 2 Business Days before the commencement of the Interest Period; or




20









 






	(b)	 	in the case of the first Interest Period applicable to the second and any subsequent Advance,
a period ending on the last day of the Interest Period then current and applicable to the
first Advance, whereupon all of the Advances shall be consolidated and treated as a single
Advance; or
	 
	(c)	 	3 months, if Clause 5.2(b) does not apply and the Borrower fails to notify the Lender by the
time specified in paragraph (a); or
	 
	(d)	 	such other period as the Lender may agree with the Borrower.
	 
	5.3	 	Duration of Interest Periods for repayment instalment. An Interest Period shall end on the
Repayment Date.
	 
	5.4	 	Non-availability of matching deposits for Interest Period selected. If, after the Borrower
has selected and the Lender has agreed an Interest Period longer than 6 months, the Lender
notifies the Borrower by 11.00 a.m. (London time) on the third Business Day before the
commencement of the Interest Period that it is not satisfied that deposits in Dollars for a
period equal to the Interest Period will be available to it in the London Interbank Market
when the Interest Period commences, the Interest Period shall be of 6 months.
	 
	6	 	DEFAULT INTEREST
	 
	6.1	 	Payment of default interest on overdue amounts. The Borrower shall pay interest in
accordance with the following provisions of this Clause 6 on any amount payable by the
Borrower under any Finance Document which the Lender does not receive on or before the
relevant date, that is:
	 
	(a)	 	the date on which the Finance Documents provide that such amount is due for payment; or
	 
	(b)	 	if a Finance Document provides that such amount is payable on demand, within the period
specified in such demand; or
	 
	(c)	 	if such amount has become immediately due and payable under Clause 19.4, the date on which it
became immediately due and payable.
	 
	6.2	 	Default rate of interest. Interest shall accrue on an overdue amount from (and including)
the relevant date until the date of actual payment (as well after as before judgment) at the
rate per annum determined by the Lender to be 1.5 per cent. above:
	 
	(a)	 	in the case of an overdue amount of principal, the higher of the rates set out at Clauses
6.3(a) and (b); or
	 
	(b)	 	in the case of any other overdue amount, the rate set out at Clause 6.3(b).
	 
	6.3	 	Calculation of default rate of interest. The rates referred to in Clause 6.2 are:
	 
	(a)	 	the rate applicable to the overdue principal amount immediately prior to the relevant date
(but only for any unexpired part of any then current Interest Period);
	 
	(b)	 	the Margin together with the Mandatory Cost Rate plus, in respect of successive periods of
any duration (including at call) up to 3 months which the Lender may select from time to time:






	 	(i)	 	RBS LIBOR; or




21









 






	 	(ii)	 	if the Lender determines that Dollar deposits for any such period are not being
made available to it by leading banks in the London Interbank Market in the ordinary
course of business, a rate from time to time determined by the Lender by reference to
the cost of funds to it from such other sources as the Lender may from time to time
determine.






	6.4	 	Notification of interest periods and default rates. The Lender shall promptly notify the
Borrower of each interest rate determined by it under Clause 6.3 and of each period selected
by it for the purposes of paragraph (b) of that Clause; but this shall not be taken to imply
that the Borrower is liable to pay such interest only with effect from the date of the
Lender’s notification.
	 
	6.5	 	Payment of accrued default interest. Subject to the other provisions of this Agreement, any
interest due under this Clause shall be paid on the last day of the period by reference to
which it was determined.
	 
	6.6	 	Compounding of default interest. Any such interest which is not paid at the end of the
period by reference to which it was determined shall thereupon be compounded.
	 
	7	 	REPAYMENT AND PREPAYMENT
	 
	7.1	 	Amount of repayment instalments. The Borrower shall repay the Loan by a single instalment on
the Repayment Date.
	 
	7.2	 	Repayment Date. The Repayment Date shall be the earlier of:
	 
	(a)	 	date falling 5 years after the final Drawdown Date; and
	 
	(b)	 	31 January 2011.
	 
	7.3	 	Payment of other sums. On the Repayment Date, the Borrower shall additionally pay to the
Lender all other sums then accrued or owing under any Finance Document.
	 
	7.4	 	Voluntary prepayment. Subject to the following conditions, the Borrower may prepay the whole
or any part of the Loan on the last day of an Interest Period.
	 
	7.5	 	Conditions for voluntary prepayment. The conditions referred to in Clause 7.4 are that:
	 
	(a)	 	a partial prepayment shall be $500,000 or a whole multiple of $500,000;
	 
	(b)	 	the Lender has received from the Borrower at least 7 days’ prior written notice specifying
the amount to be prepaid and the date on which the prepayment is to be made;
	 
	(c)	 	the Borrower has provided evidence satisfactory to the Lender that any consent required by
the Borrower or any other Security Party in connection with the prepayment has been obtained
and remains in force, and that any regulation relevant to this Agreement which affects the
Borrower or any other Security Party has been complied with; and
	 
	(d)	 	upon any prepayment of the Loan or any part thereof occurring on or before 25 September 2010
the Borrower shall pay to the Lender a prepayment fee of one per cent. (1%) of the amount
prepaid (unless, in its sole and absolute discretion, the Lender agrees in writing to waive or
reduce such fee).
	 
	7.6	 	Effect of notice of prepayment. A prepayment notice may not be withdrawn or amended without
the consent of the Lender and the amount specified in the prepayment notice shall become due
and payable by the Borrower on the date for prepayment specified in the prepayment notice.




22









 






	7.7	 	Mandatory prepayment (sale or Total Loss). The Borrower shall be obliged to prepay the
relevant proportion of the Loan:
	 
	(a)	 	without prejudice to Clause 11.3, if a Ship is sold, on or before the date on which the sale
is completed by delivery of the Ship to the buyer (the “Sale Completion Date”); or
	 
	(b)	 	if a Ship becomes a Total Loss, on the earlier of the date falling 180 days after the Total
Loss Date and the date of receipt by the Lender of the proceeds of insurance relating to such
Total Loss (the “Total Loss Receipt Date”),
	 
	 	 	and this Clause 7.7 and in Clause 7.8 “relevant proportion” means such amount necessary to
ensure that following the sale or Total Loss of a Ship, the Security to Exposure Ratio is at
least equal to the higher of:






	 	(i)	 	the Security to Exposure Ratio immediately prior to the Sale Completion Date or
the Total Loss Receipt Date (as the case may be); and
	 
	 	(ii)	 	the Minimum Security Cover Ratio.






	7.8	 	Additional prepayment. If an Event of Default of Potential Event of Default has occurred and
is continuing at the Sale Completion Date or the Total Loss Receipt Date, the Lender shall,
without prejudice to its other rights under the Finance Documents, be permitted to require an
amount greater than the relevant proportion, as the Lender may determine, to be applied in or
towards prepayment of the Loan.
	 
	7.9	 	Mandatory prepayment (full Loan). The Lender shall be entitled to serve on the Borrower a
notice requiring the Borrower, within thirty (30) days of such notice, to prepay the Loan in
full and to satisfy all Master Agreement Liabilities if:
	 
	(a)	 	the shares of the Borrower Parent shall cease to be listed on the New York Stock Exchange; or
	 
	(b)	 	any of the events or circumstances referred to in Clause 19.1(f) shall occur in relation to
any Financial Indebtedness of a Relevant Person but with, for this purpose, each reference in
Clause 19.1(f) to “in excess of an aggregate amount of $10,000,000” being construed as a
reference to “in excess of an aggregate amount of $1,000,000 and less than an aggregate amount
of $10,000,000”.
	 
	 	 	The Borrower shall promptly on becoming aware notify the Lender of the occurrence of an
event described in (a) or (b) above. For the avoidance of doubt, a failure by the Borrower
to make prepayment in accordance with a notice from the Lender pursuant to this Clause 7.9
shall constitute an Event of Default under Clause 19.1(a).
	 
	7.10	 	Amounts payable on prepayment. A prepayment shall be made together with accrued interest
(and any other amount payable under Clause 21 or otherwise) in respect of the amount prepaid
and, if the prepayment is not made on the last day of an Interest Period together with any
sums payable under Clause 21.1(b) but without premium or penalty.
	 
	7.11	 	No reborrowing. No amount prepaid may be reborrowed.
	 
	8	 	MISMATCH BETWEEN LOAN AND TRANSACTIONS
	 
	8.1	 	Full amount of commitment not borrowed. If for any reason less than the full amount of the
Commitment as at the date of this Agreement is advanced under this Agreement but nonetheless a
Transaction in respect of the full amount of the Commitment as at the date of this Agreement
has been entered into under the Master Agreement then, subject to Clause 8.3, the Lender shall
be entitled but not obliged:




23









 






	(a)	 	to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any
part of the rights, benefits and obligations created by the Master Agreement; and/or
	 
	(b)	 	to obtain or re-establish any hedge or related trading position in any manner and with any
person the Lender in its absolute discretion decides,
	 
	 	 	and, if the Lender exercises any part of that entitlement, the Borrower’s continuing
obligations under the Master Agreement shall, unless agreed otherwise by the Lender, be
calculated so far as the Lender considers practicable by reference to the repayment schedule
for the Loan taking into account the fact that less than the full amount of the Commitment
as at the date of this Agreement has been advanced under this Agreement.
	 
	 	 	It is acknowledged, subject to the conditions referred to below, that the Borrower may enter
into a Transaction (either on an immediate or forward-starting basis) on or after the date
of this Agreement and before the Drawdown Date in respect of the first Advance, in which
event the foregoing provisions of this Clause 8.1 shall, for the avoidance of doubt, apply.
The conditions referred to above are that the Lender shall have received the documents
described in paragraphs 2, 3, 4 and 5 (in relation to the Borrower only), 7, 10 and 11 (but
only an opinion on the laws of Bermuda) of Part A of Schedule 2.
	 
	8.2	 	Hedging position following prepayment. In the case of a prepayment of all or part of the
Loan under this Agreement then, subject to Clause 8.3, the Lender shall be entitled but not
obliged:
	 
	(a)	 	to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or such
part of the rights, benefits and obligations created by the Master Agreement which equate or
relate to the part of the Loan so prepaid; and/or
	 
	(b)	 	to obtain or re-establish any hedge or related trading position in any manner and with any
person the Lender in its absolute discretion decides,
	 
	 	 	and, in the case of a partial prepayment of the Loan and the Lender exercising any part of
that entitlement, the Borrower’s continuing obligations under the Master Agreement shall,
unless agreed otherwise by the Lender, be calculated so far as the Lender considers
practicable by reference to the amended repayment schedule for the Loan taking account of
the fact that the Loan then constitutes less than the amount drawndown under this Agreement,
after taking into consideration any repayment instalment previously made under Clauses 7.1
and 7.2.
	 
	8.3	 	Obligation to provide additional security. If:






	(a)	(i)	 	the Loan constitutes less than the amount advanced under this Agreement; or
	 
	 	(ii)	 	less than the full amount of the Commitment as at the date of this Agreement is
advanced under this Agreement; and






	(b)	 	in either case, following a written request from the Borrower, the Lender in its absolute
discretion agrees that the Borrower may be permitted to maintain all or part of a Transaction
in an amount not wholly matched with, or linked to, all or part of the Loan,
	 
	 	 	the Borrower shall, within 5 Business Days of being notified by the Lender of such
requirement, provide the Lender with, or procure the provision to the Lender of, such
additional security as shall, in the opinion of the Lender, be adequate to secure the
performance of any relevant Transaction.
	 
	8.4	 	Form of additional security. The additional security referred to in Clause 8.3 shall take
such form, be constituted by such documentation and be entered into by such parties, as




24









 






	 	 	the Lender may approve or require, and each document comprising such additional security
shall constitute a Credit Support Document.
	 
	8.5	 	Indemnity. The Borrower shall, on the first written demand of the Lender, indemnify the
Lender in respect of all expenses (excluding the fees of legal advisers) incurred or sustained
by the Lender as a consequence of, or in relation to, the effecting of any matters or
transactions referred to in Clauses 8.1, 8.2, 8.3 and 8.4.
	 
	8.6	 	Consequences of Transactions being terminated. Without prejudice to or limitation of the
obligations of the Borrower under Clause 8.5, if the Lender exercises any of its rights under
Clauses 8.1 or 8.2 and such exercise results in all or part of a Transaction being terminated,
such termination shall be treated under the Master Agreement as an agreed termination (in
whole or in part, as the case may be) and, notwithstanding such treatment as an agreed
termination, the Lender shall be permitted to recover from the Borrower a payment for early
termination calculated in accordance with the provisions of section 6(e)(i) of the Master
Agreement as if it were a Terminated Transaction (as defined in section 15 of the Master
Agreement) effected by the Lender after an Event of Default.
	 
	8.7	 	Master Agreement benefits. If, in the circumstances referred to in Clause 8.6, a net payment
is to be made by a Lender to the Borrower in accordance with the Master Agreement such payment
shall, provided that no Event of Default has occurred and subject to the provisions of the
Master Agreement Security Deed, be made to the Operating Account to be applied in accordance
with the provisions of Clause 18.2.
	 
	9	 	CONDITIONS PRECEDENT
	 
	9.1	 	Documents, fees and no default. The Lender’s obligation to make an Advance is subject to the
following conditions precedent:
	 
	(a)	 	that, on or before the service of the first Drawdown Notice, the Lender receives the
documents described in Part A of Schedule 2 in form and substance satisfactory to it and its
lawyers;
	 
	(b)	 	that, on the first Drawdown Date but prior to the drawdown of the first Advance, the Lender
receives the documents described in Part B of Schedule 2, in form and Substance satisfactory
to it and its lawyers;
	 
	(c)	 	that, on or before a Drawdown Date relating to the financing of a New Ship but prior to the
drawdown of the relevant Advance, the Lender receives the documents described in Part C of
Schedule 2 in relation to the New Ship being financed by that Advance, in form and substance
satisfactory to the Lender and its lawyers (each acting reasonably);
	 
	(d)	 	that, on or before the service of the first Drawdown Notice, the Lender receives the
arrangement fee referred to in the Fee Letter and all accrued commitment fee payable pursuant
to the Fee Letter;
	 
	(e)	 	that both at the date of each Drawdown Notice and at each Drawdown Date:






	 	(i)	 	no Event of Default or Potential Event of Default has occurred and is
continuing or would result from the borrowing of the Loan;
	 
	 	(ii)	 	the representations and warranties in Clause 10.1 and those of the Borrower or
any other Security Party which are set out in the other Finance Documents would be true
and not misleading if repeated on each of those dates with reference to the
circumstances then existing; and
	 
	 	(iii)	 	none of the circumstances contemplated by Clause 4.5 has occurred and is
continuing; and




25









 












	(f)	 	that, if the Security to Exposure Ratio were tested immediately following the making of the
relevant Advance, the Borrower would not be obliged to provide additional security or prepay
part of the Loan in accordance with Clause 15; and
	 
	(g)	 	that the Lender has received, and found to be acceptable to it, any further opinions,
consents, agreements and documents in connection with the Finance Documents and/or the
Underlying Documents which the Lender may reasonably request by notice to the Borrower not
less than 2 days prior to an anticipated Drawdown Date.
	 
	9.2	 	Conditions precedent to a Transaction. The obligation of the Lender to enter into any
Transaction after the first Drawdown Date shall be subject to the condition that the Lender
shall have received certified copies of such documents of the kinds referred to in paragraphs
3, 4 and 5 of Part A of Schedule 2 and such favourable legal opinions as the Lender may
require, in all respects in form and substance reasonably satisfactory to the Lender and its
legal advisers:
	 
	9.3	 	Waivers of conditions precedent. If the Lender, at its discretion, permits an Advance to be
made before certain of the conditions referred to in Clause 9.1 are satisfied, or enters into
a Transaction prior to the satisfaction of all or any of the conditions referred to in Clause
9.2, the Borrower shall ensure that those conditions are satisfied within 5 Business Days
after the Drawdown Date or the date of the relevant Transaction as the case may be (or such
longer period as the Lender may specify).
	 
	10	 	REPRESENTATIONS AND WARRANTIES
	 
	10.1	 	General. The Borrower represents and warrants to the Lender as follows.
	 
	10.2	 	Status. The Borrower is duly incorporated and validly existing and in good standing under
the laws of Bermuda.
	 
	10.3	 	Share capital and ownership. The Borrower’s issued share capital is wholly owned by the
Borrower Parent and on and after 16 January 2009 the Borrower will have an authorised share
capital of $12,000 divided into 12,000 shares of $1 each, of which 100 will have been issued
to the Borrower Parent.
	 
	10.4	 	Corporate power. The Borrower has the corporate capacity, and has taken all corporate action
and obtained all consents necessary for it:
	 
	(a)	 	to execute the Finance Documents to which it is a party; and
	 
	(b)	 	to borrow under this Agreement and to make all the payments contemplated by, and to comply
with, those Finance Documents to which it is a party.
	 
	10.5	 	Consents in force. All the consents referred to in Clause 10.4 remain in force and nothing
has occurred which makes any of them liable to revocation.
	 
	10.6	 	Only Existing Indebtedness. The Borrower and the Guarantors have incurred and have
outstanding no Financial Indebtedness other than the Existing Indebtedness and no Debt other
than as is necessary or incidental to its establishment and operations.
	 
	10.7	 	Assets of Borrower. The Borrower has no assets other than the shares in each Guarantor and
such other assets as are necessary or incidental to its establishment and operations.
	 
	10.8	 	Assets of Guarantors. Each Guarantor has no assets other than the Ship which it owns (or, in
the case of Concept and Contest, the MOA to which it is, or is to be, a party) and the other
Underlying Documents to which it is, or is to be, a party and such other assets as are
necessary or incidental to its ownership and operation of its Ship.




26









 






	10.9	 	Compliance with laws. The Borrower and each Guarantor has complied in all material respects
(in the context of the transaction contemplated by this Agreement and the other Finance
Documents) with all laws and regulations by which it is bound including, without limitation,
all applicable requirements of the SEC and the provisions of the Sarbanes-Oxley Act of 2002.
	 
	10.10	 	Legal validity; effective Security Interests. The Finance Documents to which the Borrower
is a party, do now or, as the case may be, will, upon execution and delivery (and, where
applicable, registration as provided for in the Finance Documents):
	 
	(a)	 	constitute the Borrower’s legal, valid and binding obligations enforceable against the
Borrower in accordance with their respective terms; and
	 
	(b)	 	create legal, valid and binding Security Interests enforceable in accordance with their
respective terms over all the assets to which they, by their terms, relates,
	 
	 	 	subject to the availability of any equitable remedy and any relevant insolvency laws
affecting creditors’ rights generally.
	 
	10.11	 	No third party Security Interests. Without limiting the generality of Clause 10.10, at the
time of the execution and delivery of each Finance Document to which the Borrower is a party:
	 
	(a)	 	the Borrower will have the right to create all the Security Interests which that Finance
Document purports to create; and
	 
	(b)	 	no third party will have any Security Interest (except for Permitted Security Interests), in
or in relation to any asset to which any such Security Interest, by its terms, relates.
	 
	10.12	 	No conflicts. The execution by the Borrower of each Finance Document to which it is a
party, and the borrowing by the Borrower of the Loan, and its compliance with each Finance
Document to which it is a party will not involve or lead to a contravention in any material
respect (in the context of the transaction contemplated by this Agreement and the other
Finance Documents) of:
	 
	(a)	 	any applicable law or regulation; or
	 
	(b)	 	the constitutional documents of the Borrower; or
	 
	(c)	 	any contractual or other obligation or restriction which is binding on the Borrower or any of
its assets.
	 
	10.13	 	No withholding taxes. All payments which the Borrower is liable to make under any Finance
Document may be made without deduction or withholding for or on account of any tax payable
under any law of any Pertinent Jurisdiction.
	 
	10.14	 	No default. No Event of Default or Potential Event of Default has occurred and is
continuing, nor is the Borrower in default under the Master Agreement or any other agreement
by which it is bound.
	 
	10.15	 	Information. All information which has been provided in writing by or on behalf of the
Borrower or any other Security Party to the Lender in connection with any Finance Document
satisfied the requirements of Clause 11.5; all audited and unaudited accounts which have been
so provided satisfied the requirements of Clause 11.7; and there has been no material adverse
change in the financial position or state of affairs of the Borrower or the Group from that
disclosed in the latest of those accounts.




27









 






	10.16	 	No litigation. No legal or administrative action involving the Borrower has been commenced
or taken or, to the Borrower’s knowledge, is likely to be commenced or taken, other than such
litigation or administrative action as would, if adversely determined, not affect the
Borrower’s ability to meet its obligations under this Agreement and the other Finance
Documents.
	 
	10.17	 	Validity and completeness of Underlying Documents. Each Underlying Document constitutes
valid, binding and enforceable obligations of the relevant Guarantor, the relevant Charterer,
the relevant Seller or the Manager (as the case may be) in accordance with its terms; and:
	 
	(a)	 	the copies of each Underlying Document delivered to the Lender before the date of this
Agreement are true and complete copies; and
	 
	(b)	 	no amendments or additions to any Underlying Document have been agreed nor has any Guarantor,
Seller or Charterer waived any of their respective rights under the Underlying Documents to
which they are a party.
	 
	10.18	 	No rebates etc. There is no agreement or understanding to allow or pay any rebate, premium,
commission, discount or other benefit or payment (howsoever described) to the Borrower, any
Guarantor the Seller or a third party in connection with the purchase by each New Owner of the
relevant New Ship pursuant to the relevant MOA, other than as disclosed to the Lender in
writing on or prior to the date of this Agreement.
	 
	10.19	 	Compliance with certain undertakings. At the date of this Agreement, the Borrower is in
compliance with Clauses 11.2, 11.10 and 11.14.
	 
	10.20	 	Taxes paid. The Borrower has paid all taxes applicable to or imposed on or in relation to
the Borrower or its business.
	 
	10.21	 	Margin Stock. Neither the Borrower nor any Guarantor is engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock and no proceeds of any
Advance will be used to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock.
	 
	10.22	 	ERISA. Neither the Borrower nor any Guarantor has ever established or maintained any
employee benefit plan subject to the Employee Retirement Income Security Act of 1974.
	 
	10.23	 	Not “Investment Company”. Neither the Borrower nor any Guarantor is an “investment
company”, or a company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940.
	 
	10.24	 	Place of Business. Neither the Borrower nor any Guarantor has a place of business in the
United States of America, the District of Columbia, the United States Virgin Islands, or any
territory or insular possession subject to the jurisdiction of the United States of America
other than the places of business of the Borrower’s wholly-owned subsidiary, Arlington Tankers
LLC, at 191 Post Road West, Westport, Connecticut, 06880, USA and 299 Park Avenue, New York,
New York, 10171, USA and the business offices of the Borrower at the same addresses.
	 
	10.25	 	No Money Laundering. In relation to the borrowing by the Borrower of the Advances or any of
them, the performance and discharge of its obligations under this Agreement and the other
Finance Documents and the transactions and other arrangements affected or contemplated by this
Agreement and the other Finance Documents, the Borrower confirms that it is acting for its own
account and that the foregoing will not involve or lead to contravention of any law, official
requirement or other regulatory measure or procedure implemented to combat “money laundering”
(as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European
Communities).






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	10.26	 	ISM Code and ISPS Code compliance. All requirements of the ISM Code and the ISPS Code as
they relate to each Guarantor, the Approved Manager and each Ship have been complied with.
	 
	11	 	GENERAL UNDERTAKINGS
	 
	11.1	 	General. The Borrower undertakes with the Lender to comply with the following provisions of
this Clause 11 at all times during the Security Period, except as the Lender may otherwise
permit.
	 
	11.2	 	Title; negative pledge. The Borrower will:
	 
	(a)	 	hold the legal title to, and own the entire beneficial interest in the shares in, each
Guarantor, free from all Security Interests and other interests and rights of every kind,
except for those created by the Finance Documents; and
	 
	(b)	 	not create or permit to arise any Security Interest over any other asset, present or future
(including, but not limited to, the Borrower’s rights against the Lender under the Master
Agreement or all or any part of the Borrower’s interest in any amount payable to the Borrower
by the Lender under the Master Agreement), nor sign nor file, under the Uniform Commercial
Code (or analogous statute or law) of any jurisdiction, a financing statement that names it as
debtor, or sign any security agreement authorising any secured party thereunder to file such
financing statement, or assign any right to receive income, other than Permitted Security
Interests.
	 
	11.3	 	No disposal of assets. The Borrower will not (and will procure that no Guarantor shall)
transfer, lease or otherwise dispose of:
	 
	(a)	 	in the case of the Borrower:






	 	(i)	 	any of its shares in a Guarantor other than in accordance with the terms of
this Agreement and on terms approved by the Lender; or
	 
	 	(ii)	 	in relation to any other assets, other than on arm’s length terms for market
value; or
	 
	 	(iii)	 	any debt payable to it or any other right (present, future or contingent
right) to receive a payment, including any right to damages or compensation; and






	(b)	 	in the case of a Guarantor, the Ship owned by it or any part thereof, other than in
accordance with the terms of the Finance Documents and on terms approved by the Lender.
	 
	11.4	 	No acquisitions. The Borrower will not acquire an asset outside the ordinary course of its
business other than ships (or the shares in subsidiary companies acquiring ships) acquired and
financed with prior notification to the Lender.
	 
	11.5	 	Information provided to be accurate. All financial and other information which is provided
in writing by or on behalf of the Borrower under or in connection with any Finance Document
will be true and not misleading and will not omit any material fact or consideration.
	 
	11.6	 	Provision of financial statements. The Borrower will send to the Lender:
	 
	(a)	 	as soon as possible, but in no event later than 120 days after the end of each financial year
of the Borrower Parent, the audited consolidated accounts of the Borrower Parent and the
unaudited consolidated accounts of the Borrower; and




29









 






	(b)	 	as soon as possible, but in no event later than 60 days after the end of each Accounting
Period, (i) the consolidated management accounts of the Borrower Parent prepared in
accordance with Clause 11.7 and certified as to their correctness by the Chief Financial
Officer of the Borrower Parent and (ii) the consolidated management accounts of the Borrower
prepared in accordance with Clause 11.7 and certified as to their correctness by the Chief
Financial Officer of the Borrower Parent,
	 
	 	 	and each set of accounts sent to the Lender pursuant to (a) or (b) of this Clause 11.6 shall
be sent together with a compliance certificate signed by the Borrower Parent’s Chief
Financial Officer in accordance with Clause 12.6;
	 
	11.7	 	Form of financial statements. All accounts (audited and unaudited) delivered under
Clause 11.6 will:
	 
	(a)	 	be prepared in accordance with all applicable laws and GAAP consistently applied;
	 
	(b)	 	give a GAAP presentation of the Borrower Parent and its subsidiaries or, as the case may be,
the Borrower and its subsidiaries at the date of those accounts and of their profit for the
period to which those accounts relate; and
	 
	(c)	 	fully disclose or provide for all significant liabilities of the Borrower Parent and its
subsidiaries or, as the case may be, the Borrower and its subsidiaries,
	 
	11.8	 	Keeping of books. The Borrower shall keep, and procure that each Guarantor shall keep,
proper books of record and account, in which full and correct entries shall be made in
accordance with GAAP of all financial transactions and the assets and business of the Borrower
or the Guarantor (as the case may be) to the extent necessary to permit the preparation of the
Accounting Information required to be delivered to the Lender pursuant to this Agreement.
	 
	11.9	 	Creditor notices. The Borrower will send the Lender, at the same time as they are
despatched, copies of all communications which are despatched to the whole or any class of the
Borrower’s creditors.
	 
	11.10	 	Consents. The Borrower will maintain in force and promptly obtain or renew (or procure that
this is done), and will promptly send certified copies (or procure that they are sent) to the
Lender of, all consents required:
	 
	(a)	 	for the Borrower and each Guarantor to perform its obligations under any Finance Document to
which it is a party;
	 
	(b)	 	for the validity or enforceability of any Finance Document to which it or any Guarantor is a
party;
	 
	(c)	 	for each Guarantor to continue to own and operate the Ship, owned by it,
	 
	 	 	and the Borrower will comply (or procure compliance) with the terms of all such consents.
	 
	11.11	 	Compliance with laws. The Borrower and each Guarantor will comply with all laws and
regulations by which it is bound including, without limitation, all applicable requirements of
the SEC and the provisions of the Sarbanes-Oxley Act of 2002.
	 
	11.12	 	Maintenance of Security Interests. The Borrower will:
	 
	(a)	 	at its own cost, do all that it reasonably can to ensure that any Finance Document validly
creates the obligations and the Security Interests which it purports to create; and




30









 






	(b)	 	without limiting the generality of paragraph (a), at its own cost, promptly register, file,
record or enrol any Finance Document with any court or authority in all Pertinent
Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in
respect of any Finance Document, give any notice or take any other step which may be or
become necessary or desirable for any Finance Document to be valid, enforceable or
admissible in evidence or to ensure or protect the priority of any Security Interest which
it creates.
	 
	11.13	 	Notification of litigation. The Borrower will provide the Lender with details of any legal
or administrative action involving the Borrower, any other Security Party, the Approved
Manager or any Ship, any Earnings or any Insurances as soon as such action is instituted or it
becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that
the legal or administrative action cannot be considered material in the context of any Finance
Document.
	 
	11.14	 	No amendment to MOAs. The Borrower will ensure that the relevant New Owner shall not agree
to any material amendment or supplement to, or waive or fail to enforce, the MOA to which it
is a party or any of its provisions.
	 
	11.15	 	Principal place of business. The Borrower will maintain its place of business, and keep its
corporate documents and records, at its registered office in Bermuda from time to time.
	 
	11.16	 	Confirmation of no default. The Borrower will, within 5 Business Days after service by the
Lender of a written request, serve on the Lender a notice which is signed by any 2 duly
authorised officers of the Borrower and which:
	 
	(a)	 	states that no Event of Default has occurred and, to the best of the signatories’ knowledge
following due enquiry, no Potential Event of Default has occurred; or
	 
	(b)	 	states that no Event of Default has occurred and, to the best of the signatories’ knowledge
following due enquiry, no Potential Event of Default has occurred, except for a specified
event or matter, of which all material details are given.
	 
	11.17	 	Notification of default. The Borrower will notify the Lender as soon as the Borrower
becomes aware of:
	 
	(a)	 	the occurrence of an Event of Default or a Potential Event of Default; or
	 
	(b)	 	any matter which indicates that an Event of Default or a Potential Event of Default may have
occurred,
	 
	 	 	and will keep the Lender fully up-to-date with all developments.
	 
	11.18	 	Provision of information required by the SEC. The Borrower shall send to the Lender,
promptly upon the filing thereof, copies of all registration statements and reports on Forms
10-K and 10-Q (or their equivalents) and other material filings which the Borrower shall have
filed with the SEC or any similar governmental authority, or any national securities exchange.
	 
	11.19	 	Visitation rights. The Borrower shall permit (and shall procure that each Guarantor shall
permit) the Lender or its representatives, at any reasonable time and from time to time, upon
reasonable prior notice, at the Lender’s risk and cost and to the extent reasonably requested,
to:
	 
	(a)	 	examine and make copies of and abstracts from the records and books of account of the
Borrower or any Guarantor;
	 
	(b)	 	visit the properties of the Borrower or any Guarantor; and




31









 






	(c)	 	discuss the affairs, finances and accounts of the Borrower or any Guarantor with any of its
officers or representatives and with its independent certified public accountants.
	 
	11.20	 	Provision of further information. The Borrower will, as soon as practicable after receiving
the request, provide the Lender with any additional financial or other information:
	 
	(a)	 	relating to the Borrower, each Guarantor, each Ship, any Earnings or any Insurances; or
	 
	(b)	 	relating to any other matter relevant to, or to any provision of, a Finance Document;
	 
	(c)	 	required by the Lender in relation to its “know your client” regulations and other internal
guidelines (whether in relation to the opening of the Operating Account or otherwise),
	 
	 	 	which may reasonably be requested by the Lender at any time.
	 
	12	 	CORPORATE UNDERTAKINGS
	 
	12.1	 	General. The Borrower also undertakes with the Lender to comply with the following
provisions of this Clause 12 at all times during the Security Period except as the Lender may
otherwise permit.
	 
	12.2	 	Maintenance of status and place of business. The Borrower will maintain its separate
corporate existence and remain in good standing under the laws of Bermuda and shall not
establish a place of business in the United States of America, the District of Columbia, the
United States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States of America (other than its presence and that of its wholly
owned subsidiary, Arlington Tankers LLC, at 191 Post Road West, Westport, Connecticut, 06880
and 299 Park Avenue, New York, NY 10171), unless 60 days’ prior written notice of such
establishment is given to the Lender.
	 
	12.3	 	Negative undertakings. The Borrower will not:
	 
	(a)	 	except in connection with the Amalgamation (including any amendment within five Business Days
following the Amalgamation) amend or permit any amendment of its articles of incorporation,
bye-laws, or any other of its constitutional documents (other than as may be required by
applicable law);
	 
	(b)	 	change the nature of its business from the ownership and operation of ships (through its
ownership of the Guarantors); or
	 
	(c)	 	declare or pay any dividend or make any other form of distribution or effect any form of
redemption, purchase or return of share capital if:






	 	(i)	 	an Event of Default or Potential Event of Default has occurred; or
	 
	 	(ii)	 	the aggregate value of the Ships then subject to a Mortgage (as determined by a
Recent Valuation ) is less than 140 per cent. of the aggregate of the Loan and the
Termination Amount Provided that the restriction set out in this sub-clause (c)(ii)
shall not be applicable on a Qualifying Charter Date unless the aggregate value of the
Ships as aforesaid is less than 125 per cent. of the aggregate of the Loan and the
Termination Amount;






	(d)	 	provide any form of credit or financial assistance to:






	 	(i)	 	an Affiliate;




32









 






	 	(ii)	 	a person who is directly or indirectly interested in the Borrower’s share or
loan capital; or
	 
	 	(iii)	 	any company in or with which such a person is directly or indirectly
interested or connected,






		 	or enter into any transaction with or involving such a person or company (including, without
limitation, the purchase from, sale to or exchange of property with, or the rendering of any
service by or for, such person or company) on terms which are, in any respect, less
favourable to the Borrower than those which it could obtain in a bargain made at arms’
length Provided that the foregoing shall not apply to (x) loans and advances by the Borrower
to the Borrower Parent to the extent that the Borrower may make dividends, distributions,
redemptions, purchases or return of share capital pursuant to Clause 12.3(c) or (y) subject
always to Clause 12.4, credit or financial assistance to any Guarantor (including amounts to
pay ship management fees).
	 
	(e)	 	other than the Amalgamation, enter into any form of amalgamation, merger or de-merger or any
form of reconstruction or reorganisation; or
	 
	12.4	 	Subordination of rights of Borrower. All rights which the Borrower at any time has against
any Guarantor or its assets shall be fully subordinated to the rights of the Lender under the
Finance Documents; and in particular, the Borrower shall not during the Security Period:
	 
	(a)	 	claim, or in a bankruptcy of any Guarantor prove for, any amount payable to the Borrower by a
Guarantor, whether in respect of this or any other transaction;
	 
	(b)	 	take or enforce any Security Interest for any such amount; or
	 
	(c)	 	claim to set-off any such amount against any amount payable by the Borrower to any Guarantor.
	 
	12.5	 	Financial Covenants. The Borrower shall ensure that at the end of each Accounting Period:
	 
	(a)	 	the Value Adjusted Equity shall be equal to or greater than 30 per cent. of the Value
Adjusted Total Assets; and
	 
	(b)	 	the Group shall have a positive Working Capital.
	 
	12.6	 	Compliance Check. Compliance with the undertakings contained in Clause 12.5 shall be
determined by reference to the latest Accounting Information. Unless and until the Lender
otherwise agrees in writing, at the same time as it delivers any audited or management
accounts to the Lender pursuant to Clause 11.6, the Borrower shall deliver to the Lender a
certificate in the form set out in Schedule 3 hereto, signed by the Chief Financial Officer of
the Borrower Parent.
	 
	12.7	 	Changes in GAAP. If, during the Security Period, there shall be any change in GAAP or the
interpretation thereof which affects the calculation of the financial covenants contained in
Clause 12.5, the Lender and the Borrower shall consult in good faith to agree such adjustments
(if any) to those financial covenants and the relevant defined terms as shall be necessary to
make those covenants functionally equivalent to the position which applied before such change.
If, following such good faith consultation for a period of 3 months, no agreement is reached
the financial covenants and the relevant defined terms shall be amended in such manner as the
Lender, acting reasonably, shall specify in writing to the Borrower and this Agreement shall
be deemed to be amended accordingly.




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	13	 	INSURANCE
	 
	13.1	 	General. The Borrower also undertakes with the Lender to procure that each Guarantor shall
comply with the following provisions of this Clause 13 at all times during the Security Period
except as the Lender may otherwise permit.
	 
	13.2	 	Maintenance of obligatory insurances. The Borrower shall procure that each Guarantor shall
keep the Ship owned by it insured at the expense of that Guarantor against:
	 
	(a)	 	fire and usual marine risks (including hull and machinery and excess risks);
	 
	(b)	 	war risks;
	 
	(c)	 	protection and indemnity risks;
	 
	(d)	 	any other risks against which the Lender considers, acting reasonably and having regard to
practices and other circumstances prevailing at the relevant time, it would in the opinion of
the Lender be reasonable for the relevant Guarantor to insure and which are specified by the
Lender by notice to the Borrower.
	 
	13.3	 	Terms of obligatory insurances. The Borrower shall procure that each Guarantor shall effect
such insurances:
	 
	(a)	 	in Dollars;
	 
	(b)	 	in the case of fire and usual marine risks and war risks, in an amount on an agreed value
basis at least the greater of (i) such amount, which when aggregated with the amount for which
any other Ship then subject to a Mortgage is insured, is equal to 125 per cent. of the
aggregate of the Loan and the Termination Amount and (ii) the market value of the Ship owned
by it; and
	 
	(c)	 	in the case of oil pollution liability risks, for an aggregate amount equal to the highest
level of cover from time to time available under basic protection and indemnity club entry
(with the international group of protection and indemnity clubs) and in the international
marine insurance market (currently $1,000,000,000);
	 
	(d)	 	in relation to protection and indemnity risks in respect of the full tonnage of the Ship
owned by it;
	 
	(e)	 	on approved terms; and
	 
	(f)	 	through approved brokers and with approved insurance companies and/or underwriters or, in the
case of war risks and protection and indemnity risks, in approved war risks and protection and
indemnity risks associations.
	 
	13.4	 	Further protections for the Lender. In addition to the terms set out in Clause 13.3, the
Borrower shall procure that the obligatory insurances shall:
	 
	(a)	 	whenever the Lender requires name (or be amended to name) the Lender as additional named
assured for its rights and interests, warranted no operational interest and with full waiver
of rights of subrogation against the Lender, but without the Lender thereby being liable to
pay (but having the right to pay) premiums, calls or other assessments in respect of such
insurance;
	 
	(b)	 	name the Lender as loss payee with such directions for payment as the Lender may specify;




34









 






	(c)	 	provide that all payments by or on behalf of the insurers under the obligatory insurances to
the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;
	 
	(d)	 	provide that such obligatory insurances shall be primary without right of contribution from
other insurances which may be carried by the Lender; and
	 
	(e)	 	provide that the Lender may make proof of loss if a Guarantor fails to do so.
	 
	13.5	 	Renewal of obligatory insurances. The Borrower shall procure that each Guarantor shall:
	 
	(a)	 	at least 21 days before the expiry of any obligatory insurance relating to the Ship owned by
it:






	 	(i)	 	notify the Lender of the brokers (or other insurers) and any protection and
indemnity or war risks association through or with whom the Guarantor proposes to renew
that obligatory insurance and of the proposed terms of renewal; and
	 
	 	(ii)	 	obtain the Lender’s approval to the matters referred to in paragraph (i);






	(b)	 	at least 14 days before the expiry of any obligatory insurance relating to the Ship owned by
it, renew that obligatory insurance in accordance with the Lender’s approval pursuant to
paragraph (a); and
	 
	(c)	 	procure that the approved brokers and/or the war risks and protection and indemnity
associations with which such a renewal is effected shall promptly after the renewal notify the
Lender in writing of the terms and conditions of the renewal.
	 
	13.6	 	Copies of policies; letters of undertaking. The Borrower shall procure that each Guarantor
shall ensure that all approved brokers provide the Lender with pro forma copies of all
policies relating to the obligatory insurances which they are to effect or renew and of a
letter or letters or undertaking in a form required by the Lender having regard to current
market practice and including undertakings by the approved brokers that:
	 
	(a)	 	they will have endorsed on each policy, immediately upon issue, a loss payable clause and a
notice of assignment complying with the provisions of Clause 13.4;
	 
	(b)	 	they will hold such policies, and the benefit of such insurances, to the order of the Lender
in accordance with the said loss payable clause;
	 
	(c)	 	they will advise the Lender immediately of any material change to the terms of the obligatory
insurances;
	 
	(d)	 	upon the request of the Lender, they will notify the Lender, not less than 14 days before the
expiry of the obligatory insurances, in the event of their not having received notice of
renewal instructions from the Borrower or its agents and, in the event of their receiving
instructions to renew, they will promptly notify the Lender of the terms of the instructions;
and
	 
	(e)	 	they will not set off against any sum recoverable in respect of a claim relating to the Ship
owned by it under such obligatory insurances any premiums or other amounts due to them or any
other person whether in respect of the Ship owned by it or otherwise, they waive any lien on
the policies, or any sums received under them, which they might have in respect of such
premiums or other amounts, and they will not cancel such obligatory insurances by reason of
non-payment of such premiums or other amounts, and will




35









 






	 	 	arrange for a separate policy to be
issued in respect of the Ship owned by it forthwith upon being so requested by the Lender.
	 
	13.7	 	Copies of certificates of entry. The Borrower shall procure that each Guarantor shall ensure
that any protection and indemnity and/or war risks associations in which the Ship owned by it
is entered provides the Lender with:
	 
	(a)	 	a certified copy of the certificate of entry for the Ship owned by it;
	 
	(b)	 	a letter or letters of undertaking in such form as may be required by the Lender having
regard to current market practice; and
	 
	(c)	 	a certified copy of each certificate of financial responsibility for pollution by oil or
other Environmentally Sensitive Material issued by the relevant certifying authority in
relation to the Ship owned by it.
	 
	13.8	 	Deposit of original policies. The Borrower shall procure that each Guarantor shall ensure
that all policies relating to obligatory insurances are deposited with the approved brokers
through which the insurances are effected or renewed.
	 
	13.9	 	Payment of premiums. The Borrower shall procure that each Guarantor shall punctually pay all
premiums or other sums payable in respect of the obligatory insurances and produce all
relevant receipts when so required by the Lender.
	 
	13.10	 	Guarantees. The Borrower shall procure that each Guarantor shall ensure that any guarantees
required by a protection and indemnity or war risks association are promptly issued and remain
in full force and effect.
	 
	13.11	 	Compliance with terms of insurances. The Borrower shall procure that no Guarantor either
does or omits to do (or permits to be done or not to be done) any act or thing which would or
might render any obligatory insurance invalid, void, voidable or unenforceable or render any
sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
	 
	(a)	 	the Borrower shall procure that each Guarantor shall take all necessary action and comply
with all requirements which may from time to time be applicable to the obligatory insurances,
and (without limiting the obligation contained in Clause 13.7 (c)) ensure that the obligatory
insurances are not made subject to any exclusions or qualifications to which the Lender has
not given its prior approval;
	 
	(b)	 	the Borrower shall procure that each Guarantor shall not make any changes relating to the
classification or classification society or manager or operator of the Ship owned by that
Guarantor without prior approved of the underwriters of the obligatory insurances;
	 
	(c)	 	the Borrower shall procure that each Guarantor shall make (and promptly supply copies to the
Lender of) all quarterly or other voyage declarations which may be required by the protection
and indemnity risks association in which the Ship owned by it is entered to maintain cover for
trading to the United States of America and Exclusive Economic Zone (as defined in the United
States Oil Pollution Act 1990 or any other applicable legislation); and
	 
	(d)	 	the Borrower shall procure that each Guarantor shall not employ the Ship owned by it, nor
allow it to be employed, otherwise than in conformity with the terms and conditions of the
obligatory insurances, without first obtaining the consent of the insurers and complying with
any requirements (as to extra premium or otherwise) which the insurers specify.




36









 






	13.12	 	Alteration to terms of insurances. The Borrower shall procure that each Guarantor shall
neither make nor agree to any alteration to the terms of any obligatory insurance nor waive
any right relating to any obligatory insurance.
	 
	13.13	 	Settlement of claims. The Borrower shall procure that each Guarantor shall not settle,
compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major
Casualty, and shall do all things necessary and provide all documents, evidence and
information to enable the Lender to collect or recover any moneys which at any time become
payable in respect of the obligatory insurances.
	 
	13.14	 	Provision of copies of communications. The Borrower shall procure that each Guarantor shall
provide the Lender, at the time of each such communication, copies of all written
communications between the relevant Guarantor and:
	 
	(a)	 	the approved brokers; and
	 
	(b)	 	the approved protection and indemnity and/or war risks associations; and
	 
	(c)	 	the approved insurance companies and/or underwriters, which relate directly or indirectly to:






	 	(i)	 	the relevant Guarantor’s obligations relating to the obligatory insurances
including, without limitation, all requisite declarations and payments of additional
premiums or calls; and
	 
	 	(ii)	 	any credit arrangements made between the relevant Guarantor and any of the
persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting
or maintenance of the obligatory insurances.






	13.15	 	Provision of information. In addition, the Borrower shall procure that each Guarantor shall
promptly provide the Lender (or any persons which it may designate) with any information which
the Lender (or any such designated person) requests for the purpose of:
	 
	(a)	 	obtaining or preparing any report from an independent marine insurance broker as to the
adequacy of the obligatory insurances effected or proposed to be effected; and/or
	 
	(b)	 	effecting, maintaining or renewing any such insurances as are referred to in Clause 12.16
below or dealing with or considering any matters relating to any such insurances,
	 
	 	 	and the Borrower shall, forthwith upon demand, indemnify the Lender in respect of all fees
and other expenses incurred by or for the account of the Lender in connection with any such
report as is referred to in paragraph (a) Provided that such indemnity shall not apply in
relation to the first such report for a Ship.
	 
	13.16	 	Mortgagee’s interest and additional perils. The Lender shall be entitled from time to time
to effect, maintain and renew a mortgagee’s interest additional perils insurance and a
mortgagee’s interest marine insurance in such amounts, on such terms, through such insurers
and generally in such manner as the Lender may from time to time consider appropriate and the
Borrower shall, in respect of all premiums and other expenses which are incurred in connection
with or with a view to effecting, maintaining or renewing any such insurance or dealing with,
or considering, any matter arising out of any such insurance, pay the Lender $120,000 per
annum throughout the Security Period, the first such payment to be made on the first Drawdown
Date and each subsequent payment to be made on the anniversary thereof. The Borrower shall
supply, or procure that there is supplied, to the Lender such information as the Lender may
require in connection with the matters referred to in this Clause 13.16.




37









 






	14	 	SHIP COVENANTS
	 
	14.1	 	General. The Borrower also undertakes with the Lender to procure that each Guarantor
complies with the following provisions of this Clause 14 at all times during the Security
Period except as the Lender may otherwise permit.
	 
	14.2	 	Ship’s name and registration. The Borrower shall procure that each Guarantor shall keep the
Ship owned by it registered in its name as Bermudian Ship; the Borrower shall procure that
each Guarantor shall not do or allow to be done anything as a result of which such
registration might be cancelled or imperilled; and the Borrower shall procure that each
Guarantor shall not change the name or port of registry of the Ship owned by it Provided
that a Guarantor may change the flag of the Ship owned by it to a flag acceptable to the
Lender (in its discretion) subject to the relevant Guarantor entering into and (where
applicable) registering in favour of the Lender, such Finance Documents as the Lender may
require.
	 
	14.3	 	Repair and classification. The Borrower shall procure that each Guarantor shall keep the
Ship owned by it in a good and safe condition and state of repair:
	 
	(a)	 	consistent with first-class ship ownership and management practice;
	 
	(b)	 	so as to maintain the class of the Ship owned by it, free of recommendations and conditions;
and
	 
	(c)	 	so as to comply with all laws and regulations applicable to vessels registered at ports in
Bermuda or to vessels trading to any jurisdiction to which the Ship owned by it may trade from
time to time including but not limited to the ISM Code, the ISM Code Documentation and the
ISPS Code;
	 
	14.4	 	Modification. The Borrower shall procure that each Guarantor shall not make any modification
or repairs to, or replacement of, the Ship owned by it or equipment installed on that Ship
which would or might materially alter the structure, type or performance characteristics of
that Ship or materially reduce its value.
	 
	14.5	 	Removal of parts. The Borrower shall procure that each Guarantor shall not remove any
material part of the Ship owned by it, or any item of equipment installed on that Ship, unless
the part or item so removed is forthwith replaced by a suitable part or item which is in the
same condition as or better condition than the part or item removed, is free from any Security
Interest or any right in favour of any person other than the Lender and becomes on
installation on that Ship, the property of the relevant Guarantor, and subject to the security
constituted by the Mortgage and the Deed of Covenant relating to that Ship Provided that the
relevant Guarantor may install equipment owned by a third party if the equipment can be
removed without any risk of damage to the Ship owned by it.
	 
	14.6	 	Surveys. The Borrower shall procure that each Guarantor shall submit the Ship owned by it
regularly to all periodical or other surveys which may be required for classification purposes
and, if so required by the Lender provide the Lender, with copies of all survey reports.
	 
	14.7	 	Inspection. The Borrower shall procure that each Guarantor shall permit the Lender (by
surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at
all reasonable times and without thereby interfering with or delaying the operation of the
Ship, to inspect its condition or to satisfy themselves about proposed or executed repairs and
shall afford all proper facilities for such inspections and Provided that in the event that a
Guarantor refuses access to the Ship owned by it to the Lender (or its surveyors or other
persons appointed by it for that purpose of inspecting the Ship) on the grounds that such
access will interfere with or delay the operation of the Ship, the Borrower shall procure that
the relevant Guarantor shall cooperate with the Lender and/or




38









 






	 	 	its agent in agreeing a mutually
convenient date (as soon as reasonably practicable) on which, and place at which, access to
the Ship will be permitted.
	 
	14.8	 	Prevention of and release from arrest. The Borrower shall procure that each Guarantor shall
promptly discharge:
	 
	(a)	 	all liabilities which give or may give rise to maritime or possessory liens on or claims
enforceable against the Ship owned by it, its Earnings or its Insurances;
	 
	(b)	 	all taxes, dues and other amounts charged in respect of the Ship owned by it, its Earnings or
its Insurances; and
	 
	(c)	 	all other outgoings whatsoever in respect of the Ship owned by it, its Earnings or its
Insurances,
	 
	 	 	and, forthwith upon receiving notice of the arrest of the Ship owned by it, or of its
detention in exercise or purported exercise of any lien or claim, the relevant Guarantor
shall procure its release by providing bail or otherwise as the circumstances may require.
	 
	14.9	 	Compliance with laws etc. The Borrower shall procure that each Guarantor shall:
	 
	(a)	 	comply, or procure compliance with the ISM Code, all Environmental Laws, the ISPS Code and
all other laws or regulations relating to the Ship owned by it, its ownership, operation and
management or to the business of that Guarantor;
	 
	(b)	 	not employ the Ship owned by it nor allow its employment in any manner contrary to any law or
regulation in any relevant jurisdiction including but not limited to the ISM Code and the ISPS
Code; and
	 
	(c)	 	in the event of hostilities in any part of the world (whether war is declared or not), not
cause or permit its to enter or trade to any zone which is declared a war zone by any
government or by the war risks insurers of the Ship owned by it unless the prior written
consent of the Lender has been given and the relevant Guarantor has (at its expense) effected
any special, additional or modified insurance cover which the Lender may require.
	 
	14.10	 	Provision of information. The Borrower shall procure that each Guarantor shall promptly
provide the Lender with any information which it requests regarding:
	 
	(a)	 	the Ship owned by it, its employment, position and engagements;
	 
	(b)	 	the Earnings and payments and amounts due to the master and crew of the Ship owned by it;
	 
	(c)	 	any expenses incurred, or likely to be incurred, in connection with the operation,
maintenance or repair of the Ship owned by it and any payments made in respect of that Ship;
	 
	(d)	 	any towages and salvages;
	 
	(e)	 	the relevant Guarantor’s, the Approved Manager’s or the relevant Ship’s compliance with the
ISM Code and the ISPS Code,
	 
	 	 	and, upon the Lender’s request, provide copies of any current charter relating to the Ship
owned by it, of any current charter guarantee and of that Ship’s ISM Documentation and the
ISSC.




39









 






	14.11	 	Notification of certain events. The Borrower shall procure that each Guarantor shall
immediately notify the Lender by fax, confirmed forthwith by letter, of:
	 
	(a)	 	any casualty relating to the Ship owned by it which is or is likely to be or to become a
Major Casualty;
	 
	(b)	 	any occurrence as a result of which the Ship owned by it has become or is, by the passing of
time or otherwise, likely to become a Total Loss;
	 
	(c)	 	any requirement or recommendation made by any insurer or classification society or by any
competent authority which is not immediately complied with;
	 
	(d)	 	any arrest or detention of the Ship owned by it, any exercise or purported exercise of any
lien on that Ship or its Earnings or any requisition of that Ship for hire;
	 
	(e)	 	any intended dry docking of the Ship owned by it;
	 
	(f)	 	any Environmental Claim made against the relevant Guarantor or in connection with the Ship
owned by it, or any Environmental Incident;
	 
	(g)	 	any claim for breach of the ISM Code or the ISPS Code being made against the relevant
Guarantor, the Approved Manager or otherwise in connection with the Ship owned by it;
	 
	(h)	 	any other matter, event or incident, actual or threatened, the effect of which will or could
lead to the ISM Code or the ISPS Code not being complied with,
	 
	 	 	and the Borrower shall procure that each Guarantor shall keep the Lender advised in writing
on a regular basis and in such detail as the Lender shall require of that Guarantor’s, the
Approved Manager’s or any other person’s response to any of those events or matters.
	 
	14.12	 	Restrictions on chartering, appointment of managers etc. The Borrower shall procure that
each Guarantor shall not:
	 
	(a)	 	let the Ship owned by it on demise charter for any period;
	 
	(b)	 	other than by way of the relevant Charter, enter into any time or consecutive voyage charter
in respect of the Ship owned by it for a term which exceeds, or which by virtue of any
optional extensions may exceed, 13 months; and other than by way of the relevant Sub Charter,
(if applicable) permit the Ship owned by it to be sub-time chartered for a term which exceeds,
or which by virtue of any optional extensions may exceed, 13 months;
	 
	(c)	 	enter into any charter in relation to the Ship owned by it under which more than 2 months’
hire (or the equivalent) is payable in advance;
	 
	(d)	 	charter the Ship owned by it otherwise than on bona fide arm’s length terms at the time when
that Ship is fixed;
	 
	(e)	 	appoint a manager of the Ship owned by it other than the Approved Manager or agree to any
alteration to the terms of the Approved Manager’s appointment;
	 
	(f)	 	if the Approved Manager of a Ship is to be General Maritime Management LLC, procure that
before its appointment it enters into a manager’s undertaking in favour of the Lender and in
form and substance satisfactory to the Lender;
	 
	(g)	 	de-activate or lay up the Ship owned by it; or




40









 






	(h)	 	following the occurrence and during the continuance of a Potential Event of Default or an
Event of Default (and without prejudice to the Lender’s rights under the other provisions of
the Finance Documents) put the Ship owned by it into the possession of any person for the
purpose of work being done upon her unless that person has first given to the Lender and in
terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its
Earnings for the cost of such work or for any other reason.
	 
	14.13	 	Notice of Mortgage. The Borrower shall procure that each Guarantor shall keep the relevant
Mortgage registered against the Ship owned by it as a valid first priority mortgage, carry on
board the Ship owned by it a certified copy of the Mortgage and place and maintain in a
conspicuous place in the navigation room and the Master’s cabin of that Ship a framed printed
notice stating that the Ship is mortgaged by the relevant Guarantor to the Lender.
	 
	14.14	 	Sharing of Earnings. The Borrower shall procure that, save pursuant to the Charters and any
amendment thereof made in accordance with the Finance Documents, each Guarantor
shall not enter into any agreement or
arrangement for the sharing of any
Earnings relating to the Ship owned by
it.
	 
	15	 	SECURITY COVER
	 
	15.1	 	Minimum required Security Cover. If, and so often as, the aggregate, charter-free market
value of the Ships (as determined in accordance with Clause 15.5 at such times as the Lender
may from time to time require) plus the market value of any additional security for the time
being actually provided to the Lender pursuant to Clause 15.2 falls below 125 per cent. of the
aggregate of:
	 
	(a)	 	the Loan; and
	 
	(b)	 	the Termination Amount,
	 
	 	 	(the above being the “Minimum Security Cover Ratio”) the Borrower shall, within 10 days of
being notified by the Lender of such requirement (which notification shall be conclusive and
binding on the Borrower), comply with Clause 15.2 or 15.3.
	 
	15.2	 	Provision of additional security. Subject to Clause 15.3, on receipt of the notification
referred to in Clause 15.1, the Borrower shall, within 5 days of receipt of the notification,
provide the Lender with, or procure the provision to the Lender of, such additional security
as shall, in the opinion of the Lender, be adequate to make up such deficiency, which
additional security shall take such form, be constituted by such documentation and be entered
into by such parties as the Lender in its absolute discretion may approve or require.
	 
	15.3	 	Release of additional security. If the Borrower or a third party has provided additional
security in accordance with Clause 15.2 and subsequently, as evidenced by a Recent Valuation,
the Security to Exposure Ratio, expressed as a percentage, exceeds 130%, such additional
security or part thereof shall be released to the Borrower so that immediately after such
release the Minimum Security Ratio is maintained.
	 
	15.4	 	Prepayment of Loan. If the Borrower does not make proposals satisfactory to the Lender in
relation to the additional security referred to in Clause 15.2 within 5 days of the date of
the receipt by the Borrower of the Lender’s notification referred to in Clause 15.1, the
Borrower shall be deemed to have elected to prepay (subject to, and in accordance with,
Clauses 7.8 and 7.9), such part of the Loan as will ensure that the aggregate market value (as
determined in accordance with Clauses 15.5) of the Ships then subject to a Mortgage plus the
market value of any additional security for the time being actually provided to the Lender
pursuant to Clause 15.2 is, after such prepayment, at least 125 per cent. of the aggregate of
(a) the Loan and (b) the Termination Amount.




41









 






	15.5	 	Valuation of Ship. The market value of a Ship at any date is that shown by a valuation
prepared:
	 
	(a)	 	as at a date not more than 14 days previously;
	 
	(b)	 	(subject to the last paragraph of this Clause 15.5) by an independent sale and purchase
shipbroker which the Lender has approved or appointed for the purpose;
	 
	(c)	 	without physical inspection of any Ship;
	 
	(d)	 	on the basis of a sale for prompt delivery for cash on normal arm’s length commercial terms
as between a willing seller and a willing buyer, free of any existing charter or other
contract of employment;
	 
	(e)	 	after deducting the estimated amount of the usual and reasonable expenses which would be
incurred in connection with the sale.
	 
	 	 	It is agreed that, initially, the Lender shall use Clarksons’ on-line valuation service and
any cost of the use of that service shall not be for the account of the Borrower. Should
that service cease to be available, or be available only in a manner which makes it
inappropriate to be used for the purposes of this Agreement, the Lender shall try to use a
similar service from a source acceptable to it which does not involve any cost being passed
on to the Borrower. If such a service is not available in a manner which makes it
appropriate to be used for the purposes of this Agreement, the Lender and the Borrower shall
agree on a panel of three first class international shipbrokers (the “Panel”) to provide
valuations in accordance with this Clause 15.5 and the average of the valuations so provided
shall be used for the purposes of this Clause 15. If the Borrower and the Lender are unable
to agree on the members of the Panel within 14 days of a notice from the Lender to the
Borrower to that effect, the Panel shall be selected by the Lender.
	 
	15.6	 	Value of additional vessel security. The net realisable value of any additional security
which is provided under Clause 15.2 and which consists of a Security Interest over a vessel
shall be that shown by a valuation complying with the requirements of Clause 15.5.
	 
	15.7	 	Valuations binding. Any valuation under Clause 15.5 shall be binding and conclusive as
regards the Borrower, as shall be any valuation which the Lender makes of any additional
security which does not consist of or include a Security Interest.
	 
	15.8	 	Provision of information. The Borrower shall promptly provide (or procure the provision to,
as the case may be) the Lender and any shipbroker or expert acting under Clause 15.5 who is a
member of the Panel with any information which the Lender or the shipbroker or expert may
request for the purposes of the valuation; and, if the Borrower fails to provide the
information by the date specified in the request, the valuation may be made on any basis and
assumptions which the shipbroker or the Lender (or the expert appointed by it) considers
prudent.
	 
	15.9	 	Payment of expenses. Without prejudice to the generality of the Borrower’s obligations under
Clauses 20.3 and 21.3, the Borrower shall, on demand, pay the Lender all legal expenses
incurred by the Lender in connection with any matter arising out of this Clause 15 and all the
fees and expenses of the Panel in respect of no more than two valuations in any period of 12
months and any valuation (other than a Recent Valuation) specifically required for the
purposes of Clause 15.3.
	 
	16	 	PAYMENTS AND CALCULATIONS
	 
	16.1	 	Currency and method of payments. All payments to be made by the Borrower to the Lender under
a Finance Document shall be made to the Lender:




42









 






	(a)	 	by not later than 11.00 a.m. (London time) on the due date;
	 
	(b)	 	in same day Dollar funds settled through the New York Clearing House Interbank Payments
System (or in such other Dollar funds and/or settled in such other manner as the Lender shall
specify as being customary at the time for the settlement of international transactions of the
type contemplated by this Agreement); and
	 
	(c)	 	to the account of the Lender at the Receiving Bank (Account No 000261123; SWIFT Code
AEIBUS33), or to such other account with such other bank as the Lender may from time to time
notify to the Borrower.
	 
	16.2	 	Payment on non-Business Day. If any payment by the Borrower under a Finance Document would
otherwise fall due on a day which is not a Business Day:
	 
	(a)	 	the due date shall be extended to the next succeeding Business Day; or
	 
	(b)	 	if the next succeeding Business Day falls in the next calendar month, the due date shall be
brought forward to the immediately preceding Business Day,
	 
	 	 	and interest shall be payable during any extension under paragraph (a) at the rate payable
on the original due date.
	 
	16.3	 	Basis for calculation of periodic payments. All interest and commitment fee and any other
payments under any Finance Document which are of an annual or periodic nature shall accrue
from day to day and shall be calculated on the basis of the actual number of days elapsed and
a 360 day year.
	 
	16.4	 	Lender accounts. The Lender shall maintain an account showing the amounts advanced by the
Lender and all other sums owing to the Lender from the Borrower and each other Security Party
under the Finance Documents and all payments in respect of those amounts made by the Borrower
and any other Security Party.
	 
	16.5	 	Accounts prima facie evidence. If the account maintained under Clause 16.4 shows an amount
to be owing by the Borrower or any other Security Party to the Lender, that account shall be
prima facie evidence that that amount is owing to the Lender.
	 
	17	 	APPLICATION OF RECEIPTS
	 
	17.1	 	Normal order of application. Except as any Finance Document may otherwise provide, any sums
which are received or recovered by the Lender under or by virtue of any Finance Document shall
be applied:
	 
	(a)	 	FIRST: in or towards satisfaction of any amounts then due and payable under the Finance
Documents (or any of them) in such order of application and/or such proportions as the Lender
may specify by notice to the Borrower and the other Security Parties;
	 
	(b)	 	SECONDLY: in retention of an amount equal to any amount not then due and payable under any
Finance Document but which the Lender, by notice to the Borrower and the other Security
Parties, states in its opinion will or may become due and payable in the future and, upon
those amounts becoming due and payable, in or towards satisfaction of them in accordance with
the provisions of this Clause; and
	 
	(c)	 	THIRDLY: any surplus shall be paid to the Borrower or to any other person appearing to be
entitled to it.
	 
	17.2	 	Variation of order of application. The Lender may, by notice to the Borrower and the other
Security Parties, provide for a different manner of application from that set out in




43









 






	 	 	Clause 17.1 either as regards a specified sum or sums or as regards sums in a specified
category or categories.
	 
	17.3	 	Notice of variation of order of application. The Lender may give notices under Clause 17.2
from time to time; and such a notice may be stated to apply not only to sums which may be
received or recovered in the future, but also to any sum which has been received or recovered
on or after the third Business Day before the date on which the notice is served.
	 
	17.4	 	Appropriation rights overridden. This Clause 17 and any notice which the Lender gives under
Clause 17.2 shall override any right of appropriation possessed, and any appropriation made,
by the Borrower or any other Security Party.
	 
	18	 	APPLICATION OF EARNINGS
	 
	18.1	 	Payment of Earnings. The Borrower undertakes with the Lender to ensure that, throughout the
Security Period (and subject only to the provisions of the General Assignments), all the
Earnings relating to each Ship are paid to the Operating Account.
	 
	18.2	 	Use of Account Balance. Subject to the terms of this Agreement and the other Finance
Documents, until the occurrence of an Event of Default the Account Balance shall be at the
disposal of the Borrower for the purpose of meeting the operating expenses for each Ship or
for any other purpose which is permitted by the terms of the Finance Documents.
	 
	18.3	 	Location of accounts. The Borrower shall promptly:
	 
	(a)	 	comply, or procure compliance, with any requirement of the Lender as to the location or
re-location of the Operating Account; and
	 
	(b)	 	execute, or procure the execution of, any documents which the Lender specifies to create or
maintain in favour of the Lender a Security Interest over (and/or rights of set-off,
consolidation or other rights in relation to) the Operating Account,
	 
	 	 	Provided that any cost incurred in relation to this Clause 18.3 shall be for the account of
the Lender.
	 
	18.4	 	Debits for expenses etc. The Lender shall be entitled (but not obliged) from time to time to
debit the Operating Account without prior notice in order to discharge any amount due and
payable to it under Clauses 20 or 21 or payment of which it has become entitled to demand
under Clauses 20 or 21.
	 
	18.5	 	Borrower’s obligations unaffected. The provisions of this Clause 18 do not affect:
	 
	(a)	 	the liability of the Borrower to make payments of principal and interest on the due dates; or
	 
	(b)	 	any other liability or obligation of the Borrower or any other Security Party under any
Finance Document.
	 
	19	 	EVENTS OF DEFAULT
	 
	19.1	 	Events of Default. Events of Default. An Event of Default occurs if:
	 
	(a)	 	the Borrower or any other Security Party fails to pay when due or (if so payable) on demand
any sum payable under a Finance Document or under any document relating to a Finance Document
and, in the event that such failure to pay is as a result of a banking error, the Borrower or
the relevant Security Party has failed to make the payment due




44









 






	 	 	within 2 Business Days of and
including the day on which the payment was due or demanded (as the case may be); or
	 
	(b)	 	any breach occurs of Clause 9.3, 11.2, 11.3, 11.4, 12.2, 12.3, 12.4, 12.5, 12.6, 13, 14.12 or
15; or
	 
	(c)	 	any breach by the Borrower or any other Security Party occurs of any provision of a Finance
Document (other than a breach covered by paragraph (a) or (b) if, in the opinion of the
Lender, such default is capable of remedy and such default continues unremedied 10 days after
written notice from the Lender requesting action to remedy the same; or
	 
	(d)	 	(subject to any applicable grace period specified in any Finance Document) any breach by the
Borrower or any other Security Party occurs of any provision of a Finance Document (other than
a breach covered by paragraph (a), (b) or (c)); or
	 
	(e)	 	any representation, warranty or statement made by, or by an officer of, the Borrower or any
other Security Party in a Finance Document or in the Drawdown Notice or any other notice or
document relating to a Finance Document is untrue or misleading in any material respect when
it is made; or
	 
	(f)	 	any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:






	 	(i)	 	any Financial Indebtedness in excess of an aggregate amount of $10,000,000 of a
Relevant Person is not paid when due or, if so payable, on demand; or
	 
	 	(ii)	 	any Financial Indebtedness in excess of an aggregate amount of $10,000,000 of a
Relevant Person becomes due and payable or capable of being declared due and payable
prior to its stated maturity date as a consequence of any event of default; or
	 
	 	(iii)	 	a lease, hire purchase agreement or charter creating any Financial
Indebtedness in excess of an aggregate amount of $10,000,000 of a Relevant Person is
terminated by the lessor or owner or becomes capable of being terminated as a
consequence of any termination event; or
	 
	 	(iv)	 	any overdraft, loan, note issuance, acceptance credit, letter of credit,
guarantee, foreign exchange or other facility, or any swap or other derivative contract
or transaction, relating to any Financial Indebtedness in excess of an aggregate amount
of $10,000,000 of a Relevant Person ceases to be available or becomes capable of being
terminated as a result of any event of default, or cash cover is required, or becomes
capable of being required, in respect of such a facility as a result of any event of
default; or
	 
	 	(v)	 	any Security Interest securing any Financial Indebtedness in excess of an
aggregate amount of $10,000,000 of a Relevant Person becomes enforceable; or






	(g)	 	any of the following occurs in relation to a Relevant Person:






	 	(i)	 	a Relevant Person becomes, in the opinion of the Lender, unable to pay its
debts as they fall due; or
	 
	 	(ii)	 	any assets of a Relevant Person are subject to any form of execution,
attachment, arrest, sequestration or distress, or any form of freezing order Provided
that in relation to a Ship, no Event of Default shall occur under this Clause
19.1(g)(ii) if the provisions of Clause 14.8 are complied with; or
	 
	 	(iii)	 	any administrative or other receiver is appointed over any asset of a Relevant
Person; or




45









 






	 	(iv)	 	an administrator is appointed (whether by the court or otherwise) in respect of
a Relevant Person; or
	 
	 	(v)	 	any formal declaration of bankruptcy or any formal statement to the effect that
a Relevant Person is insolvent or likely to become insolvent is made by a Relevant
Person or by the directors of a Relevant Person or, in any proceedings, by a lawyer
acting for a Relevant Person; or
	 
	 	(vi)	 	a provisional liquidator is appointed in respect of a Relevant Person, a
winding up order is made in relation to a Relevant Person or a winding up resolution is
passed by a Relevant Person; or
	 
	 	(vii)	 	a resolution is passed, an administration notice is given or filed, an
application or petition to a court is made or presented or any other step is taken by
(aa) a Relevant Person, (bb) the members or directors of a Relevant Person, (cc) a
holder of
Security Interests which together relate to all or substantially all of the assets
of a Relevant Person, or (dd) a government minister or public or regulatory
authority of a Pertinent Jurisdiction for or with a view to the winding up of that
or another Relevant Person or the appointment of a provisional liquidator or
administrator in respect of that or another Relevant Person, or that or another
Relevant Person ceasing or suspending business operations or payments to creditors,
save that this paragraph does not apply to a fully solvent winding up of a Relevant
Person other than the Borrower which is, or is to be, effected for the purposes of
an amalgamation or reconstruction previously approved by the Lender and effected not
later than 3 months after the commencement of the winding up; or
	 
	 	(viii)	 	an administration notice is given or filed, an application or petition to a court is
made or presented or any other step is taken by a creditor of a Relevant Person (other
than a holder of Security Interests which together relate to all or substantially all
of the assets of a Relevant Person) for the winding up of a Relevant Person or the
appointment of a provisional liquidator or administrator in respect of a Relevant
Person in any Pertinent Jurisdiction, unless the proposed winding up, appointment of a
provisional liquidator or administration is being contested in good faith, on
substantial grounds and not with a view to some other insolvency law procedure being
implemented instead and either (aa) the application or petition is dismissed or
withdrawn within 30 days of being made or presented, or (bb) within 30 days of the
administration notice being given or filed, or the other relevant steps being taken,
other action is taken which will ensure that there will be no administration and (in
both cases (aa) or (bb)) the Relevant Person will continue to carry on business in the
ordinary way and without being the subject of any actual, interim or pending insolvency
law procedure; or
	 
	 	(ix)	 	a Relevant Person or its directors take any steps (whether by making or
presenting an application or petition to a court, or submitting or presenting a
document setting out a proposal or proposed terms, or otherwise) with a view to
obtaining, in relation to that or another Relevant Person, any form of moratorium,
suspension or deferral of payments, reorganisation of debt (or certain debt) or
arrangement with, or protection from, all or a substantial proportion (by number or
value) of creditors or of any class of them or any such moratorium, suspension or
deferral of payments, reorganisation, arrangement or protection is effected by court
order, by the filing of documents with a court, by means of a contract or in any other
way at all; or
	 
	 	(x)	 	any meeting of the members or directors, or of any committee of the board or
senior management, of a Relevant Person is held or summoned for the purpose of
considering a resolution or proposal to authorise or take any action of a type
described in paragraphs (iv) to (ix) or a step preparatory to such action, or (with




46









 






	 		 	or
without such a meeting) the members, directors or such a committee resolve or agree
that such an action or step should be taken or should be taken if certain conditions
materialise or fail to materialise; or
	 
	 	(xi)	 	in a Pertinent Jurisdiction other than England, any event occurs, any
proceedings are opened or commenced or any step is taken which, in the opinion of the
Lender is similar to any of the foregoing; or






	(h)	 	the Borrower or any other Security Party ceases or suspends carrying on its business or a
part of its business which, in the opinion of the Lender, is material in the context of this
Agreement; or
	 
	(i)	 	it becomes unlawful or impossible:






	 	(i)	 	for the Borrower or any other Security Party to discharge any liability under a
Finance Document or to comply with any other obligation which the Lender considers
material under a Finance Document or an Underlying Document; or
	 
	 	(ii)	 	for the Lender to exercise or enforce any right under, or to enforce any
Security Interest created by, a Finance Document; or






	(j)	 	any consent necessary to enable a Guarantor to own, operate or charter the Ship owned by it
or to enable the Borrower or any other Security Party to comply with any provision which the
Lender considers material of a Finance Document or an Underlying Document is not granted,
expires without being renewed, is revoked or any condition of such a consent is not fulfilled;
or
	 
	(k)	 	it appears to the Lender that, without its prior consent, (i) there is a Change of Control or
(ii) any Security Interest is created over the shares in the Borrower in favour of any person
other than the Lender; or
	 
	(l)	 	it appears to the Lender that, without its prior consent, a Ship is being managed by someone
other than the Approved Manager;
	 
	(m)	 	a Charterer fails to pay when due or (if so payable) on demand any sum payable under the
relevant Charter and such sum remains outstanding 30 days after the date on which it became
due or was demanded (as the case may be);
	 
	(n)	 	any provision which the Lender reasonably considers material of a Finance Document proves to
have been or becomes invalid or unenforceable, or a Security Interest created by a Finance
Document proves to have been or becomes invalid or unenforceable or such a Security Interest
proves to have ranked after, or loses its priority to, another Security Interest or any other
third party claim or interest; or
	 
	(o)	 	the security constituted by a Finance Document is in any way imperilled or in jeopardy; or
	 
	(p)	 	the Lender gives notice of an Early Termination Date under Section 6(a) of the Master
Agreement; or
	 
	(q)	 	a person entitled to do so gives notice of an Early Termination Date under Section 6(b)(iv)
of the Master Agreement; or
	 
	(r)	 	an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or
	 
	(s)	 	the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise
ceases to remain in full force and effect for any reason; or




47









 






	(t)	 	any other event occurs or any other circumstances arise or develop including, without
limitation:






	 	(i)	 	a change in the financial position, state of affairs or prospects of the
Borrower or any other Security Party; or
	 
	 	(ii)	 	any accident or other event involving a Ship or another vessel owned, chartered
or operated by a Relevant Person,






	 	 	in the light of which the Lender considers that there is a significant risk that the
Borrower or any other Security Party is, or will later become, unable to discharge its
liabilities under the Finance Documents as they fall due.
	 
	19.2	 	Actions following an Event of Default. On, or at any time after, the occurrence of an Event
of Default the Lender may:
	 
	(a)	 	serve on the Borrower a notice stating that all obligations of the Lender to the Borrower
under this Agreement are terminated; and/or
	 
	(b)	 	serve on the Borrower a notice stating that the Loan, all accrued interest and all other
amounts accrued or owing under this Agreement are immediately due and payable or are due and
payable on demand; and/or
	 
	(c)	 	take any other action which, as a result of the Event of Default or any notice served under
paragraph (a) or (b), the Lender is entitled to take under any Finance Document or any
applicable law.
	 
	19.3	 	Termination of obligations. On the service of a notice under Clause 19.2(a), all the
obligations of the Lender to the Borrower under this Agreement shall terminate.
	 
	19.4	 	Acceleration of Loan. On the service of a notice under Clause 19.2(b), the Loan, all accrued
interest and all other amounts accrued or owing from the Borrower or any other Security Party
under this Agreement and every other Finance Document shall become immediately due and payable
or, as the case may be, payable on demand.
	 
	19.5	 	Multiple notices; action without notice. The Lender may serve notices under Clause 19.2(a)
and (b) simultaneously or on different dates and it may take any action referred to in Clause
19.2 if no such notice is served or simultaneously with or at any time after the service of
both or either of such notices.
	 
	19.6	 	Exclusion of Lender liability. Neither the Lender nor any receiver or manager appointed by
the Lender, shall have any liability to the Borrower or any other Security Party:
	 
	(a)	 	for any loss caused by an exercise of rights under, or enforcement of a Security Interest
created by, a Finance Document or by any failure or delay to exercise such a right or to
enforce such a Security Interest; or
	 
	(b)	 	as mortgagee in possession or otherwise, for any income or principal amount which might have
been produced by or realised from any asset comprised in such a Security Interest or for any
reduction (however caused) in the value of such an asset,
	 
	 	 	except that this does not exempt the Lender or a receiver or manager from liability for
losses shown to have been caused directly and mainly by the dishonesty or the wilful
misconduct of the Lender’s own officers and employees or ( as the case may be) such
receiver’s or manager’s own partners or employees.




48









 






	19.7	 	Relevant Persons. In this Clause 19 a “Relevant Person” means the Borrower, a Guarantor, any
other Security Party, any other subsidiary of the Borrower Parent or the Borrower Parent
itself and, for the avoidance of doubt, does not include the Approved Manager, any Charterer
or a Charter Guarantor.
	 
	19.8	 	Interpretation. In Clause 19.1(f) references to an event of default or a termination event
include any event, howsoever described, which is similar to an event of default in a facility
agreement or a termination event in a finance lease; and in Clause 19.1(g) “petition”
includes an application.
	 
	20	 	FEES AND EXPENSES
	 
	20.1	 	Fee Letter. The Borrower shall pay to the Lender the arrangement fee and all commitment fees
due in such amounts and at such times as set out in the Fee Letter.
	 
	20.2	 	Costs of negotiation, preparation etc. The Lender shall be liable for all fees and expenses
it incurs in connection with the negotiation, preparation and execution of this Agreement and
the other Finance Documents.
	 
	20.3	 	Costs of registrations. The Borrower shall be liable for, and shall indemnify the Lender
for, all fees, costs and expenses in connection with the registration of any Finance
Document Provided that the Lender shall consult with the Borrower in relation to reasonably
minimising such fees, costs and expenses prior to any such registration.
	 
	20.4	 	Costs of variation, amendments, enforcement etc. The Borrower shall pay to the Lender, on
the Lender’s demand, the amount of all expenses incurred by the Lender in connection with:
	 
	(a)	 	any amendment or supplement to a Finance Document which is reasonably and properly incurred,
or any proposal for such an amendment to be made;
	 
	(b)	 	any consent or waiver by the Lender concerned under or in connection with a Finance Document
which is reasonably and properly incurred, or any request for such a consent or waiver;
	 
	(c)	 	the valuation of any security provided or offered under Clause 15 which is reasonably and
properly incurred or any other matter relating to such security; or
	 
	(d)	 	any step taken by the Lender with a view to the protection, exercise or enforcement of any
right or Security Interest created by a Finance Document or for any similar purpose.
	 
	 	 	There shall be recoverable under paragraph (d) the full amount of all legal expenses,
whether or not such as would be allowed under rules of court or any taxation or other
procedure carried out under such rules.
	 
	20.5	 	Documentary taxes. The Borrower shall promptly pay any tax payable on or by reference to any
Finance Document, and shall, on the Lender’s demand, fully indemnify the Lender against any
claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower
to pay such a tax.
	 
	20.6	 	Finance Services Authority fees. The Borrower shall pay to the Lender, on the Lender’s
demand, the amounts which the Lender from time to time notifies the Borrower to be necessary
to compensate it for the cost attributable to the Loan resulting from the imposition from time
to time under or pursuant to the Bank of England Act 1998 and/or by the Bank of England and/or
by the Finance Services Authority (or other United Kingdom governmental authorities or
agencies) of a requirement to pay fees to the Finance Services Authority calculated by
reference to liabilities used to fund the Loan.




49









 






	20.7	 	Certification of amounts. A notice which is signed by 2 officers of the Lender, which states
that a specified amount, or aggregate amount, is due to the Lender under this Clause 20 and
which indicates (without necessarily specifying a detailed breakdown) the matters in respect
of which the amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.
	 
	21	 	INDEMNITIES
	 
	21.1	 	Indemnities regarding borrowing and repayment of Loan. The Borrower shall fully indemnify
the Lender on its demand in respect of all claims, expenses, liabilities and losses which are
made or brought against or incurred by the Lender, or which the Lender reasonably and with due
diligence estimates that it will incur, as a result of or in connection with:
	 
	(a)	 	an Advance not being borrowed on the date specified in the Drawdown Notice for any reason
other than a default by the Lender;
	 
	(b)	 	the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on
the last day of an Interest Period or other relevant period;
	 
	(c)	 	any failure (for whatever reason) by the Borrower to make payment of any amount due under a
Finance Document on the due date or, if so payable, on demand (after giving credit for any
default interest paid by the Borrower on the amount concerned under Clause 6);
	 
	(d)	 	the occurrence and/or continuance of an Event of Default or a Potential Event of Default
and/or the acceleration of repayment of the Loan under Clause 19,
	 
	 	 	and in respect of any tax (other than tax on its overall net income) for which the Lender is
liable in connection with any amount paid or payable to the Lender (whether for its own
account or otherwise) under any Finance Document.
	 
	21.2	 	Breakage costs. Without limiting its generality, Clause 21.1 covers any claim, expense,
liability or loss, including a loss of a prospective profit, incurred by the Lender:
	 
	(a)	 	in liquidating or employing deposits from third parties acquired or arranged to fund or
maintain all or any part of the Loan and/or any overdue amount (or an aggregate amount which
includes the Loan or any overdue amount); and
	 
	(b)	 	in terminating, or otherwise in connection with, any interest and/or currency swap or any
other transaction entered into (whether with another legal entity or with another office or
department of the Lender) to hedge any exposure arising under this Agreement or a number of
transactions of which this Agreement is one.
	 
	 	 	If the matters referred to in sub-clause (a) above shall result in a net gain to the Lender,
the Lender shall, subject to Clause 25.1, account to the Borrower for such gain and the
resulting amount shall, provided that no Event of Default has occurred, be paid to the
Operating Account to be applied in accordance with the provisions of Clause 18.2.
	 
	21.3	 	Miscellaneous indemnities. The Borrower shall fully indemnify the Lender on its demand in
respect of all claims, expenses, liabilities and losses which may be made or brought against
or incurred by the Lender, in any country, as a result of or in connection with:
	 
	(a)	 	any action taken, or omitted or neglected to be taken, under or in connection with any
Finance Document by the Lender or by any receiver appointed under a Finance Document;




50









 






	(b)	 	any other Pertinent Matter,
	 
		 	other than claims, expenses, liabilities and losses which are shown to have been directly
and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the
Lender.
	 
	 	 	Without prejudice to its generality, this Clause 21.3 covers any claims, expenses,
liabilities and losses which arise, or are asserted, under or in connection with any law
relating to safety at sea, the ISM Code, the ISPS Code or any Environmental Law.
	 
	21.4	 	Currency indemnity. If any sum due from the Borrower or any other Security Party to the
Lender under a Finance Document or under any order or judgment relating to a Finance Document
has to be converted from the currency in which the Finance Document provided for the sum to be
paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the
purpose of:
	 
	(a)	 	making or lodging any claim or proof against the Borrower or any Security Party, whether in
its liquidation, any arrangement involving it or otherwise; or
	 
	(b)	 	obtaining an order or judgment from any court or other tribunal; or
	 
	(c)	 	enforcing any such order or judgment,
	 
	 	 	the Borrower shall indemnify the Lender against the loss arising when the amount of the
payment actually received by the Lender is converted at the available rate of exchange into
the Contractual Currency.
	 
	 	 	In this Clause 21.4, the “available rate of exchange” means the rate at which the Lender is
able at the opening of business (London time) on the Business Day after it receives the sum
concerned to purchase the Contractual Currency with the Payment Currency.
	 
	 	 	This Clause 21.4 creates a separate liability of the Borrower which is distinct from its
other liabilities under the Finance Documents and which shall not be merged in any judgment
or order relating to those other liabilities.
	 
	21.5	 	Certification of amounts. A notice which is signed by 2 officers of the Lender, which states
that a specified amount, or aggregate amount, is due to the Lender under this Clause 21 and
which indicates (without necessarily specifying a detailed breakdown) the matters in respect
of which the amount, or aggregate amount, is due shall be prima facie evidence that the
amount, or aggregate amount, is due.
	 
	22	 	NO SET-OFF OR TAX DEDUCTION
	 
	22.1	 	No deductions. All amounts due from the Borrower under a Finance Document shall be paid:
	 
	(a)	 	without any form of set-off, cross-claim or condition; and
	 
	(b)	 	free and clear of any tax deduction except a tax deduction which the Borrower is required by
law to make.
	 
	22.2	 	Grossing-up for taxes. If the Borrower is required by law to make a tax deduction from any
payment:
	 
	(a)	 	the Borrower shall notify the Lender as soon as it becomes aware of the requirement;
	 
	(b)	 	the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and
in any event before any fine or penalty arises;




51









 






	(c)	 	the amount due in respect of the payment shall be increased by the amount necessary to ensure
that the Lender receives and retains (free from any liability relating to the tax deduction) a
net amount which, after the tax deduction, is equal to the full amount which it would
otherwise have received.
	 
	22.3	 	Evidence of payment of taxes. Within one month after making any tax deduction, the Borrower
shall deliver to the Lender documentary evidence satisfactory to the Lender that the tax had
been paid to the appropriate taxation authority.
	 
	22.4	 	Exclusion of tax on overall net income. In this Clause 22 “tax deduction” means any
deduction or withholding for or on account of any present or future tax except tax on the
Lender’s overall net income.
	 
	22.5	 	Tax credits. If the Lender receives for its own account a repayment or credit in respect of
tax on account of which the Borrower has made an increased payment under Clause 22.2, it shall
pay to the Borrower a sum equal to the proportion of the repayment or credit which the Lender
allocates to the amount due from the Borrower in respect of which the Borrower made the
increased payment Provided that:
	 
	(a)	 	the Lender shall not be obliged to allocate to this transaction any part of a tax repayment
or credit which is referable to a class or number of transactions;
	 
	(b)	 	nothing in this Clause 22.5 shall oblige the Lender to arrange its tax affairs in any
particular manner, to claim any type of relief, credit, allowance or deduction instead of, or
in priority to, another or to make any such claim within any particular time;
	 
	(c)	 	nothing in this Clause 22.5 shall oblige the Lender to make a payment which would leave it in
a worse position than it would have been in if the Borrower had not been required to make a
tax deduction from a payment; and
	 
	(d)	 	any allocation or determination made by the Lender under or in connection with this Clause
22.5 shall be conclusive and binding on the Borrower.
	 
	23	 	ILLEGALITY, ETC
	 
	23.1	 	Illegality. This Clause 23 applies if the Lender notifies the Borrower that it has become,
or will with effect from a specified date, become:
	 
	(a)	 	unlawful or prohibited as a result of the introduction of a new law, an amendment to an
existing law or a change in the manner in which an existing law is or will be interpreted or
applied; or
	 
	(b)	 	contrary to, or inconsistent with, any regulation,
	 
	 	 	for the Lender to maintain or give effect to any of its obligations under this Agreement in
the manner contemplated by this Agreement.
	 
	23.2	 	Notification and effect of illegality. On the Lender notifying the Borrower under
Clause 23.1, the Lender’s obligation to make any further Advances shall terminate; and
thereupon or, if later, on the date specified in the Lender’s notice under Clause 23.1 as the
date on which the notified event would become effective the Borrower shall prepay the Loan in
full in accordance with Clause 7.
	 
	24	 	INCREASED COSTS
	 
	24.1	 	Increased costs. This Clause 24 applies if the Lender notifies the Borrower that it
considers that as a result of:




52









 






	(a)	 	the introduction or alteration after the date of this Agreement of a law or an alteration
after the date of this Agreement in the manner in which a law is interpreted or applied
(disregarding any effect which relates to the application to payments under this Agreement of
a tax on the Lender’s overall net income); or
	 
	(b)	 	complying with any regulation (including any which relates to capital adequacy or liquidity
controls or which affects the manner in which the Lender allocates capital resources to its
obligations under this Agreement) which is introduced, or altered, or the interpretation or
application of which is altered, after the date of this Agreement,
	 
	 	 	the Lender (or a parent company of it) has incurred or will incur an “increased cost”.
	 
	24.2	 	Meaning of “increased costs”. In this Clause 24, “increased costs” means:
	 
	(a)	 	an additional or increased cost incurred as a result of, or in connection with, the Lender
having entered into, or being a party to, this Agreement or having taken an assignment of
rights under this Agreement, of funding or maintaining the Loan or performing its obligations
under this Agreement, or of having outstanding all or any part of the Loan or other unpaid
sums; or
	 
	(b)	 	a reduction in the amount of any payment to the Lender under this Agreement or in the
effective return which such a payment represents to the Lender or on its capital;
	 
	(c)	 	an additional or increased cost of funding all or maintaining all or any of the advances
comprised in a class of advances formed by or including the Loan or (as the case may require)
the proportion of that cost attributable to the Loan; or
	 
	(d)	 	a liability to make a payment, or a return foregone, which is calculated by reference to any
amounts received or receivable by the Lender under this Agreement,
	 
	 	 	but not an item attributable to a change in the rate of tax on the overall net income of the
Lender (or a parent company of it) or an item covered by the indemnity for tax in
Clause 21.1 or by Clause 22.
	 
	 	 	For the purposes of this Clause 24.2 the Lender may in good faith allocate or spread costs
and/or losses among its assets and liabilities (or any class of its assets and liabilities)
on such basis as it considers appropriate.
	 
	24.3	 	Payment of increased costs. The Borrower shall pay to the Lender, on its demand, the amounts
which the Lender from time to time notifies the Borrower that it has specified to be necessary
to compensate it for the increased cost.
	 
	24.4	 	Notice of prepayment. If the Borrower is not willing to continue to compensate the Lender
for the increased cost under Clause 24.3, the Borrower may give the Lender not less than 14
days’ notice of its intention to prepay the Loan at the end of an Interest Period.
	 
	24.5	 	Prepayment. A notice under Clause 24.4 shall be irrevocable; and on the date specified in
its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the
Loan, together with accrued interest thereon at the applicable rate plus the Margin.
	 
	24.6	 	Application of prepayment. Clause 7 shall apply in relation to the prepayment.




53









 






	25	 	SET-OFF
	 
	25.1	 	Application of credit balances. The Lender may without prior notice:
	 
	(a)	 	apply any balance (whether or not then due) which at any time stands to the credit of any
account in the name of the Borrower at any office in any country of the Lender in or towards
satisfaction of any sum then due from the Borrower to the Lender under any of the Finance
Documents; and
	 
	(b)	 	for that purpose:






	 	(i)	 	break, or alter the maturity of, all or any part of a deposit of the Borrower;
	 
	 	(ii)	 	convert or translate all or any part of a deposit or other credit balance into
Dollars; and
	 
	 	(iii)	 	enter into any other transaction or make any entry with regard to the credit
balance which the Lender considers appropriate.






	25.2	 	Set-off between this Agreement and the Master Agreement. If the Borrower is the defaulting
party under the Master Agreement, the Lender, as the non-defaulting party, may (without
prejudice to or limitation of its right of set-off under section 6(e) of the Master Agreement
and its rights under Clause 25.1) at the same time as, or at any time after, the Borrower’s
default, set-off any amount due from the Borrower to the Lender under this Agreement against
any amount due from the Lender to the Borrower under the Master Agreement and apply the first
amount in discharging the second amount. The effect of any set-off under this Clause 25.2
shall be effective to extinguish or, as the case may require, reduce the liabilities of the
Lender under the Master Agreement.
	 
	25.3	 	Existing rights unaffected. The Lender shall not be obliged to exercise any of its rights
under Clause 25.1; and those rights shall be without prejudice and in addition to any right of
set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is
entitled (whether under the general law or any document).
	 
	25.4	 	No Security Interest. This Clause 25 gives the Lender a contractual right of set-off only,
and does not create any equitable charge or other Security Interest over any credit balance of
the Borrower.
	 
	26	 	TRANSFERS AND CHANGES IN LENDING OFFICE
	 
	26.1	 	Transfer by Borrower. The Borrower may not, without the consent of the Lender transfer any
of its rights, liabilities or obligations under any Finance Document.
	 
	26.2	 	Assignment by Lender. The Lender may assign all or any of the rights and interests which it
has under or by virtue of the Finance Documents:
	 
	(a)	 	to any Affiliate of the Lender without the consent of the Borrower; or
	 
	(b)	 	to any other bank or financial institution with the consent of the Borrower, such consent not
to be unreasonably withheld or delayed,
	 
	 	 	Provided that in each case any costs incurred in relation to such an assignment shall be for
the account of the Lender and, in the case of an assignment to an Affiliate of the Lender,
the Borrower’s liabilities under the Finance Documents shall not be increased from what they
would have been in the absence of such assignment.
	 
	26.3	 	Rights of assignee. In respect of any breach of a warranty, undertaking, condition or other
provision of a Finance Document, or any misrepresentation made in or in




54









 






	 	 	connection with a
Finance Document, a direct or indirect assignee of any of the Lender’s rights or interests
under or by virtue of the Finance Documents shall be entitled to recover damages by reference
to the loss incurred by that assignee as a result of the breach or misrepresentation
irrespective of whether the Lender would have incurred a loss of that kind or amount.
	 
	26.4	 	Sub-participation; subrogation assignment. The Lender may sub-participate all or any part of
its rights and/or obligations under or in connection with the Finance Documents without the
consent of, or any notice to, the Borrower; and the Lender may assign, in any manner and terms
agreed by it, all or any part of those rights to an insurer or surety who has become
subrogated to them.
	 
	26.5	 	Disclosure of information. The Lender may disclose to a potential assignee or
sub-participant any information which the Lender has received in relation to the Borrower, any
other Security Party or their affairs under or in connection with any Finance Document, unless
the information is clearly of a confidential nature, and the Lender shall promptly inform the
Borrower of the information disclosed and to whom pursuant to this Clause 26.5.
	 
	26.6	 	Change of lending office. The Lender may change its lending office by giving notice to the
Borrower and the change shall become effective on the later of:
	 
	(a)	 	the date on which the Borrower receives the notice; and
	 
	(b)	 	the date, if any, specified in the notice as the date on which the change will come into
effect,
	 
	 	 	Provided that any costs incurred in relation to such a change in lending office shall be for
the account of the Lender.
	 
	27	 	VARIATIONS AND WAIVERS
	 
	27.1	 	Variations, waivers etc. by Lender. A document shall be effective to vary, waive, suspend or
limit any provision of a Finance Document, or the Lender’s rights or remedies under such a
provision or the general law, only if the document is signed, or specifically agreed to by
fax, by the Borrower and the Lender and, if the document relates to a Finance Document to
which a Security Party is party, by that Security Party.
	 
	27.2	 	Exclusion of other or implied variations. Except for a document which satisfies the
requirements of Clauses 27.1, no document, and no act, course of conduct, failure or neglect
to act, delay or acquiescence on the part of the Lender (or any person acting on its behalf)
shall result in the Lender (or any person acting on its behalf) being taken to have varied,
waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing,
relying on or exercising:
	 
	(a)	 	a provision of this Agreement or another Finance Document; or
	 
	(b)	 	an Event of Default; or
	 
	(c)	 	a breach by the Borrower or any other Security Party of an obligation under a Finance
Document or the general law; or
	 
	(d)	 	any right or remedy conferred by any Finance Document or by the general law,
	 
	 	 	and there shall not be implied into any Finance Document any term or condition requiring any
such provision to be enforced, or such right or remedy to be exercised, within a certain or
reasonable time.




55









 






	28	 	NOTICES
	 
	28.1	 	General. Unless otherwise specifically provided, any notice under or in connection with any
Finance Document shall be given by letter or fax; and references in the Finance Documents to
written notices, notices in writing and notices signed by particular persons shall be
construed accordingly.
	 
	28.2	 	Addresses for communications. A notice shall be sent:





	 	 	 
	(a) to the Borrower:

	 	Hayward Building
	 

	 	22 Bermudian Road
	 

	 	Hamilton HM11
	 

	 	Bermuda
	 
	 	 
	 

	 	Fax No: +1 441 292 4258
	 
	 	 
	 

	 	Attn: Grant Gibbons
	 
	 	 
	with copy to:

	 	General Maritime Corporation
	 

	 	299 Park Avenue
	 

	 	New York
	 

	 	NY 10171
	 

	 	USA
	 
	 	 
	 

	 	Fax No: (212) 743 5408
	 

	 	Attn: Chief Financial Officer
	 
	 	 
	(b) to the Lender:

	 	Shipping Business Centre
	 

	 	5-10 Great Tower Street
	 

	 	London EC3P 3HX
	 
	 	 
	 

	 	Fax No: +(44) 207 283 7538
	 
	 	 
	 

	 	For the attention of: Head of Ship Finance Portfolio Management







		 	or to such other address as the relevant party may notify the other.
	 
	28.3	 	Effective date of notices. Subject to Clauses 28.4 and 28.5:
	 
	(a)	 	a notice which is delivered personally or posted shall be deemed to be served, and shall take
effect, at the time when it is delivered;
	 
	(b)	 	a notice which is sent by telex or fax shall be deemed to be served, and shall take effect, 2
hours after its transmission is completed.
	 
	28.4	 	Service outside business hours. However, if under Clause 28.3 a notice would be deemed to be
served:
	 
	(a)	 	on a day which is not a business day in the place of receipt; or
	 
	(b)	 	on such a business day, but after 5 p.m. local time,
	 
	 	 	the notice shall (subject to Clause 28.5) be deemed to be served, and shall take effect, at
9 a.m. on the next day which is such a business day.
	 
	28.5	 	Illegible notices. Clauses 28.3 and 28.4 do not apply if the recipient of a notice notifies
the sender within 1 hour after the time at which the notice would otherwise be deemed to




56









 






	 	 	be
served that the notice has been received in a form which is illegible in a material respect.
	 
	28.6	 	Valid notices. A notice under or in connection with a Finance Document shall not be invalid
by reason that its contents or the manner of serving it do not comply with the requirements of
this Agreement or, where appropriate, any other Finance Document under which it is served if:
	 
	(a)	 	the failure to serve it in accordance with the requirements of this Agreement or other
Finance Document, as the case may be, has not caused any party to suffer any significant loss
or prejudice; or
	 
	(b)	 	in the case of incorrect and/or incomplete contents, it should have been reasonably clear to
the party on which the notice was served what the correct or missing particulars should have
been.
	 
	28.7	 	English language. Any notice under or in connection with a Finance Document shall be in
English.
	 
	28.8	 	Meaning of “notice”. In this Clause 28 “notice” includes any demand, consent, authorisation,
approval, instruction, waiver or other communication.
	 
	29	 	SUPPLEMENTAL
	 
	29.1	 	Rights cumulative, non-exclusive. The rights and remedies which the Finance Documents give
to the Lender are:
	 
	(a)	 	cumulative;
	 
	(b)	 	may be exercised as often as appears expedient; and
	 
	(c)	 	shall not, unless a Finance Document explicitly and specifically states so, be taken to
exclude or limit any right or remedy conferred by any law.
	 
	29.2	 	Severability of provisions. If any provision of a Finance Document is or subsequently
becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or
legality of the other provisions of that Finance Document or of the provisions of any other
Finance Document.
	 
	29.3	 	Counterparts. A Finance Document may be executed in any number of counterparts.
	 
	29.4	 	End of Security Period. The Lender shall notify the Borrower promptly of the end of the
Security Period.
	 
	29.5	 	Third party rights. A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of
this Agreement.
	 
	30	 	LAW AND JURISDICTION
	 
	30.1	 	English law. This Agreement shall be governed by, and construed in accordance with, English
law.
	 
	30.2	 	Exclusive English jurisdiction. Subject to Clause 30.3, the courts of England shall have
exclusive jurisdiction to settle any disputes which may arise out of or in connection with
this Agreement.




57









 






	30.3	 	Choice of forum for the exclusive benefit of the Lender. Clause 30.2 is for the exclusive
benefit of the Lender, which reserves the rights:
	 
	(a)	 	to commence proceedings in relation to any matter which arises out of or in connection with
this Agreement in the courts of any country other than England and which have or claim
jurisdiction to that matter; and
	 
	(b)	 	to commence such proceedings in the courts of any such country or countries concurrently with
or in addition to proceedings in England or without commencing proceedings in England.
	 
	30.4	 	Process agent. The Borrower irrevocably appoints RB Secretariat Limited at its registered
office for the time being, presently at 10th floor, Beaufort House, 15 St. Botolph Street,
London EC3A 7EE, England, to act as its agent to receive and accept on its behalf any process
or other document relating to any proceedings in the English courts which are connected with
this Agreement.
	 
	30.5	 	Lender’s rights unaffected. Nothing in this Clause 30 shall exclude or limit any right which
the Lender may have (whether under the law of any country, an international convention or
otherwise) with regard to the bringing of proceedings, the service of process, the recognition
or enforcement of a judgment or any similar or related matter in any jurisdiction.
	 
	30.6	 	Meaning of “proceedings”. In this Clause 30, “proceedings” means proceedings of any kind,
including an application for a provisional or protective measure.




THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.




58









 








SCHEDULE 1




DRAWDOWN NOTICE





			
	To:	 	The Royal Bank of Scotland plc

Shipping Business Centre

5-10 Great Tower Street

London EC3P 3HX





Attention: Will Pritchard, Loans Administration




[date]





	 	 	DRAWDOWN NOTICE
	 
	1	 	We refer to the loan agreement (the “Loan Agreement”) dated [l] and made between us, as
Borrower, and you, as Lender, in connection with a facility of up to US$235,000,000. Terms
defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
	 
	2	 	We request to borrow as follows:
	 
	(a)	 	Amount: US$[l] in relation to [name of Advance].
	 
	(b)	 	Drawdown Date: [l].
	 
	(c)	 	[The duration of the first Interest Period shall be [l] months;]
	 
	(d)	 	Payment instructions : the Advance shall be paid to the account of [l] and numbered
[l] with [l] of [l].
	 
	3	 	We represent and warrant that:
	 
	(a)	 	the representations and warranties in Clause 10 of the Loan Agreement would remain true and
not misleading if repeated on the date of this notice with reference to the circumstances now
existing;
	 
	(b)	 	no Event of Default or Potential Event of Default has occurred or will result from the
borrowing of the Loan.
	 
	4	 	This notice cannot be revoked without the prior consent of the Lender.
	 
	5	 	[We authorise you to deduct the arrangement fee referred to in Clause 20.1 from the amount of
the Advance.]





[Name of Signatory]

Director/Co-Chief Executive Officer

for and on behalf of

ARLINGTON TANKERS LTD.





59









 








SCHEDULE 2




CONDITION PRECEDENT DOCUMENTS




PART A



The following are the documents referred to in Clause 9.1(a).





	6	 	A duly executed original of each Finance Document (and of each document required to
be delivered by each Finance Document) other than those referred to in Part B or Part C.
	 
	7	 	Copies of the certificate of incorporation and constitutional documents of the Borrower and
each other Security Party, each set of such constitutional documents to be in a form
satisfactory to the Lender and its lawyers.
	 
	8	 	Copies of resolutions of the directors of the Borrower and the shareholders and directors of
each Guarantor, authorising the execution of each of the Finance Documents to which the
Borrower or that Guarantor is a party and, in the case of each Guarantor, authorising or
ratifying (as the case may be) the execution of the Underlying Documents to which that
Guarantor is a party and, in the case of the Borrower, authorising named officers to give the
Drawdown Notices and other notices under this Agreement.
	 
	9	 	The original of any power of attorney under which any Finance Document and/or any Underlying
Document is executed on behalf of the Borrower or a Security Party.
	 
	10	 	Copies of all consents which the Borrower or any other Security Party requires to enter into,
or make any payment under, any Finance Document or any Underlying Document.
	 
	11	 	The originals of any mandates or other documents required in connection with the opening or
operation of the Operating Account.
	 
	12	 	Copies of any documents required by the Lender in relation to its “know your client”
regulations and other internal guidelines (whether in relation to the opening of the Operating
Account or otherwise).
	 
	13	 	A copy of each Underlying Document relating to the Existing Ships (and, if available,
relating to the New Ships) and of all documents signed or issued by each relevant Guarantor,
either Charterer or either Charter Guarantor (as the case may be) under or in connection with
each such Underlying Document, each to be on terms acceptable to the Lender.
	 
	14	 	Evidence of the due authorisation and execution of each Underlying Document relating to the
Existing Ships (and, if available, relating to the New Ships) by each relevant Guarantor,
either Charterer or either Charter Guarantor (as the case may be).
	 
	15	 	Evidence that the form of the Quiet Enjoyment Agreement has been agreed by each Guarantor,
each Charterer and the Approved Manager in form and substance satisfactory to the Lender.
	 
	16	 	Documentary evidence that the agent for service of process named in Clause 30 has accepted
its appointment.
	 
	17	 	Favourable legal opinions from lawyers appointed by the Lender on such matters concerning the
laws of Bermuda, Sweden, The Netherlands and such other relevant jurisdictions as the Lender
may require.




60









 






	18	 	If the Lender so requires, in respect of any of the documents referred to above, a certified
English translation prepared by a translator approved by the Lender.




61









 











PART B





	1	 	A duly executed original of the Mortgage, Deed of Covenant, General Assignment and Charter
Assignment relating to each Existing Ship (and of each document to be delivered pursuant to
each of them).
	 
	2	 	Without prejudice to the generality of paragraph 1 above, the notices of assignment and
acknowledgements thereof required by the terms of the Charter Assignment relating to each
Existing Ship duly served on, and acknowledged by, the relevant Charterer and the relevant
Charter Guarantor.
	 
	3	 	Documentary evidence that:
	 
	(a)	 	each Existing Ship is definitively and permanently registered in the name of the relevant
Guarantor under Bermudian flag;
	 
	(b)	 	each Existing Ship is in the absolute and unencumbered ownership of the relevant Guarantor
save as contemplated by the Finance Documents;
	 
	(c)	 	each Existing Ship maintains the class highest class for a vessel of that type with an
Approved Classification Society free of all overdue recommendations and conditions of such
Classification Society;
	 
	(d)	 	each Existing Ship is continuing in service under the relevant Charter;
	 
	(e)	 	a Mortgage has been duly registered against each Existing Ship as a valid first priority
Bermudian ship mortgage in accordance with the laws of Bermuda; and
	 
	(f)	 	each Existing Ship is insured in accordance with the provisions of this Agreement and the
relevant Guarantee and all requirements therein in respect of insurances have been complied
with.
	 
	4	 	Documents establishing that each Existing Ship will, as from the first Drawdown Date, be
managed by the Approved Manager on terms acceptable to the Lender, together with:
	 
	(a)	 	a letter or letters of undertaking executed by the Approved Manager in favour of the Lender
in the terms required by the Lender agreeing certain matters in relation to the management of
each Existing Ship and subordinating the rights of the Approved Manager against each Existing
Ship and each Guarantor to the rights of the Lender under the Finance Documents; and
	 
	(b)	 	copies of the Approved Manager’s Document of Compliance and of each Existing Ship’s Safety
Management Certificate (together with any other details of the applicable safety management
system which the Lender requires).
	 
	5	 	A favourable opinion from an independent insurance consultant acceptable to the Lender on
such matters relating to the insurances for each Existing Ship as the Lender may require.
	 
	6	 	The Quiet Enjoyment Agreements in relation to each Existing Ship duly executed by each
relevant Guarantor, each relevant Charterer and the Approved Manager, together with evidence
of due authorisation and execution by those parties.
	 
	7	 	A satisfactory valuation of each Existing Ship, dated not earlier than 10 days prior to the
first Drawdown Date, from an independent London sale and purchase shipbroker selected by the
Lender.




62









 






	8	 	Evidence that the Existing Lenders have, or immediately will, release all security for the
Existing Indebtedness (and have, or immediately will, given notice thereof to all relevant
parties) and will release the Borrower and each Guarantor from all liabilities under or in
respect of the Existing Loan Agreement.
	 
	9	 	Such further or updating legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of Bermuda, Sweden, The Netherlands and such other relevant jurisdictions
as the Lender may require.




63









 











PART C



The following are the documents referred to in Clause 9.1(c).





	1	 	A copy of the MOA and other Underlying Documents relating to the relevant New Ship and of all
document signed or issued by the relevant Guarantor under or in connection with such MOA, on
terms acceptable to the Lender.
	 
	2	 	Evidence of due authorisation and execution of the MOA and other Underlying Documents
relating to the relevant New Ship.
	 
	3	 	A duly executed original of the Mortgage, Deed of Covenant, General Assignment and Charter
Assignment relating to the relevant New Ship (and of each document to be delivered pursuant to
each of them).
	 
	4	 	Without prejudice to the generality of paragraph 1 above, notices of assignment and
acknowledgements thereof required by the terms of the Charter Assignment relating to the
relevant New Ship duly served on, and acknowledged by, the relevant Charterer and the relevant
Charter Guarantor.
	 
	5	 	Documentary evidence that:
	 
	(a)	 	the relevant New Ship has been unconditionally delivered by the relevant Seller to, and
accepted by, the relevant Guarantor under the relevant MOA;
	 
	(b)	 	the relevant New Ship is definitively and permanently registered in the name of the relevant
Guarantor under Bermudian flag;
	 
	(c)	 	the relevant New Ship is in the absolute and unencumbered ownership of the relevant Guarantor
save as contemplated by the Finance Documents;
	 
	(d)	 	the relevant New Ship maintains the highest class for a vessel of that type with an Approved
Classification Society free of all overdue recommendations and conditions of such
Classification Society;
	 
	(e)	 	the relevant New Ship has entered into service under the relevant Charter;
	 
	(f)	 	a Mortgage has been duly registered against the relevant New Ship as a valid first priority
Bermudian ship mortgage in accordance with the laws of Bermuda; and
	 
	(g)	 	the relevant New Ship is insured in accordance with the provisions of this Agreement and the
relevant Guarantee and all requirements therein in respect of insurances have been complied
with.
	 
	6	 	Documents establishing that the relevant New Ship will, as from the relevant Drawdown Date,
be managed by the Approved Manager on terms acceptable to the Lender, together with:
	 
	(a)	 	a letter of undertaking executed by the Approved Manager in favour of the Lender in the terms
required by the Lender agreeing certain matters in relation to the management of the relevant
New Ship and subordinating the rights of the Approved Manager against that New Ship and the
relevant Guarantor to the rights of the Lender under the Finance Documents; and
	 
	(b)	 	copies of the Approved Manager’s Document of Compliance and of the relevant New Ship’s Safety
Management Certificate and ISCC (together with any other details of the applicable safety
management system which the Lender requires).




64









 






	7	 	A favourable opinion from an independent insurance consultant acceptable to the Lender on
such matters relating to the insurances for the relevant New Ship as the Lender may require.
	 
	8	 	The Quiet Enjoyment Agreement in relation to each New Ship duly executed by each relevant
Guarantor, each relevant Charterer and the Approved Manager, together with evidence of due
authorisation and execution by those parties.
	 
	9	 	A satisfactory valuation of the relevant New Ship, dated not earlier than 10 days prior to
the relevant Drawdown Date, from an independent London sale and purchase shipbroker selected
by the Lender.
	 
	10	 	Such further or updating legal opinions from lawyers appointed by the Lender on such matters
covering the laws of Bermuda, Sweden, The Netherlands and such other relevant jurisdictions as
the Lender may require.
	 
	11	 	The documents referred to in paragraphs 1 and 2 of this Part C need not be separately
delivered if they have previously been delivered pursuant to paragraphs 8 and 9 of Part A.
	 
	 	 	Every copy document delivered under this Schedule shall be certified as a true and up to
date copy by a director or the secretary (or equivalent officer) of the Borrower.




65









 












SCHEDULE 3




FORM OF COMPLIANCE CERTIFICATE





			
	To:	 	The Royal Bank of Scotland plc

Shipping Business Centre

5-10 Great Tower Street

London EC3P 3HX





[l] 200[l]




Dear Sirs,



We refer to a loan agreement dated 12 December 2005 (as amended and restated on or around 16
December 2008) (the “Loan Agreement”) made between (1) us as borrower and (2) you as lender.



Words and expressions defined in the Loan Agreement shall have the same meaning when used in this
compliance certificate.



We enclose with this certificate a copy of the [the audited consolidated accounts of the Borrower
Parent for the year ended [l]] [the consolidated management accounts of the Borrower Parent
for the 3-month period ended [l]]. The accounts (i) have been prepared in accordance with
all applicable laws and GAAP consistently applied, (ii) give a GAAP presentation of the Borrower
Parent accounts and of its profit for the period to which the accounts relate and (iii) fully
disclose or provide for all significant liabilities of the Borrower Parent.



The Borrower represents that no Event of Default has occurred as at the date of this certificate
and, to the best of the knowledge of each of the undersigned following due enquiry, no Potential
Event of Default has occurred as at the date of this certificate [except for the following matter
or event [set out all material details of matter or event]]. In addition as of [l], the
Borrower confirms compliance with the financial covenants set out in Clause 12.5 of the Loan
Agreement for the [12] [3] months ending as at the date to which the enclosed accounts are
prepared.



We now certify that, as at [l]:





	(b)	 	the Value Adjusted Equity is equal to or greater than 30 per cent. of the Value Adjusted
Total Assets; and
	 
	(c)	 	the Group has a positive Working Capital.




This certificate shall be governed by, and construed in accordance with, English law.




	 	 	 
	 
	 

[l]

	 	 
	 
	 	 
	Chief Financial Officer of
	 	 
	ARLINGTON TANKERS LTD.
	 	 
	 
	 	 
	 
	 
	 	 
	[l]
	 	 
	 
	 	 
	Director of
	 	 
	ARLINGTON TANKERS LTD.
	 	 






66









 






SCHEDULE 4




MANDATORY COST RATE FORMULA




The Mandatory Cost Rate will be calculated in accordance with the following formula:



          F x 0.01



             300



where on the day(s) of application of the formula:



F. is the rate of charge payable by the Lender to the Financial Services Authority pursuant to
paragraph 2 of the Fees Regulations (but where for this purpose, the figure at paragraph
2.02b/2.03b shall be deemed to be zero) and expressed in pounds per £1 million of the Fee Base of
the Lender.



For the purposes of this Schedule:



Fee Base has the meaning ascribed to it for the purposes of, and all be calculated in accordance
with, the Fees Regulations.



Fees Regulations means, as appropriate, either the Banking Supervision (Fees) Regulations 2000 or
such regulations as from time to time may be in force, relating to the payment of fees for banking
supervision in respect of periods subsequent to 31 March 2001.



Any reference to a provision of any statute, directive, order or regulation herein is a reference
to that provision as amended or re-enacted from time to time.



If alternative or additional financial requirements are imposed which in the Lender’s opinion make
the formula set out above no longer appropriate, the Lender shall be entitled to stipulate such
other formula as shall be suitable to apply in substitution for the formula set out above.




67









 








EXECUTION PAGE




	 	 	 
	BORROWER
	 	 
	 
	 	 
	SIGNED by

	 	)
	 

	 	)
	for and on behalf of

	 	)
	ARLINGTON TANKERS LTD.

	 	)
	in the presence of:

	 	)
	 
	 	 
	LENDER
	 	 
	 
	 	 
	SIGNED by

	 	)
	 

	 	)
	for and on behalf of

	 	)
	THE ROYAL BANK OF SCOTLAND plc

	 	)
	in the presence of:

	 	)







68