Document:

Exhibit
10.1

 

Execution
Version

 

 

Up
to

 

$200,000,000

 

SENIOR
SECURED REVOLVING CREDIT FACILITY AGREEMENT

 

AMONG

 

OSG AMERICA OPERATING COMPANY LLC,

as Borrower

 

AND

 

The banks and financial institutions

identified on Schedule II,

as Lenders

 

AND

 

ING BANK N.V., London Branch

as Facility Agent, Security Trustee and Issuing Lender

 

AND

 

ING BANK N.V., London Branch and DNB NOR BANK ASA,

as Mandated Lead Arrangers and Bookrunners

 

AND

 

OSG AMERICA L.P. and the Vessel-Owning Guarantors identified on
Schedule III,

as Joint and Several Guarantors

 

Dated as of November 15, 2007

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.1

  	
  Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
  1.2

  	
  Computation of Time Periods; Other Definitional Provisions

  	
   

  	
  20

  
	
   

  	
   

  	
  1.3

  	
  Accounting Terms

  	
   

  	
  20

  
	
   

  	
   

  	
  1.4

  	
  Certain Matters Regarding Materiality

  	
   

  	
  21

  
	
   

  	
   

  	
  1.5

  	
  Forms of Documents

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  THE FACILITY

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1

  	
  Purposes

  	
   

  	
  21

  
	
   

  	
   

  	
  2.2

  	
  Extension Option

  	
   

  	
  21

  
	
   

  	
   

  	
  2.3

  	
  Making of the Advances

  	
   

  	
  22

  
	
   

  	
   

  	
  2.4

  	
  Advance Availability Period

  	
   

  	
  22

  
	
   

  	
   

  	
  2.5

  	
  Drawdown Notice

  	
   

  	
  22

  
	
   

  	
   

  	
  2.6

  	
  Effect of Drawdown Notice

  	
   

  	
  22

  
	
   

  	
   

  	
  2.7

  	
  Notation of Advances

  	
   

  	
  22

  
	
   

  	
   

  	
  2.8

  	
  Several Obligations

  	
   

  	
  23

  
	
   

  	
   

  	
  2.9

  	
  Pro Rata Treatment

  	
   

  	
  23

  
	
   

  	
   

  	
  2.10

  	
  Letters of Credit

  	
   

  	
  23

  
	
   

  	
   

  	
  2.11

  	
  Letter of Credit Request

  	
   

  	
  23

  
	
   

  	
   

  	
  2.12

  	
  Letter of Credit Participation

  	
   

  	
  24

  
	
   

  	
   

  	
  2.13

  	
  Letter of Credit Payments Deemed Advances

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  CONDITIONS

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1

  	
  Conditions Precedent to the Availability of the Facility

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Authority

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
  (b)

  	
  This Agreement

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
  (c)

  	
  The Note

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Fees

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Environmental Claims

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Legal Opinions

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Registration Statement

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Vessel Documents

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Security Documents

  	
   

  	
  27

  
	
   

  	
   

  	
   

  	
  (j)

  	
  IAPPC, ISM and ISPS Code

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
  (k)

  	
  Know Your Customer Information

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
  (l)

  	
  Vessel Appraisals

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
  (m)

  	
  Loan to Value Ratio

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.2

  	
  Further Conditions Precedent

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Drawdown Notice; Letter of Credit Request

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Representations and Warranties

  	
   

  	
  28

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (c)

  	
  No Default

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
  (d)

  	
  No Material Adverse Change

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
  (e)

  	
  NYSE Listing; IPO Proceeds

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Maritime Administration Approval

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.3

  	
  Breakfunding Costs

  	
   

  	
  29

  
	
   

  	
   

  	
  3.4

  	
  Satisfaction after Drawdown

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  REPAYMENT AND PREPAYMENT

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
  Mandatory Repayment

  	
   

  	
  29

  
	
   

  	
   

  	
  4.2

  	
  Voluntary Prepayment

  	
   

  	
  30

  
	
   

  	
   

  	
  4.3

  	
  Optional Permanent Reduction of Facility

  	
   

  	
  30

  
	
   

  	
   

  	
  4.4

  	
  Borrower’s Obligations Absolute

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  INTEREST AND RATE

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.1

  	
  Payment of Interest; Interest Rate

  	
   

  	
  30

  
	
   

  	
   

  	
  5.2

  	
  Calculation of Interest

  	
   

  	
  31

  
	
   

  	
   

  	
  5.3

  	
  Maximum Interest

  	
   

  	
  31

  
	
   

  	
   

  	
  5.4

  	
  Interest Elections

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  PAYMENTS

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  6.1

  	
  Place of Payments; No Set Off

  	
   

  	
  32

  
	
   

  	
   

  	
  6.2

  	
  Federal Income Tax Credits

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  GUARANTEE

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7.1

  	
  The Guarantee

  	
   

  	
  33

  
	
   

  	
   

  	
  7.2

  	
  Obligations Unconditional

  	
   

  	
  34

  
	
   

  	
   

  	
  7.3

  	
  Reinstatement

  	
   

  	
  34

  
	
   

  	
   

  	
  7.4

  	
  Subrogation

  	
   

  	
  35

  
	
   

  	
   

  	
  7.5

  	
  Subordination

  	
   

  	
  35

  
	
   

  	
   

  	
  7.6

  	
  Remedies

  	
   

  	
  35

  
	
   

  	
   

  	
  7.7

  	
  Instrument for the Payment of Money

  	
   

  	
  35

  
	
   

  	
   

  	
  7.8

  	
  Continuing Guarantee

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Due Organization and Power

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Authorization and Consents

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Binding Obligations

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
  (d)

  	
  No Violation

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Filings; Stamp Taxes

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Approvals; Consents

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Litigation

  	
   

  	
  37

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (h)

  	
  No Default

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
  (i)

  	
  ERISA

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
  (j)

  	
  Vessels

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
  (k)

  	
  Tax Returns and Payments

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
  (l)

  	
  Chief Executive Office

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
  (m)

  	
  Insurance

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
  (n)

  	
  Foreign Trade Control Regulations

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
  (o)

  	
  Investment Company Act

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
  (p)

  	
  Equity Ownership

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
  (q)

  	
  Environmental Matters and Claims

  	
   

  	
  39

  
	
   

  	
   

  	
   

  	
  (r)

  	
  Compliance with ISM Code, the ISPS Code, the MTSA and Annex VI

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (s)

  	
  Threatened Withdrawal of DOC, SMC, ISSC or IAPPC

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (t)

  	
  Liens

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (u)

  	
  Indebtedness

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (v)

  	
  No Material Adverse Change

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (w)

  	
  No Proceedings to Dissolve

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (x)

  	
  Compliance with Laws

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
  (y)

  	
  Survival

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  COVENANTS

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.1

  	
  Affirmative Covenants

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Performance of Agreements

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Notice of Default

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Consents

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Preservation of Existence, Etc

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Books and Records

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Inspection

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Payment of Obligations

  	
   

  	
  41

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Compliance with Agreements, Statutes, etc

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Environmental Matters

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
  (j)

  	
  Maintenance of Assets

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
  (k)

  	
  Book Value

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (l)

  	
  Pari Passu

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (m)

  	
  Brokerage Commissions, etc

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (n)

  	
  IPO Proceeds

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Minimum Consolidated Tangible Net Worth

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Maximum Leverage

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Net Debt to EBITDA

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (d)

  	
  EBITDA to Net Interest Expense

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Exchange Listing

  	
   

  	
  43

  

 

iii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Ownership of the Borrower and each of the Vessel-Owning Guarantors

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Agent for Service of Process

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Financial Statements

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
  (a)

  	
  ISM Code, ISPS Code, MTSA and Annex VI Matters

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Insurance Matters

  	
   

  	
  45

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Earnings

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Vessel Management

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Vessel Appraisals

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Assignment of Earnings, Assignment of Insurances and Mortgage

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.2

  	
  Negative Covenants

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Liens

  	
   

  	
  47

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Change of Flag, Class, Management or Ownership

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Chartering

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Change in Business

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Sale of Assets

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Changes in Offices

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Loans and Advances

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Contingent Obligations, etc

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Use of Corporate Funds

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (j)

  	
  Indebtedness

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (k)

  	
  Use of Proceeds

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Mergers, Consolidations and Sales of Assets

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
  (b)

  	
  No Money Laundering

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Indebtedness

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Distributions

  	
   

  	
  49

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9.3

  	
  Substitution of Vessels

  	
   

  	
  49

  
	
   

  	
   

  	
  9.4

  	
  Inspection and Survey Reports

  	
   

  	
  50

  
	
   

  	
   

  	
  9.5

  	
  Inspection of Vessels

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.1

  	
  Events of Default

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (a)

  	
  Principal Payments

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
  (b)

  	
  Interest and other Payments

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
  (c)

  	
  Representations, etc

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
  (d)

  	
  Impossibility, Illegality

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
  (e)

  	
  Certain Covenants

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
  (f)

  	
  Covenants

  	
   

  	
  50

  
	
   

  	
   

  	
   

  	
  (g)

  	
  Indebtedness and Other Obligations

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
  (h)

  	
  Bankruptcy

  	
   

  	
  51

  
									

 

iv

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (i)

  	
  Judgments

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
  (j)

  	
  Inability to Pay Debts

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
  (k)

  	
  Cessation of Business

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
  (l)

  	
  Change of Ownership or Control

  	
   

  	
  51

  
	
   

  	
   

  	
   

  	
  (m)

  	
  Change of Commercial and Technical Manager

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
  (n)

  	
  ERISA Debt

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  10.2

  	
  Indemnification

  	
   

  	
  53

  
	
   

  	
   

  	
  10.3

  	
  Application of Moneys

  	
   

  	
  53

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  ASSIGNMENTS; PARTICIPATIONS;

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11.1

  	
  Assignments

  	
   

  	
  54

  
	
   

  	
   

  	
  11.2

  	
  Participations

  	
   

  	
  54

  
	
   

  	
   

  	
  11.3

  	
  Security Interest

  	
   

  	
  55

  
	
   

  	
   

  	
  11.4

  	
  Register

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC

  	
   

  	
  55

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  12.1

  	
  Illegality

  	
   

  	
  55

  
	
   

  	
   

  	
  12.2

  	
  Increased Cost

  	
   

  	
  55

  
	
   

  	
   

  	
  12.3

  	
  Nonavailability of Funds

  	
   

  	
  56

  
	
   

  	
   

  	
  12.4

  	
  Determination of Losses

  	
   

  	
  57

  
	
   

  	
   

  	
  12.5

  	
  Compensation for Losses

  	
   

  	
  57

  
	
   

  	
   

  	
  12.6

  	
  Compensation for Breakage Costs

  	
   

  	
  57

  
	
   

  	
   

  	
  12.7

  	
  Mitigation Obligations; Replacement of Lenders

  	
   

  	
  57

  
	
   

  	
   

  	
  12.8

  	
  Currency Indemnity

  	
   

  	
  58

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  FEES, EXPENSES AND INDEMNIFICATION

  	
   

  	
  59

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  13.2

  	
  Expenses

  	
   

  	
  59

  
	
   

  	
   

  	
  13.3

  	
  Indemnification

  	
   

  	
  60

  
	
   

  	
   

  	
  13.4

  	
  Time of Payment

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  APPLICABLE LAW, JURISDICTION AND WAIVER

  	
   

  	
  60

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  14.1

  	
  Applicable Law

  	
   

  	
  60

  
	
   

  	
   

  	
  14.2

  	
  Jurisdiction

  	
   

  	
  60

  
	
   

  	
   

  	
  14.3

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  THE FACILITY AGENT AND THE SECURITY TRUSTEE

  	
   

  	
  61

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.1

  	
  Appointment and Authorization

  	
   

  	
  61

  
	
   

  	
   

  	
  15.2

  	
  Agents and Affiliates

  	
   

  	
  62

  
	
   

  	
   

  	
  15.3

  	
  Action by Agents

  	
   

  	
  62

  
	
   

  	
   

  	
  15.4

  	
  Consultation with Experts

  	
   

  	
  62

  
	
   

  	
   

  	
  15.5

  	
  Liability of the Agents

  	
   

  	
  62

  

 

v

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  15.6

  	
  Indemnification

  	
   

  	
  62

  
	
   

  	
   

  	
  15.7

  	
  Credit Decision

  	
   

  	
  63

  
	
   

  	
   

  	
  15.8

  	
  Successor Agents

  	
   

  	
  63

  
	
   

  	
   

  	
  15.9

  	
  Distribution of Payments

  	
   

  	
  64

  
	
   

  	
   

  	
  15.10

  	
  Holder of Interest in Note

  	
   

  	
  64

  
	
   

  	
   

  	
  15.11

  	
  Assumption re Event of Default

  	
   

  	
  64

  
	
   

  	
   

  	
  15.12

  	
  Notification of Event of Default

  	
   

  	
  64

  
	
   

  	
   

  	
  15.13

  	
  Limitations of Liability of Creditors

  	
   

  	
  64

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  NOTICES AND DEMANDS

  	
   

  	
  65

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  LIMITATION OF LIABILITY/SURVIVAL OF LIABILITY/CONTINUING INDEMNITIES

  	
   

  	
  66

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  67

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  18.1

  	
  Time of Essence

  	
   

  	
  67

  
	
   

  	
   

  	
  18.2

  	
  Severability

  	
   

  	
  67

  
	
   

  	
   

  	
  18.3

  	
  References

  	
   

  	
  67

  
	
   

  	
   

  	
  18.4

  	
  Further Assurances

  	
   

  	
  67

  
	
   

  	
   

  	
  18.5

  	
  Prior Agreements, Merger

  	
   

  	
  67

  
	
   

  	
   

  	
  18.6

  	
  Entire Agreement, Amendments

  	
   

  	
  67

  
	
   

  	
   

  	
  18.7

  	
  Headings

  	
   

  	
  68

  
	
   

  	
   

  	
  18.8

  	
  Survival

  	
   

  	
  68

  
	
   

  	
   

  	
  18.9

  	
  Confidentiality

  	
   

  	
  68

  
	
   

  	
   

  	
  18.10

  	
  Counterparts

  	
   

  	
  69

  
	
   

  	
   

  	
  18.11

  	
  WAIVER OF IMMUNITY

  	
   

  	
  69

  

 

vi

 

	
  SCHEDULE I

  	
   

  	
  VESSELS

  
	
  SCHEDULE II

  	
   

  	
  LENDERS

  
	
  SCHEDULE III

  	
   

  	
  VESSEL-OWNING GUARANTORS

  
	
  SCHEDULE IV

  	
   

  	
  ACCEPTABLE BROKERS

  
	
  SCHEDULE V

  	
   

  	
  CLASSIFICATION SOCIETY

  
	
  SCHEDULE VI

  	
   

  	
  LIENS & INDEBTEDNESS

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

  
	
  EXHIBIT B

  	
   

  	
  FORM OF PROMISSORY NOTE

  
	
  EXHIBIT C

  	
   

  	
  FORM OF DRAWDOWN NOTICE

  
	
  EXHIBIT D

  	
   

  	
  FORM OF LETTER OF CREDIT REQUEST

  
	
  EXHIBIT E

  	
   

  	
  FORM OF COMPLIANCE CERTIFICATE

  
	
  EXHIBIT F

  	
   

  	
  FORM OF EARNINGS ASSIGNMENT

  
	
  EXHIBIT G

  	
   

  	
  FORM OF INSURANCES ASSIGNMENT

  
	
  EXHIBIT H

  	
   

  	
  FORM OF SHIPBUILDING CONTRACT ASSIGNMENT

  
	
  EXHIBIT I

  	
   

  	
  FORM OF UNITED STATES MORTGAGE

  

 

vii

 

SENIOR SECURED REVOLVING CREDIT FACILITY AGREEMENT

 

THIS SENIOR
SECURED REVOLVING CREDIT FACILITY AGREEMENT (this “Agreement”)
is made as of the 15th day of November, 2007 by and among (1) OSG
AMERICA OPERATING COMPANY LLC, a limited liability company organized and
existing under the laws of the State of Delaware, as borrower (the “Borrower”), (2) OSG AMERICA
L.P., a limited partnership organized and existing under the laws of the State
of Delaware (the “Parent”),
as guarantor, (3) the Parent and each of the companies listed on Schedule
III (the “Vessel-Owning Guarantors”), as
joint and several guarantors (the Vessel Owning Guarantors together with the
Parent, the “Guarantors” and each a “Guarantor”), (4) the banks and
financial institutions listed on Schedule II, as lenders (together with the
Issuing Lender and any assignee pursuant to Section 11, the “Lenders” and each a “Lender”), (5) ING BANK N.V.,
London Branch (“ING”), as
agent for the Lenders (in such capacity, the “Facility
Agent”), as security trustee for the Lenders (in such capacity,
the “Security Trustee”) and as issuing
lender (in such capacity, the “Issuing Lender”),
and (6) ING and DNB NOR BANK ASA (“DnB NOR”),
as mandated lead arrangers (in such capacity, each a “MLA”
and, collectively the “MLAs”) and
as bookrunners (in such capacity, each a “Bookrunner”
and, collectively, the “Bookrunners”).

 

WITNESSETH THAT:

 

WHEREAS, (1) the
Parent is a limited partnership formed by Overseas Shipholding Group, Inc.
(“OSG”), (2) the Borrower is a
wholly-owned subsidiary of the Parent and (3) the Vessel-Owning Guarantors
are each a wholly-owned subsidiary of the Borrower; and

 

WHEREAS, each
of the Guarantors have agreed to provide a joint and several guarantee of the
obligations of the Borrower with respect to the transactions contemplated by
this Agreement;

 

WHEREAS, at
the request of the Borrower, the Agent, the Security Trustee, the MLAs and the
Bookrunners have agreed to act in their respective capacities as set forth
herein and the Lenders have agreed to provide to the Borrower a senior secured
revolving credit facility in an amount of up to $200,000,000 with a $25,000,000
sub limit for the issuance of Letters of Credit on the terms and subject to the
conditions set forth herein for the purposes of (1) refinancing in whole
or in part the Parent’s outstanding debt to OSG, (2) financing the
pre-delivery and post-delivery costs of Hull 8015 and Hull 8016, and the cost
of retrofitting Barge OSG 243 (each as defined herein) and (3) providing
funds for general corporate purposes;

 

NOW,
THEREFORE, in consideration of the premises set forth above, the covenants and
agreements hereinafter set forth, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as set forth below:

 

1.                                       DEFINITIONS

 

1.1           Defined
Terms.  In this Agreement the words
and expressions specified below shall, except where the context otherwise requires,
have the meanings attributed to them below:

 

 

	
  “Adjusted Net Worth”

  	
  shall have
  the meaning ascribed thereto in Section 17;

  
	
   

  	
   

  
	
  “Advance(s)”

  	
  shall mean,
  as the context may require, (i) any amount advanced to the Borrower with
  respect to the Facility pursuant to Section 2, or (ii) the
  aggregate amount of all Advances outstanding at the applicable time;

  
	
   

  	
   

  
	
  “Advance Availability Period”

  	
  shall mean
  the period commencing the date hereof and ending the earlier of (i) the
  date that is one (1) month prior to the Payment Date, or (ii) the
  date on which the Facility is permanently reduced to zero and the Lenders are
  no longer required to made Advances hereunder;

  
	
   

  	
   

  
	
  “Affiliate”

  	
  shall mean,
  with respect to any Person, (i) any Person that directly, or indirectly through
  one or more intermediaries, Controls such Person or (ii) any Person
  (other than such Person or a subsidiary of such Person) which is Controlled
  by or is under common Control with a Controlling Person;

  
	
   

  	
   

  
	
  “Agents”

  	
  shall mean
  the Facility Agent and the Security Trustee;

  
	
   

  	
   

  
	
  “Agreement”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Annex VI”

  	
  shall mean
  the Regulations for the Prevention of Air Pollution from Ships to the
  International Convention for the Prevention of Pollution from Ships 1973 (as
  modified in 1978 and 1997);

  
	
   

  	
   

  
	
  “Applicable Law”

  	
  shall mean
  any Law of any Authority, including, without limitation, all national,
  Federal, state and local banking or securities laws, to which the Person in
  question is subject or by which it or any of its material property is bound;

  
	
   

  	
   

  
	
  “Applicable Rate”

  	
  shall mean,
  in respect of any Advance, the rate of interest on such Advance from time to
  time pursuant to Section 5.1;

  
	
   

  	
   

  
	
  “Assignment and Assumption Agreement(s)”

  	
  shall mean
  the Assignment and Assumption Agreement(s) executed pursuant to Section 11.1
  substantially in the form of Exhibit A;

  
	
   

  	
   

  
	
  “Assignment Notices”

  	
  shall mean (i) notices
  with respect to the Earnings Assignments substantially in the form set out in
  Exhibit 1 to Exhibit F hereto, (ii) notices with respect to
  the Insurances Assignments substantially in the form set out in Exhibit 3
  to Exhibit G hereto, and (iii) notices with respect to the
  Shipbuilding Contract Assignments substantially in the form set out in Exhibit 1
  to Exhibit H hereto;

  

 

2

 

	
  “Assignments”

  	
  shall mean
  the Earnings Assignments, the Insurances Assignments and the Shipbuilding
  Contracts Assignments;

  
	
   

  	
   

  
	
  “Authority”

  	
  shall mean
  any governmental or quasi-governmental authority, whether executive,
  legislative, judicial, administrative or other, or any combination thereof,
  including, without limitation, any national, Federal, state, local,
  territorial, county, municipal or other government or governmental or
  quasi-governmental agency, arbitrator, board, body, branch, bureau,
  commission, corporation, court, department, instrumentality, master,
  mediator, panel, referee, system or other political unit or subdivision or
  other entity of any of the foregoing, whether domestic or foreign;

  
	
   

  	
   

  
	
  “Banking Day(s)”

  	
  shall mean
  day(s) on which banks are open for the transaction of business in
  London, England and New York, United States of America;

  
	
   

  	
   

  
	
  “Barge OSG 243”

  	
  shall mean
  that certain Vessel currently being retrofitted, the details of which are set
  forth on Schedule I hereto;

  
	
   

  	
   

  
	
  “Book Value”

  	
  shall mean,
  as of the date of any determination thereof, for any asset of the Parent, the
  value net of depreciation at which the asset of the Parent and its
  Subsidiaries is recorded and reported by the Parent in its consolidated
  financial statements in accordance with GAAP, consistently applied;

  
	
   

  	
   

  
	
  “Bookrunners”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Borrower”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Capitalized Lease”

  	
  of any
  Person shall mean any lease or other arrangement conveying the right to use
  real or personal property where the obligations for Rentals are required to
  be capitalized on a balance sheet of the lessee in accordance with GAAP;

  
	
   

  	
   

  
	
  “Capitalized Rentals”

  	
  of any
  Person shall mean, as of the date of any determination thereof, the
  capitalized amount of all Rentals due and to become due under all Capitalized
  Leases of such Person, as lessee, reflected as a liability on the balance
  sheet of such Person;

  
	
   

  	
   

  
	
  “Cash”

  	
  shall mean
  as of the date of any determination thereof, the total amount of all cash and
  Cash Equivalents of a Person as determined in accordance with GAAP;

  
	
   

  	
   

  
	
  “Cash Equivalents”

  	
  shall mean (i) securities
  issued or directly and fully guaranteed or insured by the United States of
  America or any agency or instrumentality thereof (provided that the full
  faith and credit of the United States of America is pledged in support
  thereof), and

  

 

3

 

	
   

  	
  (ii) time
  deposits, certificates of deposit or deposits in the interbank market of any
  commercial bank of recognized standing organized under the laws of the United
  States of America, any state thereof or any foreign jurisdiction having
  capital and surplus in excess of $500,000,000, and rated at least A or the
  equivalent thereof by S&P in respect of (ii) above, in each case
  having maturities of less than three months from the date of acquisition;

  
	
   

  	
   

  
	
  “Classification Society”

  	
  shall mean a
  classification society listed on Schedule V;

  
	
   

  	
   

  
	
  “Closing Date”

  	
  shall mean
  the date on which each of the conditions precedent to the availability of the
  Facility set forth in Section 3.1 shall have been met or waived,
  provided that the Closing Date shall, in any event, occur no later than 30 November 2007,
  unless otherwise agreed by the Lenders;

  
	
   

  	
   

  
	
  “Code”

  	
  shall mean
  the Internal Revenue Code of 1986, as amended, and any successor statute and
  regulations promulgated thereunder;

  
	
   

  	
   

  
	
  “Commitment”

  	
  shall mean,
  in relation to a Lender, the portion of the Facility set out opposite its
  name in Schedule II hereto, or as the case may be, in any Assignment and
  Assumption Agreement, as changed from time to time pursuant to the terms of
  this Agreement;

  
	
   

  	
   

  
	
  “Commitment Fee”

  	
  shall have
  the meaning ascribed thereto in Section 13.1(a);

  
	
   

  	
   

  
	
  “Compliance Certificate”

  	
  shall mean a
  certificate in the form set out in Exhibit E, or in such other form as
  the Facility Agent may agree, certifying the compliance by each of the
  Security Parties with all of its financial covenants contained herein and
  showing the calculations thereof, which certificate shall be executed and
  delivered by the chief executive officer, the chief operating officer, the
  chief financial officer or the controller of the general partner of the
  Parent or the designee thereof to the Facility Agent;

  
	
   

  	
   

  
	
  “Consolidated Net Worth”

  	
  shall mean,
  as of the date of any determination thereof, the total of stockholders’
  equity (as shown on the most recent consolidated balance sheet of such Person)
  of such Person and its subsidiaries;

  
	
   

  	
   

  
	
  “Consolidated Tangible Net Worth”

  	
  shall mean,
  as of the date of any determination thereof, the total of stockholders’
  equity (as shown on the most recent consolidated balance sheet of such
  Person) less Intangible Assets of such Person and its subsidiaries;

  

 

4

 

	
  “Contingent Obligations”

  	
  shall mean,
  as to any Person, without duplication, any obligation of such Person
  guaranteeing or intending to guarantee any Indebtedness of any other Person
  (the “primary obligor”) in any manner, whether directly or indirectly,
  including, without limitation, any obligation of such Person, whether or not
  contingent, (a) to purchase any such Indebtedness or any property
  constituting direct or indirect security therefor, (b) to advance or
  supply funds (i) for the purchase or payment of any such Indebtedness or
  (ii) to maintain working capital or equity capital of the primary
  obligor or otherwise to maintain the net worth or solvency of the primary
  obligor, (c) to purchase property, securities or services primarily for
  the purpose of assuring the owner of any such Indebtedness or the ability or
  the primary obligor to make payment of such Indebtedness or (d) otherwise
  to assure or hold harmless the owner of such Indebtedness against loss in
  respect thereof, provided, however, that the term Contingent
  Obligation shall not include endorsements of instruments for deposit or
  collection in the ordinary course of business.  The amount of any Contingent Obligation
  shall be deemed to be an amount equal to the stated or determinable amount of
  the Indebtedness in respect of which such Contingent Obligation is made or,
  if not stated or determinable, the maximum reasonably anticipated liability
  in respect thereof (assuming such Person is required to perform thereunder)
  as determined by such Person in good faith;

  
	
   

  	
   

  
	
  “Control”

  	
  shall mean,
  for purposes of the definition of “Affiliate,” with respect to any Person,
  possession, directly or indirectly, of the power to direct or cause the
  direction of the management or policies of such Person, whether through the
  ownership of voting securities, by contract or otherwise (for purposes of the
  aforesaid definition, the term “Control” used as a verb has a
  corresponding meaning);

  
	
   

  	
   

  
	
  “Conversion Date”

  	
  shall have
  the meaning ascribed thereto in Section 12.7(a);

  
	
   

  	
   

  
	
  “Creditor(s)”

  	
  shall mean
  the Facility Agent, the Security Trustee and the Lenders (each, a “Creditor”
  and, collectively, the “Creditors”);

  
	
   

  	
   

  
	
  “Debt”

  	
  shall mean,
  as to any Person, without duplication, (i) all indebtedness of such
  Person for borrowed money or for the deferred purchase price of property or
  services, (ii) the maximum amount available to be drawn under all
  letters of credit, bankers’ acceptances and similar obligations issued for
  the account of such Person and all unpaid drawings in respect of such letters
  of credit, bankers’ acceptances and similar obligations, (iii) all
  indebtedness of the types described in clause (i), (ii), (iv), (v), or

  

 

5

 

	
   

  	
  (vi) of
  this definition secured by any Lien on any property owned by such Person,
  whether or not such indebtedness has been assumed by such Person (provided
  that, if the Person has not assumed or otherwise become liable in respect of
  such indebtedness, such indebtedness shall be deemed to be in an amount equal
  to the lesser of (i) the amount of such indebtedness and (ii) the
  fair market value of the property to which such Lien relates as determined in
  good faith by such Person), (iv) the aggregate amount of all Capitalized
  Rentals of such Persons, (v) all Contingent Obligations of such Person,
  and (vi) all obligations under any interest rate protection agreement,
  any other hedging agreement or under any similar type of agreement which, in
  accordance with GAAP, are required to be reflected as liabilities on the
  balance sheet of such Person. Notwithstanding the foregoing, Debt shall not
  include trade payables and accrued expenses incurred by any Person in
  accordance with customary practices and in the ordinary course of business of
  such Person;

  
	
   

  	
   

  
	
  “Default”

  	
  shall mean
  any event that would, with the giving of notice or passage of time, or both,
  be an Event of Default;

  
	
   

  	
   

  
	
  “Default Rate”

  	
  shall mean a
  rate per annum equal to the aggregate of (i) two percent (2%) plus (ii) the
  Applicable Rate then in effect;

  
	
   

  	
   

  
	
  “Derivatives Obligations”

  	
  of any
  Person shall mean all obligations of such Person in respect of any rate swap
  transaction, basis swap, forward rate transaction, commodity swap, commodity
  option, equity or equity index swap, equity or equity index option, bond
  option, interest rate option, foreign exchange transaction, cap transaction,
  floor transaction, collar transaction, currency swap transaction,
  cross-currency rate swap transaction, currency option or any other similar
  transaction (including any option with respect to any of the foregoing
  transactions) or any combination of the foregoing transactions;

  
	
   

  	
   

  
	
  “Determination Date”

  	
  shall have
  the meaning ascribed thereto in Section 17;

  
	
   

  	
   

  
	
  “DOC”

  	
  shall mean a
  document of compliance issued to an Operator in accordance with rule 13
  of the ISM Code;

  
	
   

  	
   

  
	
  “Dollars” or “$”

  	
  shall mean
  the legal currency, at any relevant time hereunder, of the United States of
  America and, in relation to all payments hereunder, in same day funds settled
  through the New York Clearing House Interbank Payments System (or such other
  Dollar funds as may be determined by the Facility Agent to be customary for
  the settlement in New York City of banking

  

 

6

 

	
   

  	
  transactions
  of the type herein involved);

  
	
   

  	
   

  
	
  “Drawdown Date(s)”

  	
  shall mean
  the date(s), each being a Banking Day, upon which the Borrower has requested
  that (i) an Advance be made available to the Borrower and such Advance
  is made, or (ii) an Advance is deemed to have been made due to a drawing
  under any Letter of Credit, as provided in Section 2.13;

  
	
   

  	
   

  
	
  “Drawdown Notice”

  	
  shall have
  the meaning ascribed thereto in Section 2.5;

  
	
   

  	
   

  
	
  “Earnings Assignments”

  	
  shall mean
  the assignments of earnings and charterparties in respect of (i) the
  earnings of each Vessel from any and all sources (including requisition
  compensation), (ii) any charter or other contract relating to each
  Vessel and (iii) the prorated portion of any pooled monies which are
  attributable to (i) and (ii) above, to be executed by the relevant
  Vessel-Owning Guarantor in favor of the Facility Agent pursuant to Section 3.1(j)(iii) substantially
  in the form set out in Exhibit F;

  
	
   

  	
   

  
	
  “EBITDA”

  	
  shall mean,
  in respect of a Person, consolidated net income, plus Interest Charges,
  taxes, depreciation, amortization and other non-cash charges, to the extent
  deducted in calculating net income, in each case as determined in accordance
  with GAAP;

  
	
   

  	
   

  
	
  “Environmental Affiliate”

  	
  shall have
  the meaning ascribed thereto in Section 9.1(A)(i);

  
	
   

  	
   

  
	
  “Environmental Approvals”

  	
  shall have
  the meaning ascribed thereto in Section 8(r);

  
	
   

  	
   

  
	
  “Environmental Claim”

  	
  shall have
  the meaning ascribed thereto in Section 8(r);

  
	
   

  	
   

  
	
  “Environmental Laws”

  	
  shall have
  the meaning ascribed thereto in Section 8(r);

  
	
   

  	
   

  
	
  “ERISA”

  	
  shall mean
  the Employee Retirement Income Security Act of 1974, as amended;

  
	
   

  	
   

  
	
  “ERISA Affiliate”

  	
  shall mean a
  trade or business (whether or not incorporated) which is under common control
  with the Borrower within the meaning of Sections 414(b),(c),(m) or (o) of
  the Code;

  
	
   

  	
   

  
	
  “ERISA Group”

  	
  shall mean
  the Parent and its subsidiaries within the meaning of Section 424(f) of
  the Code;

  
	
   

  	
   

  
	
  “Event(s) of Default”

  	
  shall mean
  any of the events set out in Section 10.1;

  
	
   

  	
   

  
	
  “Exchange Act”

  	
  shall mean
  the Securities Exchange Act of 1934, as amended;

  
	
   

  	
   

  
	
  “Excluded Taxes”

  	
  shall mean
  with respect to the Facility Agent, any Lender or any other recipient of any
  payment to be made by or on account of

  

 

7

 

	
   

  	
  any
  obligation of the Borrower hereunder, (a)  income or franchise taxes
  imposed on (or measured by) its net income by (i) the United States of
  America, or by the jurisdiction under the laws of which such recipient is
  organized or in which its principal office is located or, in the case of any
  Lender, in which its applicable lending office is located, (ii) reason
  of a present or former connection between the recipient and the jurisdiction
  of the Borrower (other than such connection arising solely from such
  recipient having executed, delivered, or performed its obligations under, or
  enforced, this Agreement)  (b) any
  branch profits taxes imposed by the United States of America or any similar
  tax imposed by any other jurisdiction in which such recipient is located and (c) any
  withholding tax that is imposed on amounts payable to such Lender at the time
  such Lender becomes a party to this Agreement (or designates a new lending
  office).

  
	
   

  	
   

  
	
  “Extending Lender(s)”

  	
  shall have
  the meaning ascribed thereto in Section 2.2;

  
	
   

  	
   

  
	
  “Extension Option”

  	
  shall have
  the meaning ascribed thereto in Section 2.2;

  
	
   

  	
   

  
	
  “Facility”

  	
  shall mean
  the senior secured revolving credit facility to be made available by the
  Lenders to the Borrower hereunder in multiple Advances and Letters of Credit (i) in
  the maximum aggregate principal amount of Two Hundred Million Dollars
  ($200,000,000) if the Parent receives gross proceeds from the IPO in an
  amount equal to or greater than $125,000,000, (ii) in the maximum
  aggregate principal amount of One Hundred Fifty Million Dollars
  ($150,000,000) if the Parent receives gross proceeds from the IPO in an
  amount equal to or greater than $100,000,000 but less than $125,000,000 or (iii) if
  the Parent receives gross proceeds from the IPO in an amount less than
  $100,000,000 the Facility and the total Commitments will be nil; provided,
  however, that the Facility may also be reduced from time to time pursuant to
  the terms of this Agreement and the Facility, in respect of Letters of
  Credit, shall not exceed Twenty Five Million Dollars ($25,000,000);

  
	
   

  	
   

  
	
  “Facility Agent”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Facility Amount”

  	
  shall mean,
  as of the date of determination, the aggregate amount of the Commitments on
  such date;

  
	
   

  	
   

  
	
  “Facility Balance”

  	
  shall mean,
  as of the date of determination, the Dollar amount of the Facility
  outstanding at such time;

  
	
   

  	
   

  
	
  “Facility Period”

  	
  shall mean
  the period from the date hereof to the date which is

  

 

8

 

	
   

  	
  five (5) years
  from the date hereof, unless otherwise extended pursuant to the Extension
  Option;

  
	
   

  	
   

  
	
  “Fair Market Value”

  	
  shall mean,
  in respect of any Vessel, the appraised value of such Vessel as determined by
  any two (2) brokers chosen by the Borrower from the list set forth on
  Schedule IV , such Vessel to be valued on a “as is”, “where is”, “willing
  buyer, willing seller”, stand alone basis, free and clear of any liens,
  charters or other encumbrances and with no value given to any pooling
  arrangements;

  
	
   

  	
   

  
	
  “Fee Letters”

  	
  shall mean
  those certain fee letters dated October 18, 2007 and November 15,
  2007, each entered into by the Borrower and the MLAs in respect of the
  Facility;

  
	
   

  	
   

  
	
  “Final Availability Date”

  	
  shall mean
  the Drawdown Date in relation to the final Advance, which shall not fall
  later than the day occurring one (1) month prior to the Payment Date;

  
	
   

  	
   

  
	
  “Fronting Fee”

  	
  shall have
  the meaning ascribed thereto in Section 13.1(b);

  
	
   

  	
   

  
	
  “Funded Indebtedness”

  	
  shall mean,
  as at any date of determination, the aggregate stated balance sheet amount of
  all Debt of a Person and its subsidiaries on a consolidated basis; and with
  respect to the Parent and the Subsidiaries (including the Facility);

  
	
   

  	
   

  
	
  “GAAP”

  	
  shall mean,
  at any time, generally accepted accounting principles at the time in the
  United States of America;

  
	
   

  	
   

  
	
  “Guaranteed Obligations”

  	
  shall have
  the meaning ascribed thereto in Section 7.1;

  
	
   

  	
   

  
	
  “Guarantors”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Hull 8015”

  	
  shall mean
  that certain Vessel under construction, the details of which are set forth on
  Schedule I hereto;

  
	
   

  	
   

  
	
  “Hull 8016”

  	
  shall mean
  that certain Vessel under construction, the details of which are set forth on
  Schedule I hereto;

  
	
   

  	
   

  
	
  “IAPPC”

  	
  shall mean a
  valid international air pollution prevention certificate for a Vessel issued
  under Annex VI;

  
	
   

  	
   

  
	
  “Indebtedness”

  	
  of any
  Person shall mean and include all obligations of such Person which in
  accordance with GAAP shall be classified upon a balance sheet of such Person
  as liabilities of such Person, and in any event shall include all Debt of
  such Person;

  

 

9

 

	
  “Indemnified Taxes”

  	
  shall mean Taxes other than Excluded Taxes;

  
	
   

  	
   

  
	
  “Initial Advance”

  	
  shall mean
  the first Advance to be made under the Facility pursuant to Section 2;

  
	
   

  	
   

  
	
  “Initial Payment Date”

  	
  means November 15, 2012;

  
	
   

  	
   

  
	
  “Insurances Assignments”

  	
  shall mean
  the assignments in respect of the insurances of each Vessel to be executed by
  the relevant Vessel-Owning Guarantor in favor of the Facility Agent pursuant
  to Section 3.1(j)(ii) substantially in the form set out in Exhibit G;

  
	
   

  	
   

  
	
  “Intangible Assets”

  	
  shall mean,
  as of the date of any determination thereof, goodwill, patents, trade names,
  trademarks, copyrights, franchises and such other assets as are properly
  classified as “intangible assets” in accordance with GAAP plus unamortized
  debt issuance costs;

  
	
   

  	
   

  
	
  “Interest Charges”

  	
  for any
  period shall mean all interest and all amortization of debt discount and
  expense on any particular Indebtedness;

  
	
   

  	
   

  
	
  “Interest Election Request”

  	
  shall have
  the meaning ascribed thereto in Section 5.4;

  
	
   

  	
   

  
	
  “Interest Period”

  	
  shall mean
  with respect to any Advance (a) each one (1), three (3) or six (6) month
  period, commencing on the date such Advance is made or the last day of the
  next preceding Interest Period with respect to such Advance and ending on the
  same day in the first, third or sixth calendar month thereafter, in each
  case, as selected by the Borrowers or (b) in the Lenders’ discretion,
  such other period(s) for which interest rates are quoted by the British
  Bankers’ Association as may be agreed; provided, however, (x) in
  each case, that each such Interest Period (if such Interest Period is a whole
  number of months) which commences on the last Banking Day of a calendar month
  (or on any day for which there is no numerically corresponding day in the
  appropriate subsequent calendar month) shall end on the last Banking Day of
  the appropriate subsequent calendar month, (y) that the Borrower may not
  choose more than ten (10) one month interest periods in any twelve month
  period and (z) that the Borrower may not choose more than three (3) interest
  periods with a duration of less than one month in any twelve month period and
  at no time shall more than one (1) such interest period be outstanding;

  
	
   

  	
   

  
	
   

  	
  Notwithstanding
  the foregoing, (i) each Interest Period which would otherwise end on a
  day which is not a Banking Day shall end on the next succeeding Banking Day
  (or, if such next succeeding Banking Day falls in the next succeeding
  calendar month, on the next preceding Banking Day), and (ii) each

  

 

10

 

	
   

  	
  Interest
  Period which would otherwise end after the Payment Date shall end on the
  Payment Date; 

  
	
   

  	
   

  
	
  “Interest Rate Agreements”

  	
  shall mean
  any interest rate protection agreement, interest rate future agreement,
  interest rate option agreement, interest rate swap agreement, interest rate
  cap agreement, interest rate collar agreement, interest rate hedge agreement
  or other similar agreement or arrangement entered into by the Borrower which
  is designed to protect the Borrower, the Guarantors or any of the
  Subsidiaries against fluctuations in interest rates applicable under this
  Agreement, to or under which the Borrower, the Guarantors or any of the
  Subsidiaries is a party or a beneficiary on the date of this Agreement or
  becomes a party or a beneficiary hereafter;

  
	
   

  	
   

  
	
  “Investments”

  	
  shall mean
  all investments in any Person, regardless of the form of consideration paid
  therefor, directly or indirectly, whether by acquisition of shares of capital
  stock, indebtedness or other obligations or Securities or by loan, advance,
  capital contribution or otherwise; provided, however, that “Investments”
  shall not mean or include routine investments in property to be used or
  consumed in the ordinary course of business;

  
	
   

  	
   

  
	
  “IPO”

  	
  shall mean the initial public offering of the Parent’s limited
  partnership interests;

  
	
   

  	
   

  
	
  “ISM Code”

  	
  shall mean
  the International Safety Management Code for the Safe Operating of Ships and
  for Pollution Prevention constituted pursuant to Resolution A.741(18) of the
  International Maritime Organization and incorporated into the Safety of Life
  at Sea Convention and shall include any amendments or extensions thereto and
  any regulation issued pursuant thereto;

  
	
   

  	
   

  
	
  “ISPS Code”

  	
  shall mean
  the International Ship and Port Facility Code adopted by the International
  Maritime Organization at a conference in December 2002 and incorporated
  into the Safety of Life at Sea Convention and shall include any amendments or
  extensions thereto and any regulation issued pursuant thereto;

  
	
   

  	
   

  
	
  “ISSC”

  	
  shall mean
  the International Ship Security Certificate issued pursuant to the ISPS Code;

  
	
   

  	
   

  
	
  “Issuing Lender”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Judgment Currency”

  	
  shall have
  the meaning ascribed thereto in Section 12.7(a);

  
	
   

  	
   

  
	
  “Law”

  	
  shall mean
  any law, rule, regulation or official code, consent decree, constitution,
  decree, directive, enactment, guideline, injunction, interpretation,
  judgment, order, ordinance, policy

  

 

11

 

	
   

  	
  statement,
  proclamation, promulgation, requirement, rule of law, rule of
  public policy, settlement agreement, statute, or writ, of any Authority;

  
	
   

  	
   

  
	
  “L/C Supportable Obligation(s)”

  	
  means such
  obligations of any Security Party as are not inconsistent with the issuance
  policies of the Issuing Lender; no Letter of Credit may be payable (1) to
  any entity or person who is subject to sanctions issued by the United States
  Department of Commerce or to whom payment is prohibited by the Foreign Asset
  Control Regulations of the Department of the Treasury or (2) which
  otherwise is in contravention of applicable laws and regulations;

  
	
   

  	
   

  
	
  “Lender(s)”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Letter(s) of Credit”

  	
  shall have
  the meaning ascribed thereto in Section 2.10;

  
	
   

  	
   

  
	
  “Letter of Credit Availability Period”

  	
  the period
  from the Closing Date until the date that is 30 days prior to the Payment
  Date.

  
	
   

  	
   

  
	
  “Letter of Credit Fee”

  	
  shall have
  the meaning ascribed thereto in Section 13.1(b);

  
	
   

  	
   

  
	
  “Letter of Credit Outstandings”

  	
  means, at
  any time, the aggregate stated amount of all Letters of Credit issued that have
  not expired or otherwise been terminated, less any drawings previously made
  thereunder;

  
	
   

  	
   

  
	
  “Letter of Credit Participant”

  	
  shall have
  the meaning ascribed thereto in Section 2.12;

  
	
   

  	
   

  
	
  “Letter of Credit Request”

  	
  shall have
  the meaning ascribed thereto in Section 2.11;

  
	
   

  	
   

  
	
  “LIBOR Rate”

  	
  shall mean,
  with respect to any Interest Period for any Advance, the rate per annum
  determined by the Facility Agent to be (i) the rate of interest as
  published on page 3750 of the Telerate Service (or such other service as
  may be elected by the British Bankers’ Association as the information vendor
  for purposes of displaying British Bankers’ Association Interest Settlement
  Dates) as the rate per annum at which deposits are being quoted to prime
  banks in Dollars for the relevant Interest Period at the London Interbank
  Market as of 11:00 A.M. London time, on the day that is two Banking Days
  prior to the first day of such Interest Period, or (ii) if such rate
  does not appear on such page or such service for the purposes of paragraph
  (i) or the Facility Agent determines that no rate for the relevant
  period of time appears on such page or service, the annual rate of
  interest which is the arithmetic mean (rounded upwards, if necessary, to four
  decimal places) of the rates of interest supplied by the Reference Banks to
  the Facility Agent, at its request, as being the rates quoted by the

  

 

12

 

	
   

  	
  Reference
  Banks to leading banks in the London Interbank Market in the ordinary course
  of business as of 11:00 A.M. London time, on the day that is two Banking
  Days prior to the first day of such Interest Period;

  
	
   

  	
   

  
	
  “Lien”

  	
  shall mean,
  with respect to any asset, any interest in such asset securing an obligation
  owed to, or a claim by, a Person other than the owner of the asset, whether
  such interest is based on the common law, statute or contract, and including
  but not limited to the security interest or lien arising from a mortgage,
  encumbrance, pledge, conditional sale, title retention agreement or trust
  receipt or a lease, consignment or bailment for security purposes or any
  arrangement having substantially the same economic effect as any of the
  foregoing.  The term “Lien”
  shall include reservations, exceptions, encroachments, easements, rights-of-way,
  covenants, conditions, restrictions, leases and other title exceptions and
  encumbrances (including, with respect to stock, any purchase options or
  calls, stockholder agreements, voting trust agreements, buy-back agreements
  and all similar arrangements) affecting property.  For the purposes of this Agreement, a
  Person shall be deemed to be the owner of any property which it has acquired
  or holds subject to a conditional sale agreement, Capitalized Lease or other
  arrangement pursuant to which title to the property has been retained by or
  vested in some other Person for security purposes and such retention or
  vesting shall constitute a Lien;

  
	
   

  	
   

  
	
  “Majority Lenders”

  	
  shall mean
  Lenders whose aggregate Commitments exceed fifty percent (50%) of the total
  Commitments or if the Commitments have terminated, Lenders holding in the
  aggregate in excess of fifty percent (50%) of the Facility Balance;

  
	
   

  	
   

  
	
  “Mandatory Costs”

  	
  means the
  cost of complying with any applicable regulatory requirements of any relevant
  regulatory authority;

  
	
   

  	
   

  
	
  “Margin”

  	
  shall mean
  during the period from the date hereof up to the fifth (5th)
  anniversary hereof seventy hundredths of one percent (0.70%) per annum and,
  if the Extension Option is exercised, seventy-five hundredths of one percent
  (0.75%) per annum thereafter;

  
	
   

  	
   

  
	
  “Material Adverse Change”

  	
  shall mean
  the occurrence of an event or condition which (a) materially impairs the
  ability of the Borrower and/or the Guarantors to meet or perform any of their
  obligations with regard to (i) this Agreement and the financing
  arrangements established in connection herewith or therewith or (ii) any
  of their respective other obligations that are material to the

  

 

13

 

	
   

  	
  Borrower and
  the Guarantors considered as a whole or (b) materially impairs the
  rights of or benefits or remedies available to the Lenders under the
  Facility;

  
	
   

  	
   

  
	
  “Material Financial  Obligation”

  	
  means with
  respect to any Security Party a principal or face amount of Debt (in the case
  of Derivatives Obligations, determined in respect of any counterparty on a
  net basis), and arising in one or more related or unrelated transactions,
  exceeding in the aggregate $20,000,000 (or its equivalent in any other
  currency);

  
	
   

  	
   

  
	
  “Materials of Environmental Concern”

  	
  shall have the meaning ascribed thereto in Section 8(r);

  
	
   

  	
   

  
	
  “Maximum Liability Amount”

  	
  shall have
  the meaning ascribed thereto in Section 17;

  
	
   

  	
   

  
	
  “MLA(s)”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Moody’s”

  	
  shall mean
  Moody’s Investors Service, Inc.;

  
	
   

  	
   

  
	
  “Mortgages”

  	
  shall mean,
  collectively, the first preferred United States ship mortgages on the Vessels
  to be executed by the respective Vessel-Owning Guarantor which is the
  registered owner of such Vessel in favor of the Security Trustee pursuant to Section 3.1(j)(i) substantially
  in the forms set out in Exhibit I; 

  
	
   

  	
   

  
	
  “MTSA”

  	
  shall mean
  the Maritime and Transportation Security Act, 2002, as amended, inter alia,
  by Public Law 107-295;

  
	
   

  	
   

  
	
  “Multiemployer Plan”

  	
  shall mean a
  “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA) to
  which the Borrower or any ERISA Affiliate is making or accruing an obligation
  to make contributions or has within any of the preceding five plan years made
  or accrued an obligation to make contributions;

  
	
   

  	
   

  
	
  “Multiple Employer Plan”

  	
  shall mean
  an employee benefit plan, other than a Multiemployer Plan, subject to Title
  IV of ERISA to which the Borrower or ERISA Affiliate, and one or more
  employers other than the Borrower or ERISA Affiliate, is making or accruing
  an obligation to make contributions or, in the event that any such plan has
  been terminated, to which the Borrower or ERISA Affiliate made or accrued an
  obligation to make contributions during any of the five plan years preceding
  the date of termination of such plan;

  
	
   

  	
   

  
	
  “Net Debt”

  	
  shall mean
  Debt minus Cash and Cash Equivalents;

  

 

14

 

	
  “Net Interest Expense”

  	
  shall mean
  for any period, all cash interest and cash commitment fees incurred by the a
  Person less all interest and other financing income received by such Person;

  
	
   

  	
   

  
	
  “Non-Extending Lenders”

  	
  any Lender(s) who
  does not extend its respective Commitment(s) at the Borrower’s exercise
  of the Extension Option;

  
	
   

  	
   

  
	
  “Note”

  	
  shall mean
  the promissory note, to be executed by the Borrower to the order of the
  Facility Agent pursuant to Section 3.1(c), to evidence the Facility,
  substantially in the form set out in Exhibit B or in such other form as
  the Facility Agent may agree;

  
	
   

  	
   

  
	
  “Operator”

  	
  shall mean,
  in respect of any Vessel, the Person who is concerned with the operation of
  such Vessel and falls within the definition of “Company” set out in rule 1.1.2
  of the ISM Code;

  
	
   

  	
   

  
	
  “OSG”

  	
  shall have
  the meaning ascribed thereto in the Recitals;

  
	
   

  	
   

  
	
  “OSG Ship Management”

  	
  shall mean
  OSG Ship Management, Inc., a Delaware corporation;

  
	
   

  	
   

  
	
  “Other
  Taxes”

  	
  shall mean
  any and all present or future stamp or documentary Taxes or any other excise
  or property Taxes, charges or similar levies arising from any payment made
  hereunder or from the execution, delivery or enforcement of, or otherwise
  with respect to, this Agreement.  

  
	
   

  	
   

  
	
  “Parent”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Participant”

  	
  shall have
  the meaning ascribed thereto in Section 11.2;

  
	
   

  	
   

  
	
  “Payment Date”

  	
  shall mean (i) the
  date which falls on the fifth anniversary of the date hereof, or (ii) if
  the Extension Option is exercised by the Borrower pursuant to Section 2.2,
  the date which falls on the seventh anniversary of the date hereof.  If such day is not a Banking Day, the
  Payment Date shall be the immediately preceding Banking Day;

  
	
   

  	
   

  
	
  “Permitted Country(ies)”

  	
  shall mean
  any or all of the following:  United
  States of America, United Kingdom, Ireland, France, Belgium, the Netherlands,
  Germany, Sweden, Denmark, Norway, Switzerland, Finland, Austria, Spain,
  Portugal, Italy, Luxembourg, Greece, Canada, the Cayman Islands, Republic of
  Barbados, Japan, China, Hong Kong and Bermuda;

  
	
   

  	
   

  
	
  “Permitted Debt”

  	
  shall mean,
  without duplication,

  
	
   

  	
   

  
	
   

  	
  (a)   Capital
  Leases;

  

 

15

 

	
   

  	
  (b)   Indebtedness
  owing to any Creditor

  
	
   

  	
   

  
	
   

  	
  (c)   existing
  Indebtedness described in Schedule VI and any refinancing thereof which do
  not have the effect of increasing the principal amount thereof or changing
  the amortization thereof (other than to extend the same) and which are
  otherwise on terms and conditions no less favorable to any Security Party,
  the Facility Agent or any Lender, as determined by the Facility Agent, than
  the terms of the Debt being refinanced, amended or modified; and

  
	
   

  	
   

  
	
   

  	
  (d)   Debt
  consisting of intercompany loans and advances made by any Security Party to
  any other Security Party.

  
	
   

  	
   

  
	
  “Permitted Lien”

  	
  has the
  meaning ascribed thereto in Section 9.2(A)(a)

  
	
   

  	
   

  
	
  “Permitted Investments” 

  	
  shall mean with respect to any
  Person any of the following:

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Investments in commercial paper maturing in 270 days or less from the
  date of issuance which, at the time of acquisition, is rated one of the two
  highest ratings by S&P or by Moody’s or any substantially similar
  commercial paper or short-term ratings by any other nationally recognized
  credit rating agency domiciled in the United States of America or the United
  Kingdom which in the reasonable opinion of the Majority Lenders is of similar
  standing and with comparable rating categories and methodologies (a “Substitute
  Rating Agency”);

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Investments in obligations directly issued by or fully and
  unconditionally guaranteed as to principal and interest by the United States
  of America or any agency or instrumentality of the United States of America,
  in either case, maturing in three (3) years or less from the date of
  acquisition thereof;

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Investments in certificates of deposit, time deposits or bankers’
  acceptances issued by a Lender or any other bank or trust company organized
  under the laws of any Permitted Country or any state thereof, having capital,
  surplus and undivided profits aggregating at least $500,000,000 maturing in
  270 days or less from the date of acquisition thereof;

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Investments in indebtedness of any governmental body of the United
  States of America or any State or political subdivision thereof, which
  indebtedness is at all times

  

 

16

 

	
   

  	
   

  	
  accorded one of the two highest ratings by S&P, Moody’s, or a
  Substitute Rating Agency maturing not later than three (3) years from
  the date of acquisition thereof (or, if maturing more than three (3) years
  after the date of acquisition, which is subject to a put at par by the holder
  thereof on a weekly or more frequent basis);

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Investments in money market investment programs which are classified
  as a current asset in accordance with GAAP and which are administered by
  reputable financial institutions having capital, surplus and undivided
  profits of at least $500,000,000 and which are registered under the
  Investment Company Act of 1940, as amended; and

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  investments in money market and auction rate preferred stocks rated
  “A” or better by S&P or Moody’s or a similar category by a Substitute
  Rating Agency;

  
	
   

  	
   

  
	
  “Person”

  	
  shall mean
  an individual, partnership, corporation, limited liability company, business
  trust, bank, trust company, joint venture, association, joint stock company,
  trust or other unincorporated organization, whether or not a legal entity, or
  any government or agency or political subdivision thereof;

  
	
   

  	
   

  
	
  “Plan”

  	
  shall mean
  any employee benefit plan (other than a Multiemployer Plan or a Multiple
  Employer Plan) covered by Title IV of ERISA or Section 302 of
  ERISA;

  
	
   

  	
   

  
	
  “Reference Banks”

  	
  shall mean
  DnB NOR and ING;

  
	
   

  	
   

  
	
  “Register”

  	
  shall have
  the meaning ascribed thereto in Section 11.4;

  
	
   

  	
   

  
	
  “Registration Statement”

  	
  shall mean
  the Registration Statement on Form S-1 (Registration No. 333-145341),
  and all amendments thereto as filed by the Parent prior to the Closing Date;

  
	
   

  	
   

  
	
  “Rentals”

  	
  shall mean
  and include as of the date of any determination thereof all fixed payments
  (including as such all payments which the lessee is obligated to make to the
  lessor on termination of the lease or surrender of the property) payable by a
  Person, as lessee or sublessee under a lease of real or personal property
  (excluding (i) fixed payments on any item of personal property involving
  rentals of less than $1,000 per month each and $10,000 per month in the
  aggregate and (ii) hire and other amounts payable under any time charter
  of a vessel for a remaining period less than twelve (12) months, including
  any optional extensions or renewals) but shall be exclusive of any amounts
  required to be paid by such Person, directly or indirectly (whether or not

  

 

17

 

	
   

  	
  designated
  as rents or additional rents), on account of maintenance, repairs, insurance,
  taxes and similar charges incurred by such lessee or sublessee.  Fixed rents under any so-called “percentage
  leases” shall be computed solely on the basis of the minimum rents, if any,
  required to be paid by the lessee regardless of sales volume or gross
  revenues;

  
	
   

  	
   

  
	
  “Revised Facility Amount”

  	
  shall have
  the meaning ascribed thereto in Section 2.2;

  
	
   

  	
   

  
	
  “S&P”

  	
  shall mean
  Standard & Poor’s Ratings Services, a division of McGraw-Hill Inc.;

  
	
   

  	
   

  
	
  “Sale and Leaseback Transaction”

  	
  shall mean any arrangement with any Person providing for the leasing by
  the Parent or a Subsidiary for a period, including renewals, in excess of
  three years of any asset which has been or is to be sold or transferred more
  than 180 days after the acquisition or occupancy thereof or the completion or
  construction and commencement of full operation thereof, whichever is later,
  by the Parent or any Subsidiary to such Person;

  
	
   

  	
   

  
	
  “Securities”

  	
  shall have
  the same meaning as in Section 2(1) of the Securities Act of 1933,
  as amended;

  
	
   

  	
   

  
	
  “Securities and Exchange  Commission”

  	
  shall mean
  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 Exchange Act;

  
	
   

  	
   

  
	
  “Security Documents”

  	
  shall mean
  the Mortgages, the Assignments and any other documents that may be executed
  as security for the Facility and the Borrower’s and each of the Guarantors’
  obligations in connection therewith;

  
	
   

  	
   

  
	
  “Security Party”

  	
  shall mean
  each of the Borrower and the Guarantors;

  
	
   

  	
   

  
	
  “Security Trustee”

  	
  shall have
  the meaning ascribed thereto in the preamble;

  
	
   

  	
   

  
	
  “Shipbuilding Contract Assignment(s)”

  	
  shall mean
  the first priority assignments over the shipbuilding contracts for Hull 8015
  and Hull 8016;

  
	
   

  	
   

  
	
  “Shipping and Related Businesses” 

  	
  shall mean
  any one or all of the following: owning, chartering, leasing, crewing,
  navigating, managing, supplying or operating or repairing commercial vessels
  of all kinds, including but not limited to cargo ships, liners, container
  ships, passenger vessels, tugs, barges and ferries; owning, operating or
  managing transportation assets ancillary to or in furtherance of the

  

 

18

 

	
   

  	
  transportation
  of freight and passengers by water; owning, operating or managing terminals
  and other facilities of any kind incidental or ancillary to or in furtherance
  of the transportation of freight and passengers by water; and owning,
  managing or operating terminals, docks, piers, quays, wharves, dry docks,
  storage facilities and port facilities incidental or ancillary to or in
  furtherance of the transportation of freight and passengers by water;

  
	
   

  	
   

  
	
  “SMC”

  	
  means the
  safety management certificate issued in respect of any of the Vessel in
  accordance with rule 13 of the ISM Code;

  
	
   

  	
   

  
	
  “Stated Amount”

  	
  means with
  respect to each Letter of Credit, the maximum amount available to be drawn
  thereunder (regardless of whether any conditions for drawing could then be
  met);

  
	
   

  	
   

  
	
  “subsidiary”

  	
  shall mean
  as to any particular Person, at any date, any corporation, limited liability
  company, partnership or other entity of which more than 50% (by number of
  votes of the Voting Stock or other ownership interests having ordinary voting
  power) are beneficially owned or controlled, directly or indirectly, by such
  Person and/or one or more other subsidiaries of such Person;

  
	
   

  	
   

  
	
  “Subsidiary(ies)” 

  	
  shall mean
  a/the subsidiary(ies) of the Parent;

  
	
   

  	
   

  
	
  “Taxes”

  	
  shall mean
  any present or future income or other taxes, levies, duties, charges, fees,
  deductions or withholdings of any nature now or hereafter imposed, levied,
  collected, withheld or assessed by any taxing authority;

  
	
   

  	
   

  
	
  “Termination Event”

  	
  shall mean (i) a
  “reportable event,” as such term is defined in Section 4043 of ERISA, (ii) the
  withdrawal of the Borrower or any ERISA Affiliate from a Multiple Employer
  Plan during a plan year in which it was a “substantial employer,” as such
  term is defined in Section 4001(a)(2) of ERISA, or the incurrence
  of liability by the Borrower or any ERISA Affiliate under Section 4064
  of ERISA upon the termination of a Multiple Employer Plan, (iii) the
  filing of a notice of intent to terminate a Plan under Section 4041 of
  ERISA or the termination or the treatment of a Multiemployer Plan amendment
  as a termination under Section 4041A of ERISA, (iv) the institution
  of proceedings to terminate a Plan or a Multiemployer Plan or (v) any
  other event or condition which might constitute grounds under Section 4042
  of ERISA for the termination of, or the appointment of a trustee to
  administer, any Plan or Multiemployer Plan;

  

 

19

 

	
  “Total Capitalization”

  	
  shall mean
  the sum of (i) Funded Indebtedness plus (ii) Consolidated Net
  Worth;

  
	
   

  	
   

  
	
  “Transaction Documents”

  	
  shall mean
  each of this Agreement, the Note, the Security Documents and any other
  instrument, document or other agreement delivered in connection herewith or
  therewith,;

  
	
   

  	
   

  
	
  “Vessels”

  	
  shall mean
  the Vessels listed in Schedule I hereto, registered in the name of the
  relevant Vessel-Owning Guarantor or any vessel acquired by the Borrower or a
  Vessel-Owning Guarantor in accordance with Section 9.3; 

  
	
   

  	
   

  
	
  “Vessel-Owning Guarantor(s)”

  	
  shall have
  the meaning ascribed thereto in the preamble; 

  
	
   

  	
   

  
	
  “Voting Stock”

  	
  shall mean,
  with respect to any Person, Securities of any class or classes, the holders
  of which are ordinarily, in the absence of contingencies, entitled to elect a
  majority of the corporate directors (or Persons performing similar functions)
  of such Person; and

  
	
   

  	
   

  
	
  “Withdrawal Liability”

  	
  shall have
  the meaning given to such term under Part 1 of Subtitle E of Title IV of
  ERISA.  

  

 

1.2           Computation
of Time Periods; Other Definitional Provisions.  In this Agreement and the other Transaction
Documents, in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words “to”
and “until” each mean “to but excluding”; words importing either gender include
the other gender; references to “writing” include printing, typing, lithography
and other means of reproducing words in a tangible visible form; the words “including,”
“includes” and “include” shall be deemed to be followed by the words “without
limitation”; references to agreements and other contractual instruments
(including this Agreement and the other Transaction Documents) shall be deemed
to include all subsequent amendments, amendments and restatements, supplements,
extensions, replacements and other modifications to such instruments (without,
however, limiting any prohibition on any such amendments, extensions and other
modifications by the terms of this Agreement or the other Transaction
Documents); references to any matter that is “approved” or requires “approval”
of a party shall mean approval given in the sole and absolute discretion of
such party unless otherwise specified; words importing the singular number only
shall include the plural and vice versa (except as indicated), as may be
appropriate; references to any Person shall include such Person, its successors
and permitted assigns and transferees.

 

1.3           Accounting
Terms.  Unless otherwise specified
herein, all accounting terms used in this Agreement, the Note and in the
Security Documents shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Facility Agent or to the Lenders under this Agreement shall be prepared, in
accordance with GAAP; provided that, if the Borrower notifies the Facility
Agent that the

 

20

 

Borrower requests an amendment to any provision hereof
to eliminate the effect of any change occurring after the Closing Date in GAAP
or in the application thereof on the operation of such provision (or if the
Facility Agent notifies the Borrower that the Majority Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.

 

1.4           Certain
Matters Regarding Materiality.  To
the extent that any representation, warranty, covenant or other undertaking of
the Borrowers in this Agreement is qualified by reference to those which are
not reasonably expected to result in a “Material Adverse Change” or language of
similar import, no inference shall be drawn therefrom that the Facility Agent,
the Security Trustee or any Lender has knowledge or approves of any
noncompliance by such Borrower with any governmental rule.

 

1.5           Forms
of Documents.  Except as otherwise
expressly provided in this Agreement, references to documents or certificates “substantially
in the form” of exhibits to another document shall mean that such documents or
certificates are duly completed in the form of the related exhibits with
substantive changes subject to the provisions of Section 18.6 of this
Agreement, as the case may be, or the correlative provisions of the Transaction
Documents.

 

2.             THE FACILITY

 

2.1           Purposes.  The Lenders shall make the Facility available
to the Borrower for the purposes of (1) refinancing in whole or in part
the Parent’s outstanding debt to OSG, (2) financing the pre-delivery and
post-delivery costs of Hull 8015 and Hull 8016, and the cost of retrofitting
Barge OSG 243, (3) providing funds for general company and working capital
purposes of the Borrower and its subsidiaries and (4) at the request of
the Borrower, to issue Letter(s) of Credit as provided for in this Section 2.

 

2.2           Extension
Option.  At any time on or after the
second anniversary of the Closing Date until the date which is ninety (90) days
prior to the Initial Payment Date, the Borrower may request, by at least sixty
(60) days written notice to the Facility Agent, that the Lenders extend the
Initial Payment Date by an additional 24 months from the fifth anniversary of
the Closing Date to the seventh anniversary of the Closing Date (the “Extension
Option”).  The Lenders who agree to
extend their Commitment (the “Extending Lenders”) shall do so at their
Closing Date Commitment level.  Once a
Lender agrees to extend its Commitment, the request of the Borrower is
irrevocable.  If less than all of the
Lenders agree to extend their Commitments, the Facility Agent shall notify the
Extending Lenders and each Extending Lender shall inform the Facility Agent
within 30 days of such notice of the amount, if any, of the Non-Extending
Lenders’ Commitments it is willing to accept and assume on the Initial Payment
Date and shall enter into an Assignment and Assumption Agreement with such
Non-Extending Lender(s) with respect to such Commitment or portion
thereof, which shall be effective on the Initial Payment Date.  If, after giving effect to the assignments
described above all of the Lenders’ Commitments have not been extended and or
assumed, the Borrower may arrange for one or more Extending Lenders or other
assignees eligible to

 

21

 

become Lenders to the Facility to accept and assume
the unassigned amounts of the commitments of the Non-Extending Lenders or
reduce the Facility on the Initial Payment Date to the aggregate amount of the
commitments of the Extending Lenders (the “Revised Facility Amount”).  For the avoidance of doubt the parties hereto
agree that the Commitment of a Non-Extending Lender shall not terminate until
the Initial Payment Date.  Amounts
outstanding on the Initial Payment Date in excess of the Revised Facility
Amount shall be repaid on the Initial Payment Date.

 

2.3           Making
of the Advances.  Each of the
Lenders, relying upon each of the representations and warranties set out in Section 8,
hereby severally, and not jointly, agrees with the Borrower that, subject to
and upon the terms of this Agreement, it will on each Drawdown Date make its
ratable portion of the relevant Advance available through the Facility Agent,
to the Borrower in an amount not to exceed its Commitment.

 

2.4           Advance
Availability Period.  Subject to
satisfaction of the terms and conditions set forth herein, the Facility will be
available for drawings on a revolving basis until the earlier of (i) one (1) month
prior to the Payment Date or (ii) the date on which the Facility is
permanently reduced to zero and the Lenders are no longer required to make
Advances hereunder.  The maximum number
of Advances that may be outstanding at any one time is ten (10).

 

2.5           Drawdown
Notice.  When the Borrower seeks to
draw an Advance hereunder, it shall serve a written notice (a “Drawdown
Notice”) on the Facility Agent (which shall promptly furnish a copy to each
Lender) no later than 11:00 A.M., New York time, at least three (3) Banking
Days prior to the date of the proposed Advance except in the case of the
initial Advance in which case the Borrower shall give at least one (1) Banking
Day prior notice.  Each Drawdown Notice
shall specify (a) the date of the proposed borrowing (which shall be a
Banking Day), (b) the principal amount of the Advance to be made by the
Lenders on that date, (c) the Interest Period requested by the Borrower,
which period may end no later than the Payment Date, and (d) the
disbursement instructions for the proceeds of such Advance.  Each Drawdown Notice shall be effective upon
receipt by the Facility Agent, shall be irrevocable and shall be in the form
set out in Exhibit C.

 

2.6           Effect
of Drawdown Notice.  Each Drawdown
Notice shall be deemed to constitute a warranty by the Borrower:  (a) that the representations and
warranties stated in Section 8 are true and correct on the date of such
Drawdown Notice and will be true and correct on the applicable Drawdown Date as
if made on such date except for such representations and warranties that relate
to a specific earlier date, (b) that no Default or Event of Default has
occurred and is continuing on such Drawdown Date or would result from the
making of a Advance, and (c) that the Conditions Precedent stated in
Sections 3.1 and 3.2 have been satisfied.

 

2.7           Notation
of Advances.  Each Advance made by
the Lenders to the Borrower may be evidenced by a notation of the same made by
the Facility Agent on the grid attached to the Note, which notation, absent
manifest error, shall be prima facie evidence of the amount of the relevant
Advance.

 

22

 

2.8           Several
Obligations.  The failure of any
Lender to make its pro rata portion of the relevant Advance on the date
specified therefore shall not relieve any other Lender of its obligation to
make its pro  rata portion of such Advance on such date, and
neither the Facility Agent nor any Lender shall be responsible for the failure
of any other Lender to make its pro rata portion of an Advance.

 

2.9           Pro
Rata Treatment.  Each borrowing from
the Lenders hereunder shall be made from the Lenders, each payment of fees and
expenses under Section 13 shall be made for account of the Lenders, and
each termination or reduction of the amount of the Commitments shall be applied
to the Commitments of the Lenders, pro rata according to the amounts of their
respective Commitments; each payment or prepayment of principal of any portion
of the Facility Balance by the Borrower shall be made for account of the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the Facility Balance held by the Lenders; and each payment of interest on the
Facility Balance by the Borrower shall be made for the account of the Lenders
pro rata in accordance with the amounts of interest due and payable to the
respective Lenders.

 

2.10         Letters
of Credit.  (a) Subject to and
upon the terms and conditions herein set forth, the Borrower may request that
the Issuing Lender at any time during the Letter of Credit Availability Period,
issue for the account of the Borrower and for the purposes of the Borrower, the
Parent or any Subsidiary and in support of L/C Supportable Obligations, and
subject to and upon the terms and conditions herein set forth, and the Issuing
Lender agrees to issue from time to time, irrevocable standby letters of credit
denominated in Dollars in such form as may be approved by the Issuing Lender
(singly, a “Letter of Credit” and collectively, the “Letter(s) of
Credit”).  The maximum number of
Letters of Credit that may be outstanding at any one time is ten (10).

 

(b)           Notwithstanding
anything to the contrary contained in this Agreement, no Letter of Credit shall
be issued, the Stated Amount of which, (i) is greater than Twenty Five
Million Dollars ($25,000,000), or (ii) when added to the Letter of Credit
Outstandings would exceed Twenty Five Million Dollars ($25,000,000), or (iii) when
added to the Letter of Credit Outstandings and the Facility Balance, would
exceed the maximum principal amount available under the Facility.

 

(c)           Each Letter of Credit
shall terminate within 12 months after the date of issuance but any such Letter
of Credit shall be extendable upon the agreement of the Borrower and the
Issuing Lender for successive periods of up to 12 months.  No Letter of Credit shall be issued, which
would exceed the Payment Date.

 

2.11         Letter
of Credit Request.  (a) At any
time during the Letter of Credit Availability Period, whenever the Borrower
wishes that a Letter of Credit be issued, the Borrower shall give the Issuing
Lender written notice (a “Letter of Credit Request”) substantially in
the form of Exhibit D prior to 11:00 A.M., New York time, at least
three (3) Banking Days prior to the proposed date of issuance (which shall
be a Banking Day), which Letter of Credit Request shall include any documents
that the Letter of Credit Issuer may reasonably require in connection
therewith.  The Letter of Credit Request
shall be irrevocable.  The Issuing Lender
shall promptly notify each Lender of each Letter of Credit Request and the
Issuing Lender

 

23

 

shall, on the date of each issuance of a Letter of
Credit by it, give each Lender and the Borrower written notice of the issuance
of such Letter of Credit.

 

(b)           The making of each
Letter of Credit Request shall be deemed to be a representation and warranty by
the Borrower to the Lenders that such Letter of Credit may be issued in
accordance with, and will not violate the requirements of, Section 2.10.  Unless the Issuing Lender has received notice
from the Borrower, any other Security Party or the Lenders before it issues a
Letter of Credit that one or more of the conditions specified in Section 3
has not been satisfied, or that the issuance of such Letter of Credit would violate
Section 2.10, then the Issuing Lender shall, subject to the terms and
conditions of this Agreement, issue the requested Letter of Credit on behalf of
the Borrower in accordance with the Issuing Lender’s usual and customary
practices.

 

2.12         Letter
of Credit Participation.  (a) Immediately
upon the issuance by the Issuing Lender of a Letter of Credit, the Issuing
Lender shall be deemed to have sold and transferred to each Lender, and each
Lender (each a “Letter of Credit Participant”) shall be deemed irrevocably
and unconditionally to have purchased and received from the Issuing Lender,
without recourse or warranty, an undivided interest and participation, in
proportion to such Lender’s Commitment, in such Letter of Credit, each
substitute letter of credit, each drawing or payment made thereunder and the
obligations of the Borrower under this Agreement with respect thereto (although
the Letter of Credit Fee shall be payable directly to the Facility Agent for
the account of the Letter of Credit Participants as provided in Section 13.1(b))
and any security therefor or guaranty pertaining thereto.  Upon any change in a Lender’s Commitment
pursuant to Section 11.1 or 11.2, it is hereby agreed that, with respect
to all outstanding Letters of Credits and unpaid drawings relating thereto,
there shall be an automatic adjustment to the participations pursuant to this Section 2.12
to reflect the adjusted obligations in respect of the Letter of Credits of the
assignor and assignee Lender, as the case may be.

 

(b)           In determining whether
to pay under any Letter of Credit, the Issuing Lender shall not have any
obligation relative to the other Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to substantially comply on their face with
the requirements of such Letter of Credit. 
Any action taken or omitted to be taken by the Issuing Lender under or
in connection with any Letter of Credit issued by it shall not create for the
Issuing Lender any resulting liability to the Borrower, any other Security
Party, any Lender or any other Person unless such action is taken or omitted to
be taken with gross negligence or willful misconduct on the part of the Issuing
Lender (as determined by a court of competent jurisdiction in a final and
non-appealable decision).

 

(c)           The obligations of the
Letter of Credit Participants to make payments to the Issuing Lender with
respect to Letters of Credit shall be irrevocable and not subject to any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:

 

24

 

(i)            any
lack of validity or enforceability of this Agreement or any of the other
Transaction Documents;

 

(ii)           the
existence of any claim, setoff, defense or other right which the Borrower, the
Parent or any of the Subsidiaries may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting), the Facility Agent, any
Letter of Credit Participant, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the
Borrower, the Parent or any of the Subsidiaries and the beneficiary named in
any such Letter of Credit);

 

(iii)          any draft, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

 

(iv)          the
surrender or impairment of any security for the performance or observance of
any of the terms of any of the Credit Documents; or

 

(v)           the
occurrence of any Default or Event of Default.

 

2.13         Letter
of Credit Payments Deemed Advances. 
The Borrower hereby agrees that any payment or disbursement made by the
Issuing Lender under any Letter of Credit shall be deemed an Advance in Dollars
and shall bear interest for each day from the date of such payment or
disbursement at the Applicable Rate.  The
Issuing Lender shall give prompt notice to the Borrower and the Lenders of each
payment or disbursement and the amount thereof in Dollars under a Letter of
Credit.  The Borrower’s obligation to
repay any Advance deemed made under this Section 2.13 (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender or
any Lender, including, without limitation, any defense based upon the failure
of any drawing under a Letter of Credit to conform to the terms of the Letter
of Credit (other than the failure of the Issuing Lender to determine that any
documents required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit) or any non-application or misapplication by the beneficiary
of the proceeds of such drawing; provided, however, that the Borrower shall not
be obligated to reimburse the Issuing Lender for any wrongful payment made by
the Issuing Lender with respect to a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
the Issuing Lender.

 

3.             CONDITIONS

 

3.1           Conditions
Precedent to the Availability of the Facility.  The obligation of the Lenders to make the
Facility available to the Borrower to make the initial Advance or the issuance
of any Letter of Credit on the Closing Date under this Agreement shall be expressly
subject to the following conditions precedent:

 

25

 

(a)           Authority.  The Facility Agent shall have received the
following documents in form and substance satisfactory to the Facility Agent
and its legal advisers no later than the Drawdown Date of the initial Advance:

 

(i)            copies,
certified as true and complete by an officer of each of the Security Parties,
of the resolutions of its board of directors and, with respect to the Borrower
and the Vessel-Owning Guarantors, and, if necessary, shareholders evidencing
approval of the Transaction Documents to which each is a party and authorizing
an appropriate officer or officers or attorney-in-fact or attorneys-in-fact to
execute the same on its behalf;

 

(ii)           copies,
certified as true and complete by an officer of each of the Security Parties,
of all documents evidencing any other necessary action, approvals or consents
with respect to the Transaction Documents to which each is a party and the
transactions contemplated hereby and thereby;

 

(iii)          copies, certified as true and complete by an
officer of each of the Security Parties, of the constitutional documents of
each Security Party and all amendments thereto;

 

(iv)          certificate
of the jurisdiction or formation, as the case may be, of each Security Party as
to the good standing thereof; and

 

(v)           a
certificate signed by an authorized officer of each of the Security Parties to
the effect that (A) no Default or Event of Default shall have occurred and
be continuing, (B) the representations and warranties of such Security
Party contained in this Agreement are true and correct as of the Drawdown Date
of the Initial Advance, except for such representations and warranties that
relate to a specific earlier date and (C) sets out specimen signatures for
the officers who are authorized to be signatories to this Agreement or any of
the other Transaction Documents or any documents related thereto.

 

(b)           This Agreement.  Each of the Security Parties shall have duly
executed and delivered this Agreement to the Facility Agent.

 

(c)           The Note.  The Borrower shall have duly executed and
delivered the Note to the Facility Agent.

 

(d)           Fees.  The Creditors shall have received payment in
full of all other fees and expenses due to each thereof pursuant to the terms
hereof on the date when due including, without limitation, all fees and
expenses due under the Fee Letters and Sections 13.1 and 13.2.

 

(e)           Environmental Claims.  The Lenders shall be satisfied that none of
the Security Parties is subject to any Environmental Claim which could
reasonably be expected to result in a Material Adverse Change.

 

(f)            Legal Opinions.  The Facility Agent shall have received
opinions addressed to the Agents and the Lenders from James I. Edelson, Esq.,
general counsel to OSG

 

26

 

and Seward &
Kissel LLP, special counsel to the Facility Agent, in such form as the Facility
Agent may agree, as well as such other legal opinions as the Lenders shall have
reasonably required as to all or any matters under the laws of the State of
Delaware, the United States of America and the State of New York covering the
conditions and representations and warranties which are the subjects of
Sections 3 and 8, respectively.

 

(g)           Registration
Statement.  The Facility Agent shall
have received a copy of the Registration Statement and the Registration
Statement shall have been declared “effective” by the Securities and Exchange
Commission.

 

(h)           Vessel Documents.  The Facility Agent shall have received
evidence satisfactory to it and its counsel that each Vessel (other than Hull
8015 and Hull 8016):

 

(i)            is
registered in the name of the relevant Vessel-Owning Guarantor as set forth in
Schedule III under the United States flag, free of all liens and encumbrances
of record other than the Mortgage and the other Permitted Liens, which Mortgage
shall have been submitted to the National
Vessel Documentation Center for recordation on or prior to the Closing Date;

 

(ii)           is
insured in accordance with the provisions of its Mortgage and all requirements
of its Mortgage in respect of such insurance have been fulfilled (including,
but not limited to, letters of undertaking from the insurance brokers,
including confirmation notices of assignment, notices of cancellation and loss
payable clauses acceptable to the Facility Agent);

 

(iii)          is classed in the highest classification and
rating for vessels of the same age and type with its Classification Society
without any material outstanding recommendations; and

 

(iv)          the
technical and/or operational management for each Vessel is being provided by
OSG Ship Management.

 

(i)            Security Documents.  Each of the Vessel-Owning Guarantors shall
have executed and delivered to the Security Trustee:

 

(i)            the
Mortgage on the Vessel owned thereby, except for Hull 8015 and Hull 8016 which
Mortgages shall be executed and delivered upon delivery of the respective
Vessel to the relevant Vessel-Owning Guarantor, which shall have been recorded
in accordance with the laws of the United States of America so as to constitute
a first preferred mortgage lien under United States law;

 

(ii)           the
Insurances Assignment in respect of the Vessel owned thereby, except for Hull
8015 and Hull 8016 which Insurances Assignment shall be executed and delivered
upon delivery of the respective Vessel to the relevant Vessel-Owning Guarantor;

 

(iii)          the Earnings Assignment in respect of the
Vessel owned thereby, except for Hull 8015 and Hull 8016 which Earnings
Assignment shall be executed

 

27

 

and delivered upon delivery of the respective Vessel to the relevant
Vessel-Owning Guarantor;

 

(iv)          the
Assignment of Shipbuilding Contracts in respect of the Hull 8015 and Hull 8016
Shipbuilding Contracts;

 

(v)           the
Assignment Notices with respect to the Vessel owned thereby; and

 

(vi)          such
Uniform Commercial Code Financing Statements (Forms UCC-1) as the Security
Trustee shall require.

 

(j)            IAPPC, ISM and ISPS
Code.  The Facility Agent shall have
received a copy of the DOC, SMC, ISSC and IAPPC for each Vessel.

 

(k)           Know Your Customer
Information.  The Lenders shall have
received such documentation and other evidence requested by any Lender in order
for such Lender to carry out and be satisfied with the results of all necessary
“know your customer” or other checks it is required to carry out in connection
with the transactions contemplated by this Agreement, the Note and the Security
Documents.

 

(l)            Vessel Appraisals.  The Facility Agent shall have received
valuations of the Fair Market Value of each Vessel.

 

(m)          Loan to Value Ratio.  As of the Closing Date, the ratio of the
Facility to the value of the Vessels, based on the fleet valuations delivered
pursuant to Section 3.1(m), shall be no more than .65 to 1.00.

 

3.2           Further
Conditions Precedent.  On each
Drawdown Date, the obligation of the Lenders to make any Advance available to
the Borrower or issue any Letter of Credit on behalf of the Borrower shall be
expressly conditional upon:

 

(a)           Drawdown Notice;
Letter of Credit Request.  The
Facility Agent having received a Drawdown Notice in accordance with the terms
of Section 2.5 or a Letter of Credit Request in accordance with the terms
of Section 2.11, as applicable.

 

(b)           Representations and
Warranties.  The representations stated
in Section 8 being true and correct as if made on that date except for
such representations and warranties that relate to a specific earlier date.

 

(c)           No Default.  No Default or Event of Default having
occurred and be continuing or resulting from the making of an Advance.

 

(d)           No Material Adverse
Change.  There being no Material
Adverse Change since October 29, 2007.

 

28

 

(e)           NYSE Listing; IPO
Proceeds.  The Parent being listed on
the New York Stock Exchange and following the consummation of the IPO the
Parent shall receive gross proceeds from its IPO in an amount equal to or
greater than $100,000,000.

 

(f)            Maritime
Administration Approval.  Luxmar
Tanker, LLC and Maremar Tanker LLC having obtained, within thirty (30) days of
the date hereof, pre-approval from the United States Maritime Administration,
in form and substance satisfactory to the Administrative Agent, for the
possible transfer of its respective Vessel upon the exercise of the Security
Trustee’s rights under the respective Mortgage to a party not qualified to own
and document a vessel under United States flag and/or the re-documentation of
such Vessel under foreign flag.

 

3.3           Breakfunding
Costs.  In the event that, on the
date specified for the making of the Advance in the Drawdown Notice, the
Lenders shall not be obliged under this Agreement to make such Advance
available under this Agreement, the Borrower shall indemnify and hold the
Lenders fully harmless against any losses which the Lenders (or any thereof)
may sustain as a result of borrowing or agreeing to borrow funds to meet the
drawdown requirement of such Drawdown Notice and the certificate of the
relevant Lender or Lenders shall, absent manifest error, be conclusive and
binding on the Borrower as to the extent of any such losses.

 

3.4           Satisfaction
after Drawdown.  Without prejudice to
any of the other terms and conditions of this Agreement, in the event all of
the Lenders elect, in their sole discretion, to make an Advance prior to the satisfaction
of all or any of the conditions referred to in Sections 3.1 and 3.2, the
Borrower hereby covenants and undertakes to satisfy or procure the satisfaction
of such condition or conditions within seven (7) days after the
Drawdown Date (or such longer period as the Majority Lenders, in their sole
discretion, may agree).

 

4.             REPAYMENT AND
PREPAYMENT

 

4.1           Mandatory
Repayment.  (a)  All amounts
outstanding on the Payment Date shall be repaid in full on the Payment Date.

 

(b)           If less than all of the
Lenders agree to extend their Commitment and the Commitments of the
Non-Extending Lenders are not assumed by another Lender or assignee, any
amounts outstanding in excess of the Revised Facility Amount shall be repaid on
the Initial Payment Date.

 

(c)           The Facility Amount or
Revised Facility Amount, as applicable, will be reduced (including, if
necessary, by the repayment of outstanding Advances) upon any of the Vessels
being sold, lost or declared an actual or constructive total loss in an amount
equal to the then total Facility Amount or Revised Facility Amount, multiplied
by a fraction, the numerator of which is the most recent Fair Market Value of
such Vessel in the most recent appraisal delivered to the Facility Agent and
the denominator of which is the aggregate of the Fair Market Value in the most
recent appraisal delivered to the Facility Agent of all Vessels.  In the event of any such sale or total loss
and in lieu of prepaying the Facility or a part thereof, the Borrower may
substitute a Vessel with a vessel acceptable to the Lenders in their sole
discretion pursuant to Section 9.3. 
Notwithstanding the foregoing, the parties hereto agree that no
repayment shall be required pursuant to this Section 4.1(c) in
connection with the replacement of the

 

29

 

SEAFARER and FREEDOM with
Hull 8015 and 8016, which replacements shall not require consent of the Lenders
or any of them.

 

(d)           If at any time the
aggregate amount outstanding under the Facility exceeds the Facility Amount or
Revised Facility Amount, as applicable, an immediate repayment will be required
equal to such excess.

 

4.2           Voluntary
Prepayment.  The Borrower may, at its option, upon three (3) Banking
Days written notice, prepay any outstanding Advance or any portion of the
Facility Balance, without penalty, provided that if such prepayment is made on
a day other than the last day of the Interest Period of such Advance the
Borrower shall compensate the Lenders and Participants or any thereof for any
loss, cost or expense incurred by them as a result of a prepayment made on any
day other than the last day of an Interest Period.  Each prepayment shall be in a minimum amount
of Five Million Dollars ($5,000,000) plus any One Million Dollar ($1,000,000)
multiple thereof or the full amount of the then outstanding Advances.  Subject to the limits and upon the conditions
herein provided (including the reductions of the Commitments provided in Section 4.3),
the Borrower may from time to time prepay the Advances and thereafter re-borrow
such Advances or a portion thereof.

 

4.3           Optional
Permanent Reduction of Facility.  The
Borrower shall have the right, at any time and from time to time, to, without
penalty, permanently reduce the Facility, provided that the Facility Agent
receives five (5) business days prior written notice of such reduction and
the Lenders are reimbursed for any breakage costs as provided in Section 12.6
with respect to any Advances, or portions thereof, that are prepaid on any day
other than the last day of the applicable Interest Period(s) in the event
that such prepayment is necessary to reduce the Facility Balance so that the
aggregate amount of the Advances outstanding do not exceed the amount available
under the Facility after giving effect to any such permanent reduction in the
Facility.  Each such permanent reduction
shall be in an integral multiple of One Million Dollars ($1,000,000) with a
minimum amount of Five Million Dollars ($5,000,000).  Amounts permanently reduced cannot be
reinstated and are not available for re-borrowing.

 

4.4           Borrower’s
Obligations Absolute.  The Borrower’s
obligations to pay each Creditor hereunder and under the Note shall be
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms hereof and thereof, under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrowers or any of them may have or have had against the Creditors.

 

5.             INTEREST AND RATE

 

5.1           Payment
of Interest; Interest Rate.  (a) The
Borrower hereby agrees to pay to the Lenders as primary obligor interest on the
unpaid principal amount of each Advance for the period commencing on the
Drawdown Date of such Advance or if such Advance is a deemed Advance pursuant
to Section 2.13 the date of the relevant drawing under the Letter of
Credit until but not including the stated maturity thereof (whether by
acceleration or otherwise) or the date of prepayment thereof at the Applicable
Rate which shall be the rate per annum which is equal to the aggregate of (i) the
LIBOR Rate for the relevant Interest Period plus (ii)

 

30

 

the Margin plus (iii) Mandatory Costs.  The Applicable Rate with respect to the
Advance shall be determined by the Facility Agent at or about 11:00 A.M.
New York time two (2) Banking Days prior to the first day of the relevant
Interest Period.  The Facility Agent
shall promptly notify the Borrower and the Lenders in writing of the Applicable
Rate and the duration of each Interest Period as and when determined.  Each such determination, absent demonstrative
error, shall be conclusive and binding upon the Borrower.

 

(b)           Notwithstanding the
foregoing, the Borrower hereby agrees that after the occurrence and during the
continuance of an Event of Default, the Facility Balance shall bear interest at
a rate per annum equal to the Default Rate. 
In addition, after the occurrence and during the continuance of an Event
of Default, the Borrower hereby promise to pay interest on the Facility Balance
or any installment thereof and (to the extent that the payment of such interest
shall be legally enforceable) on any overdue installment of interest, and on
any other amount payable by the Borrower hereunder which shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise), for the
period commencing on the due date thereof until but not including the date the
same is paid in full at the Default Rate.

 

(c)           Except as provided in
the next sentence, accrued interest shall be payable on the last day of each
Interest Period, provided, however, that if the Borrower shall select an
Interest Period which is longer than three months, interest shall be payable
quarterly in arrears.  Interest payable at the Default Rate
shall be payable from time to time on demand of the Facility Agent.  No Interest Period shall extend beyond the
Payment Date.

 

5.2           Calculation
of Interest.  All interest shall
accrue from day-to-day and be calculated on the actual number of days elapsed
and on the basis of a three hundred sixty (360) day year.

 

5.3           Maximum
Interest.  Anything in this Agreement
or the Note to the contrary notwithstanding, the interest rate on any Advance
shall in no event be in excess of the maximum rate permitted by Applicable Law.

 

5.4           Interest
Elections.  (a) On the last day
of each Interest Period, with respect to any Advance, the Borrower may elect to
continue such Advance for one or more new Interest Periods as provided in this Section 5.

 

(b)           To make an election pursuant
to this Section 5, the Borrower shall notify the Facility Agent of such
election in writing by hand delivery or facsimile no later than 11:00 A.M.
New York time at least three (3) Banking Days prior to the expiration of
the then current Interest Period relating to such Advance (each an “Interest
Election Request”). Each Interest Election Request shall be irrevocable and in
a form approved by the Facility Agent and signed by the Borrower.

 

(c)           Each written Interest
Election Request shall specify the following information:

 

(i)            the
Advance to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Advance;

 

31

 

(ii)           the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Banking Day; and

 

(iii)          the Interest Period to be applicable thereto
after giving effect to such election, which shall be a period contemplated by
the definition of Interest Period. If the Borrower does not request an Interest
Period, it shall be deemed to have selected an Interest Period of one month’s
duration.

 

(d)           Promptly following
receipt of an Interest Election Request, the Facility Agent shall advise each
Lender of the details thereof and of such Lender’s portion of each resulting
Advance.

 

(e)           If the Borrower fails
to deliver a timely Interest Election Request on or prior to the date that is
three (3) Banking Days prior to the end of the Interest Period applicable
thereto, then, such Advance shall be repaid on the last day of such Interest
Period as provided herein.

 

6.             PAYMENTS

 

6.1           Place
of Payments; No Set Off.  All
payments to be made hereunder by the Borrower shall be made in Dollars on the
due dates of such payments to the account of the Facility Agent at JPMorgan
Chase Bank, New York, BIC Code CHASUS33 (ABA No. 021 000 021), for the
Account of ING Bank, London Branch, BIC Code INGBGB2L, Account No. 001 1 938
123 (Ref: OSG attn Loans Agency) for distribution to the Lenders or to such
other account of the Facility Agent as the Facility Agent may direct, without
set-off or counterclaim and free from, clear of and without deduction for, any
Indemnified Taxes or Other Taxes; provided, however, that if the
Borrower shall at any time be compelled by law to withhold or deduct any
Indemnified Taxes or Other Taxes from any amounts payable to the Facility Agent
for the account of the Lenders or the other Creditors hereunder, then, the
Borrower shall pay such additional amounts as may be necessary in order that
the net amounts received after withholding or deduction shall equal the amounts
which would have been received if such withholding or deduction were not required
and, in the event any withholding or deduction is made.  For any Indemnified Taxes or Other Taxes, the
Borrower shall promptly send to the Facility Agent any documentary evidence
they have with respect to such withholding or deduction.  No Lender shall change its lending office if
such change would result in the Borrower being compelled by law to withhold or
deduct any Indemnified Taxes or Other Taxes from any amounts payable to the
Facility Agent for the account of the Lenders or the other Creditors hereunder.

 

6.2           Federal
Income Tax Credits.  (a) If any
Lender obtains the benefit of a credit against its liability for federal income
taxes imposed by the United States of America, or any income taxes imposed by
another jurisdiction, for all or part of the Taxes as to which the Borrower has
paid additional amounts as aforesaid then such Lender shall reimburse the
Borrower for the amount of the credit so obtained; (b) each of the Lenders
that is a United States Person (as such term is defined in Section 7701(a)(3) of
the Code) shall, on or prior to the making of the Initial Advance (and in the
case of an assignee, on or prior to the effective date of the relevant
assignment) and from time to time thereafter when required by applicable
provisions

 

32

 

of the Code, provide the Borrower with two duly
completed copies of Internal Revenue Service Form W-9, as appropriate, or
any successor for prescribed by the Internal Revenue Service, certifying that
the Lender is not subject to backup withholding, (c) each of the Lenders
that is not a United States Person (as such term is defined in Section 7701(a)(30)
of the Code) shall, on or prior to the making of the Initial Advance (and in
the case of an assignee, on or prior to the effective date of the relevant
assignment) and from time to time thereafter when required by applicable
provisions of the Code, provide the Borrower with two duly completed copies of
Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, or any successor
form prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States of
America is a party that exempts withholding tax on payments under this
Agreement or the other Transaction Documents or certifying that the income
receivable by it pursuant to this Agreement or the other Transaction Documents
is effectively connected with the conduct of a trade or business in the United
States of America; (d) each of the Lenders that is not a United States
Person (as such term is defined in Section 7701(a)(3) of the Code)
and is claiming the benefits of the exemption for portfolio interest under Section 881(c) of
the Code shall, on or prior to the making of the Initial Advance (and in the
case of an assignee, on or prior to the effective date of the relevant
assignment) and from time to time thereafter when required by applicable
provisions of the Code, provide (x) a certificate to the effect that the
Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, (B) a “10 percent shareholder” within the meaning of Section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code and (y) two duly completed copies of Internal Revenue Service Form W-8BEN.
(e) for any period with respect to which a Lender that is not a United
States Person has failed to provide the Borrower with the appropriate forms
described in clause (c) or (d) above (other than if such failure is
due to a change in law occurring after the date on which such person was
originally required to provide such forms, or if such forms are otherwise not
required under clause (c) or (d) above), such Lender shall not be
entitled to payment of additional amounts under Section 6.1 with respect
to Taxes imposed by the United States of America; provided, however,
that should a Lender become subject to Taxes because of its failure to deliver
a form required hereunder, the Borrower at such Lender’s expense shall take
such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.

 

7.             GUARANTEE

 

7.1           The
Guarantee.  The Guarantors hereby
jointly and severally guarantee to each of the Creditors and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise)
of the principal of and interest on the Advances (including, but not limited
to, any payment or disbursement made by the Issuing Lender under any
Letter of Credit which has been deemed an Advance pursuant to Section 2.13)
made by the Lenders to the Borrower,
and to the extent not deemed an Advance hereunder, all reimbursement
obligations in respect of drawings made under outstanding Letters of Credit
issued by the Issuing Lender on behalf of any Security Party and all
other amounts from time to time owing to the Creditors by any Security Party
under this Agreement, under the Note, under any of the Security Documents and
under any Interest Rate Agreement, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called the “Guaranteed
Obligations”).  The Guarantors hereby

 

33

 

further jointly and severally agree that if the any
Security Party shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors
will promptly pay the same, on first demand, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.

 

7.2           Obligations
Unconditional.  The obligations of
the Guarantors under Section 7.1 are joint and several, absolute,
unconditional and irrevocable, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligation of the Borrower under
this Agreement, the Note or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of, or security for, any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this Section 7.2
that the obligations of the Guarantors hereunder shall be joint and several,
absolute, unconditional and irrevocable, under any and all circumstances.  Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantors hereunder, which
shall remain absolute, unconditional and irrevocable as described above:

 

(a)           at any time or from
time to time, without notice to the Guarantors, the time for any performance of
or compliance with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;

 

(b)           any of the acts
mentioned in any of the provisions of this Agreement, the Note or any other
agreement or instrument referred to herein or therein shall be done or omitted;

 

(c)           the maturity of any of
the Guaranteed Obligations shall be accelerated, or any of the Guaranteed
Obligations shall be modified, supplemented or amended in any respect, or any
right under this Agreement, the Note or any other agreement or instrument
referred to herein or therein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefore shall be released or
exchanged, in whole or in part, or otherwise dealt with; or

 

(d)           any lien or security
interest granted to, or in favor of, the Facility Agent or any Lender or
Lenders as security for any of the Guaranteed Obligations shall fail to be
perfected.

 

The Guarantors
hereby expressly waive diligence, presentment, demand of payment, protest and
any notice not provided for herein, and any requirement that the Facility Agent
or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement, the Note or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.

 

7.3           Reinstatement.  The obligations of the Guarantors under this Section 7
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf

 

34

 

of the Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether or not as a result of any proceedings, and
the Guarantors jointly and severally agree that they will indemnify each
Creditor on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by such Creditor in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

 

7.4           Subrogation.  Each Guarantor hereby irrevocably waives, but
only until all Guaranteed Obligations payable hereunder by the Guarantors to
the Creditors (or any of the them) have been paid in full, any and all rights
to which any of them may be entitled, by operation of law or otherwise, upon
making any payment hereunder to be subrogated to the rights of the payee
against the Borrower with respect to such payment or otherwise to be
reimbursed, indemnified or exonerated by the Borrower in respect thereof.

 

7.5           Subordination.  The Guarantors jointly and severally agree
that, so long as the Borrower remains under any actual or contingent liability
under this Agreement, the Note, the Security Documents and any Interest Rate
Agreement other than any Contingent Obligations for which no demand has been or
is reasonably expected to be made, any rights which any Guarantor may have at
any time by reason of the performance by such Guarantor of the Guaranteed
Obligations to take the benefit (in whole or in part) of any security taken
pursuant to this Agreement, any of the Security Documents or any Interest Rate
Agreement shall be subject and subordinate to the rights of the Creditors
hereunder and shall be exercised by such Guarantor in such manner and upon such
terms as the Creditors may require and further agree to hold any monies at any
time received by such Guarantor as a result of the exercise of any such rights
or otherwise for and on behalf of the Creditors for application in or towards
payment of any sums at any time owed by the Borrower under this Agreement, the
Security Documents or any Interest Rate Agreement.

 

7.6           Remedies.  The Guarantors jointly and severally agree
that, as between the Guarantors and the Lenders, the obligations of the
Borrower under this Agreement and the Note may be declared to be forthwith due
and payable as provided in Section 10 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 10)
for purposes of Section 7.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event
of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and
payable by the Borrower) shall forthwith become due and payable by the
Guarantors for purposes of Section 7.1.

 

7.7           Instrument
for the Payment of Money.  Each of
the Guarantors hereby acknowledges that the guarantee in this Section 7
constitutes an instrument for the payment of money, and consents and agrees
that any Creditor, at such Creditor’s sole option, in the event of a dispute by
such Guarantor in the payment of any moneys due hereunder, shall have the right
to bring motion-action under New York CPLR Section 3213.

 

35

 

7.8           Continuing
Guarantee.  The guarantee in this Section 7
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.

 

8.             REPRESENTATIONS
AND WARRANTIES

 

In order to
induce the Creditors to enter into this Agreement and to make the Facility
available, each of the Security Parties hereby represents and warrants, to the
Creditors (which representations and warranties shall survive the execution and
delivery of this Agreement and the other Transaction Documents and each
drawdown of the Facility) that:

 

(a)           Due Organization and
Power.  Each of the Security Parties
is a limited partnership or limited liability company duly formed and is
validly existing in good standing under the laws of its jurisdiction of
formation or, if redomiciled, under the laws of such new domicile and is duly
qualified to do business as a foreign Person in each jurisdiction wherein the
nature of the business transacted thereby makes such qualification necessary,
except where failure to so qualify would not result in a Material Adverse
Change, has full power and authority and, to the best of its knowledge after
due investigation, all material governmental licenses, authorizations, consents
and approvals required to carry on its business as now being conducted and to
own its properties and has full power and authority to enter into and perform
its obligations under the Transaction Documents to which it is a party, and has
complied with all statutory, regulatory and other requirements relative to such
business, property and instruments to which it is a party, or to which its
property is subject, failures that, either singly or in the aggregate, would
not reasonably be expected to result in a Material Adverse Change;

 

(b)           Authorization and
Consents.  All necessary limited
partnership or limited liability company action has been taken to authorize,
and all necessary consents and authorities have been obtained and remain in
full force and effect to permit, each Security Party to enter into and perform
its obligations under this Agreement, the Note, the Security Documents and any
Interest Rate Agreement and, in the case of the Borrower, to borrow, service
and repay the Facility and, as of the date of this Agreement, no further
consents or authorities are necessary for the service and repayment of the
Facility or any part thereof;

 

(c)           Binding Obligations.  This Agreement, the Note, the Security
Documents and, if applicable, the Interest Rate Agreements(s) constitute
or will, when executed and delivered, constitute the legal, valid and binding
obligations of each Security Party as is a party thereto enforceable against
such Security Party in accordance with their respective terms, except to the
extent that such enforcement may be limited by equitable principles, principles
of public policy or applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting generally the enforcement of creditors’ rights;

 

(d)           No Violation.  The execution and delivery of, and the
performance of the provisions of, this Agreement, the Note and those of the
Security Documents and any Interest Rate Agreement to which it is to be a party
by each Security Party do not contravene, in any material respect, any
Applicable Law or regulation existing at the date hereof or any contractual
restriction binding on such Security Party or the certificate of limited
partnership, certificate of formation or limited partnership agreement (or
equivalent instruments) thereof;

 

36

 

(e)           Filings; Stamp Taxes.  Other
than the recording of the Mortgages in the National Vessel Documentation Center
and the filing of Uniform Commercial Code Financing Statements in the State of
Delaware in respect of the Assignments, and the payment and filing or recording
fees consequent thereto, it is not necessary for the legality, validity,
enforceability or admissibility into evidence of this Agreement, the Notes or
the Security Documents that any of them or any document relating thereto be
registered, filed recorded or enrolled with any court or authority in any
relevant jurisdiction or that any stamp, registration or similar Taxes be paid
on or in relation to this Agreement, the Note or any of the Security Documents;

 

(f)            Approvals; Consents.  As of the date hereof, all consents,
licenses, approvals and authorizations required, whether by statute or
otherwise, in connection with the entry into and performance by the Security
Parties, and the validity and enforceability against the Security Parties, of
this Agreement, the Note, the Security Documents and, if applicable, the
Interest Rate Agreement(s) have been obtained and are in full force and
effect;

 

(g)           Litigation.  As of the date hereof, no action, suit or
proceeding is pending or threatened against any Security Party or any
subsidiary thereof before any court, board of arbitration or administrative
agency which would be reasonably likely to result in any Material Adverse
Change;

 

(h)           No Default.  As of the date hereof, no Security Party or
any subsidiary thereof is in default under any material agreement by which it
is bound which default might lead to a Material Adverse Change, or is in
default of any Material Financial Obligation;

 

(i)            ERISA.  The execution and delivery of this Agreement
and the consummation of the transactions hereunder will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of the
Code and no condition exists or event or transaction has occurred in connection
with any Plan maintained or contributed to by any member of the ERISA Group or
any ERISA Affiliate resulting from the failure of any thereof to comply with
ERISA which is reasonably likely to result in any member of the ERISA Group or
any ERISA Affiliate incurring any liability, fine or penalty which individually
or in the aggregate could result in a Material Adverse Change. No member of the
ERISA Group nor any ERISA Affiliate, individually or collectively, has
incurred, or reasonably expects to incur, Withdrawal Liabilities or liabilities
upon the happening of a Termination Event. 
With respect to any Multiemployer Plan, Multiple Employer Plan or Plan,
to the knowledge of the Borrower, no member of the ERISA Group nor any ERISA
Affiliate is aware of or has been notified that any “variance” from the “minimum
funding standard” has been requested (each such term as defined in Part 3,
Subtitle B, of Title 1 of ERISA). 
To the knowledge of the Borrower, no member of the ERISA Group nor any
ERISA Affiliate has received any notice that any Multiemployer Plan is in
reorganization, within the meaning of Title IV of ERISA, which
reorganization could result in a Material Adverse Change;

 

(j)            Vessels.  Upon the Initial Advance and, after the
delivery of Hull 8015 or Hull 8016, as applicable, upon each Advance
thereafter, each Vessel:

 

(i)            will
be in the sole and absolute ownership of the relevant Vessel-Owning Guarantor
and duly registered in such Vessel-Owning Guarantor’s name

 

37

 

under United States flag unencumbered, save and except for the Mortgage
with respect thereto and as permitted thereby;

 

(ii)           will
be classed in the highest classification and rating for vessels of the same age
and type with its Classification Society without any material outstanding
recommendations;

 

(iii)          will be operationally seaworthy and in every
way fit for its existing and intended service;

 

(iv)          will
be insured in accordance with the provisions of the Mortgage thereon and the
requirements thereof in respect of such insurances will have been complied
with; and

 

(v)           will
comply with all relevant laws, regulations and requirements (including
environmental laws, regulations and requirements), statutory or otherwise, as
are applicable to (A) vessels documented under United States flag and (B) vessels
engaged in a trade similar to that performed or to be performed by the Vessel,
except where the failure to so comply would not materially and adversely affect
the operation of such Vessel in its existing or intended trade or the financial
condition of any Security Party.

 

(k)           Tax Returns and
Payments.  The Borrower and the
Subsidiaries have filed all Tax returns required to be filed by them and have
paid all material Taxes payable by them which have become due, other than those
not yet delinquent and except for those Taxes being contested in good faith and
by appropriate proceedings or other acts and for which adequate reserves as
determined in accordance with GAAP shall have been set aside on its books;

 

(l)            Chief Executive
Office.  The chief executive office
and chief place of business of the Borrower is located at c/o OSG America L.P.,
Two Harbour Place, 302 Knights Run Avenue, Suite 1200, Tampa, Florida
33602.  The offices in which the records
relating to the earnings and other receivables for the Vessels are kept is that
of (i) the Borrower at Two Harbour Place, 302 Knights Run Avenue, Suite 1200,
Tampa, Florida 33602 and (ii) OSG Ship Management at 666 Third Avenue, New
York, New York 10017;

 

(m)          Insurance.  Each of the Security Parties and the
Subsidiaries has insured its properties and assets against such risks and in
such amounts as are customary for companies engaged in similar businesses.

 

(n)           Foreign Trade
Control Regulations.  None of the
transactions contemplated herein will violate any of the provisions of the
Foreign Assets Control Regulations of the United States of America
(Title 31, Code of Federal Regulations, Chapter V, Part 500, as
amended), any of the provisions of the Cuban Assets Control Regulations of the
United States of America (Title 31, Code of Federal Regulations,
Chapter V, Part 515, as amended), any of the provisions of the
Iranian Transaction Regulations of the United States of America (Title 31, Code
of Federal Regulations, Chapter V, Part 560, as amended) or any of the
provisions of the Regulations of the United States of America Governing
Transactions in Foreign Shipping of Merchandise (Title 31, Code of Federal
Regulations, Chapter V, Part 505, as amended);

 

38

 

(o)           Investment Company
Act.  Neither the Parent nor any of the Subsidiaries is an “investment
company” or an “affiliated person” of, or a “promoter” or “principal underwriter”
for or a company “controlled” by an “investment company” as such terms are
defined in the Investment Company Act of 1940, as amended; neither the making
of an Advance nor the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions contemplated hereby,
will violate any provision of such act or any rule, regulation or order of the
Securities and Exchange Commission thereunder;

 

(p)           Equity Ownership.  The Borrower is a wholly-owned subsidiary of
the Parent and each of the
Vessel-Owning Guarantors is a wholly-owned subsidiary of the Borrower.  As of the date hereof, other than as
previously disclosed to the Facility Agent, including the information disclosed
in the immediately preceding sentence, on each Drawdown Date, the Borrower does
not own any shares of capital stock, limited liability company interest,
partnership interest or any other direct or indirect equity interest in any
corporation, limited liability company, partnership or other entity;

 

(q)           Environmental
Matters and Claims.  (A) Each of
the Security Parties and each Subsidiary, when required, will be in compliance
with all applicable United States federal and state, local, foreign and
international laws, regulations, conventions and agreements relating to
pollution, pollution prevention or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, navigable waters, waters of the contiguous zone, ocean waters and
international waters), including, without limitation, laws, regulations,
conventions and agreements relating to (1) emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous materials, oil, hazardous substances, petroleum and
petroleum products and by-products (“Materials of Environmental Concern”),
or (2) the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern (“Environmental
Laws”) (except as to all of the above, where the failure to do so would not
be reasonably likely to result in a Material Adverse Change); (B) each of
the Security Parties and each Subsidiary will, when required, have all permits,
licenses, approvals, rulings, variances, exemptions, clearances, consents or
other authorizations required under applicable Environmental Laws (“Environmental
Approvals”) and will, when required, be in compliance with all
Environmental Approvals required to operate their respective businesses as then
being conducted (except where the failure to comply with, obtain or renew such
permits, licenses, rulings, variances, exemptions, clearances, consents or
other authorizations would not be reasonably likely to result in a Material
Adverse Change); (C) none of the Security Parties nor any Subsidiary has
received any notice of any claim, action, cause of action, investigation or
demand by any Person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or instrumentality
thereof, alleging potential liability which would be reasonably likely to
result in a Material Adverse Change or a requirement to incur investigatory
costs, cleanup costs, response and/or remedial costs (whether incurred by a
governmental entity or otherwise), natural resources damages, property damages,
personal injuries, attorneys’ fees and expenses, or fines or penalties which
would be reasonably likely to result in a Material Adverse Change, in each case
arising out of, based on or resulting from (1) the presence, or release,
or threat of release, of any Materials of Environmental Concern at any
location, whether or not owned by such person, or (2) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law or Environmental Approval

 

39

 

(“Environmental Claim”)
(other than Environmental Claims that have been fully and finally adjudicated
or otherwise determined and all fines, penalties and other costs (including
permitted deductibles), if any, payable by any of the Security Parties or any
of the Subsidiaries in respect thereof have been paid in full or which are
fully covered by insurance); (D) to the best of the Borrowers’ knowledge,
after due investigation, there are no circumstances that would be reasonably
likely to prevent or interfere with such full compliance in the future; and (E) there
is no Environmental Claim pending or, to the best of the Borrower’s knowledge,
threatened against the Parent or any Subsidiary and to the best of the Borrower’s
knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge or disposal of any Materials of Environmental Concern, that
could reasonably be expected to form the basis of any Environmental Claim
against such persons the adverse disposition of which could reasonably be
expected to result in a Material Adverse Change;

 

(r)            Compliance with ISM
Code, the ISPS Code, the MTSA and Annex VI. 
Each of the Vessels and OSG Ship Management complies with the
requirements of the ISM Code, the ISPS Code, the MTSA and Annex VI, including
(but not limited to) the maintenance and renewal of valid certificates pursuant
thereto;

 

(s)           Threatened
Withdrawal of DOC, SMC, ISSC or IAPPC. 
There is no threatened or actual withdrawal of OSG Ship Management’s DOC
or SMC or of the ISSC or IAPPC in respect of the Vessels or other certification
of documentation related to the ISM Code, Annex VI or otherwise required for
the operation of the Vessels;

 

(t)            Liens.  There are no liens of any kind on any
property owned by the Borrower or Guarantors other than those liens created
pursuant to this Agreement or the Security Documents or other than Permitted
Liens;

 

(u)           Indebtedness.  The Borrower does not have any Funded
Indebtedness except to the Lenders or as listed in Schedule VI;

 

(v)           No Material Adverse
Change.  Since October 29, 2007
with respect to any of the Security Parties, there has been no Material Adverse
Change;

 

(w)          No Proceedings to
Dissolve.  There are no proceedings
or actions pending or contemplated by the Borrower or, to the best of the
Borrower’s knowledge, contemplated by any third party, to dissolve or terminate
the Borrower;

 

(x)            Compliance with
Laws.  The Borrower is in compliance
with all Applicable Laws, except where any failure to comply with any such
Applicable Laws would not, alone or in the aggregate, result in a Material
Adverse Change; and

 

(y)           Survival.  All representations, covenants and warranties
made herein and in any certificate or other document delivered pursuant hereto
or in connection herewith shall survive the making of the Facility or any
portion thereof and the issuance of the Note.

 

40

 

9.             COVENANTS

 

9.1           Affirmative
Covenants.  Each of the Security
Parties jointly and severally hereby covenants and undertakes with each of the
Lenders that, from the date hereof and so long as the Commitments are in effect
or any principal, interest or other moneys are owing in respect of the Facility
or otherwise owing under this Agreement, the Note or any Security Document:

 

(A)          Each of the Security
Parties will:

 

(a)           Performance of
Agreements.  Duly perform and observe
the terms of this Agreement and the other Transaction Documents to which it is
a party;

 

(b)           Notice of Default.  Inform the Facility Agent (which shall
promptly, and in any event within three (3) Banking Days, notify the
Lenders) of the occurrence of (i) any Default or Event of Default, (ii) any
litigation or governmental proceeding pending or threatened against any
Security Party which in any manner draws into question the validity or
enforceability of this Agreement, the Note or any Security Document or which
could reasonably be expected to result in a Material Adverse Change and (iii) any
other event or condition of which it becomes aware which is reasonably likely
to result in a Material Adverse Change, in each case, promptly, and in any
event within three (3) Banking Days after becoming aware of the occurrence
thereof;

 

(c)           Consents.  Without prejudice to Section 8 and this Section 9.1,
obtain every consent applicable to it and do all other acts and things which
may from time to time be necessary for the continued due performance of all its
obligations under this Agreement and under any other Transaction Document;

 

(d)           Preservation of
Existence, Etc.  Except as otherwise
permitted herein, preserve and maintain, and shall cause each of the
Subsidiaries to preserve and maintain, its existence, rights (charter and
statutory) and franchises;

 

(e)           Books and Records.  Keep proper books and record in accordance
with GAAP of all transactions relating to the business activities of the Security
Parties made until all obligations under this Agreement have been satisfied in
full;

 

(f)            Inspection.  Allow any representative or representatives
designated by any Lender, at the risk and expense of such Lender and during
normal business hours, subject to applicable laws and regulations, upon
reasonable prior notice to visit and inspect any properties of the Security
Parties or the Subsidiaries, and, on request, to examine the Security Parties’
or the Subsidiaries’ books of account, records, reports and other papers (and
to make copies thereof and to take extracts therefrom) and to discuss their
affairs, finances and accounts with the Security Parties’ and the Subsidiaries’
officers and executive employees all at such reasonable times and as often as such
Lender reasonably requests but in no event more than twice for all the Lenders
during any calendar year except during the continuance of an Event of Default
in which event there shall be no limit;

 

(g)           Payment of
Obligations.  Pay and discharge, or
cause to be paid and discharged, or will cause each Subsidiary to pay and
discharge, at or before maturity, all their

 

41

 

respective obligations
and liabilities, including, without limitation, all taxes, assessments and
governmental charges or levies imposed upon them, the Subsidiaries or their
respective income or property prior to the date upon which penalties attach
thereto which, if not paid, could reasonably be expected to result, either
singularly or in the aggregate, in a Material Adverse Change; provided, however,
that the Security Parties shall not be required to pay and discharge, or cause
to be paid and discharged, any such obligation, liability, tax, assessment,
charge or levy so long as the legality thereof shall be contested in good faith
and by appropriate proceedings and they or the relevant Subsidiary or
Subsidiaries shall maintain in accordance with GAAP appropriate reserves with
respect thereto.

 

(h)           Compliance with
Agreements, Statutes, etc.  Do or
cause to be done all things necessary to comply with all material contracts or
agreements to which any of the Security Parties is a party, and all laws and
the rules and regulations thereunder, applicable to the Security Parties
or any of the Subsidiaries or their conduct of their business including,
without limitation, those laws, rules and regulations relating to employee
benefit plans and environmental matters except where the failure to do so would
not be reasonably likely to result in a Material Adverse Change;

 

(i)            Environmental
Matters.  Promptly upon the
occurrence of any of the following conditions, provide to the Facility Agent
(which shall promptly furnish a copy thereof to each Lender) a certificate of
an executive officer of Borrower, specifying in detail the nature of such
condition and its proposed response or the response of its Environmental
Affiliates (as hereinafter defined): (i) its receipt or the receipt by any
of the Subsidiaries or any of their Environmental Affiliates of any communication
whatsoever that alleges that such Person is not in compliance with any
applicable Environmental Law or Environmental Approval, if such noncompliance
could reasonably be expected to result in a Material Adverse Change, (ii) knowledge
by it, any of the Subsidiaries or any of their Environmental Affiliates that
there exists any Environmental Claim pending or threatened against any such
Person, which could reasonably be expected to result in a Material Adverse
Change, or (iii) any release, emission, discharge or disposal of any
material that could form the basis of any Environmental Claim against it, any
of the Subsidiaries or any of their Environmental Affiliates if such
Environmental Claim could reasonably be expected to result in a Material Adverse
Change.  Upon the written request by the
Facility Agent, the Borrowers will submit to the Lenders at reasonable
intervals, a report providing an update of the status of any issue or claim
identified in any notice or certificate required pursuant to this subsection.  For the purposes of this subsection, “Environmental
Affiliate” with respect to a Security Party shall mean any Person or entity
the liability of which for Environmental Claims such Security Party may have
assumed by contract or operation of law;

 

(j)            Maintenance of
Assets.  Except as provided herein,
maintain and keep, and procure that each of the Subsidiaries shall maintain and
keep, all properties used or useful in the conduct of their respective business
in good condition, repair and working order (ordinary wear and tear excepted)
and supplied with all necessary equipment and will make, or cause to be made,
all necessary repairs, renewals and replacements thereof so that the business
carried on in connection therewith and every material portion thereof may be
properly conducted at all times except where the failure to do so would not be
reasonably likely to result in a Material Adverse Change;

 

42

 

(k)           Book Value.  At all times use valuation procedures to
determine Book Value which are consistent with GAAP consistently applied;

 

(l)            Pari Passu.  Ensure that their respective obligations
under this Agreement, the Notes, and the Security Documents shall at all times
rank at least pari passu with all its other present and future unsecured and
unsubordinated indebtedness with the exception of any obligations which are
mandatorily preferred by any applicable laws to companies generally and not by
contract;

 

(m)          Brokerage
Commissions, etc.  Indemnify and hold
each of the Creditors harmless from any claim for any brokerage commission,
fee, or compensation from any broker or third party resulting from the
transactions contemplated hereby; provided, however that the
Borrower has been informed by the relevant Creditor of any such agreement with
any broker or third party prior to the date of this Agreement; and

 

(n)           IPO Proceeds.  Permanently reduce the Facility and the total
Commitments to (i) $150,000,000 if the gross proceeds received from the
IPO are less than $125,000,000 but at least $100,000,000 or (ii) nil if
the gross proceeds received from the IPO are less than $100,000,000.

 

(B)           The Parent will:

 

(a)           Minimum Consolidated
Tangible Net Worth.  Maintain a
Consolidated Tangible Net Worth on the last day of each fiscal quarter at an
amount not less than $200,000,000;

 

(b)           Maximum Leverage.  Maintain a ratio of Net Debt to Total
Capitalization on the last day of each fiscal quarter of less than 1.0 to 2.0
(in respect of the Parent and the Subsidiaries on a consolidated basis);

 

(c)           Net Debt to EBITDA.  Maintain a ratio of Net Debt to EBITDA for
the four fiscal quarters most recently ended for which financial information is
available of less than 4.0 to 1.0 (in respect of the Parent and the
Subsidiaries on a consolidated basis);

 

(d)           EBITDA to Net
Interest Expense.  Maintain a ratio
of EBITDA to Net Interest Expense on the last day of each fiscal quarter of
more than 4.5 to 1.0, measured not less than quarterly, in each instance based
on the four most recent fiscal quarters for which financial information is
available (in respect of the Parent and the Subsidiaries on a consolidated
basis);

 

(e)           Exchange Listing.  Remain listed on the New York Stock Exchange;

 

(f)            Ownership of the
Borrower and each of the Vessel-Owning Guarantors.  Own the Borrower and the Vessel-Owning
Guarantors directly or indirectly;

 

(g)           Agent for Service of
Process.  Cause each of the Borrower
and the Vessel-Owning Guarantors to maintain at all times OSG Ship Management,
or another agent acceptable to the Majority Lenders, as its agent for service
of process in the State of New York and shall cause any other such agent to
execute and deliver to the Parent and the Facility Agent a letter in

 

43

 

form and substance
reasonably satisfactory to the Facility Agent, accepting such agency, prior to
or concurrently with such other agent’s acceptance of its appointment as agent
for service of process for the Borrower or such Vessel-Owning Guarantor, as the
case may be; and

 

(h)           Financial Statements.  Deliver to the Facility Agent with sufficient
copies for the Lenders to be distributed to the Lenders by the Facility Agent
promptly upon receipt thereof:

 

(i)            as
soon as available and in any event within ninety (90) days after the end of
each fiscal year of the Parent, a
consolidated balance sheet of the Parent
and the Subsidiaries as of the end of such fiscal year and the related
consolidated statements of income and retained earnings and cash flows for such
fiscal year, setting forth in each case in comparative form the figures as of
the end of and for the previous fiscal year, complying in all material respects
with all applicable rules and regulations promulgated by the Securities
and Exchange Commission, in each case accompanied by an unqualified opinion of
Ernst & Young LLP or other independent public accountants of
nationally recognized standing;

 

(ii)           as
soon as available and in any event within sixty (60) days after the end of each
of the first three fiscal quarters of each fiscal year of the Parent, an unaudited consolidated balance
sheet of the Parent and the
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and retained earnings and cash flows for such
fiscal quarter and for the portion of the Parent’s
fiscal year ended at the end of such fiscal quarter, setting forth in each case
in comparative form the figures as of the end of and for the corresponding
fiscal quarter and the corresponding portion of the Parent’s previous fiscal year, all certified (subject to normal
year-end adjustments) as to fairness of presentation and compliance in all
material respects with all applicable rules and regulations of the
Securities and Exchange Commission with respect to interim financial statements
and consistency by the chief financial officer or the chief accounting officer
of the Parent; provided, however, with
respect to the fiscal quarter ended September 30, 2007, the Parent shall
be required to deliver its unaudited consolidated balance sheet no later than December 31,
2007;

 

(iii)          simultaneously with the delivery of each set
of financial statements referred to in clauses (i) and (ii) above, a
Compliance Certificate of the Parent
(A) setting forth in reasonable detail the calculations required to
establish whether the covenants set forth in Sections 9.1(B) (a), (b), (c) and
(d) are complied with as of the last day of the fiscal period covered by
such financial statements, and (B) stating whether any Default or Event of
Default exists on the date of such Certificate and, if any Default or Event of
Default then exists, setting forth the details thereof and the action which the
Security Parties are taking or propose to take with respect thereto;

 

44

 

(iv)          promptly
upon the mailing thereof to the limited partners of the Parent, electronic
copies of all financial statements, reports and proxy statements and other
communications provided to the Parent’s limited partners; and

 

(v)           from
time to time such additional financial information of the Parent and the Subsidiaries as the
Facility Agent, at the request of any Lender, may reasonably request.

 

(C)           The Borrower and each
of the Vessel-Owning Guarantors will:

 

(a)           ISM Code, ISPS Code,
MTSA and Annex VI Matters.

 

(i)            Procure
that OSG Ship Management will comply with and ensure that their respective
Vessel will comply with the requirements of the ISM Code, the ISPS Code, MTSA
and Annex VI in accordance with the respective implementation schedules
thereof, including (but not limited to) the maintenance and renewal of valid
certificates pursuant thereto throughout the Facility Period;

 

(ii)           and
will procure that OSG Ship Management will promptly inform the Facility Agent
if there is any threatened or actual withdrawal of its DOC, SMC, ISSC or IAPPC
in respect of the applicable Vessel;

 

(iii)          and will procure that OSG Ship Management
will promptly inform the Facility Agent upon the issue to the Borrower, the
relevant Vessel-Owning Guarantor or OSG Ship Management and to any Vessel of an
SMC, ISSC or IAPPC;

 

(b)           Insurance Matters.

 

(i)            Maintain,
with financially sound and reputable insurance companies, any and all
insurances required pursuant to the terms and conditions of the Mortgage,
including (a) hull and machinery insurance, (b) war risks insurance,
and (c) protection and indemnity insurance (including the maximum coverage
for oil pollution liability risks).  In
the cases of the insurances referred to in sub-sections (i) (a) through
(c) above, each Security Party shall maintain or cause the respective
Vessel-Owning Guarantor to maintain such insurances in such amounts as shall be
at least equivalent to One Hundred Ten percent (110%) of the outstanding amount
of the Facility multiplied by a fraction, the numerator of which is the Fair
Market Value of the Vessel and the denominator of which is the aggregate of the
Fair Market Value of all the Vessels then mortgaged to the Security Trustee in
connection with this Agreement, and all such insurance shall be payable in
lawful money of the United States of America and upon such terms (including
provisions as to named insureds and loss payees and prior notice of
cancellation) and with such deductibles as shall from time to time be approved
by the Security Trustee;

 

(ii)           Mortgagee’s
Interest Insurance including Additional Perils-Pollution Insurance, provided,
however, that the Mortgagee’s Interest Insurance

 

45

 

may, with the consent of the Borrower, which consent shall not be
unreasonably withheld or delayed, be arranged by the Facility Agent at the
expense of the Borrower; and

 

(iii)          such other insurance on all their respective
properties and against all such risks in at least such amounts as are usually
insured against by companies of established repute engaged in the same or
similar business from time to time;

 

(c)           Earnings.  Do all acts, take all steps and obtain any
and all consents which may from time to time be necessary or advisable for the
payment of any and all Earnings (as such terms is defined in the Earnings
Assignment) with respect to each of the Vessels into the Earnings Accounts;

 

(d)           Vessel Management.  Cause the Vessels to be managed technically
and commercially by OSG Ship Management (or an entity that is successor to
substantially all of OSG Ship Management’s U.S. Flag ship management business
and is wholly owned by either OSG or the Parent);

 

(e)           Vessel Appraisals.  Cause the Fair Market Value of the Vessels to
be determined annually by any two (2) brokers listed on Schedule IV and
selected by the Borrower, such appraisals to be addressed and delivered to the
Facility Agent along with the annual financial statements to be delivered
pursuant to Section 9.1.(B)(h);.and

 

(f)            Assignment of
Earnings, Assignment of Insurances and Mortgage.  On the date of delivery of Hull 8015 or Hull
8016, respectively, the respective Vessel-Owning Guarantor will duly authorize,
execute and deliver to the Security Trustee, (a) the Mortgage on the Vessel
owned thereby, which shall have been recorded in accordance with the laws of
the United States of America so as to constitute a first preferred mortgage
lien under United States law, (b) the Insurances Assignment in respect of
the Vessel owned thereby, and (c) the Earnings Assignment in respect of
the Vessel owned thereby a Mortgage, in respect of the Vessel owned thereby,
together with:

 

(i)            proper
Uniform Commercial Code Financing Statements;

 

(ii)           certified
copies of Requests for Information or Copies, or equivalent reports, and

 

(iii)          evidence that all other actions necessary or,
in the reasonable opinion of the Security Agent, desirable to perfect and
protect the security interests purported to be created by the Assignment of
Earnings, the Assignment of Insurances and the Mortgage have been taken.

 

9.2           Negative
Covenants.  Each of the Security
Parties hereby jointly and severally covenants and undertakes with each of the
Lenders that, from the date hereof and so long as the Commitments are in effect
or any principal, interest or other moneys are owing in respect of the Facility
or otherwise owing under this Agreement, the Note or any other Transaction
Document:

 

46

 

(A)          The Security Parties
will not, without the prior written consent of the Majority Lenders:

 

(a)           Liens.  Create, assume or permit to exist, any Liens
whatsoever upon any Vessel or other collateral provided as security under this
Agreement or the other Transaction Documents except for the following (each a “Permitted
Lien”):

 

(i)            liens
for taxes not yet payable for which adequate reserves have been maintained;

 

(ii)           liens
in connection with any Security Document and other liens in favor of the
Security Trustee;

 

(iii)          liens, charges and encumbrances against their
respective Vessel permitted to exist under the terms of the Mortgages; and

 

(iv)          other
liens, charges and encumbrances incidental to the conduct of the business of
each such party, the ownership of any such party’s property and assets and
which do not in the aggregate materially detract from the value of each such
party’s property or assets or materially impair the use thereof in the
operation of its business;

 

(v)           pledges
and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
regulations;

 

(vi)          deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations
of a like nature, in each case in the ordinary course of business;

 

(vii)         judgment liens in respect of judgments that do
not constitute an Event of Default under Section 10.1(i) hereto;

 

(viii)        easements, zoning restrictions, rights-of-way
and similar encumbrances on real property imposed by law or arising in the
ordinary course of business that do not materially detract from the value of
the affected property or interfere with the ordinary conduct of business of
such Security Party;

 

(ix)           leases,
subleases, licenses and sublicenses granted to others in the ordinary course of
business;

 

(x)            Liens
in existence on the Closing Date which are listed, and the property subject
thereto described, in Schedule VI hereto, provided that the aggregate principal
amount of the Indebtedness, if any, secured by such Liens does not increase
from that amount outstanding on the Closing Date, less any repayments of
principal thereof; and

 

(xi)           Any
time charter entered into with respect to a Vessel;

 

47

 

(b)           Change of Flag,
Class, Management or Ownership. 
Change the flag of any of the Vessels, change the class or
Classification Society of any of the Vessels other than to another
Classification Society, change the technical management of any Vessel or the
immediate or ultimate ownership of any Vessel except as permitted hereby;

 

(c)           Chartering.  Enter into any demise or bareboat charter
with respect to any Vessel without the prior consent of the Facility Agent;

 

(d)           Change in Business.  Materially change the nature of its business
or commence any business materially different from its current business;

 

(e)           Sale of Assets.  Sell, or otherwise dispose of, any Vessel
(unless otherwise in accordance with this Agreement) or any other asset (by way
of spin-off, installment sale or otherwise) which is substantial in relation to
its assets taken as a whole;

 

(f)            Changes in Offices.  Change the location of its chief executive
office or, its chief place of business, or the office of the Security Party in
which the records relating to the earnings or insurances of the Vessels are
kept unless the Facility Agent shall have received thirty (30) days prior
written notice of such change;

 

(g)           Loans and Advances.  No Vessel-Owning Guarantor shall make any
loans or advances to, or any investments (other than Permitted Investments and
as otherwise permitted herein) in, any person, firm, corporation, joint venture
or other entity (including, without limitation, any loan or advance to any
officer, director, employee or customer of any company affiliated with any
Security Party) except for loans, advances and investments in the ordinary
course of its business;

 

(h)           Contingent
Obligations, etc.  No Vessel-Owning
Guarantor shall assume, guarantee or (other than in the ordinary course of its
business) endorse or otherwise become liable, in connection with any obligation
of any person, firm, company or other entity except for guaranties in favor of
the Lenders or the Facility Agent on behalf of the Lenders or guaranties of
Permitted Debt;

 

(i)            Use of Corporate
Funds.  No Vessel-Owning Guarantor
shall pay out any funds to any company or person except in the ordinary course
of business in connection with the management of its business;

 

(j)            Indebtedness.  No Vessel-Owning Guarantor shall create,
assume, incur or become or be or remain liable, directly or indirectly, or make
any repayment in respect of any indebtedness except for Permitted Debt or make
any repayment in respect of any Debt except for (a) Debt owing to any
Creditor and (b) Debt secured by a Permitted Lien if the asset secured by
such Permitted Lien is disposed of as otherwise permitted herein;

 

(k)           Use of Proceeds.  Will not use the proceeds of the Advances in
violation of the Foreign Assets Control Regulations of the United States of
America (Title 31, Code of Federal Regulations, Chapter V, Part 500 as
amended) or for any hostile acquisition; and

 

48

 

(B)           The Parent will not,
without the prior written consent of the Majority Lenders:

 

(a)           Mergers,
Consolidations and Sales of Assets.  (A) Permit
any Security Party to, consolidate with or be a party to a merger with any
other Person or (B) sell, lease (other than chartering in the ordinary
course of business, which shall not include bareboat chartering for periods in
excess of ten (10) years) or otherwise dispose of all or substantially all
of the assets of the Parent and the Subsidiaries, taken as a whole; provided,
however, that the Parent or any other Security Party may consolidate or
merge with any other Person if (A) at the time of such transaction and
after giving effect thereto, no Default or Event of Default shall have occurred
and be continuing, and (B) the surviving entity in such consolidation or
merger shall be the Parent, or the respective Security Party, or, if another
entity, the surviving entity would have a net worth greater or equal to the net
worth of the Parent, or the respective Security Party, prior to the merger and,
in any case the survivor shall have assumed all liabilities and obligations of
the parties thereto.

 

(b)           No Money Laundering.  Will not, and will not permit any Subsidiary
to, contravene 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 European Communities) and
comparable United States Federal and state laws.

 

(c)           Indebtedness.  Create, assume, incur or become or be or
remain liable, directly or indirectly, or make any repayment in respect of, any
indebtedness to shareholders or Affiliates except Permitted Debt.

 

(d)           Distributions.  Pay or declare any dividend on any class of
stock if at the time any such proposed payment is to be made, or after giving
effect to any such proposed payment, an Event of Default exists or would result
from the making of such payment or a breach of a Financial Covenant contained
in Section 9.1(B) exists at the time or would result from the making
of such payment.

 

9.3           Substitution
of Vessels.  In the event that a
Vessel (other than the Vessels to be replaced by Hull 8015 and Hull 8016) is
sold, lost or declared an actual or constructive total loss, the Borrower may
substitute a Vessel with a similar vessel to such Vessel within 180 days
subject to the consent of the Lenders, such consent not to be unduly withheld
or delayed, and so long as no Event of Default or potential Event of Default
has occurred and is continuing (or would result from such disposition).  Such substitute vessel shall meet all of the
following characteristics, and the owner of such vessel meets all of the
following conditions, as the case may be:

 

(a)           a vessel of a
comparable age and tonnage as the Vessel sold or released to the Lenders or a vessel
of another size and tonnage acceptable to the Lenders;

 

(b)           complies with
requirements of Section 3.1(i);

 

(c)           has, at the time of
substitution, a Fair Market Value greater than or equal to the Fair Market
Value of the Vessel for which it is substituted or a Fair Market Value
acceptable to the Lenders; and

 

49

 

(d)           the owner of the
substitute Vessel has met the conditions, updated mutatis  mutandis,
of Sections 3.1(a), (b), (e), (i), (j) and (k) and Sections 3.2 (c) and
(d).

 

9.4           Inspection
and Survey Reports.  If the Lenders
shall so request, the Borrower shall provide the Lenders with copies of
internally generated inspection or survey reports on the Vessel.

 

9.5           Inspection
of Vessels.  The Lenders shall be
entitled to inspect each of the Vessels at any time upon reasonable prior
notice provided such inspection may not unduly interfere with the operation of
the Vessels no more than twice during any calendar year except during the
continuance of an Event of Default in which event there shall be no limit. One
such inspection per year shall be at the cost of the Borrower.

 

10.           EVENTS OF DEFAULT

 

10.1         Events
of Default.  In the event that any of
the following events shall occur and be continuing:

 

(a)           Principal Payments.  Any principal of the Facility Balance is not
paid on the due date therefore; or

 

(b)           Interest and other
Payments.  Any interest on the
Facility Balance or any other amount becoming payable under this Agreement and
under any Transaction Document or under any of them, is not paid within three (3) Banking
Days from the date when due; or

 

(c)           Representations, etc.  Any representation, warranty or other
statement made by the Security Parties in this Agreement or in any other
instrument, document or other agreement delivered in connection herewith proves
to have been untrue or misleading in any material respect as at the date as of
which it was made, unless circumstances giving rise to such misrepresentation
are capable of remedy and are remedied within 15 days after the earlier of the
Facility Agent giving notice to the Borrower requiring such remedy and the
Borrower becoming aware of such representation; or

 

(d)           Impossibility,
Illegality.  It becomes impossible or
unlawful for the Security Parties to fulfill any of the covenants and
obligations contained herein or in any Transaction Document, or for any of the
Lenders to exercise any of the rights vested in any of them hereunder or under
the other Transaction Documents and such impossibility or illegality, in the
reasonable opinion of such Lender, will have a Material Adverse Change on any
of its rights hereunder or under the other Transaction Documents or on any of
its rights to enforce any thereof; or

 

(e)           Certain Covenants.  The Borrower defaults in the performance or
observance of any covenant contained in Section 9.1(A)(b), 9.1(B)(a) through
(d), 9.1(C)(b), 9.2(B)(a), and 9.3; or

 

(f)            Covenants.  One or more of the Security Parties default
in the performance of any term, covenant or agreement contained in this
Agreement or in the other Transaction Documents, in each case other than an
Event of Default referred to elsewhere in this

 

50

 

Section 10.1, and
such default continues unremedied for a period of fifteen (15) days after
written notice thereof has been given to the Security Party by the Facility
Agent at the request of any Lender unless such Security Party is diligently
pursuing a remedy of such Default provided such Default is, in the
determination of the Facility Agent, capable of being remedied within a
reasonable period of time (and in any event within thirty (30) days) without
adversely affecting the Lender’s rights hereunder, under the Note or under the
Security Documents or any thereof and such Default is in fact so remedied; or

 

(g)           Indebtedness and
Other Obligations.  Any Security
Party defaults under (i) any Material Financial Obligation or (ii) any
other material contract or agreement to which it is a party or by which it is
bound and, in the case of this (ii), such default could reasonably be expected
to result in a Material Adverse Change; or

 

(h)           Bankruptcy.  Any Security Party commences any proceedings
relating to any substantial portion of its property under any reorganization,
arrangement or readjustment of debt, dissolution, winding up, adjustment,
composition, bankruptcy or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect (a “Proceeding”), or there is
commenced against any thereof any Proceeding and such Proceeding remains
undismissed or unstayed for a period of sixty (60) days; or any receiver,
trustee, liquidator or sequestrator of, or for, any thereof or any substantial
portion of the property of any thereof is appointed and is not discharged
within a period of sixty (60) days; or any thereof by any act indicates
consent to or approval of or acquiescence in any Proceeding or to the
appointment of any receiver, trustee, liquidator or sequestrator of, or for,
itself or any substantial portion of its property; or

 

(i)            Judgments.  Any judgment or order is made the effect
whereof would be to render invalid this Agreement or any other Transaction
Document or any material provision thereof or any Security Party asserts that
any such agreement or provision thereof is invalid; or judgments or orders for
the payment of money in excess of $20,000,000 in the aggregate for any
Guarantor or the Subsidiaries (or its equivalent in any other currency) shall
be rendered against any Guarantor and/or
any of the Subsidiaries and such judgments or orders shall continue unsatisfied
and unstayed for a period of thirty (30) consecutive days and action shall
legally be taken by the judgment creditor to attach or levy upon assets of the
Parent or any of the Subsidiaries to enforce such judgment; or

 

(j)            Inability to Pay
Debts.  Any Security Party is
generally unable to pay or admits its inability to pay its debts as they fall
due or a moratorium shall be declared in respect of any Indebtedness of any
thereof; or

 

(k)           Cessation of
Business.  Any Security Party ceases
to do business other than as permitted herein; or

 

(l)            Change of Ownership
or Control.  A change of ownership or
control which results in any of the following not being true:

 

(i)            OSG
owns at least 50.1% of membership interests (directly or indirectly) in the
Parent;

 

51

 

(ii)           OSG
owns more than 50.1% of membership interests in OSG America LLC, which is the
general partner of the Parent;

 

(iii)          OSG America LLC is the general partner of and
has a 2% general partnership interest in the Parent;

 

(iv)          The
Parent wholly-owns the Borrower;

 

(v)           Borrower
wholly-owns (directly or indirectly) the Vessel-Owning Guarantors; or

 

(m)          Change of Commercial
and Technical Manager.  OSG Ship
Management (or any entity that is successor to substantially all of OSG Ship
Management’s U.S. Flag ship management business and is wholly owned by either
OSG or the Parent) ceasing to be both the commercial and technical manager of
any Vessel either directly or indirectly owned by the Borrower; or

 

(n)           ERISA
Debt.  Any member of the ERISA Group
or any ERISA Affiliate shall (i) fail to pay when due an amount or amounts
aggregating in excess of $5,000,000 which it or they shall have become liable
to pay under Title IV of ERISA or (ii) any member of the ERISA Group
or any ERISA Affiliate, individually or collectively, shall incur, or shall
reasonably expect to incur, any Withdrawal Liability or liability upon the
happening of a Termination Event and the aggregate of all such Withdrawal
Liabilities and such other liabilities shall be in excess of $10,000,000;

 

then, the Lenders’ obligation to make the Facility available shall
cease and the Facility Agent on behalf of the Lenders may, with the Majority
Lenders’ consent and shall, upon the Majority Lenders’ instruction, by notice
to the Borrower, (i) declare the entire Facility Balance, accrued interest
and any other sums payable by the Borrower hereunder and under the Note, the
other Transaction Documents and any Interest Rate Agreement due and payable
whereupon the same shall forthwith be due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly
waived; provided that upon the happening of an event specified in
subclauses (h) or (j) of this Section 10.1, the Facility
Balance, accrued interest and any other sums payable by the Borrower hereunder
and under the Note, the other Transaction Documents and any Interest Rate
Agreement shall be immediately due and payable without declaration,
presentment, demand, protest or other notice to the Borrower all of which are
expressly waived.  In such event, the
Creditors may proceed to protect and enforce their rights by action at law,
suit in equity or in admiralty or other appropriate proceeding, whether for
specific performance of any covenant contained in this Agreement, the Note, any
other Transaction Document or any Interest Rate Agreement or in aid of the
exercise of any power granted herein or therein, or the Lenders or the Facility
Agent may proceed to enforce the payment of the Note when due or to enforce any
other legal or equitable right of the Lenders, or proceed to take any action
authorized or permitted by Applicable Law for the collection of all sums due,
or so declared due, including, without limitation, the right to appropriate and
hold or apply (directly, by way of set-off or otherwise) to the payment of the
obligations of the Borrower to any of the Creditors hereunder and/or under the
Note and the other Transaction Documents (whether or not then due) all moneys
and other amounts of the Borrower then or thereafter in possession of any
Creditor, the

 

52

 

balance of any deposit account (demand or time, matured or unmatured)
of the Borrower then or thereafter with any Creditor and every other claim of
the Borrower then or thereafter against any of the Creditors, (ii) terminate
any Letter of Credit which may be terminated in accordance with its terms and (iii) direct
the Borrower to pay (and the Borrower hereby agrees upon receipt of such
notice, or upon the occurrence of an Event of Default specified in subsection (h) or
(j) of this Section 10.1, it will pay) to the Facility Agent at the
office set forth in Section 7.1 such additional amounts, to be held as
security in respect of Letters of Credit then outstanding (if any), equal to
the aggregate of the then Letter of Credit Outstandings, such amounts to be
repaid to the Borrower to the extent not utilized to cover Letter of Credit
drawings.

 

10.2         Indemnification.  The Borrower agrees to, and shall, indemnify
and hold harmless each of the Creditors against any loss or reasonable costs or
expenses (including legal fees and expenses) which any of the Creditors
sustains or incurs as a consequence of any default in payment of the principal
amount of the Facility Balance or interest accrued thereon or any other amount
payable hereunder, under the Note or under the other Transaction Documents,
including, but not limited to, costs for which the Borrower is required to
compensate the Lenders pursuant to Section 12.6 or funds acquired to
effect or maintain the Advances or any part thereof.  The Borrower also agrees to reimburse and
indemnify the Issuing Lender for and against any and all losses, costs or
expenses of whatever nature which may be incurred by the Issuing Lender in
performing its respective duties in any way relating to or arising out of its
issuance of Letters of Credit; provided that the Borrower shall not be liable
for the portion of such losses, costs or expenses resulting from the Issuing
Lender’s gross negligence or willful misconduct.  A Creditor’s certification of such costs and
expenses shall, absent any manifest error, be conclusive and binding on the
Borrower.

 

10.3         Application
of Moneys.  All moneys received by
any of the Creditors under or pursuant to this Agreement, the Note or the other
Transaction Documents after the happening of any Event of Default shall be
applied by the Facility Agent in the following manner:

 

(i)            firstly,
in or towards the payment or reimbursement of any expenses or liabilities
incurred by any of the Creditors in connection with the ascertainment,
protection or enforcement of its rights and remedies hereunder and under the
Note and the other Transaction Documents;

 

(ii)           secondly,
in or towards payment of any interest owing in respect of the Advances or
Letters of Credit;

 

(iii)          thirdly, in or towards repayment of the Advances;

 

(iv)          fourthly,
as security in respect of Letters of Credit then outstanding, in the aggregate
amount of the then Letter of Credit Outstandings,

 

(v)           fifthly,
in or towards payment of all other sums which may be owing to any of the
Creditors under this Agreement or under the Note or the other Transaction
Documents;

 

(vi)          sixthly,
in or towards payments of any amounts then owed under any Interest Rate
Agreement, and

 

53

 

(vii)         seventhly, after all Letters of Credit have
expired or are terminated and returned to the Issuing Lender, the surplus (if
any), as well as any moneys held as security for Letters of Credit to the
extent not utilized to cover Letters of Credit the surplus (if any), shall be
paid to the Borrower or to whomsoever else may be entitled thereto.

 

11.           ASSIGNMENTS;
PARTICIPATIONS;

 

11.1         Assignments.  This Agreement shall be binding upon, and
inure to the benefit of, the Borrower and each of the Creditors and their
respective successors and permitted assigns, except that the Borrower may not
assign any of their rights or obligations hereunder without the prior written
consent of the Lenders.  Any Lender may
assign its rights and obligations under this Agreement to any one or more
financial institutions approved by the Facility Agent and the Borrower, which
approval shall not be unreasonably withheld; provided, however,
that no such consent shall be required if the assignee is, immediately prior to
such assignment, another Lender or an Affiliate of the assigning Lender (the
expenses of any Lender in connection with any such assignment shall be for its
own account); provided, further that no Borrower shall be
required to pay any amount under Sections 6.1 or 11 that is greater than the
amount which it would have been required to pay had no such assignment been
made; provided, further that any assignment shall be made
pursuant to an Assignment and Assumption Agreement substantially in the form of
Exhibit A hereto; and provided, finally, that the minimum
amount which may be assigned shall be $10,000,000 unless otherwise agreed by
the Borrower and the Facility Agent.  The
Borrowers will take all reasonable actions requested by the Lenders to effect
any such permitted assignment, including, without limitation, the execution of
a written consent to such Assignment and Assumption Agreement.

 

11.2         Participations.  Any Lender may at any time sell to one or
more commercial banks or other financial institutions (each of such commercial
banks and other financial institutions being herein called a “Participant”)
participating interests in the Advances, its Commitment or other interests of
such Lender hereunder; provided, however, that

 

(a)           no participation
contemplated in this Section 11.2 shall relieve such Lender from its
Commitment or its other obligations hereunder;

 

(b)           such Lender shall
remain solely responsible for the performance of its Commitment and such other
obligations;

 

(c)           no Participant, unless
such Participant is an Affiliate of such Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder, except that
such Lender may agree with any Participant that such Lender will not, without
such Participant’s consent, approve any amendment or waiver of any provision of
this Agreement or the Note or consent to any departure by the Borrower
therefrom, if any such amendment, waiver or consent would require the
affirmative consent of such Lender pursuant to Section 18.6 hereof; and

 

54

 

(d)           the Borrower shall not
be required to pay any amount under Sections 6.1 or 11 that is greater than the
amount which it would have been required to pay had no participating interest
been sold.

 

11.3         Security
Interest.  Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time grant a
security interest in all or any portion of its rights under this Agreement and
the other Transaction Documents.

 

11.4         Register.  The
Facility Agent, acting solely for this purpose as an agent of the Borrower,
shall maintain at its office in London, a copy of each Assignment and
Assumption Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitment of, and principal amount
of the Advances owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Facility Agent and the
Lender may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The register shall be available for inspection by the Borrower and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.

 

12.           ILLEGALITY,
INCREASED COST, NON-AVAILABILITY, ETC.

 

12.1         Illegality.  In the event that by reason of any change in
any applicable law, regulation or regulatory requirement or in the
interpretation or application thereof by any authority after the Closing Date,
a Lender or Participant has a reasonable basis to conclude that it has become
unlawful for such Lender or Participant to maintain or give effect to its
obligations as contemplated by this Agreement, such Lender or Participant shall
inform the Borrower and the Facility Agent to that effect, whereafter the
liability of such Lender or Participant to make its Commitment available shall
forthwith cease and the Borrower shall be required to repay to such Lender or
Participant that portion of the Facility Balance advanced by such Lender or
Participant immediately and to provide the Facility Agent with sufficient
amounts of Cash or Cash Equivalents equal to such Lender’s proportionate amount
of Letter of Credit Outstandings, such amounts to be repaid to the Borrower to
the extent not utilized to cover Letter of Credit drawings.  In any such event, but without prejudice to
the aforesaid obligations of the Borrower to prepay the relevant portion of the
Facility Balance or part thereof and fund any possible drawings under Letters
of Credit then in existence, the Borrower and such Lender or Participant shall
negotiate in good faith with a view to agreeing on terms for making the
Commitment available from another jurisdiction or otherwise restructuring the
Commitment on a basis which is not unlawful.

 

12.2         Increased
Cost.  If after the Closing Date any
change in applicable law, regulation or regulatory requirement or in the
interpretation or application thereof by any Authority shall:

 

(a)           subject any Lender or
Participant to any Indemnified Taxes or Other Taxes; or

 

(b)           change the basis of
taxation to any Lender or Participant of payments of principal or interest or
any other payment due or to become due pursuant to this Agreement

 

55

 

(other than a change in
the basis effected by the United States of America, the State or the City of
New York or any governmental subdivision or other taxing authority having
jurisdiction over such Lender or Participant (unless such jurisdiction is
asserted solely by reason of the activities of any Security Party) or such
other jurisdiction where the Advances may be payable); or

 

(c)           impose, modify or deem
applicable any reserve or capital adequacy requirements or require the making
of any special deposits against or in respect of any assets or liabilities of,
deposits with or for the account of, or loans by, any Lender or Participant; or

 

(d)           impose on any Lender or
Participant any other condition affecting the Facility or any part thereof;

 

and the result
of the foregoing is either to increase the cost to such Lender or Participant
of making available or maintaining the Facility or any part thereof or to
reduce the rate of return on assets or equity of such Lender or Participant or
the amount of any payment received by such Lender or Participant, then and in
any such case if such increase or reduction in the opinion of such Lender or
Participant materially affects the interests of such Lender or Participant
under or in connection with this Agreement:

 

(i)            such
Lender or Participant shall notify the Borrower and the Facility Agent in
writing of the happening of such event;

 

(ii)           the
Borrowers agree forthwith upon receipt of notice from such Lender or
Participant as aforesaid to pay to such Lender or Participant such amount as
such Lender or Participant certifies to be necessary to compensate such Lender
or Participant for such additional cost or such reduction.

 

(e)           Any such notice
referred to in subsections (i) and (ii) of this Section 12.2 may
be made by a Lender or Participant which notice shall set forth in reasonable
detail the amount or amount necessary to compensate such Lender or Participant
at any time before or within one (1) year after any repayment of the
outstanding Facility Amount; provided, however, that before
making any such demand, such Lender agrees to use its best efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different lending office if the making of such designation would avoid the need
for, or reduce the amount of, such increased cost or such reduction and would
not, in the judgment of such Lender, be otherwise disadvantageous to such
Lenders.

 

12.3         Nonavailability
of Funds.  If the Facility Agent
shall determine that, by reason of circumstances affecting the London Interbank
Market generally, adequate and reasonable means do not or will not exist for
ascertaining the Applicable Rate for any Advance for any Interest Period, the Facility
Agent shall give notice of such determination to the Borrower and the
Lenders.  The Borrower and the Facility
Agent, acting in accordance with the instruction of the Lenders, shall then
negotiate in good faith in order to agree upon a mutually satisfactory interest
rate and/or Interest Period to be substituted for those which would otherwise
have applied under this Agreement.  If
the Borrower and the Facility Agent are unable to agree upon such a substituted
interest rate and/or Interest Period within thirty (30) days of the giving
of such determination notice, the Facility Agent shall set an

 

56

 

interest rate and Interest Period to take effect from
the expiration of the Interest Period in effect at the date of determination,
which rate shall be equal to the Margin plus the cost to the Lenders and
Participants (as certified by each Lender and Participant) of funding such
Advance.  In the event the state of
affairs referred to in this Section 12.3 shall extend beyond the end of
any Interest Period, the foregoing procedure shall continue to apply until
circumstances are such that the Applicable Rate may be determined pursuant to Section 5.1.

 

12.4         Determination
of Losses.  A certificate or
determination notice of the Facility Agent or any affected Lender or
Participant, as the case may be, as to any of the matters referred to in this Section 12
shall, absent demonstrative error, be conclusive and binding on the Borrower.

 

12.5         Compensation
for Losses.  Where any portion of the
Facility Balance is to be prepaid by the Borrower pursuant to Section 12.1
the Borrower agrees simultaneously with such prepayment to pay to the affected
Lender or Participant all accrued interest to the date of actual payment and
all other sums payable by the Borrower to such Lender or Participant pursuant
to this Agreement together with such amounts as may be certified by such Lender
or Participant to be necessary to compensate such Lender or Participant for any
actual loss, premium or penalties incurred or to be incurred by it on account
of funds borrowed to make, fund or maintain its portion of the outstanding
Facility Amount for the remainder (if any) of the then current Interest Period
or Periods, but otherwise without penalty or premium.

 

12.6         Compensation
for Breakage Costs.  The Borrower
shall pay to the Lenders, Participants or any thereof, upon the request of any
thereof such amount or amounts as shall be sufficient (in the reasonable
opinion of the relevant Lenders and/or Participants) to compensate them for any
loss, cost or expense incurred by them as a result of:

 

(a)           any payment or
prepayment (including any such prepayment made pursuant to Sections 4.1, 4.2
and 12.1) of an Advance on a date other than the last day of the relevant
Interest Period; or

 

(b)           any failure by the
Borrower to borrow (including without limitation any such failure resulting
from a condition precedent set forth in Section 3) or prepay the Facility
Balance held by any Lenders and/or Participants on the date for such borrowing
or prepayment specified in the relevant request for such Advance or notice of
prepayment delivered under Sections 2.2 or 4.1, respectively;

 

Any
certification of a relevant Lender or Participant shall, absent demonstrative
error, be conclusive and binding on the Borrower as to the extent of any such
losses.

 

12.7         Mitigation
Obligations; Replacement of Lenders. 
(a) If any Lender requests compensation under Sections 12.1 or
12.2, or if the Borrower is required to pay any additional amount to any Lender
or any Authority for the account of any Lender pursuant to Section 6.1,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Advances hereunder or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates,
if, in the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to

 

57

 

Section 12.1, 12.2 or 6.1, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

(b)           If (i) any Lender
requests compensation under Sections 12.1 or 12.2, (ii) the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 6.1 or (iii) if
any Lender defaults in its obligation to fund Loans hereunder, then, in each
such case, the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Facility Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 11.1), all its interests, rights and obligations under the
Transaction Documents to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (A) the Borrower shall have received the prior written consent of the
Facility Agent, which consent shall not be unreasonably withheld, (B) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Advances, accrued interest thereon and all other amounts
payable to it hereunder (including amounts payable pursuant to Sections 6.1,
12.1 or 12.2), from the assignee (to the extent of such outstanding principal
and accrued interest) or the Borrower (in the case of all other amounts) and (C) in
the case of any such assignment resulting from a claim for compensation under Section 12.1
or 12.2 or payments required to be made pursuant to Section 6.1, such
assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

12.8         Currency
Indemnity.  (a) If for the
purpose of obtaining or enforcing a judgment in any court in any country it
becomes necessary to convert into any other currency (the “Judgment Currency”)
an amount due in Dollars under this Agreement or the other Transaction
Documents, then the conversion shall be made, in the discretion of the Facility
Agent, at the rate of exchange prevailing either on the date of default or on
the day before the day on which the judgment is given or the order for
enforcement is made, as the case may be (the “Conversion Date”);
provided that the Facility Agent shall not be entitled to recover under this
clause any amount in the judgment currency which exceeds at the Conversion Date
the amount in Dollars due under this Agreement and/or the other Transaction
Documents.

 

(b)           If there is a change in
the rate of exchange prevailing between the Conversion Date and the date of
actual payment of the amount due, the Borrower shall pay such additional
amounts (if any, but in any event not a lesser amount) as may be necessary to
ensure that the amount paid in the judgment currency when converted at the rate
of exchange prevailing on the date of payment will produce the amount then due
under this Agreement and/or the other Transaction Documents, in Dollars; any
excess over the amount due received or collected by the Creditors and
Participants shall be remitted to the Borrower.

 

58

 

(c)           Any amount due from the
Borrower under Section 12.7(b) shall be due as a separate debt and
shall not be affected by judgment being obtained for any other sums due under
or in respect of this Agreement and/or the other Transaction Documents.

 

(d)           The term “rate of
exchange” in this Section 12.7 means the rate at which the Facility Agent
in accordance with its normal practices is able on the relevant date to
purchase Dollars with the judgment currency and includes any premium and costs
of exchange payable in connection with such purchase.

 

13.           FEES, EXPENSES AND
INDEMNIFICATION

 

(a)           Fees.  The Borrower shall pay to the Facility Agent
(for the account of the Lenders) a commitment fee (the “Commitment Fee”)
equal to twenty-five hundredths of one percent (.25%) on the daily undrawn
balance of the Facility for the period commencing on the Closing Date and
ending on the Final Availability Date. Such commitment fee shall accrue from
day to day and be calculated on the basis of actual days elapsed over a 365 day
year and such commitment fee shall be payable quarterly in arrears.  The Borrower shall also pay to the Facility
Agent each of the fees set forth in the Fee Letters.

 

(b)           In addition, the
Borrower shall pay to the Facility Agent, for distribution to the Letter of
Credit Participants, a fee in Dollars in respect of each Letter of Credit (the “Letter
of Credit Fee”) computed at a rate per annum equal to (i) the Margin
in effect from time to time plus (ii) Mandatory Costs on the daily Stated
Amount of such Letter of Credit as reduced by any drawings thereunder.  The Borrower further agrees to pay to the
Issuing Lender, commencing at such time, a fee in Dollars in respect of each
Letter of Credit (the “Fronting Fee”) computed at a rate per annum equal
to one-eighth of one percent (1/8%) (but in no event less than $500 per annum
for each Letter of Credit) on the daily Stated Amount of such Letter of Credit
as reduced by any drawings thereunder. 
Accrued Letter of Credit Fees and Fronting Fees shall be calculated on
the basis of actual days elapsed over a 360 day year and shall be due and
payable quarterly in arrears on the first day of November, February, May and
August of each year the Facility remains outstanding and on the Payment
Date.  The Borrower also agrees to pay to
the Issuing Lender, upon the issuance of any Letter of Credit, an issuance fee
equal to the greater of (i) $2,500 or (ii) one-eighth of one percent
of the amount of each issued Letter of Credit.

 

13.2         Expenses.  The Borrower agrees, whether or not the
transactions hereby contemplated are consummated, on demand to pay, or
reimburse the Facility Agent for the payment of the reasonable, documented
expenses of the Facility Agent and (after the occurrence and during the
continuance of an Event of Default) the Lenders incident to said transactions
(and in connection with any supplements, amendments, waivers or consents
relating thereto or incurred in connection with the enforcement or defense of
any of the Facility Agent’s and the Lenders’ rights or remedies with respect
thereto or in the preservation of the Facility Agent’s and Lenders’ priorities
under documentation executed and delivered in connection therewith) including,
without limitation, all reasonable costs and expenses of preparation,
negotiation, execution and administration of this Agreement and the documents
referred to herein, fees for the registration of mortgages and any other filing
fees for the filing of any other Transaction Document, the reasonable fees and
disbursements of the Facility Agent’s counsel in connection therewith, as well
as reasonable traveling expenses of the Facility

 

59

 

Agent, the reasonable fees and expenses of any
independent appraisers, surveyors, engineers and other consultants retained by
the Facility Agent in connection with this transaction including one (but not
more than one) annual valuation of the Vessel, all reasonable costs and
expenses, if any, in connection with the enforcement of this Agreement and the
other Transaction Documents and stamp and other similar taxes, if any, incident
to the execution and delivery of the documents (including, without limitation,
the other Transaction Documents) herein contemplated and to hold the Creditors
free and harmless in connection with any liability arising from the nonpayment
of any such stamp or other similar taxes. 
Such taxes and, if any, interest and penalties related thereto as may
become payable after the date hereof shall be paid immediately by the Borrower
to the Facility Agent or the Lenders, as the case may be, when liability
therefor is no longer contested by such party or parties or reimbursed
immediately by the Borrowers to such party or parties after payment thereof (if
the Facility Agent or the Lenders, in their sole discretion, choose to make
such payment).

 

13.3         Indemnification.  Neither any Creditor nor any of its
directors, officers, agents or employees shall be liable to the Borrower for
any action taken or not taken by it in connection herewith in the absence of
its own gross negligence or willful misconduct. 
The Borrower hereby agrees to indemnify the Creditors, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from
and against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement, any actual or proposed use of proceeds of
any Advance hereunder, or any related transaction or claim; provided
that (i) no Indemnitee shall have the right to be indemnified hereunder
for such Indemnitee’s own gross negligence or willful misconduct as determined
by a court of competent jurisdiction and (ii) to the extent permitted by
law, the Indemnitee shall provide the Borrower with prompt notice of any such
investigative, administrative or judicial proceeding after the Indemnitee
becomes aware of such proceeding; provided, however, that the
Indemnitee’s failure to provide such notice in a timely manner shall not
relieve the Borrower of its obligations hereunder.

 

13.4         Time of Payment.  All
amounts due under this Section 13 (unless otherwise provided in this
Agreement) shall be payable no later than twenty (20) Banking Days after
written demand therefor.

 

14.           APPLICABLE LAW,
JURISDICTION AND WAIVER

 

14.1         Applicable
Law.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

 

14.2         Jurisdiction.  The Borrower and each of the Guarantors
hereby irrevocably submits, to the jurisdiction of the courts of the State of
New York located in New York County and of the United States District Court for
the Southern District of New York in any action or proceeding brought against
it by any Creditor under this Agreement or any instrument delivered hereunder
and hereby agree that service of summons or other legal process thereon

 

60

 

may be made by serving a copy of the summons or other
legal process in any such action or proceeding on any Security Party by mailing
or delivering the same by hand at the address indicated for notices in Section 16
of such summons or other legal process in any such action or proceeding shall
be deemed personal service and accepted by the Security Parties as such, and
shall be legal and binding upon the Security Parties for all purposes of any
such action or proceeding.  Final
judgment (a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of any indebtedness of the Borrower to any of the
Creditors) against the Security Parties in any such legal action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment.  In the event that any of the
Security Parties shall not be conveniently available for such service, each
Security Party hereby irrevocably appoints the Person who then is the Secretary
of State of the State of New York as its attorney-in-fact and agent.  The Borrower will advise the Facility Agent
promptly of any change of address for the purpose of service of process.  Notwithstanding anything herein to the
contrary, a Creditor may bring any legal action or proceeding in any other
appropriate jurisdiction.

 

14.3         WAIVER
OF JURY TRIAL.  IT IS MUTUALLY AGREED
BY AND AMONG EACH OF THE SECURITY PARTIES AND EACH OF THE CREDITORS THAT EACH
OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR THE
OTHER TRANSACTION DOCUMENTS.

 

15.           THE FACILITY AGENT
AND THE SECURITY TRUSTEE

 

15.1         Appointment
and Authorization.  (a) Each
Lender irrevocably appoints and authorizes the Facility Agent and the Security
Trustee severally each to take such action as agent on its behalf and to
exercise such powers under this Agreement and the other Transaction Documents
as are delegated to such Facility Agent or Security Trustee by the terms hereof
or thereof, together with all such powers as are reasonably incidental
thereto.  Each of the Facility Agent and
the Security Trustee hereby accepts such appointment.

 

(b)           Each of the Creditors
irrevocably appoints the Security Trustee as trustee on its behalf with regard
to (i) the security, powers, rights, titles, benefits and interests (both
present and future) constituted by and conferred on the Creditors or any of
them or for the benefit thereof under or pursuant to this Agreement or any of
the other Transaction Documents (including, without limitation, the benefit of
all covenants, undertakings, representations, warranties and obligations given,
made or undertaken to any Creditor in this Agreement or any of the other
Transaction Documents), (ii) all moneys, property and other assets paid or
transferred to or vested in any Creditor or any agent of any Creditor or
received or recovered by any Creditor or any agent of any Creditor pursuant to,
or in connection with, this Agreement or the other Transaction Documents
whether from any Security Party or any other person and (iii) all money,
investments, property and other assets at any time representing or deriving
from any of the foregoing, including all interest, income and other sums at any
time received or receivable by any Creditor or any agent of any Creditor in
respect of the same (or any part thereof). 
The Security Trustee hereby accepts such appointment.

 

61

 

15.2         Agents
and Affiliates.  With respect to that
portion of the Facility made by it, the Facility Agent and the Security Trustee
shall have the same rights and powers under this Agreement as any other Lender
and may exercise or refrain from exercising the same as though they were not a
Facility Agent or Security Trustee and the terms “Lender” and “Lenders” shall
include each Agent in its capacity as a Lender. 
Each Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with, the Borrowers and the other
Security Parties thereof as if it were not an Agent hereunder.

 

15.3         Action
by Agents.  The obligations of the
Facility Agent and the Security Trustee hereunder are only those expressly set
forth herein.  Without limiting the generality
of the foregoing, no Agent shall be required to take any action with respect to
any Event of Default, except, in the case of the Facility Agent, as expressly
provided in Section 10.  The Agents
shall be entitled to use their discretion with respect to exercising or
refraining from exercising any rights which may be vested in it by, and with
respect to taking or refraining from taking any action or actions which it may
be able to take under or in respect of, this Agreement and the other
Transaction Documents, unless the Agent shall have been instructed by the
Majority Lenders (or, to the extent provided herein, all of the Lenders) to
exercise such rights or to take or refrain from taking such action; provided,
however, that neither Agent shall not be required to take any action
which exposes it to personal liability or which is contrary to this Agreement
or Applicable Law.

 

15.4         Consultation
with Experts.  The Agents may consult
with legal counsel (who may be counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable to any
Lender for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.

 

15.5         Liability
of the Agents.  Neither the Facility
Agent, nor the Security Trustee, nor any of their directors, officers, agents
or employees shall be liable to any Lender for any action taken or not taken by
it in connection herewith (a) with the consent or at the request of the
Majority Lenders or (b) in the absence of its own gross negligence or
willful misconduct.  Neither the Facility
Agent, nor the Security Trustee, nor any of their directors, officers, agents
or employees shall be responsible for or have any duty to ascertain, inquire
into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any Advance hereunder; (ii) the
performance or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified in Section 3,
except receipt of items required to be delivered to the Facility Agent or
Security Trustee; or (iv) the validity, effectiveness or genuineness of
this Agreement, the other Transaction Documents or any other instrument or
writing furnished in connection herewith. 
The Agents shall be entitled to assume that this Agreement, the other
Transaction Documents or any other instrument or writing furnished in
connection herewith are valid, effective and genuine, have been signed or sent
by the proper parties and are what they purport to be.  Neither the Facility Agent nor the Security
Trustee shall incur any liability by acting in reliance upon any notice,
consent, certificate, statement or other writing (which may be a bank wire,
telex or similar writing) believed by it to be genuine or to be signed by the
proper party or parties.

 

15.6         Indemnification.  Each Lender shall, ratably in accordance with
its Commitment, indemnify each Agent, their affiliates and their respective
directors, officers, agents and

 

62

 

employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, judgment, suit, loss, damage,
obligation, penalty, disbursement or liability of any kind whatsoever (except
such as result from such Indemnitee’s gross negligence or willful misconduct)
that such Indemnitees may suffer or incur in connection with or in any way
relating to or arising out of this Agreement or the other Transaction Documents
or that such Indemnitees may suffer or incur in connection with any action
taken or omitted by such Indemnitees hereunder or thereunder.  Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Facility Agent and/or the
Security Trustee, as applicable, promptly upon demand for the ratable share of
any out-of-pocket expenses (including reasonable counsel fees and
disbursements) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or waiver of
any provision of, or legal advice in respect of rights or responsibilities
under, this Agreement or the other Transaction Documents, to the extent that
the Agent is not reimbursed for such expenses by the Borrower and to the extent
the same does not result from the gross negligence or willful misconduct of the
Agent.  Under no circumstances shall
either Agent be obligated to expend its own funds for the protection of the
interests of the Lenders, but the Agents shall be entitled to be indemnified to
its satisfaction hereunder by the Lenders prior to taking any action or
expending any funds hereunder.

 

15.7         Credit
Decision.  Each Lender acknowledges
that it has, independently and without reliance upon the Facility Agent,
Security Trustee or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Facility Agent, the Security Trustee or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under this Agreement.

 

15.8         Successor
Agents.  The Facility Agent and the
Security Trustee may resign at any time by giving written notice thereof to the
Lenders and the Borrowers.  Upon any such
resignation, the Lenders shall appoint a successor Facility Agent or Security
Trustee, as applicable, subject to the consent of the Borrower, such consent
not to be unreasonably withheld.  The
Borrower hereby consents to the appointment of any successor Facility Agent or
Security Trustee, as applicable, that is a Creditor or a first class bank.  If no successor Facility Agent or Security
Trustee shall have been so appointed by the Lenders, and shall have accepted
such appointment, within thirty (30) days after the retiring Facility Agent or
Security Trustee gives notice of resignation, then the retiring Facility Agent
or Security Trustee may, on behalf of the Lenders, appoint a successor Facility
Agent or Security Trustee, as applicable, which shall be a bank or trust
company of recognized standing having a combined capital and surplus of at
least $500,000,000.  Upon the acceptance
of its appointment as Facility Agent or Security Trustee hereunder by a successor
respective Agent, such successor Facility Agent or Security Trustee shall
thereupon succeed to and become vested with all the rights and duties of the
respective retiring Agent and the respective retiring Agent shall be discharged
from its duties and obligations hereunder. 
After an Agent’s resignation hereunder, the provisions of this Article shall
inure to its benefit as to

 

63

 

any actions taken or omitted to be taken by it while
it was Facility Agent or Security Trustee, as applicable.

 

15.9         Distribution
of Payments.  Whenever any payment is
received by the Facility Agent from the Borrowers for the account of the
Lenders, or any of them, whether of principal or interest on the Note or
otherwise, it will thereafter cause like funds relating to such payment to be
promptly distributed ratably to the Lenders according to their respective
Commitments, in each case to be applied according to the terms of this
Agreement.  Notwithstanding any other
provision of this Agreement, the Facility Agent (a) may, before making an
amount available to a Lender, deduct and withhold from that amount any sum
which is then due and payable to the Facility Agent from that Lender under this
Agreement or any sum which the Facility Agent is then entitled under this
Agreement to require that Lender to pay on demand, and (b) shall not be
obliged to make available to the Borrower or any Lender any sum which the
Facility Agent is expecting to receive for remittance or distribution to the
Borrower or that Lender until the Facility Agent has satisfied itself that it
has received that sum.

 

15.10       Holder of Interest in Note.  The Facility Agent and the Security Trustee
may treat each Lender as the holder of all of the interest of such Lender in
the Note unless and until the Facility Agent has received a copy of an
Assignment and Assumption Agreement evidencing the transfer of all or any part
of such Lender’s interest in the Facility.

 

15.11       Assumption re Event of Default.  Except as otherwise provided in Section 15.13,
the Facility Agent and the Security Trustee shall be entitled to assume that no
Default or Event of Default, has occurred and is continuing, unless the
Facility Agent has been notified by the Borrower of such fact or has been notified
by a Lender that such Lender considers that a Default or Event of Default
(specifying in detail the nature thereof) has occurred and is continuing.  In the event that the Facility Agent shall
have been notified by any party in the manner set forth in the preceding
sentence of any Default or Event of Default, the Facility Agent shall notify
the Security Trustee and the Lenders and shall take such action and assert such
rights under this Agreement and under the other Transaction Documents as the
Majority Lenders (or, to the extent provided herein, all of the Lenders) shall
request in writing.

 

15.12       Notification of Event of Default.  The Facility Agent hereby undertakes promptly
to notify the Lenders, and each of the Lenders hereby undertakes promptly to
notify the Facility Agent and the other Lenders, of the existence of any Event
of Default which shall have occurred and be continuing of which the Facility
Agent or such Lender has actual knowledge.

 

15.13       Limitations of Liability of Creditors.  None of the Creditors shall be under any
liability or responsibility whatsoever:

 

(a)           to the Borrower or any
other person or entity as a consequence of any failure or delay in performance
by, or any breach by, any other Creditor or any other person of any of its or
their respective obligations under this Agreement or under the other
Transaction Documents;

 

64

 

(b)           to any other Creditor
as a consequence of any failure or delay in performance by, or any breach by,
the Borrower of any of its respective obligations under this Agreement or under
the other Transaction Documents; or

 

(c)           to any other Creditor
for any statements, representations or warranties contained in this Agreement
or in any document or instrument delivered in connection with the transactions
hereby contemplated; or for the validity, effectiveness, enforceability or
sufficiency of this Agreement, the other Transaction Documents or any document
or instrument delivered in connection with the transactions hereby
contemplated.

 

16.           NOTICES AND DEMANDS

 

All notices,
requests, demands and other communications to any party hereunder shall be in
writing (including prepaid overnight courier, facsimile transmission or similar
writing) and shall be given to the Borrower and the Facility Agent at their
respective addresses or facsimile numbers set forth below and to any Lender at
the address or facsimile number set forth on Schedule II or at such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to each other party hereto. 
Each such notice, request or other communication shall be effective (i) if
given by facsimile or e-mail, when such facsimile or e-mail is transmitted to
the facsimile number or e-mail address, as the case may be, specified in this Section and
(telephonic, in the case of a facsimile) confirmation of receipt thereof is
obtained or (ii) if given by mail, prepaid overnight courier or any other
means, when received at the address specified in this Section or when
delivery at such address is refused.

 

If to any Security Party, addressed to it:

c/o OSG America L.P.

Two Harbour Place

302 Knights Run Avenue, Suite 1200

Tampa, Florida 33602

Attention: 
President

Facsimile: 
(813) 221-2769

 

with a copy to

 

OSG Ship Management, Inc.

666 Third Avenue

New York, New York 10017

Attention: Henry Flinter

Telephone: 
(212) 578-1877

Facsimile: 
(212) 578-1670

E-mail: 
hflinter@osg.com

 

If to the Facility Agent:

 

ING Bank N.V.

London Branch

60 London Wall, London

 

65

 

EC2M 5TQ, United Kingdom

Attention:  Craig Baker

Telephone: 44 20 7767 5617

Facsimile:  44 20 7767 7324

E-mail:  craig.baker@uk.ing.com

 

17.           LIMITATION OF
LIABILITY/SURVIVAL OF LIABILITY/CONTINUING INDEMNITIES

 

Notwithstanding
anything to the contrary contained in this Agreement, in the event that any
court or other judicial body of competent jurisdiction determines that legal
principles of fraudulent conveyances, fraudulent transfers or similar concepts
are applicable in evaluating the enforceability against any Security Party or
its respective assets of this Agreement and that under such principles, this
Agreement would not be enforceable against such Security Party or its assets
unless the following provisions of this Section 17 had effect, then, the
maximum liability of each Security Party hereunder (the “Maximum Liability
Amount”) shall be limited so that in no event shall such amount exceed the
lesser of (i) the aggregate outstanding principal amount of the Facility
and (ii) an amount equal to the aggregate, without double counting, of (a) ninety-five
percent (95%) of such Security Party’s Adjusted Net Worth (as hereinafter
defined) on the date hereof, or on the date enforcement of this Agreement is
sought (the “Determination Date”), whichever is greater and (b) the amount
of any Valuable Transfer (as hereinafter defined) to such Security Party;
provided that such Security Party’s liability under this Agreement shall be
further limited to the extent, if any, required so that the obligations of such
Security Party under this Agreement shall not be subject to being set aside or
annulled under any applicable law relating to fraudulent transfers or
fraudulent conveyances.  As used herein “Adjusted
Net Worth” of the respective Security Party shall mean, as of any date of
determination thereof, an amount equal to the lesser of (a) an amount
equal to the excess of (i) the amount of the present fair saleable value
of the assets of such Security Party over (ii) the amount that will be
required to pay such Security Party’s probable liability on its then existing
debts, including contingent liabilities (exclusive of its contingent
liabilities hereunder), as they become absolute and matured, and (b) an
amount equal to (i) the excess of the sum of such Security Party’s
property at a fair valuation over (ii) the amount of all liabilities of
such Security Party, contingent or otherwise (exclusive of its contingent
liabilities hereunder), as such terms are construed in accordance with applicable
laws governing determinations of the insolvency of debtors.  In determining the Adjusted Net Worth of a
Security Party for purposes of calculating the Maximum Liability Amount for
such Security Party, the liabilities of such Security Party to be used in such
determination pursuant to each clause (ii) of the preceding sentence shall
in any event exclude (a) the liability of such Security Party under this
Agreement and (b) the liabilities of such Security Party subordinated in
right of payment to this Agreement.  As
used herein “Valuable Transfer” shall mean, in respect of such Security Party, (a) all
loans, advances or capital contributions made to such Security Party with
proceeds of the Facility, (b) all debt securities or other obligations of
such Security Party acquired from such Security Party or retired by such
Security Party with proceeds of the Facility, (c) the fair market value of
all property acquired with proceeds of the Facility and transferred, absolutely
and not as collateral, to such Security Party, (d) all equity securities
of such Security Party acquired from such Security Party with proceeds of the
Facility, and (e) the value of any other economic benefits in accordance

 

66

 

with applicable laws governing determinations of the insolvency of
debtors, in each such case accruing to such Security Party as a result of the
Facility and this Agreement.

 

18.           MISCELLANEOUS

 

18.1         Time
of Essence.  Time is of the essence
under this Agreement, but no failure or delay on the part of any Creditor to
exercise any power or right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise by any Creditor of any power
or right hereunder preclude any other or further exercise thereof or the
exercise of any other power or right. 
The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.

 

18.2         Severability.  In case any one or more of the provisions
contained in this Agreement or in the other Transaction Documents would, if
given effect, be invalid, illegal or unenforceable in any respect under any law
applicable in any relevant jurisdiction, said provision shall not be
enforceable against the Borrowers, but the validity, legality and
enforceability of the remaining provisions herein or therein contained shall
not in any way be affected or impaired thereby.

 

18.3         References.  References herein to Articles, Sections (or
subdivisions of Sections), Schedules, Annexes or Exhibits are to be construed
as references to articles, sections (or subdivisions of sections) of, and
schedules, annexes or exhibits to, this Agreement or the other Transaction
Documents, as applicable, unless the context otherwise requires.

 

18.4         Further
Assurances.  Each of the Security
Parties hereby agrees that if this Agreement or the other Transaction Documents
shall at any time be deemed by the Lenders for any reason insufficient in whole
or in part to carry out the true intent and spirit hereof or thereof, it will execute
or cause to be executed such other and further assurances and documents as in
the opinion of the Lenders may be required in order more effectively to
accomplish the purposes of this Agreement and/or the other Transaction
Documents.

 

18.5         Prior
Agreements, Merger.  Any and all
prior understandings and agreements heretofore entered into between the
Borrower on the one part and the Creditors on the other part, whether written
or oral, are superseded by and merged into this Agreement and the other Transaction
Documents as to the subject matter hereof or thereof, which alone fully and
completely express the agreements between the Borrower and the Creditors as to
such subject matter.

 

18.6         Entire
Agreement, Amendments.  This
Agreement, the Note and the other Transaction Documents constitute the entire
agreement of the parties hereto as to the subject matter hereof or thereof,
including all parties added hereto pursuant to an Assignment and Assumption
Agreement.  Any provision of this
Agreement, the Note or the other Transaction Documents may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Majority Lenders (and, if the rights or duties of the Facility
Agent are affected thereby, by the Facility Agent); provided that no
amendment or waiver shall, unless signed by all the Lenders, (a) increase
or decrease the Commitment of any Lender or subject any Lender to any
additional obligation, (b) reduce the

 

67

 

principal of or rate of interest on any Advance or any
fees hereunder or any Letter of Credit reimbursement or any fees or other
amounts hereunder, (c) postpone the date fixed for any payment of
principal of or interest on any Advance or any fees hereunder or for any
termination of any Commitment, (d) amend Section 10, (e) waive
any condition precedent to the making of an Advance (other than the condition
precedent set forth in Section 3.2(a)), (f) release any collateral, (g) consent
to the assignment or transfer by the Borrower of any of their rights and
obligations under this Agreement or the other Transaction Documents or (h) amend
or modify the definition of “Majority Lenders” or this Section 18.6.

 

18.7         Headings.  In this Agreement, section headings are
inserted for convenience of reference only and shall not be taken into account
in the interpretation of this Agreement.

 

18.8         Survival.  The obligations of the Borrower under
Sections 6, 10.2, 12 and 13 shall survive the termination of this Agreement and
the payment in full of all obligations hereunder.

 

18.9         Confidentiality.  The Creditors shall hold all non-public
information (either in the form of non-public documentation relating to the
Facility or which otherwise has been identified as non-public information by
the Borrower) obtained pursuant to the requirements of this Agreement
confidential for so long as such information remains non-public in accordance
with its customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
shall have the right to make disclosure (1) to any of their respective
examiners, Affiliates, outside auditors, counsel and other professional
advisors in connection with this Agreement, (2) as reasonably required by
any bona  fide transferee or Participant, to a potential bona
fide transferee or Participant, (3) as required or requested by any
Authority or pursuant to legal process, (4) as required by Applicable Law
or (5) in connection with any litigation to which both a Creditor and the
Borrower are parties; provided, however, that

 

(a)           unless specifically
prohibited by Applicable Law or court order, such Facility Agent or Lender
shall notify the Borrower of any request by any Authority (other than any such
request in connection with an examination of the financial condition of such
Facility Agent or Lender by such Authority) for disclosure of any such
non-public information as soon as possible after any such request;

 

(b)           any such bona fide transferee
or Participant by their acceptance of such assignment or participation shall be
deemed to have agreed (i) to be bound by this Section 18.9 and (ii) to
require any other Person to whom such transferee or Participant discloses such
non-public information to be similarly bound by this Section 18.9;

 

(c)           the Creditors shall
require any potential bona fide transferee or Participant to whom the Creditors
may disclose such non-public information to be bound by a confidentiality
agreement containing provisions substantially identical to this Section 18.9
(except that such Person shall be obligated to return any materials furnished
by the Borrower if it does not become a transferee or Participant) or
incorporating the same by reference;

 

68

 

(d)           except as may be
required by an order of a court of competent jurisdiction and to the extent set
forth therein (but in such case, the Creditors may retain any materials
furnished by the Borrower in accordance with their customary credit or document
retention policies), the Creditors shall not be obligated or required to return
any materials furnished by the Borrower; and

 

(e)           the Creditors shall not
be bound by the terms of this Section 18.9 with respect to any information
which has become or becomes publicly known or available through means other
than a breach of this Agreement.

 

18.10       Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all such counterparts
together shall constitute one and the same instrument.

 

18.11       WAIVER OF IMMUNITY.  TO THE EXTENT THAT ANY SECURITY PARTY HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR
ANY LEGAL PROCESS (WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR
REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH SECURITY PARTY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS.

 

[Signature pages to follow]

 

69

 

IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by
their duly authorized representative as of the day and year first above
written.

 

 

	
   

  	
  OSG AMERICA OPERATING COMPANY LLC,

  
	
   

  	
  as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG AMERICA L.P.,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
  By: OSG America LLC,

  
	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Myles R. Itkin

  
	
   

  	
   

  	
   Name: Myles R. Itkin

  
	
   

  	
   

  	
   Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LUXMAR TANKER LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MAREMAR TANKER LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I Edelson

  
	
   

  	
   

  	
   Title: Manager

  

 

 

	
   

  	
  OSG 192 LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG 209 LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Peter Popov

  
	
   

  	
   

  	
   Name: Peter Popov

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG 242 LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG 243 LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG 244 LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Alan G. Himmelstein

  
	
   

  	
   

  	
   Name: Alan G. Himmelstein

  
	
   

  	
   

  	
   Title: Manager

  

 

 

	
   

  	
  OSG 252 LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Peter Popov

  
	
   

  	
   

  	
   Name: Peter Popov

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG COLUMBIA LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Alan G. Himmelstein

  
	
   

  	
   

  	
   Name: Alan G. Himmelstein

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG COURAGEOUS LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OVERSEAS DILIGENCE LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG ENDURANCE LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Janice K. Smith

  
	
   

  	
   

  	
   Name: Janice K. Smith

  
	
   

  	
   

  	
   Title: Manager

  

 

 

	
   

  	
  OSG ENTERPRISE LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG FREEDOM LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OVERSEAS GALENA BAY LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OVERSEAS INTEGRITY LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG INDEPENDENCE LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  

 

 

	
   

  	
  OVERSEAS PUGET SOUND LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ James I. Edelson

  
	
   

  	
   

  	
   Name: James I. Edelson

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG SEAFARER LLC,

  
	
   

  	
  as joint and several Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Alan G. Himmelstein

  
	
   

  	
   

  	
   Name: Alan G. Himmelstein

  
	
   

  	
   

  	
   Title: Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ING BANK N.V., London Branch

  
	
   

  	
  as Facility Agent, Security Trustee, MLA,

  Bookrunner, Issuing Lender and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ S. J. Fenster

  
	
   

  	
   

  	
   Name: S. J. Fenster

  
	
   

  	
   

  	
   Title: Managing Director

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Adam Byrne

  
	
   

  	
   

  	
   Name: Adam Byrne

  
	
   

  	
   

  	
   Title: Director-Asset Based

  
	
   

  	
   

  	
             Finance

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DNB NOR BANK ASA,

  
	
   

  	
  as MLA, Bookrunner and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Nikolai A. Nachamkin

  
	
   

  	
   

  	
   Name: Nikolai A. Nachamkin

  
	
   

  	
   

  	
   Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/ Sanjiv Nayar

  
	
   

  	
   

  	
   Name: Sanjiv Nayar

  
	
   

  	
   

  	
   Title: Senior Vice

  
	
   

  	
   

  	
             PresidentExhibit 10.2

 

EXECUTION COPY

 

 

AMENDED
AND RESTATED CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

 

AMONG

 

OSG
BULK SHIPS, INC.,

 

OSG
SHIP MANAGEMENT, INC.,

 

OSGAMLP
ONE PERCENT INTEREST CORPORATION,

 

OSG
AMERICA LLC,

 

OSG
AMERICA L.P.

 

AND

 

OSG
AMERICA OPERATING COMPANY LLC

 

 

 

Table of Contents

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  
	
  ARTICLE I

  
	
   

  
	
  Definitions

  
	
   

  
	
  SECTION 1.01.

  	
   

  	
  Definitions

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  Contribution and Conveyance

  
	
   

  
	
  SECTION 2.01.

  	
   

  	
  Acknowledgement of Transfer by Bulk Ships of Luxmar
  and Maremar Interests

  	
   

  	
  5

  
	
  SECTION 2.02.

  	
   

  	
  Transfer by Bulk Ships of OSG MLP Operating Company
  Interests

  	
   

  	
  5

  
	
  SECTION 2.03.

  	
   

  	
  Transfer by OSGM of ATC Interest

  	
   

  	
  5

  
	
  SECTION 2.04.

  	
   

  	
  Issuance of Units and Payment of Reimbursement
  Payment for Luxmar and Maremar Interests and the OSG MLP Operating Company
  Interest

  	
   

  	
  5

  
	
  SECTION 2.05.

  	
   

  	
  Issuance of Units to OSGM for ATC Interest

  	
   

  	
  6

  
	
  SECTION 2.06.

  	
   

  	
  Conversion of Bulk Ships’ Limited Partner Interest

  	
   

  	
  6

  
	
  SECTION 2.07.

  	
   

  	
  Conversion of One Percent’s Limited Partner Interest

  	
   

  	
  6

  
	
  SECTION 2.08.

  	
   

  	
  Conversion of OSG MLP General Partner’s General
  Partner Interest

  	
   

  	
  6

  
	
  SECTION 2.09.

  	
   

  	
  OSG MLP’s Receipt of the OSG MLP Operating Company
  Interest and Luxmar and Maremar Interests

  	
   

  	
  6

  
	
  SECTION 2.10.

  	
   

  	
  OSG MLP’s Receipt of ATC Interest

  	
   

  	
  6

  
	
  SECTION 2.11.

  	
   

  	
  Bulk Ships’, One Percent’s and OSG MLP General
  Partner’s Receipt of Units and Reimbursement Payment

  	
   

  	
  6

  
	
  SECTION 2.12.

  	
   

  	
  OSGM Receipt’s of Units

  	
   

  	
  6

  
	
  SECTION 2.13.

  	
   

  	
  Transfer of Luxmar and Maremar Interest and ATC
  Interest

  	
   

  	
  7

  
	
  SECTION 2.14.

  	
   

  	
  OSG MLP Operating Company’s Receipt of Luxmar and
  Maremar Interests and ATC Interests

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  Assumption of Certain Liabilities and Adoption of Certain
  Limited Liability Company Agreements

  
	
   

  
	
  SECTION 3.01.

  	
   

  	
  Assumption of Liabilities

  	
   

  	
  7

  
	
  SECTION 3.02.

  	
   

  	
  Adoption of Limited Liability Company Agreement of
  OSG MLP Operating Company

  	
   

  	
  7

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.03.

  	
   

  	
  Adoption of Limited Liability Company Agreements of Luxmar Tanker LLC

  	
   

  	
  7

  
	
  SECTION 3.04.

  	
   

  	
  Adoption of Limited Liability Company Agreements of Maremar Tanker
  LLC

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  Additional Transaction

  
	
   

  
	
  SECTION 4.01.

  	
   

  	
  Exercise of the Over-Allotment Option

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  Representations and Warranties

  
	
   

  
	
  SECTION 5.01.

  	
   

  	
  Representations and Warranties of Bulk Ships and One Percent

  	
   

  	
  8

  
	
  SECTION 5.02.

  	
   

  	
  Representations and Warranties of OSGM

  	
   

  	
  9

  
	
  SECTION 5.03.

  	
   

  	
  DISCLAIMER OF WARRANTIES

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  Further Assurances

  
	
   

  
	
  SECTION 6.01.

  	
   

  	
  Further Assurances

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  Miscellaneous

  
	
   

  
	
  SECTION 7.01.

  	
   

  	
  Survival of Representations and Warranties

  	
   

  	
  12

  
	
  SECTION 7.02.

  	
   

  	
  Costs

  	
   

  	
  12

  
	
  SECTION 7.03.

  	
   

  	
  Headings; References; Interpretation

  	
   

  	
  12

  
	
  SECTION 7.04.

  	
   

  	
  Successors and Assigns

  	
   

  	
  12

  
	
  SECTION 7.05.

  	
   

  	
  No Third Party Rights

  	
   

  	
  12

  
	
  SECTION 7.06.

  	
   

  	
  Counterparts

  	
   

  	
  13

  
	
  SECTION 7.07.

  	
   

  	
  Governing Law

  	
   

  	
  13

  
	
  SECTION 7.08.

  	
   

  	
  Severability

  	
   

  	
  13

  
	
  SECTION 7.09.

  	
   

  	
  Deed; Bill of Sale; Assignment

  	
   

  	
  13

  
	
  SECTION 7.10.

  	
   

  	
  Amendment or Modification

  	
   

  	
  13

  
	
  SECTION 7.11.

  	
   

  	
  Entire Agreement

  	
   

  	
  13

  

 

ii

 

AMENDED AND RESTATED CONTRIBUTION, CONVEYANCE
AND ASSUMPTION AGREEMENT (this “Agreement”) dated as of November 15,
2007, between OSG BULK SHIPS, INC., a New York corporation (“Bulk Ships”),
OSG SHIP MANAGEMENT, INC., a Delaware corporation (“OSGM”), OSGAMLP ONE
PERCENT INTEREST CORPORATION, a Delaware corporation (“One Percent”),
OSG AMERICA LLC, a Delaware limited liability company (“OSG MLP General
Partner”), OSG AMERICA L.P., a Delaware limited partnership (“OSG MLP”)
and OSG AMERICA OPERATING COMPANY LLC, a Delaware limited liability company (“OSG
MLP Operating Company”).

 

RECITALS

 

WHEREAS Bulk
Ships and OSG MLP General Partner have formed OSG MLP pursuant to the Delaware
Revised Uniform Limited Partnership Act (the “DRULPA”) for the purpose
of, among other things: (a) acquiring and owning all of the outstanding
limited liability company interests of certain subsidiaries of Bulk Ships that
own or operate certain U.S. flag product carriers and barges used to provide
marine transportation, distribution and logistics services for the
transportation of crude oil and refined petroleum products and (b) to
acquire from OSGM 37.5% of the outstanding limited liability company interests
of Alaska Tanker Company, LLC (the “ATC Interest”), a joint venture that
operates tankers used to transport crude-oil from Alaska to the continental
United States.

 

WHEREAS in
order to accomplish the objectives and purposes in the preceding recital:

 

1.     Bulk
Ships formed OSG MLP General Partner on May 14, 2007, pursuant to the
Delaware Limited Liability Company Act (the “Delaware LLC Act”), and
contributed $100 in exchange for all of the limited liability company interests
in OSG MLP General Partner.

 

2.     Bulk
Ships and OSG MLP General Partner formed OSG MLP on May 14, 2007, pursuant
to the DRULPA, and Bulk Ships contributed $980 in exchange for a limited
partner interest representing a 98% interest in OSG MLP and OSG MLP General
Partner contributed $20 in exchange for a general partner interest representing
a 2% interest in OSG MLP.

 

3.     On
August 30, 2007, Bulk Ships transferred a limited partner interest
representing a 1% interest in OSG MLP to One Percent such that, after such
transfer to One Percent, Bulk Ships held a limited partner interest
representing a 97% interest in OSG MLP, One Percent held a limited partner
interest representing a 1% interest in OSG MLP and OSG MLP General Partner held
a general partner interest representing a 2% interest in OSG MLP.

 

 

4.     On
August 30, 2007, pursuant to that certain Conveyance and Assumption
Agreement dated August 30, 2007, between Bulk Ships and OSG MLP (the “Original
Contribution Agreement”), Bulk Ships conveyed to OSG MLP all of its right
title and interest in and to all of the limited liability company interests in
each of Luxmar Tanker LLC and Maremar Tanker LLC, each a Delaware limited
liability company (the “Luxmar and Maremar Interests”), in consideration
for the agreement by OSG MLP when and if the Registration Statement (as defined
below) becomes effective and the Offering (as defined below) is consummated, to
make a cash distribution, in an aggregate amount not to exceed $150,000,000, to
reimburse Bulk Ships for certain preformation capital expenditures for the
vessel Overseas Luxmar owned by Luxmar Tanker LLC, the vessel Overseas Maremar
owned by Maremar Tanker LLC and certain other vessels expected to be
transferred to OSG MLP.

 

5.     On
October 2, 2007, Bulk Ships formed OSG MLP Operating Company pursuant to
the Delaware LLC Act and contributed $1,000 in exchange for all of the limited
liability company interests in OSG MLP Operating Company.

 

6.     On November 5, 2007, Bulk Ships contributed
to OSG MLP Operating Company, of which Bulk Ships is the sole member, all of
the limited liability company interests in the Bulk Ships Subsidiaries (as defined
below) as an additional capital contribution.

 

WHEREAS in connection with the closing of the Offering (as defined
below) and concurrently with the consummation of the transactions contemplated
hereby, each of the following shall occur:

 

1.     It
is acknowledged that Bulk Ships, on behalf of itself, One Percent and OSG MLP
General Partner, conveyed to OSG MLP the Luxmar and Maremar Interests on August 30,
2007 and Bulk Ships, on behalf of itself, One Percent and OSG MLP General
Partner, will transfer to OSG MLP, subsequent to the execution of the
Underwriting Agreement (as defined below), the OSG MLP Operating Company
Interest (as defined below).  As
consideration therefor, OSG MLP will (a)(i) issue to Bulk Ships 6,496,827 Common
Units (as defined below), (ii) issue to Bulk Ships 14,999,999 Subordinated
Units (as defined below) and (iii) pay to Bulk Ships the Reimbursement
Payment (as defined below), (b) issue to One Percent 277,413 Common Units and
(c)(i) issue to OSG MLP General Partner the Incentive Distribution Rights
and (ii) issue to OSG MLP General Partner 612,244 General Partner Units.

 

2.     OSGM
will convey to OSG MLP, subsequent to the execution of the Underwriting
Agreement, the ATC Interest.  As
consideration therefor, OSG MLP will issue to OSGM, and OSGM will receive 725,759
Common Units.

 

2

 

3.     Bulk
Ships’ limited partner interest representing a 97% interest in OSG MLP, prior
to the execution of the Underwriting Agreement, will be converted into one
Subordinated Unit.

 

4.     One
Percent’s limited partner interest representing a 1% interest in OSG MLP, prior
to the execution of the Underwriting Agreement, will be converted into one
Common Unit.

 

5.     OSG
MLP General Partner’s general partner interest representing a 2% interest in OSG
MLP, prior to the execution of the Underwriting Agreement, will be converted
into one General Partner Unit.

 

6.     OSG
MLP will transfer the Luxmar and Maremar Interests and the ATC Interest to OSG
MLP Operating Company.

 

7.     OSG
MLP, through the underwriters of the Offering (the “Underwriters”) and
pursuant to the Underwriting Agreement, will sell 7,500,000 Common Units to the
public in exchange for $142,500,000 (the “Offering Proceeds”).

 

8.     OSG
MLP will use the Offering Proceeds to (a) pay the underwriting discounts
and commissions and expenses incurred by OSG MLP in connection with the
Offering and (b) make the Reimbursement Payment.

 

WHEREAS the
parties hereto wish to amend and restate the Original Contribution Agreement in
its entirety as set forth herein.

 

NOW, THEREFORE, in
consideration of the foregoing and the respective covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto hereby amend
and restate the Original Contribution Agreement in its entirety as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  Definitions.  For the purposes of this Agreement:

 

“ATC Interest” has the
meaning given to such terms in the recitals to this Agreement.

 

“Bulk Ships Subsidiaries”
means the Delaware limited liability companies set forth on Exhibit A
hereto and, as applicable, that own or operate the vessel set forth opposite
their name.

 

3

 

“Common Units” has the
meaning assigned to such term in the Partnership Agreement (as defined below).

 

“Delaware LLC Act” has
the meaning given to such term in the recitals to this Agreement.

 

“DRULPA” has the meaning
given to such term in the recitals to this Agreement.

 

“Incentive Distribution
Rights” has the meaning assigned to such term in the Partnership Agreement.

 

“Interests” means the
Luxmar and Maremar Interests, the OSG MLP Operating Company Interest and the
ATC Interest.

 

“Laws” or “Law”
means any and all laws, statutes, ordinances, rules or regulations
promulgated by a governmental authority, orders of a governmental authority,
judicial decisions, decisions of arbitrators or determinations of any
governmental authority or court.

 

“Luxmar and Maremar Interests”
has the meaning given to such term in the recitals to this Agreement.

 

“Offering” means the
initial public offering of approximately 7,500,000 Common Units by OSG MLP to
the public.

 

“Offering Proceeds” has
the meaning given to such term in the recitals to this Agreement.

 

“Omnibus Agreement”
means the Omnibus Agreement to be entered into among Overseas Shipholding Group, Inc.,
OSG MLP General Partner and OSG MLP.

 

“Operating Subsidiaries”
means collectively Luxmar Tanker LLC, Maremar Tanker LLC and the Bulk Ships
Subsidiaries.

 

“Original Contribution
Agreement” has the meaning given to such term in the recitals to this
Agreement.

 

“OSG MLP Operating Company
Interest” means all of the limited liability company interests of OSG MLP
Operating Company.

 

“Parties” means the
parties to this Agreement and their successors and permitted assigns.

 

“Partnership Agreement”
means the Amended and Restated Agreement of Limited Partnership of OSG MLP dated
as of the date of this Agreement, as amended, supplemented or otherwise
modified from time to time.

 

4

 

“Registration Statement”
means the registration statement on Form S-1 (File No. 333-145341)
filed by OSG MLP for the Offering, as may be amended.

 

“Reimbursement Payment” means
an aggregate amount equal to $129,500,000, to reimburse Bulk Ships, One Percent
and OSG MLP General Partner for certain preformation capital expenditures in
respect of Overseas Luxmar, Overseas Maremar and certain other vessels being
transferred to OSG MLP.

 

“Subordinated Units” has
the meaning assigned to such term in the Partnership Agreement.

 

“Underwriters” has the
meaning given to such term in the recitals to this Agreement.

 

“Underwriting Agreement”
means the Underwriting Agreement by and among Overseas Shipholding Group, Inc.,
OSG MLP General Partner, OSG MLP, the Underwriters and the other parties
thereto, dated as of November 8, 2007.

 

“Vessels” means the vessels
owned or operated by the Operating Subsidiaries.

 

ARTICLE II

 

Contribution and Conveyance

 

SECTION 2.01.  Acknowledgement
of Transfer by Bulk Ships of Luxmar and Maremar Interests.  Bulk Ships and OSG MLP hereby acknowledge the
assignment, conveyance, transfer and delivery by Bulk Ships, on behalf of
itself, One Percent and OSG MLP General Partner, to OSG MLP of all of its
right, title and interest in and to all of the Luxmar and Maremar Interests on August 30,
2007.

 

SECTION 2.02.  Transfer
by Bulk Ships of OSG MLP Operating Company Interests.  Bulk Ships, on behalf of itself, One Percent
and OSG MLP General Partner, hereby assigns, conveys, transfers and delivers to
OSG MLP all of its right, title and interest in and to the OSG MLP Operating
Company Interest and OSG MLP hereby acquires and accepts from Bulk Ships all
right, title and interest of Bulk Ships in and to the OSG MLP Operating Company
Interest.

 

SECTION 2.03.  Transfer
by OSGM of ATC Interest.  OSGM hereby
assigns, conveys, transfers and delivers to OSG MLP all of its right, title and
interest in and to the ATC Interest and OSG MLP hereby acquires and accepts
from OSGM all right, title and interest of OSGM in and to the ATC Interest.

 

SECTION 2.04.  Issuance
of Units and Payment of Reimbursement Payment for Luxmar and Maremar Interests
and the OSG MLP Operating Company Interest. 
OSG MLP hereby (a)(i) issues to Bulk Ships 6,496,827 Common Units, (ii) issues
to Bulk Ships 14,999,999 Subordinated Units and (iii) makes a cash

 

5

 

distribution
to Bulk Ships in an aggregate amount equal to the Reimbursement Payment, (b) issues
to One Percent 277,213 Common Units and (c)(i) issues the OSG MLP General
Partner the Incentive Distribution Rights and (ii) issues to OSG MLP
General Partner 612,244 General Partner Units.

 

SECTION 2.05.  Issuance
of Units to OSGM for ATC Interest. 
OSG MLP hereby issues to OSGM 725,759 Common Units.

 

SECTION 2.06.  Conversion
of Bulk Ships’ Limited Partner Interest. 
OSG MLP hereby converts Bulk Ships’ limited partner interest
representing a 97% interest in OSG MLP, prior to the execution of the
Underwriting Agreement, into one Subordinated Unit and Bulk Ships hereby
acknowledges receipt of such one Subordinated Unit.

 

SECTION 2.07.  Conversion
of One Percent’s Limited Partner Interest. 
OSG MLP hereby converts One Percent’s limited partner interest
representing a 1% interest in OSG MLP, prior to the execution of the
Underwriting Agreement, into one Common Unit and One Percent hereby
acknowledges receipt of such one Common Unit.

 

SECTION 2.08.  Conversion
of OSG MLP General Partner’s General Partner Interest.  OSG MLP hereby converts OSG MLP General
Partner’s general partner interest representing a 2% interest in OSG MLP, prior
to the execution of the Underwriting Agreement, into one General Partner Unit
and OSG MLP hereby acknowledges receipt of such one General Partner Unit.

 

SECTION 2.09.  OSG MLP’s
Receipt of the OSG MLP Operating Company Interest and Luxmar and Maremar
Interests.  As consideration for (a) the
issuance of 6,774,241 Common Units, 14,999,999 Subordinated Units, the
Incentive Distribution Rights and 612,244 General Partner Units and (b) the
making of the Reimbursement Payment, OSG MLP hereby acknowledges receipt of the
OSG MLP Operating Company Interest and the Luxmar and Maremar Interests.

 

SECTION 2.10.  OSG MLP’s
Receipt of ATC Interest.  As
consideration for the issuance of 725,759 Common Units OSG MLP hereby
acknowledges receipt of the ATC Interest.

 

SECTION 2.11.  Bulk Ships’,
One Percent’s and OSG MLP General Partner’s Receipt of Units and Reimbursement
Payment.  As consideration for the
OSG MLP Operating Company Interest, the Luxmar and Maremar Interests and the
conversion of their existing interests in OSG MLP as provided for in this
Agreement, (a) Bulk Ships hereby acknowledges receipt of (i) 6,496,827
Common Units, (ii) 15,000,000 Subordinated Units and (iii) the
Reimbursement Payment, (b) One Percent hereby acknowledges receipt of 277,414
Common Units and (c) OSG MLP General Partner hereby acknowledges receipt
of (i) the Incentive Distribution Rights and (ii) 612,245 General
Partner Units.

 

SECTION 2.12.  OSGM
Receipt’s of Units.  As consideration
for the ATC Interest, OSGM hereby acknowledges receipt of 725,759 Common Units.

 

6

 

SECTION 2.13.  Transfer
of Luxmar and Maremar Interest and ATC Interest.  OSG MLP hereby assigns, conveys, transfers and
delivers the Luxmar and Maremar Interests and the ATC Interest to OSG MLP Operating
Company and OSG MLP Operating Company hereby acknowledges receipt of such
Luxmar and Maremar Interests.

 

SECTION 2.14.  OSG MLP
Operating Company’s Receipt of Luxmar and Maremar Interests and ATC Interests.  OSG MLP Operating Company hereby acknowledges
receipt of the Luxmar and Maremar Interests and the ATC Interest.

 

ARTICLE III

 

Assumption of Certain Liabilities and Adoption of Certain Limited
Liability Company Agreements

 

SECTION 3.01.  Assumption
of Liabilities.  In connection with
the transfer of the OSG MLP Operating Company Interest by Bulk Ships, on behalf
of itself, One Percent and OSG MLP General Partner, as described in Article II
above, OSG MLP hereby assumes and agrees to duly and timely pay, perform and
discharge when due all of liabilities and obligations of the applicable Vessel Owning
Subsidiary relating the construction costs or rebuilding expenses with respect
to the vessels OSG Endurance, OSG Courageous and OSG 243, to the full extent
that such Vessel Owning Subsidiary has been or would have been in the future
obligated to pay, perform and discharge such liabilities and obligations were it
not for the execution and delivery of this Agreement; provided, however,
that such assumption and agreement to duly and timely pay, perform and
discharge such liabilities and obligations shall not (a) increase the
obligation of OSG MLP with respect to such liabilities and obligations beyond
that of the applicable Vessel Owning Subsidiary, (b) waive any defense
that was available to such Vessel Owning Subsidiary with respect to such liabilities
and obligations or (c) enlarge any rights or remedies of any third party
under or with respect to any such liabilities and obligations.

 

SECTION 3.02.  Adoption
of Limited Liability Company Agreement of OSG MLP Operating Company.  OSG MLP hereby agrees that all of the limited
liability company interests in OSG MLP Operating Company acquired by OSG MLP
pursuant to this Agreement shall be bound by and the subject to the terms of
the Limited Liability Company Agreement of OSG MLP Operating Company dated as
of October 2, 2007, as amended (the “OSG MLP Operating Company LLC
Agreement”) and hereby adopts and agrees to be bound by the terms of the OSG
MLP Operating Company LLC Agreement with the same force and effect as if OSG
MLP were originally party thereto.

 

SECTION 3.03.  Adoption
of Limited Liability Company Agreements of Luxmar Tanker LLC.  OSG MLP Operating Company hereby agrees that
all of the limited liability company interests in Luxmar Tanker LLC acquired by
OSG MLP Operating Company pursuant to this Agreement shall be bound by and
subject to the terms of the limited liability company agreement of Luxmar
Tanker LLC, as amended

 

7

 

through the
date of this Agreement (the “Luxmar LLC Agreement”), and hereby adopts
and agrees to be bound by the terms of the Luxmar LLC Agreement with the same
force and effect as if OSG MLP Operating Company were originally a party
thereto.

 

SECTION 3.04.  Adoption
of Limited Liability Company Agreements of Maremar Tanker LLC.  OSG MLP Operating Company hereby agrees that
all of the limited liability company interests in Maremar Tanker LLC acquired
by OSG MLP Operating Company pursuant to this Agreement shall be bound by and
subject to the terms of the limited liability company agreement of Maremar
Tanker LLC, as amended through the date of this Agreement (the “Maremar LLC
Agreement”), and hereby adopts and agrees to be bound by the terms of the Maremar
LLC Agreement with the same force and effect as if OSG MLP Operating Company
were originally a party thereto.

 

ARTICLE IV

 

Additional Transaction

 

SECTION 4.01.  Exercise
of the Over-Allotment Option.  The
Parties agree that if the Underwriters exercise their over-allotment option
with respect to the Offering, OSG MLP shall redeem first from One Percent,
second from OSGM and third from Bulk Ships until an aggregate number of Common
Units has been redeemed equal to the number of Common Units issued upon the
exercise of the over-allotment option, at a price per common unit equal to the
price per Common Unit before expenses, but after underwriting discounts,
commissions and structuring fees.

 

ARTICLE V

 

Representations and Warranties

 

SECTION 5.01.  Representations and Warranties of Bulk
Ships and One Percent.  Bulk Ships
and One Percent hereby, jointly and severally, represent and warrant to OSG MLP
as follows:

 

(a)  Organization,
Standing and Power.  Each of the Operating
Subsidiaries is a limited liability company duly formed, validly existing and
in good standing under Delaware law and has the power to own, lease, charter,
operate or otherwise hold its assets and to conduct its businesses as presently
conducted.

 

(b)  Authority;
Execution and Delivery; Enforceability. 
Each of Bulk Ships and One Percent has full power and authority to
execute this Agreement and to consummate the transactions contemplated
hereby.  The execution and delivery by each
of Bulk Ships and One Percent of this Agreement and the consummation by each of
Bulk Ships and One Percent of the transactions contemplated hereby have been
duly authorized by all necessary corporate action.  Each of Bulk Ships and One Percent has duly
executed and delivered this Agreement and this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, subject

 

8

 

to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity at law.

 

(c)  No Conflicts;
Consents.  The execution, delivery
and performance by Bulk Ships and One Percent of this Agreement will not
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under any provision of (i) their or any Vessel
Owning Subsidiary’s certificate of formation or certificate of incorporation or
limited liability company agreement, by-laws or other organizational documents,
(ii) any lien, encumbrance, security interest, pledge, mortgage, charge,
other claim, contract, lease, license, indenture, agreement, commitment or
other legally binding arrangement to which they or any Vessel Owning Subsidiary
is a party or by which any of their or any Vessel Owning Subsidiary’s assets
may be bound or (iii) any applicable Law. 
Except as already obtained, no material consent, approval, license,
permit, order or authorization of, or registration, declaration or filing with,
any federal, state, local or foreign governmental authority is required in
connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.

 

(d)  The Interests.  Bulk Ships has good and valid title to the Luxmar
and Maremar Interests and the OSG MLP Operating Company Interest, free and
clear of all mortgages, liens, security interests, covenants, options, claims,
restrictions, or encumbrances of any kind. 
With respect to the Luxmar and Maremar Interests and the OSG MLP
Operating Company Interest, there is no further obligation to make any capital
contribution to the applicable Vessel Owning Subsidiary.

 

SECTION 5.02.  Representations and Warranties of OSGM.  OSGM hereby represents and warrants to OSG
MLP as follows:

 

(a)  Organization,
Standing and Power.  Alaska Tanker
Company, LLC (“ATC”) is a limited liability company duly formed, validly
existing and in good standing under Delaware law and has the power to own,
lease, charter, operate or otherwise hold its assets and to conduct its
businesses as presently conducted.

 

(b)  Authority;
Execution and Delivery; Enforceability. 
OSGM has full power and authority to execute this Agreement and to
consummate the transactions contemplated hereby.  The execution and delivery by OSGM of this
Agreement and the consummation by OSGM of the transactions contemplated hereby
have been duly authorized by all necessary corporate action.  OSGM has duly executed and delivered this
Agreement and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity at law.

 

(c)  No Conflicts;
Consents.  The execution, delivery
and performance by OSGM of this Agreement will not conflict with, or result in
any violation of or default

 

9

 

(with or without notice or lapse of time, or
both) under any provision of (i) its or ATC’s certificate of formation or
certificate of incorporation or limited liability company agreement or by-laws,
(ii) any lien, encumbrance, security interest, pledge, mortgage, charge,
other claim, contract, lease, license, indenture, agreement, commitment or
other legally binding arrangement to which it or ATC is a party or by which any
of its or ATC’s assets may be bound or (iii) any applicable Law.  Except as already obtained, no material
consent, approval, license, permit, order or authorization of, or registration,
declaration or filing with, any federal, state, local or foreign governmental
authority is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.

 

(d)  The Interests.  OSGM has good and valid title to the ATC Interest,
free and clear of all mortgages, liens, security interests, covenants, options,
claims, restrictions, or encumbrances of any kind.  With respect to the ATC Interest, there is no
further obligation to make any capital contribution to the ATC.

 

SECTION 5.03.  DISCLAIMER OF WARRANTIES.  (a)  EXCEPT TO THE EXTENT PROVIDED IN
ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR
THE OFFERING INCLUDING THE OMNIBUS AGREEMENT, THE PARTIES HEREBY ACKNOWLEDGE
AND AGREE THAT NONE OF THE PARTIES HAS MADE, OR MAKES AND EACH SUCH PARTY
SPECIFICALLY NEGATES, DISCLAIMS AND DENIES ANY REPRESENTATIONS, WARRANTIES,
PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR
PRESENT, REGARDING (i) THE VALUE, NATURE, QUALITY OR CONDITION OF THE OPERATING
SUBSIDIARIES AND THE ASSETS OWNED BY THE OPERATING SUBSIDIARIES (INCLUDING THE
VESSELS), INCLUDING THE ENVIRONMENTAL CONDITION OF SUCH ASSETS GENERALLY,
INCLUDING, THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES OR OTHER MATTERS IN,
ON OR ABOUT SUCH ASSETS, (ii) THE INCOME TO BE DERIVED FROM SUCH ASSETS, (iii) THE
SUITABILITY OF SUCH ASSETS FOR ANY AND ALL ACTIVITIES AND USES THAT MAY BE
CONDUCTED THEREON, THEREBY OR THEREWITH, (iv) THE COMPLIANCE OF OR BY SUCH
ASSETS OR THEIR OPERATION WITH ANY LAWS (INCLUDING ENVIRONMENTAL PROTECTION OR
POLLUTION LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (v) THE
SEAWORTHINESS, HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF SUCH ASSETS. EXCEPT TO THE EXTENT PROVIDED
IN ANY OTHER DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT
OR THE OFFERING INCLUDING THE OMNIBUS AGREEMENT, EACH PARTY ACKNOWLEDGES AND
AGREES THAT IT HAS HAD THE OPPORTUNITY TO INSPECT THE RESPECTIVE ASSETS OF THE OPERATING
SUBSIDIARIES AND IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE RESPECTIVE
ASSETS OF THE OPERATING SUBSIDIARIES AND NOT ON ANY INFORMATION PROVIDED OR TO
BE PROVIDED BY ANY OF THE OTHER

 

10

 

PARTIES. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED
OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING INCLUDING THE
OMNIBUS AGREEMENT, NONE OF THE PARTIES IS LIABLE OR BOUND IN ANY MANNER BY ANY
VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
ASSETS OF THE OPERATING SUBSIDIARIES FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT
OR THIRD PARTY. EXCEPT TO THE EXTENT PROVIDED IN ANY OTHER DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE OFFERING INCLUDING THE
OMNIBUS AGREEMENT, EACH OF THE PARTIES HEREBY ACKNOWLEDGES THAT, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, THE ASSETS OWNED BY THE OPERATING SUBSIDIARIES, AS
PROVIDED FOR HEREIN, ARE CONVEYED ON AN “AS IS,” “WHERE IS” CONDITION WITH ALL
FAULTS, AND THE ASSETS OF THE OPERATING SUBSIDIARIES ARE CONVEYED SUBJECT TO
ALL OF THE MATTERS CONTAINED IN THIS SECTION. THIS SECTION SHALL SURVIVE
SUCH CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE PROVISIONS OF THIS SECTION HAVE
BEEN NEGOTIATED BY THE PARTIES AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A
COMPLETE EXCLUSION, NEGATION AND DENIAL OF ANY REPRESENTATIONS OR WARRANTIES,
WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE ASSETS OF THE OPERATING
SUBSIDIARIES THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN
EFFECT, OR OTHERWISE, EXCEPT AS SET FORTH IN THIS AGREEMENT OR ANY OTHER
DOCUMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR THE
OFFERING, INCLUDING, THE OMNIBUS AGREEMENT.

 

ARTICLE VI

 

Further Assurances

 

SECTION 6.01.  Further
Assurances.  From time to time, and
without any further consideration, as and when requested by any Party, each
Party shall execute and deliver, or cause to be executed and delivered, all
such documents and instruments and shall take, or cause to be taken, all such
further or other actions as such other Party may reasonably deem necessary or
desirable to consummate the transactions contemplated by this Agreement
including, in the case of Bulk Ships, One Percent and OSGM executing and delivering
to OSG MLP such assignments, deeds, bills of sale, consents and other
instruments as OSG MLP may reasonably request as necessary or desirable for
such purpose.

 

11

 

ARTICLE VII

 

Miscellaneous

 

SECTION 7.01.  Survival
of Representations and Warranties. 
The representations and warranties of Bulk Ships and OSGM in this
Agreement and in or under any documents, instruments and agreements delivered
pursuant to this Agreement, will survive the completion of the transactions
contemplated hereby regardless of any independent investigations that OSG MLP
may make or cause to be made, or knowledge it may have, prior to the date of
this Agreement and will continue in full force and effect for a period of one
year from the date of this Agreement.  At
the end of such period, such representations and warranties will terminate, and
no claim may be brought by OSG MLP against Bulk Ships or OSGM thereafter based upon
such representations and warranties.

 

SECTION 7.02.  Costs.  OSG MLP shall pay any and all sales, use and
similar taxes arising out of the conveyances and deliveries to be made
hereunder and shall pay all documentary, filing, recording, transfer, deed, and
conveyance taxes and fees required in connection therewith.

 

SECTION 7.03.  Headings;
References; Interpretation.  All Article and
Section headings in this Agreement are for convenience only and shall not
be deemed to control or affect the meaning or construction of any of the
provisions hereof. The words “hereof,” “herein” and “hereunder” and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement. All references herein to
Articles and Sections shall, unless the context requires a different
construction, be deemed to be references to the Articles and Sections of this
Agreement, respectively. All personal pronouns used in this Agreement, whether
used in the masculine, feminine or neuter gender, shall include all other
genders, and the singular shall include the plural and vice versa. The use
herein of the word “including” following any general statement, term or matter
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, but rather shall be deemed to refer to all other items or matters
that could reasonably fall within the broadest possible scope of such general
statement, term or matter, and whenever the words “include”, “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without
limitation”.

 

SECTION 7.04.  Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and assigns.

 

SECTION 7.05.  No Third
Party Rights.  The provisions of this
Agreement are intended to bind the Parties as to each other and are not
intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended
to be a third party beneficiary of any of the provisions of this Agreement.

 

12

 

SECTION 7.06.  Counterparts.  This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the Parties and delivered to the other Parties.

 

SECTION 7.07.  Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, applicable to agreements made and to be performed entirely within such
State, without regard to the conflicts of law principles of such State.

 

SECTION 7.08.  Severability.  If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.

 

SECTION 7.09.  Deed; Bill
of Sale; Assignment.  To the extent
required and permitted by applicable Law, this Agreement shall also constitute
a “deed,” “bill of sale” or “assignment” of the Interests.

 

SECTION 7.10.  Amendment
or Modification.  This Agreement may
be amended or modified from time to time only by the written agreement of all
the Parties hereto.

 

SECTION 7.11.  Entire
Agreement.  This Agreement
constitutes the entire agreement of the Parties relating to the matters
contained herein, superseding all prior contracts or agreements, whether oral
or written, relating to the matters contained herein.

 

[Signature Page Follows]

 

13

 

IN WITNESS WHEREOF, this
Agreement has been duly executed by the parties set forth below.

 

 

	
   

  	
  OSG BULK SHIPS, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by:

  
	
   

  	
   

  	
   

  	
       /s/ Myles R. Itkin

  
	
   

  	
   

  	
   

  	
  Name: Myles R. Itkin

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice President &
  Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG SHIP MANAGEMENT, INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by:

  
	
   

  	
   

  	
   

  	
       /s/ Lois Zabrocky

  
	
   

  	
   

  	
   

  	
  Name: Lois Zabrocky

  
	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSGAMLP ONE PERCENT INTEREST

  CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  	
  by:

  
	
   

  	
   

  	
   

  	
       /s/ Jerry Miller

  
	
   

  	
   

  	
   

  	
  Name: Jerry Miller

  
	
   

  	
   

  	
   

  	
  Title: Vice President & Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG AMERICA LLC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by:

  
	
   

  	
   

  	
   

  	
       /s/ Myles R. Itkin

  
	
   

  	
   

  	
   

  	
  Name: Myles R. Itkin

  
	
   

  	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

[Signature Page to Amended and Restated Contribution, Conveyance and
Assumption Agreement]

 

 

	
   

  	
  OSG AMERICA L.P.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by:

  	
  OSG AMERICA LLC, its general

  partner,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  by

  
	
   

  	
   

  	
   

  	
   

  	
       /s/ Myles R. Itkin

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Myles R. Itkin

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OSG AMERICA OPERATING

  COMPANY LLC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  by:

  
	
   

  	
   

  	
   

  	
       /s/ Janice K. Smith

  
	
   

  	
   

  	
   

  	
  Name: Janice K. Smith

  
	
   

  	
   

  	
   

  	
  Title: Authorized Officer

  

 

[Signature Page to Amended and Restated
Contribution, Conveyance and Assumption Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]