Document:

Exhibit 4(d)

                                  $240,000,000

                                CREDIT AGREEMENT

                                      AMONG

                        OVERSEAS SHIPHOLDING GROUP, INC.,
                              OSG BULK SHIPS, INC.,
                            OSG INTERNATIONAL, INC.,
                         as joint and several Borrowers,

                              JPMORGAN CHASE BANK,
                       as Administrative Agent and Lender,

                              DEN NORSKE BANK ASA,
                 as Syndication Agent, Lead Arranger and Lender,

                                     NORDEA,
                 as Syndication Agent, Lead Arranger and Lender,

                   LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE,
                as Documentation Agent, Lead Arranger and Lender,

                    HAMBURGISCHE LANDESBANK - GIROZENTRALE-,
                          as Lead Arranger and Lender,

                             NIB CAPITAL BANK N.V.,
                          as Lead Arranger and Lender,

                          J.P. MORGAN SECURITIES INC.,
                                as Lead Arranger,

                                       AND

        The Banks and Financial Institutions listed on Schedule 1 hereto,
                                    as Banks

                          Dated as of December 12, 2001

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.    DEFINITIONS..............................................................1
      1.1. Defined Terms.......................................................1
      1.2. Computation of Time Periods; Other Definitional Provisions.........23
      1.3. Accounting Terms...................................................23

2.    THE ADVANCES............................................................23
      2.1. Advances...........................................................23
      2.2. Drawdown Notice....................................................24
      2.3. Effect of Drawdown Notice..........................................24
      2.4. Funding of Advances................................................24
      2.5. Notation of Advances...............................................25
      2.6. Reduction of the Commitments.......................................25
      2.7. Mandatory Prepayments..............................................26
      2.8. Several Obligations................................................26
      2.9. Pro Rata Treatment.................................................26

3.    CONDITIONS..............................................................26
      3.1. Conditions Precedent to Availability of the Facility...............26
      3.2. Further Conditions Precedent.......................................28
      3.3. Satisfaction after Drawdown........................................28

4.    REPAYMENT AND PREPAYMENT................................................28
      4.1. Repayment..........................................................28
      4.2. Prepayment.........................................................29
      4.3. Borrowers' Obligations Absolute....................................29

5.    INTEREST AND RATE.......................................................29
      5.1. Payment of Interest; Interest Rate.................................29
      5.2. Calculation of Interest............................................30
      5.3. Maximum Interest...................................................30

6.    PAYMENTS................................................................30
      6.1. Place of Payments; No Set Off......................................30
      6.2. Federal Income Tax Credits.........................................30
      6.3. Sharing of Setoffs.................................................31

7.    REPRESENTATIONS AND WARRANTIES..........................................31

8.    COVENANTS...............................................................36
      8.1. Affirmative Covenants..............................................36
      8.2. Negative Covenants.................................................44

9.    EVENTS OF DEFAULT.......................................................48
      9.1. Events of Default..................................................48

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      9.2. Application of Moneys..............................................50

10.   ASSIGNMENTS; PARTICIPATIONS; PLEDGES....................................50
      10.1. Assignments.......................................................50
      10.2. Participations....................................................51
      10.3. Promissory Notes..................................................51
      10.4. Security Interest.................................................51

11.   ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.......................52
      11.1. Illegality........................................................52
      11.2. Increased Cost....................................................52
      11.3. Nonavailability of Funds..........................................53
      11.4. Determination of Losses...........................................53
      11.5. Compensation for Losses...........................................53
      11.6. Compensation for Breakage Costs...................................54
      11.7. Currency Indemnity................................................54
      11.8. Replacement of Bank or Participant................................55

12.   FEES, EXPENSES AND INDEMNIFICATION......................................55
      12.1. Fees..............................................................55
      12.2. Expenses; Indemnity; Damage Waiver................................56

13.   APPLICABLE LAW, JURISDICTION AND WAIVER.................................57
      13.1. Applicable Law....................................................57
      13.2. Jurisdiction......................................................57
      13.3. Waiver of Jurisdiction , Forum Non Conveniens.....................57
      13.4. Waiver Of Jury Trial..............................................58

14.   THE AGENTS..............................................................58
      14.1.  Appointment and Authorization....................................58
      14.2.  Agents and Affiliates............................................58
      14.3.  Action by Agents.................................................58
      14.4.  Consultation with Experts........................................58
      14.5.  Liability of the Agents..........................................58
      14.6.  Indemnification..................................................59
      14.7.  Credit Decision..................................................59
      14.8.  Successor Administrative Agent...................................59
      14.9.  Administrative Fee...............................................60
      14.10. Distribution of Payments.........................................60
      14.11. Holder of Interest in Notes......................................60
      14.12. Assumption re Event of Default...................................60
      14.13. Notification of Event of Default.................................61
      14.14. Limitations of Liability of Creditors............................61

15.   NOTICES AND DEMANDS.....................................................61

                                       ii
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16.   LIMITATION OF LIABILITY/SURVIVAL OF LIABILITY/CONTINUING INDEMNITIES....62
      16.1.  Limitation of Liability..........................................62

17.   MISCELLANEOUS...........................................................63
      17.1.  Time of Essence..................................................63
      17.2.  Severability.....................................................63
      17.3.  References.......................................................63
      17.4.  Further Assurances...............................................64
      17.5.  Prior Agreements, Merger.........................................64
      17.6.  Entire Agreement, Amendments.....................................64
      17.7.  Headings.........................................................64
      17.8.  Survival.........................................................64
      17.9.  Confidentiality..................................................64
      17.10. Counterparts.....................................................65
      17.11. Waiver Of Immunity...............................................65

SCHEDULE I - BANKS

SCHEDULE II - APPLICABLE MARGIN

SCHEDULE III - FUNDED DEBT AT DECEMBER 31. 1999

SCHEDULE IV - ACCEPTABLE BROKERS

EXHIBIT A - FORM OF ADMINISTRATIVE QUESTIONAIRE

EXHIBIT B - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

EXHIBIT C - PROMISSORY NOTE

EXHIBIT D - FORM OF DRAWDOWN NOTICE1

EXHIBIT E - FORM OF COMPLIANCE CERTIFICATE

EXHIBIT F - FORM OF INTEREST NOTICE

EXHIBIT G - FORM OF OPINION OF PROSKAUER ROSE LLP, SPECIAL COUNSEL TO THE
            BORROWERS

EXHIBIT H - FORM OF OPINION OF ROBERT N. COWEN, ESQ. COUNSEL TO OSG AND OSG BULK

EXHIBIT I - FORM OF OPINION OF MARK LOWE, ESQ., COUNSEL TO OSG INTERNATIONAL

EXHIBIT J - FORM OF OPINION OF SEWARD & KISSEL LLP, SPECIAL COUNSEL TO THE
            AGENTS

                                      iii
<PAGE>

                                CREDIT AGREEMENT

            THIS CREDIT AGREEMENT (the "Agreement") is made as of the 12th day
of December, 2001, by and among (1) OVERSEAS SHIPHOLDING GROUP, INC., a
corporation incorporated under the laws of the State of Delaware ("OSG"), with
offices at 511 Fifth Avenue, New York, New York 10017, (2) OSG BULK SHIPS, INC.,
a corporation incorporated under the laws of the State of New York ("OSG Bulk"),
with offices at 511 Fifth Avenue, New York, New York 10017, (3) OSG
INTERNATIONAL, INC., a corporation incorporated under the laws of the Republic
of the Marshall Islands with offices at 511 Fifth Avenue, New York, New York
10017 ("OSG International," jointly and severally with OSG and OSG Bulk, the
"Borrowers," each a "Borrower"), (4) the banks and financial institutions whose
names and addresses are set out in Schedule 1 hereto (together with any assignee
pursuant to Section 10, the "Banks," each a "Bank"), (5) JPMORGAN CHASE BANK
(successor by merger to The Chase Manhattan Bank), in its capacity as
administrative agent for the Banks (the "Administrative Agent") and lender, (6)
DEN NORSKE BANK ASA ("DnB"), as syndication agent for the Banks and lender, (7)
NORDEA, acting through Nordea Bank Finland Plc, New York Branch, as syndication
agent for the Banks and lender (together with DnB, the "Syndication Agents"),
(8) LANDESBANK SCHLESWIG-HOLSTEIN GIROZENTRALE, as documentation agent for the
Banks and lender (the "Documentation Agent" and together with the Administrative
Agent and the Syndication Agents, the "Agents"), (9) HAMBURGISCHE
LANDESBANK-GIROZENTRALE-, lender and (10) NIB CAPITAL BANK N.V., as lender.

                                WITNESSETH THAT:

            WHEREAS, at the request of the Borrowers, each of the Agents has
agreed to act in its respective capacity as set forth herein and the Banks have
agreed to provide to the Borrowers a revolving credit facility in the initial
amount of $240,000,000 on the terms and conditions set forth herein which
facility may be increased, to the extent Commitments from additional Banks are
obtained after the date hereof and prior to January 31, 2002, up to $300,000,000
on the terms and subject to the conditions set forth herein and in the
Commitment Letter (as hereinafter defined);

            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 Fixed Charges"               shall mean for each period of four
                                       consecutive fiscal quarters (taken as a
                                       single accounting period) for which a
                                       determination is being made, the sum of
                                       (i) Fixed Charges plus (ii) the average
                                       of the amount of Current Debt of OSG and
                                       the Recourse

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                                       Subsidiaries outstanding as of the end of
                                       each fiscal quarter within such period;

"Administrative Agent"                 shall have the meaning ascribed thereto
                                       in the preamble;

"Administrative Questionnaire"         shall mean, with respect to each Bank, an
                                       administrative questionnaire
                                       substantially in the form of Exhibit A
                                       hereto, submitted to the Administrative
                                       Agent (with a copy to the Borrowers) duly
                                       completed by such Bank;

"Advance"                              shall mean any amount advanced or
                                       requested to be advanced to the Borrowers
                                       pursuant to Section 2.1; provided that
                                       each such Advance shall be in a minimum
                                       amount of $10,000,000 or any larger
                                       multiple of $1,000,000;

"Advance Time Charter                  shall mean, as of the date of any
Revenues"                              determination thereof, the amount of
                                       advance time charter revenues of OSG and
                                       its Recourse Subsidiaries that are
                                       properly included on the liability side
                                       of OSG's most recent consolidated balance
                                       sheet, determined in accordance with
                                       GAAP, and if not listed as separate line
                                       items on such balance sheet, such amounts
                                       as are described separately in the
                                       applicable Compliance Certificate
                                       required pursuant to Section 8.1(d)(iii);

"Affiliate"                            shall mean, with respect to any Person,
                                       (i) any Person that directly, or
                                       indirectly through one or more
                                       intermediaries, Controls such Person (a
                                       "Controlling 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;

"Agent(s)"                             shall have the meaning ascribed thereto
                                       in the preamble;

"Applicable Law"                       shall mean any Law of any Authority,
                                       including, without limitation, all
                                       Federal, state and foreign 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 Margin"                    shall mean a margin which will vary as
                                       set forth on Schedule II attached hereto
                                       based upon the rating levels assigned to
                                       OSG's senior long-term unsecured debt
                                       (without third-party credit enhancement)
                                       by S&P and Moody's and in certain cases,
                                       Fitch;

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

"Assignment and                        shall mean the Assignment and Assumption
                                       Agreement(s)

                                       2
<PAGE>

Assumption Agreement(s)"               executed pursuant to Section 10.1 or 11.8
                                       substantially in the form of Exhibit B;

"Attributable Debt"                    shall mean, as of the date of any
                                       determination thereof, in connection with
                                       any Sale and Leaseback Transaction which
                                       is not permitted pursuant to Section
                                       8.2(d)(ii), the lesser of (i) the sum of
                                       the Fair Market Value of any vessels
                                       subject to such transaction and the fair
                                       market value of any non-vessel assets
                                       subject to such transaction or (ii) the
                                       present value (computed in accordance
                                       with GAAP at the imputed rate of interest
                                       used in such transaction) of the
                                       obligation of a lessee in such
                                       transaction for Rentals during the
                                       remaining term of any lease (including
                                       any period for which such lease has been
                                       extended or may, at the option of the
                                       lessor, be extended);

"Authority"                            shall mean any governmental or
                                       quasi-governmental authority, whether
                                       executive, legislative, judicial,
                                       administrative, monetary or other, or any
                                       combination thereof, including, without
                                       limitation, any Federal, state,
                                       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;

"Bank(s)"                              shall have the meaning ascribed thereto
                                       in the preamble;

"Banking Day(s)"                       shall mean any day that is not a
                                       Saturday, Sunday or other day on which
                                       (a) commercial banks in New York, New
                                       York are authorized or required by law to
                                       remain closed, or (b) banks are not
                                       generally open for dealing in dollar
                                       deposits in the London interbank market;

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

"Borrower(s)"                          shall have the meaning ascribed thereto
                                       in the preamble;

"Capital Construction Funds"           shall mean as of the date of any
                                       determination thereof, the aggregate
                                       amount on deposit in capital construction
                                       funds established and maintained pursuant
                                       to agreement with the Secretary of
                                       Transportation in accordance with Section
                                       1177 of the Merchant Marine Act, 1936, as
                                       amended, 46 U.S.C. Appx. Section 1177,
                                       for the account of OSG and the Recourse

                                       3
<PAGE>

                                       Subsidiaries;

"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 as
                                       determined in accordance with GAAP of OSG
                                       and the Recourse Subsidiaries including,
                                       without limitation, cash of OSG and the
                                       Recourse Subsidiaries included in Capital
                                       Construction Funds (net of any taxes
                                       calculated at the applicable rate for
                                       non-qualified withdrawals pursuant to
                                       Section 1177 of the Merchant Marine Act,
                                       1936, as amended, 46 U.S.C. Appx. Section
                                       1177, and penalties thereon, if any),
                                       interest-bearing deposits in banks or
                                       trust companies described in clause (c)
                                       of the definition of "Permitted
                                       Investments" with maturities of less than
                                       one year held by OSG and the Recourse
                                       Subsidiaries as the same are reflected in
                                       a consolidated balance sheet of OSG and
                                       the Subsidiaries delivered in accordance
                                       with Section 8.1(d), and "Cash" shall
                                       also include, for the purposes of the
                                       calculations of Cash Adjusted
                                       Consolidated Net Tangible Assets and Cash
                                       Adjusted Funded Debt required by Section
                                       8.1(s) only, Cash of OSG and the Recourse
                                       Subsidiaries included in Restricted
                                       Funds;

"Cash Adjusted                         shall mean, as of the date of any
Consolidated                           determination thereof, Consolidated Net
Net Tangible Assets"                   Tangible Assets less Cash;

"Cash Adjusted Debt                    shall mean, for each four consecutive
Service Coverage Ratio"                fiscal quarter periods (taken as a single
                                       accounting period) for which a
                                       determination is being made, the ratio of
                                       Cash Adjusted Income Available for Fixed
                                       Charges to Adjusted Fixed Charges;

"Cash Adjusted Funded Debt"            shall mean, as of the date of any
                                       determination thereof, Consolidated
                                       Funded Debt less Cash;

"Cash Adjusted Income                  shall mean, for any period, with respect
Available for Fixed Charges"           to OSG and the Recourse Subsidiaries, the
                                       sum of (without duplication) (i) Net
                                       Income Available for Fixed Charges, (ii)
                                       depreciation and amortization of OSG and
                                       the Recourse Subsidiaries determined on a
                                       consolidated basis in accordance with
                                       GAAP for such period, and (iii) 75% of

                                       4
<PAGE>

                                       the average of the amounts of Cash
                                       outstanding as of the end of each of the
                                       four consecutive quarterly fiscal periods
                                       included in the determination;

"Cash Collateral"                      shall have the meaning ascribed thereto
                                       in Section 8.1(t);

"Cash Equivalents"                     shall mean (i) securities directly issued
                                       or fully and unconditionally guaranteed
                                       or insured, as to principal and interest,
                                       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 (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, with respect to both (i)
                                       and (ii) above, and in each case having
                                       maturities of not more than ninety (90)
                                       days from the date of acquisition;

"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;

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

"Collateral Date"                      shall have the meaning ascribed thereto
                                       in Section 8.1(t);

"Collateralized Assets"                shall mean as of the date of
                                       determination any assets of OSG that are
                                       pledged or mortgaged as security for any
                                       type of financing (including Capitalized
                                       Leases);

"Commitment"                           shall mean, with respect to each Bank,
                                       the commitment of such Bank to make
                                       Advances, and to acquire Participations
                                       in Advances, pursuant to this Agreement,
                                       expressed as an amount representing the
                                       maximum aggregate amount of its
                                       obligations to fund hereunder, as such
                                       commitment may be (a) reduced from time
                                       to time pursuant to this Agreement and
                                       (b) reduced or increased from time to
                                       time by assignment by or to such Bank
                                       pursuant to Section 6.3. The initial
                                       amount of each Bank's commitment is set
                                       forth opposite its name in Schedule I
                                       hereto or, as the case may be, in the
                                       Assignment and Assumption Agreement
                                       pursuant to which it assumes its
                                       commitment.

"Commitment Fee"                       shall have the meaning ascribed thereto
                                       in Section 12.1;

                                       5
<PAGE>

"Commitment Letter"                    shall mean that certain commitment letter
                                       dated October 26, 2001 by and between
                                       JPMorgan Chase Bank (successor by merger
                                       to The Chase Manhattan Bank), DnB,
                                       Nordea, Landesbank Schleswig-Holstein
                                       Girozentrale, Hamburgische Landesbank
                                       -Girozentrale-, NIB Capital Bank N.V. and
                                       J.P. Morgan Securities Inc. and as
                                       accepted and agreed by the Borrowers;

"Compliance Certificate"               shall mean a certificate in the form set
                                       out in Exhibit E, or in such other form
                                       as the Administrative Agent may agree,
                                       certifying the compliance by each of the
                                       Borrowers with all of its covenants
                                       contained herein and showing the
                                       calculations thereof, which certificate
                                       shall be executed and delivered by the
                                       chief executive officer, the chief
                                       operating officer or the chief financial
                                       officer of OSG or the designee thereof to
                                       the Administrative Agent with sufficient
                                       copies for the other Creditors to be
                                       distributed to the other Creditors by the
                                       Administrative Agent promptly upon
                                       receipt thereof pursuant to Section
                                       8.1(d)(iii);

"Consolidated EBITDA"                  shall mean, for any period, with respect
                                       to OSG and the Recourse Subsidiaries, the
                                       sum of (without duplication) (i)
                                       Consolidated Net Income; (ii) all
                                       Interest Charges of OSG and the Recourse
                                       Subsidiaries; (iii) income taxes (other
                                       than income taxes (either positive or
                                       negative) attributable to extraordinary
                                       and non-recurring gains or losses) of OSG
                                       and the Recourse Subsidiaries; and (iv)
                                       depreciation and amortization of OSG and
                                       the Recourse Subsidiaries determined on a
                                       consolidated basis in accordance with
                                       GAAP for such period; provided that if
                                       any Recourse Subsidiary is not
                                       wholly-owned by OSG, Consolidated EBITDA
                                       shall be reduced (to the extent not
                                       otherwise reduced in accordance with
                                       GAAP) by an amount equal to (A) the
                                       amount of the Consolidated Net Income
                                       attributable to such Recourse Subsidiary
                                       multiplied by (B) the percentage
                                       ownership interest in the income of such
                                       Recourse Subsidiary not owned on the last
                                       day of such period by OSG;

"Consolidated Funded Debt"             shall mean, as of the date of
                                       determination, all Funded Debt of OSG and
                                       the Recourse Subsidiaries, determined on
                                       a consolidated basis eliminating
                                       intercompany items;

"Consolidated Net Income"              for any period shall mean consolidated
                                       net income of OSG and the Recourse
                                       Subsidiaries for such period, as shown on
                                       the consolidated financial statements of
                                       OSG and the Recourse Subsidiaries
                                       delivered in accordance with Section
                                       8.1(d);

"Consolidated Net Tangible             shall mean as of the date of any
Assets"                                determination thereof the total amount of
                                       all Tangible Assets after excluding
                                       therefrom (i) all Restricted Investments
                                       (valued in accordance with GAAP) and (ii)
                                       any write-up of fixed assets of OSG and
                                       the Recourse

                                       6
<PAGE>

                                       Subsidiaries other than write-ups in
                                       accordance with GAAP of assets of a
                                       business made upon the acquisition of
                                       such business after December 31, 2000 and
                                       after deducting all liabilities except
                                       deferred income taxes, deferred credits,
                                       Advance Time Charter Revenues, Minority
                                       Interests, Unterminated Voyage Revenues
                                       and Consolidated Funded Debt;

"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
                                       OSG and the Recourse Subsidiaries) less
                                       Intangible Assets of OSG and the Recourse
                                       Subsidiaries;

"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 11.7(a);

"Creditors"                            shall mean, together, the Agents and the
                                       Banks, each, a "Creditor";

"Current Debt"                         of any Person shall mean as of the date
                                       of any determination thereof (i) the
                                       Current Portion, (ii) all other Debt of
                                       such Person other than Funded Debt and
                                       (iii) (without duplication) Guarantees by
                                       such Person of Debt of the type described
                                       in clauses (i) and (ii);

"Current Portion"                      with respect to any Person or
                                       consolidated group of Persons shall mean
                                       the portion (determined in accordance
                                       with GAAP) of long-term Debt of such
                                       Person(s) shown as a current liability on
                                       the consolidated balance sheet of such
                                       Person(s);

"Debt"                                 of any Person shall mean (i) all
                                       liabilities for money borrowed
                                       (excluding, in the case of OSG or any
                                       Recourse Subsidiary, Debt defined herein
                                       as Non-Recourse Debt) as determined in
                                       accordance with GAAP eliminating
                                       intercompany items, (ii) (without
                                       duplication) all Capitalized Rentals of
                                       such Person (other than rentals owing
                                       from OSG or any Recourse Subsidiary to
                                       OSG or another Recourse Subsidiary), and
                                       (iii) (without duplication) all
                                       Guarantees by such Person of Debt of
                                       Persons (other than, in the case of OSG
                                       or any Recourse Subsidiary, Debt of OSG
                                       or any Recourse Subsidiary);

                                       7
<PAGE>

"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 have the meaning ascribed thereto
                                       in Section 5.1(b);

"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;

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

"Documentation Agent"                  shall have the meaning ascribed thereto
                                       in the preamble;

"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 Administrative Agent to be
                                       customary for the settlement in New York
                                       City of banking transactions of the type
                                       herein involved);

"Drawdown Date"                        shall mean any date, being a Banking Day,
                                       not later than the date falling one day
                                       prior to the Final Payment Date, upon
                                       which the Borrowers have requested that
                                       an Advance be made as provided in Section
                                       2.2;

"Drawdown Notice"                      shall have the meaning ascribed thereto
                                       in Section 2.2;

"Environmental Approvals"              shall have the meaning ascribed thereto
                                       in Section 7.1(h);

"Environmental Claim"                  shall have the meaning ascribed thereto
                                       in Section 7.1(h);

"Environmental Laws"                   shall have the meaning ascribed thereto
                                       in Section 7.1(h);

"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 any Borrower within
                                       the meaning of Sections 414(b),(c),(m) or
                                       (o) of the Code;

                                       8
<PAGE>

"ERISA Group"                          shall mean OSG and the Subsidiaries;

"Event(s) of Default"                  shall mean any of the events set out in
                                       Section 9.1;

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

"Existing Credit Facility"             shall mean the credit facility
                                       established pursuant to that certain
                                       Second Amended and Restated Credit
                                       Agreement in its entirety, dated as of
                                       August 19, 1997, among the Borrowers, the
                                       banks listed therein, Citibank, N.A., as
                                       Administrative Agent, The Chase Manhattan
                                       Bank, as Syndication Agent, and Morgan
                                       Guaranty Trust Company of New York, as
                                       Documentation Agent;

"Facility"                             the line of credit, in an initial amount
                                       of Two Hundred Forty Million Dollars
                                       ($240,000,000) and not to exceed Three
                                       Hundred Million Dollars ($300,000,000) in
                                       aggregate principal amount, to be made
                                       available to Borrowers pursuant to
                                       Section 2 hereof, as the same may be
                                       reduced from time to time pursuant to
                                       Section 2.6 hereof;

"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 five (5)
                                       years from the date hereof;

"Fair Market Value"                    shall mean, in respect of any vessel, the
                                       average of two sets of appraised values
                                       of such vessel as determined by two (2)
                                       independent brokers chosen from the
                                       brokers listed on Schedule IV, such
                                       vessel to be valued on a stand alone
                                       basis, free and clear of any liens,
                                       charters or other encumbrances and with
                                       no value given to any pooling
                                       arrangements. One broker shall be
                                       selected by the Borrowers and one broker
                                       shall be selected by the Administrative
                                       Agent. No appraisal shall be dated more
                                       than thirty (30) days prior to the date
                                       on which such appraisal is required
                                       pursuant to this Agreement;

"Federal Funds Rate"                   shall mean, for each day during any
                                       period, the weighted average (rounded if
                                       necessary to the next 1/100 of 1%) of the
                                       rates on overnight Federal funds
                                       transactions with members of the Federal
                                       Reserve System arranged by Federal funds
                                       brokers, as published for such day (on
                                       the next succeeding Banking Day or, if
                                       such day is not a Banking Day, on the
                                       next succeeding Banking Day) by the
                                       Federal Reserve Bank of New York, or, if
                                       such rate is not so published for any day
                                       which is a Banking Day, the average of
                                       the quotations for such day on such
                                       transactions received by the
                                       Administrative Agent from three (3)
                                       Federal funds brokers of

                                       9
<PAGE>

                                       recognized standing selected by the
                                       Administrative Agent;

"Fee Letter"                           shall mean that certain fee letter dated
                                       October 26, 2001 by and between JPMorgan
                                       Chase Bank (successor by merger to The
                                       Chase Manhattan Bank), DnB, Nordea,
                                       Landesbank Schleswig-Holstein
                                       Girozentrale, Hamburgische Landesbank
                                       -Girozentrale-, NIB Capital Bank N.V. and
                                       J.P. Morgan Securities Inc. and as
                                       accepted and agreed by the Borrowers;

"Final Payment Date"                   shall mean the date which falls on the
                                       fifth anniversary of the date of this
                                       Agreement or, if such day is not a
                                       Banking Day, the Final Payment Date shall
                                       be the immediately preceding Banking Day
                                       or such earlier date on which all sums
                                       become due and payable under this
                                       Agreement whether by prepayment,
                                       acceleration or otherwise;

"Fitch"                                shall mean Fitch IBCA, Inc. and any
                                       successor or successors thereto;

"Fixed Charges"                        for any period shall mean on a
                                       consolidated basis the sum of (i) all
                                       Rentals (other than Capitalized Rentals)
                                       payable in respect of such period by OSG
                                       and the Recourse Subsidiaries, and (ii)
                                       all Interest Charges on all Indebtedness
                                       (including the interest component of
                                       Capitalized Rentals) of OSG and the
                                       Recourse Subsidiaries;

"Funded Debt"                          of any Person shall mean all Debt of such
                                       Person having a final maturity of more
                                       than one year from the date of origin
                                       thereof (or which is renewable or
                                       extendible at the option of the obligor
                                       for a period or periods more than one
                                       year from the date of origin), excluding
                                       the Current Portion of such Debt solely
                                       to the extent that such Person has
                                       sufficient availability under (i)
                                       existing credit facilities (including
                                       this Agreement) or (ii) underwritten
                                       commitments on terms reasonably
                                       satisfactory to the Administrative Agent
                                       to refinance such Current Portion for a
                                       period of at least 12 months;

"GAAP"                                 shall mean generally accepted accounting
                                       principles at the time in the United
                                       States, except that (so long as the
                                       Statement of Financial Accounting
                                       Standards No. 94 (or any substantially
                                       similar successor statement) is in
                                       effect), with respect to financial
                                       statements of OSG and the Recourse
                                       Subsidiaries, the failure to consolidate
                                       Non-Recourse Subsidiaries shall be deemed
                                       to be in accordance with such principles;

"Guarantee"                            by any Person shall mean, without
                                       duplication, any obligation (other than
                                       endorsements in the ordinary course of
                                       business of negotiable instruments for
                                       deposit or collection), contingent or

                                       10
<PAGE>

                                       otherwise, of such Person (the
                                       "Guarantor") directly or indirectly
                                       guaranteeing or having the economic
                                       effect of a guarantee of any Debt or
                                       other obligation of any other Person and,
                                       without limiting the generality of the
                                       foregoing, any obligation, direct or
                                       indirect, contingent or otherwise, of the
                                       Guarantor (i) to purchase or pay (or
                                       advance or supply funds for the purchase
                                       or payment of) such Debt or other
                                       obligation or any security therefor
                                       (whether arising by virtue of partnership
                                       arrangements, by agreement to keep-well,
                                       to take-or-pay (or similar arrangements
                                       involving the purchase of goods,
                                       securities or services), or to maintain
                                       working capital, equity capital or any
                                       other financial statement condition or
                                       liquidity of such other Person or
                                       otherwise); or (ii) entered into for the
                                       purpose of assuring in any other manner
                                       the obligee of such Debt or other
                                       obligation of the payment thereof or to
                                       protect such obligee against loss in
                                       respect thereof (in whole or in part);
                                       provided that the term "Guarantee" used
                                       as a verb has a corresponding meaning;

"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;

"Intangible Assets"                    shall mean, as of the date of any
                                       determination thereof, goodwill, patents,
                                       trade names, trademarks, copyrights,
                                       franchises, experimental expenses,
                                       organization expenses, unamortized debt
                                       discount and expenses, deferred charges
                                       (other than unamortized deferred drydock
                                       costs, unterminated voyage expenses,
                                       prepaid insurance, prepaid taxes, prepaid
                                       charterhire and other prepaid items
                                       properly excludable from intangible
                                       assets under GAAP), the excess of cost of
                                       shares acquired over fair value of
                                       underlying tangible assets and such other
                                       assets as are properly classified as
                                       "intangible assets" in accordance with
                                       GAAP;

"Interest Charges"                     for any period shall mean all interest
                                       and all amortization of debt discount and
                                       expense on any particular Indebtedness
                                       for which such calculations are being
                                       made;

"Interest Notice"                      means a notice from the Borrowers to the
                                       Administrative Agent to be delivered to
                                       the Administrative Agent at least three
                                       (3) Banking Days prior to the end of any
                                       then existing Interest Period and
                                       specifying the duration of any relevant
                                       Interest Period and certifying OSG's
                                       current rating level and the
                                       corresponding Applicable Margin, each
                                       substantially in the form of Exhibit F;

"Interest Period"                      shall mean with respect to any Advance,
                                       (a) each seven (7) day period (a "Seven
                                       Day Interest Period") or each one (1),
                                       three (3), six (6) or twelve (12) month
                                       period commencing on the date such

                                       11
<PAGE>

                                       Advance is made or the last day of the
                                       next preceding Interest Period with
                                       respect to such Advance and ending on the
                                       seventh (7th) day thereafter or on the
                                       same day in the first, third, sixth or
                                       twelfth calendar month thereafter, in
                                       each case, as selected by the Borrowers
                                       in the Interest Notice or, (b) in the
                                       Administrative Agent's discretion, such
                                       other period(s) not to exceed twelve (12)
                                       months as may be agreed by the Majority
                                       Banks, or, (c) in the Banks' discretion,
                                       such other period(s) in excess of twelve
                                       (12) months 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 if no LIBOR Rate is
                                       quoted or available for a 12 month
                                       Interest Period or a Seven Day Interest
                                       Period, the Borrowers shall not request,
                                       and the Lenders need not fund, a 12 month
                                       Interest Period or a Seven Day Interest
                                       Period, as the case may be, and (z) there
                                       shall be no more than two Seven Day
                                       Interest Periods outstanding at any time.
                                       If at the end of any then existing
                                       Interest Period the Borrowers fail to
                                       deliver an Interest Notice or an Event of
                                       Default shall have occurred and be
                                       continuing, the relevant Interest Period
                                       shall be one month.

                                       Notwithstanding the foregoing, (i) no
                                       Interest Period may extend beyond the
                                       Final Payment Date; (ii) 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
                                       (iii) each Interest Period which would
                                       otherwise commence before and end after
                                       the Final Payment Date shall end on the
                                       Final Payment Date;

"Investments"                          shall mean all investments, regardless of
                                       the form of consideration paid therefor,
                                       directly or indirectly in any Person,
                                       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;

"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

                                       12
<PAGE>

                                       Convention and shall include any
                                       amendments or extensions thereto and any
                                       regulation issued pursuant thereto;

"Joint Venture"                        shall mean at any date any Person (other
                                       than a Subsidiary) in which OSG or any
                                       Subsidiary has an ownership interest or
                                       profits or loss which would be accounted
                                       for in the consolidated financial
                                       statements of OSG and its consolidated
                                       Subsidiaries by the equity method if such
                                       statements were prepared as of such date;

"judgment currency"                    shall have the meaning ascribed thereto
                                       in Section 11.7(a);

"Law"                                  shall mean any law, rule, regulation or
                                       official code, consent decree,
                                       constitution, decree, directive,
                                       enactment, guideline, injunction,
                                       interpretation, judgment, order,
                                       ordinance, policy statement,
                                       proclamation, promulgation, requirement,
                                       rule of law, rule of public policy,
                                       settlement agreement, statute, or writ,
                                       of any Authority;

"LIBOR Rate"                           shall mean, with respect to any Interest
                                       Period for any Advance, the rate per
                                       annum determined by the Administrative
                                       Agent to be equal to the quotient
                                       (rounded upwards, if necessary, to the
                                       next higher 1/16 of 1%) of (y) (i) the
                                       rate of interest for deposits in Dollars
                                       for a period equal to the number of days
                                       in such Interest Period (or, in the case
                                       of a Seven Day Interest Period, if
                                       greater, the rate of interest for
                                       deposits in Dollars for a one month
                                       period) which appears on the Telerate
                                       Page 3750 as of 11:00 A.M., London time,
                                       on the day that is two (2) Banking Days
                                       prior to the first day of such Interest
                                       Period, or (ii) if such rate does not
                                       appear on the Telerate Page 3750 at such
                                       time, the rate per annum at which
                                       deposits in Dollars are offered to the
                                       Administrative Agent in immediately
                                       available funds at its LIBOR lending
                                       office in an amount comparable to the
                                       principal amount of such Advance for a
                                       period equal to such Interest Period (or,
                                       in the case of a Seven Day Interest
                                       Period, if greater, the rate of interest
                                       for deposits in Dollars for a one month
                                       period) at approximately 10:00 A.M., New
                                       York City time, on the date two (2)
                                       Banking Days before the first day of such
                                       Interest Period, divided by (z) a number
                                       equal to 1.00 minus the LIBOR Rate
                                       Reserve Percentage;

"LIBOR Rate Reserve Percentage"        shall mean, for any day, the maximum
                                       percentage (expressed as a decimal)
                                       specified from time to time by the Board
                                       of Governors of the Federal Reserve
                                       System (or any successor) for determining
                                       the maximum reserve requirements
                                       (including, but not limited to,
                                       supplemental, marginal and emergency
                                       reserves) with respect to eurocurrency
                                       funding (currently referred to as
                                       "Eurocurrency Liabilities") of a member
                                       bank in such System. The LIBOR Rate

                                       13
<PAGE>

                                       shall be adjusted automatically with
                                       respect to any Advance outstanding on the
                                       effective date of any change in the LIBOR
                                       Rate Reserve Percentage, as of such
                                       effective date;

"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, OSG or a
                                       Recourse Subsidiary 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;

"List of Vessels"                      shall mean a list of vessels more than
                                       fifty percent (50%) owned directly or
                                       indirectly by the Borrowers or any
                                       Subsidiary, which list shall describe
                                       each Lien on any such vessel;

"Majority Banks"                       shall mean Banks, the dollar amount of
                                       whose aggregate Commitments exceed
                                       one-half of the total Commitments or if
                                       the Commitments have terminated, Banks
                                       holding in the aggregate a dollar amount
                                       in excess of one-half of the Facility
                                       Balance;

"Material Adverse Change"              shall mean the occurrence of an event or
                                       condition which (a) materially impairs
                                       the ability of OSG and the Subsidiaries
                                       to meet or perform any of their
                                       obligations with regard to (i) the
                                       Facility and the financing arrangements
                                       established in connection therewith or
                                       (ii) any of their respective other
                                       obligations that are material to OSG and
                                       the Subsidiaries considered as a whole;
                                       or (b) materially impairs the rights of
                                       or benefits or remedies available to the
                                       Banks under this Agreement;

"Material Financial Obligations"       means a principal or face amount of Debt
                                       (in the case of Derivative Obligations,
                                       determined in respect of any counterparty
                                       on a net basis), in each case of OSG
                                       and/or one or more of the Subsidiaries
                                       and arising in one or more related or
                                       unrelated

                                       14
<PAGE>

                                       transactions, exceeding in the aggregate
                                       $10,000,000 (or its equivalent in any
                                       other currency);

"Material Subsidiary"                  shall mean, at any date, each of the
                                       following: (i) any Subsidiary (other than
                                       OSG Bulk or OSG International) which
                                       owns, leases or charters any vessel on
                                       such date and/or (ii) any Subsidiary or
                                       Subsidiaries the assets of which,
                                       individually or in the aggregate, had an
                                       aggregate book value (net of
                                       depreciation) as of the date of the
                                       consolidated balance sheet of OSG and the
                                       Subsidiaries most recently delivered or
                                       required to be delivered to the
                                       Administrative Agent pursuant to Section
                                       8.1(d) prior to such date, in excess of
                                       the lesser of (x) $50,000,000 and (y) 2%
                                       of the aggregate book value (net of
                                       depreciation) of all assets of OSG and
                                       the Subsidiaries as of the date of such
                                       balance sheet;

"Materials of Environmental            shall have the meaning ascribed thereto
Concern"                               in Section 7.1(h);

"Minority Interests"                   shall mean any shares of stock of any
                                       class of a Subsidiary (other than
                                       directors' qualifying shares as required
                                       by law) that are not owned by OSG and/or
                                       one or more of the Recourse Subsidiaries.
                                       Minority Interests shall be valued by
                                       valuing Minority Interests constituting
                                       preferred stock at the voluntary or
                                       involuntary liquidation value of such
                                       preferred stock, whichever is greater,
                                       and by valuing Minority Interests
                                       constituting common stock at the book
                                       value of capital and surplus applicable
                                       thereto adjusted, if necessary, to
                                       reflect any changes from the book value
                                       of such common stock required by the
                                       foregoing method of valuing Minority
                                       Interests in preferred stock;

"Moody's"                              shall mean Moody's Investors Service,
                                       Inc.;

"Multiemployer Plan"                   shall mean a "multiemployer plan" (as
                                       defined in Section 4001(a)(3) of ERISA)
                                       to which any 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 any
                                       Borrower or ERISA Affiliate, and one or
                                       more employers other than a 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 a 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 Income Available for              for any period shall mean Consolidated
                                       Net Income excluding

                                       15
<PAGE>

Fixed Charges"                         extraordinary gains or losses (adjusted
                                       for taxes, if any) during such period
                                       plus (to the extent used in the
                                       determination of Consolidated Net
                                       Income), (i) all provisions for any
                                       Federal, state or other taxes based on
                                       income made by OSG and the Recourse
                                       Subsidiaries during such period and (ii)
                                       Fixed Charges during such period;

"Non-Recourse Debt"                    shall mean Debt of any Subsidiary (i)
                                       that is not Guaranteed by OSG or any
                                       Recourse Subsidiary, (ii) that is not
                                       secured by a Lien on any asset of OSG or
                                       any Recourse Subsidiary and (iii) with
                                       respect to which Debt or Subsidiary
                                       neither OSG nor any of the Recourse
                                       Subsidiaries has any express obligation
                                       or has written any instrument or letter
                                       indicating its support for such Debt or
                                       Subsidiary; provided that Debt of such
                                       Subsidiary shall constitute Non-Recourse
                                       Debt only if (x) OSG shall have given the
                                       Banks, through the Administrative Agent,
                                       written notice at least twenty (20) days
                                       prior to the incurrence, issuance,
                                       assumption or Guarantee thereof (or, in
                                       the case of Debt of a Person to be
                                       acquired by such Subsidiary, prior to the
                                       time of such acquisition) and (y) the
                                       terms and conditions of the related
                                       documentation insofar as they relate to
                                       the non-recourse nature of such Debt, and
                                       the final form of such documentation with
                                       respect thereto, shall be reasonably
                                       satisfactory to the Majority Banks;

"Non-Recourse Subsidiary"              shall mean, at any time, a Subsidiary of
                                       OSG (i) having no Debt at such time
                                       (other than Non-Recourse Debt) and (ii)
                                       as to which an officer of OSG has, prior
                                       to the issuance, incurrence, assumption
                                       or Guarantee of any Non-Recourse Debt by
                                       such Subsidiary, delivered a certificate
                                       to the Administrative Agent certifying
                                       that such Subsidiary is a Non-Recourse
                                       Subsidiary in accordance with the terms
                                       of this Agreement;

"Note"                                 shall mean a promissory note, to be
                                       executed by the Borrowers in favor of a
                                       Bank pursuant to Section 3.1(b) to
                                       evidence the Advances made by such Bank
                                       and substantially in the form set out in
                                       Exhibit C or in such other form as the
                                       Administrative Agent may agree and shall
                                       include any promissory note issued by the
                                       Borrowers pursuant to Section 10.3,
                                       collectively, the "Notes";

"Operating Assets"                     of OSG and the Recourse Subsidiaries
                                       shall mean, as of the date of any
                                       determination thereof, all assets of such
                                       Person as determined in accordance with
                                       GAAP other than Cash and marketable
                                       securities of OSG and the Recourse
                                       Subsidiaries;

"Operator"                             shall mean, in respect of any of the
                                       Borrowers' vessels, 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

                                       16
<PAGE>

                                       ISM Code;

"OSG"                                  shall have the meaning ascribed thereto
                                       in the preamble;

"OSG Bulk"                             shall have the meaning ascribed thereto
                                       in the preamble;

"OSG International"                    shall have the meaning ascribed thereto
                                       in the preamble;

"Participant"                          shall have the meaning ascribed thereto
                                       in Section 10.2;

"PBGC"                                 shall mean the Pension Benefit Guaranty
                                       Corporation;

"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,
                                       Canada and Japan;

"Permitted Investments"                shall mean 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 by OSG or any
                                             Subsidiary, 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 Banks 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 Bank 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

                                       17
<PAGE>

                                             subdivision thereof, which
                                             indebtedness is at all times
                                             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 pension benefit
                                       plan (other than a Multiemployer Plan or
                                       a Multiple Employer Plan) covered by
                                       Title IV of ERISA or Section 302 of ERISA
                                       or Section 412 of the Code;

"rate of exchange"                     shall have the meaning ascribed thereto
                                       in Section 11.7(d);

"Recourse Subsidiaries"                shall mean all Subsidiaries of OSG other
                                       than the Non-Recourse Subsidiaries;

"Regulation T"                         shall mean Regulation T of the Board of
                                       Governors of the Federal Reserve System,
                                       as in effect from time to time;

"Regulation U"                         shall mean Regulation U of the Board of
                                       Governors of the Federal Reserve System,
                                       as in effect from time to time;

"Regulation X"                         shall mean Regulation X of the Board of
                                       Governors of the Federal Reserve System,
                                       as in effect from time to time;

"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

                                       18
<PAGE>

                                       or sublessee under a lease of real or
                                       personal property (excluding 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), but shall be exclusive of any
                                       amounts required to be paid by such
                                       Person, directly or indirectly (whether
                                       or not 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;

"Replacement Bank"                     shall have the meaning ascribed thereto
                                       in Section 11.8 of this Agreement;

"Restricted Funds"                     shall mean restricted funds established
                                       and maintained pursuant to Title XI
                                       reserve fund and financial agreements
                                       between OSG or any of the Subsidiaries
                                       and the Secretary of Transportation in
                                       accordance with Title XI of the Merchant
                                       Marine Act, 1936, as amended, and the
                                       regulations promulgated thereunder;
                                       provided that "Restricted Funds" shall
                                       mean, for any period, the aggregate
                                       amount on deposit in Restricted Funds as
                                       so defined as of the last day of such
                                       period, as the same is reflected in a
                                       consolidated balance sheet of OSG and the
                                       Subsidiaries as of such date;

"Restricted Investments"               shall mean all Investments by OSG or any
                                       Recourse Subsidiary in any Person or
                                       property except the following:

                                       (a)   Permitted Investments;

                                       (b)   Cash;

                                       (c)   Investments in Shipping and Related
                                             Businesses ;

                                       (d)   Investments by OSG and the Recourse
                                             Subsidiaries in and to Recourse
                                             Subsidiaries, including any
                                             Investment in a corporation which,
                                             after giving effect to such
                                             Investment, will become a Recourse
                                             Subsidiary;

                                       (e)   Investments in property to be used
                                             in the ordinary course of business;

                                       (f)   Investments in marketable
                                             securities (as defined in
                                             accordance with GAAP); and

                                       (g)   Investments (in addition to those
                                             listed in (a) through (f) above) in
                                             Persons not engaged in Shipping and
                                             Related Businesses and which are
                                             not Recourse Subsidiaries in an

                                       19
<PAGE>

                                             amount (excluding Investments
                                             existing as of the date of this
                                             Agreement) not to exceed the sum of
                                             (i) $10,000,000 plus (ii) 10% of
                                             Consolidated Tangible Net Worth;

"Sale and Leaseback                    shall mean any arrangement with any
Transaction"                           Person to which such Person is a party,
                                       (not including, in either case, OSG or
                                       any Recourse Subsidiary) providing for
                                       the leasing by OSG or a Recourse
                                       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 of construction and
                                       commencement of full operation thereof,
                                       whichever is later, by OSG or any
                                       Recourse Subsidiary to such Person;

"Secured Debt"                         shall mean all Debt of OSG or any of the
                                       Recourse Subsidiaries which is secured by
                                       a Lien on any of the property or assets
                                       of OSG or any of the Recourse
                                       Subsidiaries;

"Securities and Exchange               shall mean the United States Securities
Commission"                            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"                             shall have the same meaning as in Section
                                       2(1) of the Securities Act of 1933, as
                                       amended;

"Security Documents"                   shall have the meaning ascribed thereto
                                       in Section 8.1(t);

"Seven Day Interest Period"            "Seven Day Interest Period" shall have
                                       the meaning ascribed thereto in the
                                       definition of "Interest Period";

"Shipping and Related                  shall mean any one or all of the
Businesses"                            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
                                       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;

                                       20
<PAGE>

"Shipping Manager"                     shall mean (a) the principal companies
                                       that, as of the date of this Agreement,
                                       are acting as agent for OSG and the
                                       Subsidiaries in respect of ships owned,
                                       leased or chartered by, and is providing
                                       substantially all of the general and
                                       administrative services to, OSG and the
                                       Subsidiaries, or (b) any Person, if, for
                                       the period of two consecutive years after
                                       the date of formation of such Person, all
                                       or substantially all of the executive
                                       officers and directors of such Person
                                       were executive officers or directors, as
                                       the case may be, of the Shipping Manager
                                       immediately prior to the formation of
                                       such Person, (except for any executive
                                       officer or director who shall have been
                                       appointed or elected to such position as
                                       a result of any death, disability,
                                       retirement or incapacity of any such
                                       executive officer or director);

"S&P"                                  shall mean Standard & Poor's Ratings
                                       Services, a division of McGraw-Hill Inc.;

"SMC"                                  means the safety management certificate
                                       issued in respect of any of the
                                       Borrowers' vessels in accordance with
                                       rule 13 of the ISM Code;

"Subordinated Funded Debt"             shall mean all unsecured Funded Debt of
                                       the Borrowers which shall contain or have
                                       applicable thereto subordination
                                       provisions (reasonably satisfactory to
                                       the holders of not less than 66 2/3% in
                                       aggregate principal amount of the
                                       Commitments or, if the Commitments have
                                       been terminated, of the Facility Balance)
                                       providing for the subordination of such
                                       unsecured Funded Debt to other Debt of
                                       the Borrowers, including, without
                                       limitation, to the Notes;

"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 OSG;

"Subsidiary Structurally               shall mean, as of the date of any
Subordinated Assets"                   determination thereof, for any Recourse
                                       Subsidiary (other than OSG Bulk and OSG
                                       International), an amount equal to the
                                       Debt which is not Secured Debt plus
                                       one-third (1/3) of an amount equal to (i)
                                       the total Book Value of assets minus (ii)
                                       the total amount of Debt which is not
                                       Secured Debt;

"Syndication Agent"                    shall have the meaning ascribed thereto
                                       in the preamble;

                                       21
<PAGE>

"Tangible Assets"                      shall mean, as of the date of
                                       determination thereof, the Book Value of
                                       assets of OSG and the Recourse
                                       Subsidiaries (less depreciation,
                                       depletion and other properly deductible
                                       valuation reserves) after deducting
                                       Intangible Assets therefrom;

"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 whatsoever, except for
                                       taxes on or measured by the overall net
                                       income of any Bank imposed by the United
                                       States of America, the State or The City
                                       of New York or any governmental
                                       subdivision or taxing authority of any
                                       thereof or by any other taxing authority
                                       having jurisdiction over such Bank
                                       (unless such jurisdiction is asserted
                                       solely by reason of the activities of the
                                       Borrower or any of the Subsidiaries);

"Termination Event"                    shall mean (i) a "reportable event," as
                                       such term is defined in Section 4043 of
                                       ERISA, (ii) the withdrawal of any
                                       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 any 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;

"Unencumbered Assets"                  shall mean, as of the date of any
                                       determination thereof, Tangible Assets
                                       (excluding the Book Value of any assets
                                       of any Subsidiaries, the shares of stock
                                       or any evidence of Indebtedness of which
                                       have been pledged to secure any
                                       obligations) less the sum of (without
                                       duplication) (i) Attributable Debt and
                                       (ii) the Book Value of any assets of OSG
                                       and any Recourse Subsidiary which have
                                       become or have been agreed to become
                                       subject to a Lien securing any Secured
                                       Debt and (iii) Subsidiary Structurally
                                       Subordinated Assets;

"Unsecured Debt"                       shall mean, as of the date of any
                                       determination thereof, all Debt of OSG
                                       and the Subsidiaries other than Secured
                                       Debt;

"Unterminated Voyage                   shall mean, as of the date of any
Revenues"                              determination thereof, accrued but unpaid
                                       revenues for uncompleted voyages the
                                       amounts thereof determined in accordance
                                       with GAAP as reflected in the

                                       22
<PAGE>

                                       consolidated financial statements of OSG
                                       and the Recourse Subsidiaries;

"Vessel Collateral"                    shall have the meaning ascribed thereto
                                       in Section 8.1(t);

"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 Notes, 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, electronic and other means of reproducing or capable 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 Notes) 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 Notes); 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 and in the Notes shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be
delivered to the Administrative Agent or to the Banks under this Agreement shall
be prepared, in accordance with GAAP as in effect from time to time.

2. THE ADVANCES

2.1. Advances. Each of the Banks, relying upon each of the representations and
warranties set out in Section 7, hereby severally, and not jointly, agrees with
the Borrowers that, subject to and upon the terms of this Agreement, it will on
the Drawdown Dates from time to time during the Facility Period make its portion
of the Advances available through the Administrative Agent, to the Borrowers,
ratably with the other Banks according to their respective Commitments;
provided, however, that at no time shall the outstanding aggregate principal
amount of the Advances made by any Bank exceed the Bank's Commitment or the
outstanding aggregate principal amount of all Advances of all Banks hereunder
exceed the total Commitments of all the Banks. The proceeds of the Advances
shall be utilized for lawful corporate purposes; provided,

                                       23
<PAGE>

however, that such proceeds may not be used for hostile acquisitions of
substantially all the assets or securities of another company without the prior
consent of the Majority Banks. Multiple Advances may be outstanding at any one
time during the Facility Period; provided, however, that there shall be no more
than ten (10) different Interest Periods relating to the Advances outstanding at
any one time. Within the foregoing limits of this Section 2.1 and upon the
conditions herein provided, the Borrowers may from time to time borrow pursuant
to this Section 2.1, repay Advances pursuant to Section 4 and reborrow pursuant
to this Section 2.1.

2.2. Drawdown Notice. The Borrowers shall, in respect of all Advances, serve a
written notice (a "Drawdown Notice") on the Administrative Agent (which shall
promptly furnish a copy to each Bank) not later than 11:00 A.M., New York City
time, at least three (3) Banking Days prior to the date of the proposed Advance.
Each Drawdown Notice shall specify (a) the date of the proposed borrowing which
shall be a Banking Day, (a "Drawdown Date"), (b) the aggregate principal amount
of the Advance to be made by the Banks on that date, (c) the Interest Period
requested by the Borrowers, which Period may end no later than the Maturity
Date, (d) the locations and account(s) to which the proceeds of such Advance
shall be disbursed, and (e) the name of the Borrower(s) which will draw down
such Advance. Each Drawdown Notice shall be effective upon receipt by the
Administrative Agent, shall be irrevocable and shall be in the form set out in
Exhibit D.

2.3. Effect of Drawdown Notice. Each Drawdown Notice shall be deemed to
constitute a warranty by the Borrowers: (a) that the representations and
warranties stated in Section 7 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 to the extent provided in Section 3.2(b), and (b) that no Default
or Event of Default has occurred and is continuing on the date of such Notice or
will occur and be continuing on such Drawdown Date or would result from the
making of such Advance.

2.4. Funding of Advances. Upon receipt of a Drawdown Notice, the Administrative
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
share of the proposed Advance.

            (a) Not later than 11:00 A.M. (New York City time) on the Drawdown
Date of each Advance, each Bank shall (except as provided in subsection (b) of
this Section) make available its share of such Advance, in Federal or other
funds immediately available in New York City, to the Administrative Agent at its
address set forth on Schedule I or to such account of the Administrative Agent
most recently designated by it for such purpose by notice to the Banks. Unless
the Administrative Agent determines that any applicable condition specified in
Section 3.1 or 3.2 has not been satisfied, the Administrative Agent will make
the funds so received from the Banks available to the Borrowers at the aforesaid
address, subject to the receipt of funds by the Administrative Agent as provided
in the immediately preceding sentence, not later than 2:30 P.M. (New York City
time) on the date of such Advance, and in any event as soon as practicable after
receipt.

            (b) If any Bank makes a new Advance hereunder to any Borrower on a
day on which such Borrower is to repay all or any part of an outstanding Advance
from such Bank, such Bank shall apply the proceeds of its new Advance to make
such repayment and only an amount equal to the difference (if any) between the
amount being borrowed from such Bank by such

                                       24
<PAGE>

Borrower and the amount being repaid to such Bank shall be made available by
such Bank to the Administrative Agent as provided in subsection (b) of this
Section, or remitted by such Borrower to the Administrative Agent for repayment
to such Bank, as the case may be.

            (c) Unless the Administrative Agent shall have received notice from
a Bank prior to the Drawdown Date of any Advance that such Bank will not make
available to the Administrative Agent such Bank's share of such Advance, the
Administrative Agent may assume that such Bank has made such share available to
the Administrative Agent on the date of such Advance in accordance with
subsections (a) and (b) of this Section 2.4 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and the Borrowers
(but without duplication) severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrowers until
the date such amount is repaid to the Administrative Agent, at (i) in the case
of the Borrowers, a rate per annum equal to the higher of (y) the Federal Funds
Rate and (z) the interest rate applicable thereto pursuant to Section 5.1(a) and
(ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay
to the Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's Advance included in such Advance for purposes of
this Agreement as of the date such Advance was made. Nothing in this subsection
(d) shall be deemed to relieve any Bank of its obligation to make Advances to
the extent provided in this Agreement. In the event that the Borrowers are
required to repay an Advance to the Administrative Agent pursuant to this
Section 2.4(c), as between the Borrowers and the defaulting Bank, the liability
for any breakage costs as described in Section 11.6 shall be borne by the
defaulting Bank. If the defaulting Bank has not paid any such breakage costs
upon demand by the Administrative Agent therefor, the Borrowers shall pay such
breakage costs upon demand by the Administrative Agent and the Borrowers shall
be entitled to recover any such payment for breakage costs made by the Borrowers
from the defaulting Bank.

2.5. Notation of Advances. Each Advance made by a Bank to the Borrowers may be
evidenced by a notation of the same made by such Bank on the applicable grid
attached to such Bank's Note, which notation, absent manifest error, shall be
prima facie evidence of the amount of the relevant Advance.

2.6. Reduction of the Commitments.

            (a) Subject to Section 2.9, the Borrowers may from time to time
reduce the Commitments of the Banks by $10,000,000 or any larger multiple of
$1,000,000 upon five (5) Banking Days' written notice to the Administrative
Agent (which shall promptly notify each Bank). Any such reduction shall be
permanent and irrevocable and pro rata among the Banks ratably in accordance
with their respective Commitments; provided that no reduction in Commitments
shall be made if, after giving effect to such reduction of the Commitments and
any concurrent prepayment of Advances, the aggregate Commitments shall be less
than the aggregate principal amount of all outstanding Advances.

            (b) On the Final Payment Date, the Commitments shall be reduced to
zero and any Advances then outstanding (together with accrued interest thereon)
shall be due and payable on such date.

                                       25
<PAGE>

            (c) Upon the effectiveness of any reduction pursuant to Section
2.6(a) hereof, the term "Commitment" shall mean the Commitments of each Bank in
effect immediately prior to such reduction less the amount of such reduction of
the Commitment.

2.7. Mandatory Prepayments. If at any time the aggregate principal amount of
outstanding Advances shall exceed the aggregate Commitments, then the Borrowers
shall immediately prepay the Advances in an amount equal to such excess together
with any compensation due pursuant to the provisions of Section 11.6.

2.8. Several Obligations. The failure of any Bank to make any Advance to be made
by it on the date specified therefor shall not relieve any other Bank of its
obligation to make its Advance on such date, and none of the Agents nor any Bank
shall be responsible for the failure of any other Bank to make an Advance to be
made by such other Bank.

2.9. Pro Rata Treatment. Each borrowing from the Banks hereunder shall be made
from the Banks, each payment of the Commitment Fee or other fees and expenses
under Section 12 shall be made for account of the Banks, and each termination or
reduction of the amount of the Commitments shall be applied to the Commitments
of the Banks, pro rata according to the amounts of their respective Commitments;
each payment or prepayment of principal of Advances by the Borrowers shall be
made for account of the Banks pro rata in accordance with the respective unpaid
principal amounts of the Advances made by the Banks; and each payment of
interest on Advances by the Borrowers shall be made for the account of the Banks
pro rata in accordance with the amounts of interest due and payable to the
respective Banks.

3. CONDITIONS

3.1. Conditions Precedent to Availability of the Facility. The obligation of the
Banks to make the Facility available to the Borrowers under this Agreement shall
be expressly subject to the following conditions precedent:

            (a) Corporate Authority. The Administrative Agent shall have
received the following documents in form and substance satisfactory to the
Administrative Agent and its legal advisers:

            (i) copies of the resolutions adopted by the board of directors of
      each Borrower, certified as true and complete by an officer of such
      Borrower, evidencing approval of this Agreement and the Notes and
      authorizing an appropriate officer or officers or attorney-in-fact or
      attorneys-in-fact of each such Borrower to execute the same on its behalf;

            (ii) copies from each Borrower, certified as true and complete by an
      officer of such Borrower, of all documents evidencing any other necessary
      action, approvals or consents with respect to this Agreement and the Notes
      and the transactions contemplated hereby and thereby;

            (iii) copies from each Borrower, certified as true and complete by
      an officer of such Borrower, of the certificate or articles of
      incorporation and by-laws or similar constituent document thereof;

                                       26
<PAGE>

            (iv) a good standing certificate (or, in the case of OSG
      International, the equivalent thereof) issued by the jurisdiction of
      incorporation or formation of each of the Borrowers; and

            (v) a certificate signed by the President, Treasurer, Comptroller,
      Controller or chief financial officer of each of the Borrowers to the
      effect that (A) no Default or Event of Default shall have occurred and be
      continuing and (B) the representations and warranties of the Borrowers
      contained in this Agreement are true and correct as of the date of such
      certificate.

            (b) The Agreement and the Notes. The Borrowers shall have duly
executed and delivered this Agreement and the Notes to the Administrative Agent.

            (c) The Creditors. The Administrative Agent shall have received
executed counterparts of this Agreement from each of the Banks and the Agents
(or, in the case of any Bank as to which an executed counterpart shall not have
been received, the Administrative Agent shall have received in form satisfactory
to it a telex, facsimile or other written confirmation from such Bank of the
execution of a counterpart of this Agreement by such Bank).

            (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
Section 12 and all fees and expenses due pursuant to the Fee Letter shall have
been received in full by the parties thereto.

            (e) Environmental Claims. None of the Borrowers nor any Subsidiary
is subject to any Environmental Claim which could reasonably be expected to
result in a Material Adverse Change.

            (f) Legal Opinions. The Administrative Agent shall have received
opinions addressed to the Agents from (i) Proskauer Rose LLP, special counsel to
the Borrowers, (ii) Robert N. Cowen, Esq., Senior Vice President and Chief
Operating Officer of OSG and counsel to OSG and OSG Bulk, (iii) Mark A. Lowe,
Esq., counsel to OSG International, and (iv) Seward & Kissel LLP, special
counsel to the Agents, in the forms attached hereto as Exhibits G through J and
including such other legal opinions as the Banks shall have required as to all
or any matters under the laws of the State of Delaware, the United States of
America, the State of New York and the Republic of the Marshall Islands covering
the conditions and representations and warranties which are the subjects of
Sections 3 and 7, respectively.

            (g) Appointment of Process Agent. The Administrative Agent shall
have received a duly executed copy of the acceptance by OSG Ship Management,
Inc. of its appointment as agent for service of process for OSG International,
which acceptance shall be in such form and substance as may be reasonably
satisfactory to the Administrative Agent.

            (h) Officer's Certificate. The Administrative Agent shall have
received a certificate signed by the President or chief financial officer of OSG
certifying that under Applicable Law existing on the date hereof, no Borrower
shall be compelled by law to withhold or deduct any Taxes from any amounts to
become payable to the Administrative Agent for the account of the Administrative
Agent or the Creditors hereunder.

                                       27
<PAGE>

            (i) Insurance. Receipt by the Administrative Agent of certificates
of insurance or other evidence satisfactory to it indicating the existence and
effectiveness of the insurance required to be maintained by or on behalf of OSG,
the Subsidiaries and the Joint Ventures pursuant to Section 8.1(m).

            (j) Reduction of Existing Credit Facility. The Administrative Agent
shall have received evidence that the commitments of the banks and other lenders
under the Existing Credit Facility have been reduced to $126,000,000.

            (h) List of Vessels. The Administrative Agent shall have received a
List of Vessels.

3.2. Further Conditions Precedent. The obligation of the Banks to make an
Advance available to the Borrowers shall be expressly and separately from the
foregoing conditional upon, on each Drawdown Date:

            (a) Drawdown Notice. The Administrative Agent having received a
Drawdown Notice in accordance with the terms of Section 2.2.

            (b) Representations and Warranties True. The representations stated
in Section 7 being true and correct as if made on such Drawdown Date; provided,
however, that (i) the representations and warranties set forth in Section 7.1(e)
and (o) shall be deemed inapplicable on such date if such Advance would not
result in an incremental increase in the aggregate principal amount of Advances
outstanding under the Facility and (ii) any representation and warranty which,
by its express terms, relates solely to an earlier date shall be true and
accurate on and as of such earlier date.

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

            (d) No Material Adverse Change. There having been no Material
Adverse Change since September 30, 2001; provided however, that this condition
shall not apply to any Advance which would not increase the aggregate principal
amount of Advances outstanding under the Facility.

3.3. Satisfaction after Drawdown. Without prejudice to any of the other terms
and conditions of this Agreement, in the event all of the Banks 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 Borrowers hereby
covenant and undertake 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 Banks, in their sole discretion, may agree).

4. REPAYMENT AND PREPAYMENT

4.1. Repayment. Each Borrower jointly and severally agrees to repay to the Banks
the principal of each Advance made to the Borrowers on the last day of the
Interest Period therefor

                                       28
<PAGE>

and to pay the then outstanding aggregate principal amount of all of the
Advances on the Final Payment Date.

4.2. Prepayment. Subject to delivery of the notices required by this Section
4.2, the Borrowers may, at their option, on any Banking Day, prepay all or any
portion of the principal of any Advance. The Borrowers shall compensate the
Banks 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 in accordance with the provisions of Section 11.6. Prepayments
made on the last day of any Interest Period shall be without penalty or premium.
Any prepayment shall be in an integral multiple of $1,000,000 with a minimum
amount of $10,000,000. In addition, on the date of any prepayment hereunder, all
accrued interest to the date of such prepayment must be paid in full with
respect to the Advances or portions thereof being prepaid. The Borrowers shall
deliver to the Administrative Agent (which shall promptly furnish a copy to each
Bank) notice of such prepayment on not less than three (3) Banking Days (which
notice shall be irrevocable and shall specify the date and amount of
prepayment).

4.3. Borrowers' Obligations Absolute. The Borrowers' obligations to pay each
Creditor hereunder and under the Notes 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 Borrowers hereby jointly and severally promise to pay to the
Banks interest on the unpaid principal amount of each outstanding Advance made
to the Borrowers for the period commencing on the date of such Advance until but
not including the maturity thereof (whether at stated maturity, 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) the Applicable Margin. The
Applicable Rate with respect to each Advance shall be determined by the
Administrative Agent two (2) Banking Days prior to the first day of the relevant
Interest Period. The Administrative Agent shall promptly notify the Borrowers
and the Banks in writing of the Applicable Rate and the duration of each
Interest Period as and when determined. Each such determination, absent manifest
error, shall be conclusive and binding upon the Borrowers.

            (b) Notwithstanding the foregoing, each Borrower jointly and
severally agrees that upon the occurrence and during the continuance of an Event
of Default, each outstanding Advance shall bear interest at a rate per annum
equal to the greater of (A) two percent (2%) plus the Applicable Rate in effect
with respect to such Advance or (B) two percent (2%) plus the sum of (x) the
Applicable Margin plus (y) the LIBOR Rate for overnight or weekend deposits (the
"Default Rate"). In addition, each Borrower hereby jointly and severally
promises to pay interest on any Advance made to the Borrowers 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 Borrowers hereunder which shall not be paid in full when

                                       29
<PAGE>

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 on
each Advance shall be payable (i) on the last day of each Interest Period,
except that if the Borrowers shall select an Interest Period in excess of three
(3) months, accrued interest shall be payable during such Interest Period on
each three (3) month anniversary of the commencement of such Interest Period and
upon the last day of such Interest Period, and (ii) with each repayment of
principal thereof. Interest payable at the Default Rate shall be payable from
time to time on demand of the Administrative Agent.

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 Notes 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.

6. PAYMENTS

6.1. Place of Payments; No Set Off. All payments to be made hereunder by the
Borrowers shall be made in Dollars on the due dates or dates of demand of such
payments to the Administrative Agent at its office located at One Chase
Manhattan Plaza, 8th Floor, New York, NY 10005-1401 or to such other branch of
the Administrative Agent as the Administrative Agent may direct, without set-off
or counterclaim and free from, clear of and without deduction for, any Taxes;
provided, however, that if the Borrowers shall at any time be compelled by law
or regulatory authority to withhold or deduct any Taxes or any other amounts
from any amounts payable to the Administrative Agent for the account of the
Banks or the other Creditors hereunder, then, the Borrowers 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, whether for Taxes or otherwise, the
Borrowers shall promptly send to the Administrative Agent any documentary
evidence they have with respect to such withholding or deduction. No Bank shall
change its lending office if such change would result in the Borrowers being
compelled by law to withhold or deduct any Taxes (or increase the amount to be
withheld or deducted) from any amounts payable to the Administrative Agent for
the account of the Banks or the other Creditors hereunder. If a Bank becomes
subject to withholding, such Bank shall use its best efforts to change its
lending office to one without withholding, and should such change in lending
office not be possible, (i) the Borrowers may replace such Bank pursuant to
Section 11.8 or (ii) such Bank may waive its rights to any additional amounts
such Bank would be entitled to receive under this Section 6.1.

6.2. Federal Income Tax Credits. If any Bank obtains the benefit of a credit
against its liability for federal income taxes imposed by the United States of
America for all or part of the Taxes as to which the Borrowers have paid
additional amounts as aforesaid then such Bank shall reimburse the Borrowers for
the amount of the credit so obtained; (b) each of the Banks 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 first Drawdown Date (and in the case of an assignee,
on or prior to the effective

                                       30
<PAGE>

date of the relevant assignment) and from time to time thereafter when required
by applicable provisions of the Code, provide the Borrowers with two duly
completed copies of Internal Revenue Service Form W-8 BEN or W-8ECI, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party that exempts withholding tax on payments
under this Agreement or the Notes or certifying that the income receivable by it
pursuant to this Agreement or the Notes is effectively connected with the
conduct of a trade or business in the United States; (c) for any period with
respect to which a Bank that is not a United States Person has failed to provide
the Borrowers with the appropriate forms described in clause (b) 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 (b) above), such Bank shall not be entitled
to payment of additional amounts under Section 6.1 with respect to Federal Taxes
imposed by the United States; provided, however, that should a Bank become
subject to Taxes because of its failure to deliver a form required hereunder,
the Borrowers shall take such steps as such Bank shall reasonably request to
assist such Bank to recover such Taxes if, in the judgment of the Borrowers such
steps would avoid the need for, or reduce the amount of, any Taxes required to
be deducted from or in respect of any sum payable hereunder to such Bank and
would not, in the judgment of the Borrowers, be disadvantageous to the
Borrowers.6.3. Sharing of Setoffs. Each Bank agrees that if it shall, through
the exercise of a right of banker's lien, setoff or counterclaim or pursuant to
a secured claim under the Federal Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, exercised or received by such
Bank under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means (except in the event of such Bank's replacement
pursuant to Section 11.8), obtain payment (voluntary or involuntary) in respect
of any Advance or Advances as a result of which the unpaid principal portion of
its Advances (and accrued and unpaid interest thereon) shall be proportionately
less than the unpaid principal portion of the Advances (and accrued and unpaid
interest thereon) of any other Bank, it shall be deemed simultaneously to have
purchased from such other Bank at face value, and shall promptly pay to such
other Bank the purchase price for, a participation in the Advances of such other
Bank so that the aggregate unpaid principal amount of the Advances (and accrued
and unpaid interest thereon) and participations in the Advances held by each
Bank shall be in the same proportion to the aggregate unpaid principal amount of
all Advances then outstanding as the principal amount of its Advances (and
accrued and unpaid interest thereon) prior to such exercise of banker's lien,
setoff or counterclaim or other event was to the principal amount of all
Advances outstanding (and accrued and unpaid interest thereon) prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 6.3 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. Any Bank holding a participation in an
Advance deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
to such Bank by reason thereof as fully as if such Bank had made an Advance in
the amount of such participation. The Borrowers expressly consent to the
foregoing arrangement.

7. REPRESENTATIONS AND WARRANTIES

                                       31
<PAGE>

7.1. In order to induce the Creditors to enter into this Agreement and to make
the Facility and each Advance thereunder available, the Borrowers hereby,
jointly and severally, represent and warrant to the Banks (which representations
and warranties shall survive the execution and delivery of this Agreement and
the Notes and each drawdown of the Facility) that:

            (a) Due Organization and Power. Each of the Borrowers is a
corporation duly formed and validly existing in good standing under the laws of
its jurisdiction of incorporation and is duly qualified and is authorized to do
business as a foreign corporation 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 this Agreement and the Notes, and has complied with all
statutory, regulatory and other requirements relative to such business, property
and with all agreements and instruments to which it is party, or to which its
property is subject, other than those agreements for which non-compliance,
either singularly or in the aggregate, could not reasonably be expected to
result in a Material Adverse Change.

            (b) Authorization and Consents. All necessary corporate action has
been taken to duly authorize, and all necessary consents and authorities have
been obtained and remain in full force and effect to permit, each of the
Borrowers to enter into and perform its obligations under this Agreement and the
Notes and to borrow, service and repay the Advances and, as of the date of this
Agreement, no further consents or authorities are necessary for the service and
repayment of the Advances or any part thereof.

            (c) Binding Obligations. Each of this Agreement and the Notes
constitutes a legal, valid and binding obligation of each Borrower enforceable
against such Borrower in accordance with its terms.

            (d) No Violation. Neither the execution and delivery by the
Borrowers of this Agreement or the Notes, or any instrument or agreement
referred to herein or therein, or contemplated hereby or thereby, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the terms, conditions and provisions hereof or thereof by each of them,
will (i) conflict with, or result in a breach or violation of, or constitute a
default under the organizational documents of the Borrowers; (ii) conflict with
or contravene any Applicable Law or any contractual restriction binding on or
affecting the Borrowers or any of their respective assets or properties; (iii)
result in a breach or violation of, or constitute a default under, or permit the
acceleration of any material obligation or liability in, or but for any
requirement of the giving of notice or the passage of time (or both) would
constitute such a conflict with, breach or violation of, or default under, or
permit any such acceleration in, any material contractual obligation or any
material agreement or document to which any of the Borrowers is a party or by
which any of the Borrowers or any of their respective assets or properties is
bound (or to which any such obligation, agreement or document relates); or (iv)
result in any Lien upon any of the Borrowers' respective material assets or
properties.

            (e) Litigation. No action, suit or proceeding is pending or
threatened against OSG or any Subsidiary before any court, board of arbitration
or administrative agency which

                                       32
<PAGE>

could be reasonably expected to result in any Material Adverse Change or which
in any manner draws into question the validity or enforceability of this
Agreement or the Notes.

            (f) No Default. Neither OSG nor any of the Subsidiaries is in
default under any material agreement by which it is bound and no circumstances,
conditions, acts or events have occurred and are continuing or will result from
the transactions contemplated hereby which constitute or would give rise to or
would with the passage of time or the giving of notice or both constitute a
default under any such agreement.

            (g) 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 the aggregate of which for all such Withdrawal
Liabilities and other liabilities exceeds or would exceed $30,000,000. With
respect to any Multiemployer Plan, Multiple Employer Plan or Plan, 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). 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.

            (h) Environmental Matters and Claims. (A) OSG and each Subsidiary
and the Affiliates of each thereof will, when required, 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) OSG, each Subsidiary and the Affiliates of
each 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) neither OSG, nor any
Subsidiary

                                       33
<PAGE>

nor any Affiliates of any thereof 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 ("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 OSG 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 Borrowers' knowledge, threatened against OSG, any
Subsidiary or any Affiliate of any thereof and to the best of the Borrowers'
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.

            (i) Subsidiaries. (A) Each Material Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and authority and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and to own its properties and
(B) there are no Non-Recourse Subsidiaries as of the date hereof.

            (j) Financial Statements. Each of the audited consolidated balance
sheet of OSG and the Subsidiaries as at December 31, 2000 and the related
audited consolidated statements of operations and retained earnings and cash
flows for the fiscal year then ended reported on by Ernst & Young LLP and
included in OSG's 2000 Form 10-K, as well as the unaudited consolidated balance
sheet of OSG and the Subsidiaries for the nine month period ended on September
30, 2001 and the related unaudited consolidated statements of income and
retained earnings and cash flows for such period as reported on OSG's September
30, 2001 Form 10-Q, copies of all of which have been furnished to each Bank,
fairly present, in all material respects, the consolidated financial condition
of OSG and the Subsidiaries as at such dates and the consolidated results of the
operations of OSG and the Subsidiaries for the periods ended on such dates, all
in accordance with GAAP consistently applied.

            (k) Tax Returns and Payments. United States Federal income tax
returns of OSG and the Subsidiaries have been examined and closed through the
fiscal year ended December 31, 1996. OSG and the Subsidiaries have filed all
United States Federal, state, local and foreign income tax returns and all other
material tax or information returns which are

                                       34
<PAGE>

required to be filed by them (collectively, the "Tax Returns"). All of the Tax
Returns (and any tax or information return becoming due after the date hereof
and on or before the Closing Date) are true and complete in all material
respects. OSG and the Subsidiaries have paid all material federal, state, local
and foreign taxes (collectively, the "OSG Taxes") due pursuant to the Tax
Returns or pursuant to any assessment received by OSG or any Subsidiary, other
than OSG Taxes which are being contested in good faith by appropriate
proceedings and for which adequate reserves (in conformity with GAAP
consistently applied) shall have been set aside on their books. The charges,
accruals and reserves on the books of OSG and the Subsidiaries in respect of OSG
Taxes are adequate in all material respects and in conformity with GAAP
consistently applied. There is no material action, suit, proceeding, audit,
investigation or claim pending or, to the knowledge of OSG or its Subsidiaries,
threatened in respect of any OSG Taxes for which OSG or any of the Subsidiaries
is or may become liable nor has any deficiency or claim for any such OSG Taxes
been proposed, asserted or, to the knowledge of OSG or its Subsidiaries
threatened. Neither OSG nor its Subsidiaries, has consented to any waivers or
extensions of any statute of limitations with respect to the collection or
assessment of any OSG Taxes against it.

            (l) Insurance. Each of OSG 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. The properties and assets of each
Joint Venture have been insured against such risks and in such amounts as are
customary for companies engaged in similar businesses.

            (m) Foreign Trade Control Regulations. None of the transactions (i)
contemplated herein or (ii) otherwise engaged in by the Borrowers 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 Libyan Assets Control
Regulations of the United States of America (Title 31, Code of Federal
Regulations, Chapter V, Part 550, 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), any of the provisions
of the Iraqi Sanctions Regulations (Title 31, Code of Federal Regulations,
Chapter V, Part 575, as amended), any of the provisions of the Federal Republic
of Yugoslavia (Serbia and Montenegro) and Bosnian Serb-Controlled Areas of the
Republic of Bosnia and Herzegovina Sanctions Regulations (Title 31, Code of
Federal Regulations, Chapter V, Part 585, as amended), 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) or any other applicable foreign trade control
regulation; except, with respect to matters covered by clause (ii) above, where
any failure to comply with any such laws could not reasonably be expected to,
alone or in the aggregate, result in a Material Adverse Change.

            (n) Investment Company Act. Neither OSG 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 the Advances nor the application of the proceeds or
repayment thereof by the Borrowers, nor the consummation of the

                                       35
<PAGE>

other transactions contemplated hereby, will violate any provision of such act
or any rule, regulation or order of the Securities and Exchange Commission
thereunder.

            (o) No Material Adverse Change. Since December 31, 2000, there has
been no Material Adverse Change.

            (p) Compliance with ISM Code. Each of the Borrowers' and
Subsidiaries' vessels and each Operator thereof complies with the requirements
of the ISM Code in all material respects including (but not limited to)
obtaining all necessary ISM Code documentation and the maintenance and renewal
of valid certificates pursuant thereto.

            (q) No Threatened Withdrawal of DOC or SMC. There is no actual or,
to the best of the Borrowers' knowledge, threatened withdrawal of any Operator's
DOC, SMC or other certification or documentation related to the ISM Code or
otherwise required for the operation of such vessels in respect of any of the
Borrowers' or Subsidiaries' vessels.

            (r) No Proceedings to Dissolve. There are no proceedings or actions
pending or contemplated by any of the Borrowers or, to the best of the
Borrowers' knowledge, contemplated by any third party, to dissolve or terminate
such Borrowers.

            (s) Compliance with Laws. Each of the Borrowers 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 or reasonably be
expected to result in a Material Adverse Change.

            (t) OSG International Not Immune. OSG International is generally
subject to suit, and neither OSG International nor any of its properties or
assets has any immunity from the jurisdiction of any court or from legal process
(whether through service of process or notice of attachment prior to judgment,
attachment in aid of execution or otherwise) under the laws of the Marshall
Islands or any political subdivision thereof.

            (u) No Marshall Islands Filing Necessary. To ensure the
enforceability or admissibility in evidence of this Agreement and/or the Notes,
it is not necessary that this Agreement or any of the Notes be filed or recorded
with any court or other authority in the Marshall Islands or any political
subdivision thereof or that any stamp or similar tax be paid hereon or thereon
or in respect hereof or thereof.

8. COVENANTS

8.1. Affirmative Covenants. Each of the Borrowers hereby jointly and severally
covenants and undertakes with each of the Banks 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 or the Notes or any of them, such Borrower will:

            (a) Performance of Agreements. Duly perform and observe the terms of
this Agreement and the Notes.

                                       36
<PAGE>

            (b) Notice of Default. Provide written notice to the Administrative
Agent (which shall promptly, and in any event within three (3) Banking Days of
receipt of such notice, notify the Banks) of the occurrence of (i) any Default
or Event of Default, (ii) any litigation or governmental proceeding pending or
threatened against OSG or any Subsidiary which in any manner draws into question
the validity or enforceability of this Agreement or any Note or which will
result or could reasonably be expected to result in a Material Adverse Change or
Default, and (iii) any other event or condition of which it becomes aware which
is reasonably likely to result in a Material Adverse Change or Default, 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 7.1 and this Section 8.1,
obtain every consent 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 the Notes.

            (d) Financial Statements and Other Information. Deliver to the
Administrative Agent with sufficient copies for the other Creditors to be
distributed to the other Creditors by the Administrative Agent promptly upon
receipt thereof:

            (i) as soon as available and in any event within 105 days after the
      end of each fiscal year of OSG, (A) a consolidated balance sheet of OSG
      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 and (B)
      if there are any Non-Recourse Subsidiaries, an unaudited consolidated
      balance sheet of OSG and the Recourse Subsidiaries as of the end of such
      fiscal year and the related unaudited 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, together with a letter from the independent public
      accountants referred to in the foregoing clause (A) confirming the
      mathematical accuracy of such financial statements and the derivation
      thereof on a reasonable basis from the audited financial statements
      referred to in clause (A);

            (ii) as soon as available and in any event within 60 days after the
      end of each of the first three fiscal quarters of each fiscal year of OSG,
      (A) an unaudited consolidated balance sheet of OSG 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 OSG'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 OSG'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 OSG and (B) if there are any
      Non-Recourse Subsidiaries, an unaudited consolidated balance sheet of OSG
      and the Recourse Subsidiaries as of the end of such fiscal quarter

                                       37
<PAGE>

      and the related unaudited consolidated statements of income and retained
      earnings and cash flows for such fiscal quarter and for the portion of
      OSG'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 OSG's
      previous fiscal year, together with a certificate of the chief financial
      officer or chief accounting officer of OSG as to the derivation of such
      financial statements from the financial statements referred to in clause
      (A) of this subsection (ii);

            (iii) simultaneously with the delivery of each set of financial
      statements referred to in clauses (i)(A) and (ii)(A) above, a Compliance
      Certificate of OSG executed by OSG's chief financial officer or chief
      accounting officer (A) setting forth in reasonable detail the calculations
      required to establish whether the covenants set forth in Sections 8.1(p)
      through (s) and 8.2(a), (c), (e) and (h) were 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 Borrowers are taking or
      propose to take with respect thereto;

            (iv) simultaneously with the delivery of each set of financial
      statements referred to in clause (i)(A) above, a statement of the firm of
      independent public accountants which reported on such statements (A)
      stating whether anything has come to their attention to cause them to
      believe that OSG and the Subsidiaries were not in compliance with any of
      the covenants set forth in Sections 8.1(p) through (s) and 8.1(w) and
      8.2(a)through (e) and 8.2 (h) on the date of such statements and (B)
      confirming the calculations set forth in the officer's certificates
      delivered simultaneously therewith pursuant to subsection (iii) above or,
      with respect to the calculations required to derive the amount referred to
      in the covenants set forth in Section 8.1(p) through (s), 8.1(w), and 8.2
      (a) through (e) and 8.2 (h), verifying the mathematical accuracy of such
      calculations and comparing Consolidated Net Income for each of the
      relevant fiscal quarters with the consolidated income statement of OSG and
      the Recourse Subsidiaries for such fiscal quarter;

            (v) within three (3) Banking Days after the date on which any
      executive officer of any of the Borrowers obtains knowledge of (A) any
      Default or Event of Default, if such Default or Event of Default is then
      continuing, or (B) a Material Adverse Change or any action, suit or
      proceeding of the type referred to in Section 7.1(e), a certificate of the
      chief financial officer or the chief accounting officer of each of the
      Borrowers setting forth the details thereof and the action which the
      Borrowers are taking or propose to take with respect thereto;

            (vi) promptly upon the mailing thereof to the shareholders of OSG
      generally, copies of all financial statements, reports and proxy
      statements so mailed;

            (vii) promptly upon the filing thereof, copies of all registration
      statements (other than the exhibits thereto and any registration
      statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
      and 8-K (or their equivalents) which OSG shall have filed with the
      Securities and Exchange Commission;

                                       38
<PAGE>

            (viii) as soon as possible, (A) copies of all reports and notices
      which any member of the ERISA Group or ERISA Affiliate files under ERISA
      with the Internal Revenue Service or the PBGC or the U.S. Department of
      Labor or the sponsor of a Multiemployer Plan or which any member of the
      ERISA Group or ERISA Affiliate receives from the PBGC or the sponsor of a
      Multiemployer Plan relating to (1) any Termination Event and (2) with
      respect to a Multiemployer Plan, any Withdrawal Liability, or any actual
      or expected reorganization (within the meaning of Title IV of ERISA) or
      termination of a Multiemployer Plan (within the meaning of Title IV of
      ERISA) and (B) a certificate of the chief financial officer or chief
      accounting officer of OSG setting forth in reasonable detail the
      calculation of the amount (to the extent then reasonably determinable) of
      any liability in connection with the foregoing;

            (ix) within 72 hours after any officer of any of the Borrowers
      becomes aware of any change in the rating by Moody's or S&P of OSG's
      publicly-traded senior unsecured long-term debt securities, notice of such
      change;

            (x) in the event of any change in OSG's fiscal year, OSG shall as
      soon as possible, restate such of its consolidated financial statements
      required to be delivered under this Section 8.1(d) for such twelve month
      period as shall be necessary in order to permit the calculation of the
      financial covenants set forth in this Agreement;

            (xi) as soon as available and in any event within 45 days after the
      end of each fiscal quarter of OSG, a List of Vessels, current as of the
      date provided; provided, however, that the Borrowers shall update such
      list as soon as practicable (and in any event within 15 Banking Days) in
      the event that there is a change of ten percent (10%) or more (by number
      of vessels) in the Borrowers' fleet of vessels; and

            (xii) from time to time such additional information regarding the
      financial position, results of operations, business or prospects of OSG
      and the Subsidiaries as the Administrative Agent, at the request of any
      Bank, may reasonably request.

            (e) Corporate Existence. Do or cause to be done all things necessary
to preserve and keep in full force and effect the Borrowers' and each Material
Subsidiary's legal existence, and all licenses, franchises, permits and assets
necessary or material to the conduct of the business of OSG and the
Subsidiaries.

            (f) Books and Records. Keep proper books and records of all
transactions relating to the business activities of the Borrowers are made until
all obligations under this Agreement have been satisfied in full.

            (g) Inspection. Allow any representative or representatives
designated by any Bank, at the risk and expense of such Bank and during normal
business hours, subject to applicable laws and regulations, to visit and inspect
any of the property of Borrowers or Subsidiaries, and, on reasonable prior
notice, to examine the Borrowers' and 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
Borrowers' and Subsidiaries' officers and executive employees all at such
reasonable times and as often as such Bank reasonably requests.

                                       39
<PAGE>

            (h) Inspection and Survey Reports. If the Majority Banks shall so
request, and the Borrowers have become obligated to provide Vessel Collateral as
provided in Section 8.1(t) hereof, the Borrowers shall provide the Banks with
copies of all internally generated inspection or survey reports on any Vessel
Collateral.

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

            (j) 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 Borrowers or Material Subsidiaries is a party, and all laws and
the rules and regulations thereunder, applicable to the Borrowers or any of the
Subsidiaries or the 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.

            (k) Environmental Matters. Promptly upon the occurrence of any of
the following conditions, provide to the Administrative Agent (which shall
promptly furnish a copy thereof to each Bank) a certificate of an executive
officer of each of the Borrowers, specifying in detail the nature of such
condition and their proposed response or the response of their 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 Administrative Agent, each Borrower will
submit to the Banks 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" shall mean any Person or entity whose liability for Environmental
Claims may have been assumed by contract or operation of law by OSG or any of
the Subsidiaries.

            (l) Maintenance of Assets. Maintain and keep, and procure that each
of the Subsidiaries shall maintain and keep, all properties used or useful in
the conduct of their

                                       40
<PAGE>

respective business in good condition, repair and working order (ordinary wear
and tear excepted) and will be 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 maintain such properties would not either singularly, or in the
aggregate, be reasonably likely to result in a Material Adverse Change.

            (m) Insurance. Maintain, cause each Subsidiary to maintain and use
its best efforts to cause each Joint Venture to maintain, with financially sound
and reputable insurance companies (which may include protection and indemnity
clubs) (i) in the case of OSG or any Subsidiary or Joint Venture which engages
in any shipping or shipping related business or in any business in products
related to oil, including without limitation, owning, leasing or chartering any
ship engaged in the transport of oil or related products, oil pollution
insurance covering risks in the maximum amount available in accordance with
standard industry practice or, if such insurance is not available at a
reasonable cost after taking into account the level of exposure to which OSG,
the Subsidiaries and the Joint Ventures may be subject, such other amount as is
usually insured against by companies of established repute engaged in the same
or similar business from time to time and (ii) 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.

            (n) Shipping Management. At all times cause not less than 66 2/3% of
the Consolidated Net Tangible Assets to be managed by OSG, any Subsidiary, the
Shipping Manager, any subsidiary of the Shipping Manager, one or more other
shipping management companies reasonably acceptable to the Majority Banks or any
combination of the foregoing.

            (o) Agent for Service of Process. OSG shall cause OSG International
to maintain at all times OSG Ship Management, Inc., or another agent acceptable
to the Majority Banks, 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 OSG and the
Administrative Agent a letter in form and substance reasonably satisfactory to
the Administrative Agent, accepting such agency, prior to or concurrently with
such other agent's acceptance of its appointment as agent for service of process
for OSG International.

            (p) Consolidated Tangible Net Worth. At all times maintain
Consolidated Tangible Net Worth at an amount not less than $659,226,000, plus
50% of cumulative Consolidated Net Income (to the extent positive) for each
fiscal quarter after June 30, 2001.

            (q) Cash Adjusted Debt Service Coverage Ratio. At all times maintain
a Cash Adjusted Debt Service Coverage Ratio measured as of the end of each
fiscal quarter for the period of four consecutive fiscal quarters ended on that
date (taken as a single accounting period) of not less than 1.75 to 1.

            (r) Unencumbered Assets to Unsecured Debt Ratio. At all times
maintain a ratio of Unencumbered Assets to Unsecured Debt of not less than 1.50
to 1.

                                       41
<PAGE>

            (s) Cash Adjusted Funded Debt to Cash Adjusted Consolidated Net
Tangible Assets. At all times maintain a ratio of Cash Adjusted Funded Debt to
Cash Adjusted Consolidated Net Tangible Assets of not more than 0.60 to 1.

            (t) Security Interest on Ratings Downgrade. (i) Unless the Banks
unanimously consent to continue the Facility on an unsecured basis, (x) upon the
event of a downgrading of Moody's and S&P's ratings of OSG's senior long-term
unsecured debt (without third-party credit enhancement) to a combined rating of
(I) BB- or lower by S&P or BB by S&P on Credit Watch with negative outlook, and
(II) Ba3 or lower by Moody's or (y) if no longer rated by S&P and Moody's, then
OSG shall, or shall cause one or more of the Subsidiaries to:

                  (A) not later than the fifteenth (15th) day after the
            occurrence of such ratings downgrade submit to the Administrative
            Agent for approval by the Agents a list of collateral for the
            Advances made or to be made hereunder which it proposes to grant a
            security interest in, pledge, assign or mortgage to or in favor of
            the Administrative Agent for the benefit of the Creditors, as
            collateral for the Advances, pursuant to one or more agreements or
            other instruments to which OSG (and any relevant Subsidiary) is a
            party (collectively, "Security Documents"). The list of collateral
            shall contain a description and valuation of any proposed
            collateral. Such proposed collateral shall consist of (1) vessels of
            OSG or any Subsidiary reasonably satisfactory to the Agents (the
            "Vessel Collateral"), such Vessel Collateral to be subject to no
            other Liens (other than Liens arising in the ordinary course of
            business which (x) do not secure Debt and (y) do not, individually
            or in the aggregate, materially detract from the value of the Vessel
            Collateral as collateral hereunder) and to have an aggregate Fair
            Market Value (taking into account such Liens) at least equal to 125%
            of the sum of the aggregate principal amount of all Advances
            outstanding on such fifteenth (15th) Banking Day; or (2) a cash
            collateral account of OSG or any Subsidiary maintained with the
            Administrative Agent into which OSG or any Subsidiary shall propose
            to deposit cash in an amount equal to 100% of the sum of the
            aggregate principal amount of all Advances outstanding on the date
            such list is provided (the "Cash Collateral") or (3) any combination
            of Vessel Collateral and Cash Collateral so long as the sum of (x)
            80% of the Fair Market Value of any Vessel Collateral plus (y) any
            Cash Collateral, equals or exceeds the sum of the aggregate
            principal amount of all Advances outstanding on the date such list
            is provided. The Administrative Agent shall notify OSG in writing as
            to whether the proposed collateral is acceptable to the Majority
            Banks on or prior to the fifteenth (15th) day following its receipt
            of the list of proposed collateral from OSG. On or prior to the
            fifteenth (15th) Banking Day following its receipt of such notice
            from the Administrative Agent, OSG shall grant and perfect a
            security interest in, pledge, assign or mortgage to or in favor of
            the Administrative Agent for the benefit of the Creditors any such
            collateral as the Agents shall have approved pursuant to one or more
            Security Documents (such day, the "Collateral Date"). In the event
            the Agents do not find the proposed collateral to be reasonably
            acceptable (it being understood that collateral in which another
            Person has a first priority security interest shall not be deemed
            reasonably acceptable for this purpose), OSG shall propose
            alternative collateral on or prior to the fifteenth

                                       42
<PAGE>

            (15th) Banking Day following its receipt of the notice from the
            Administrative Agent. It shall constitute an Event of Default if the
            Borrowers shall fail to provide substitute collateral reasonably
            acceptable to the Administrative Agent with the approval of the
            Majority Banks;

                  (B) on the Collateral Date, provide to the Administrative
            Agent one or more opinions of counsel, the form and substance of
            each such opinion and such counsel to be reasonably satisfactory in
            the opinion of counsel to the Administrative Agent, as to the
            creation, validity, effectiveness, perfection and priority of such
            security interests, pledges, assignments and mortgages, compliance
            with Regulation U, the absence of any fraudulent conveyance or
            transfer and such other matters as the Administrative Agent may
            reasonably request; and

                  (C) amend or modify this Agreement, pursuant to one or more
            amendments or modifications in form and substance satisfactory to
            the Administrative Agent, to the extent necessary or desirable, in
            the reasonable judgment of the Administrative Agent, to take into
            account the Security Documents entered into in accordance with this
            Section 8.1(t) and such security interests, pledges, assignments and
            mortgages and such other matters related thereto as the
            Administrative Agent may reasonably request, such amendments and
            modifications to include, without limitation, one or more
            representations and warranties, covenants, events of default and
            indemnities relating to the subject matter addressed in clauses (A)
            and (B) above, or the Security Documents, opinions or other writings
            referred to therein. In order for OSG to satisfy its obligations
            under this Section 8.1(t) and without limiting the provisions set
            forth above, the assets constituting Vessel Collateral hereunder,
            the determination of the Fair Market Value thereof and the form and
            substance of the Security Documents, the opinions referred to in
            clause (B) above and the amendments and modifications referred to in
            clause (C) above must each be satisfactory in form and substance to
            the Administrative Agent and its counsel, and OSG must have received
            a certificate signed by the Administrative Agent stating that OSG
            has complied with its obligations under this Section 8.1(t);
            provided that, in the event the entity which is the Administrative
            Agent is no longer a Bank at the time the Borrowers become obligated
            to grant a security interest in, pledge, assign or mortgage
            collateral for the Advances under this Section 8.1(t), the Majority
            Banks may appoint one of the Banks as Administrative Agent to
            replace the then existing Administrative Agent. The provisions of
            Article 14 shall continue to inure to such replaced Administrative
            Agent's benefit as to any actions taken or omitted to be taken while
            it was Administrative Agent.

            (ii) At all times after the Collateral Date, the sum of (x) 80% of
      the Fair Market Value of any Vessel Collateral plus (y) any Cash
      Collateral, shall be at least equal to the aggregate principal amount of
      all Advances outstanding hereunder from time to time. In the event the sum
      of the Fair Market Value of any Vessel Collateral and any Cash Collateral
      exceeds 140% of the aggregate principal amount of all Advances then
      outstanding hereunder, the Borrowers may withdraw Vessel Collateral, (with
      the consent

                                       43
<PAGE>

      of the Majority Banks (such consent not to be unreasonably withheld))
      and/or Cash Collateral so long as the Fair Market Value of any remaining
      Vessel Collateral and any remaining Cash Collateral equals or exceeds 140%
      of the aggregate principal amount of all Advances outstanding hereunder
      immediately following any such release of collateral. Should the Borrowers
      wish to withdraw Vessel Collateral a current List of Vessels must be
      provided to the Administrative Agent. If any collateral is released
      pursuant to this clause (ii), the Administrative Agent shall, within 15
      Banking Days release or deliver a signed termination statement or other
      document releasing any Lien relating to such Vessel Collateral or Cash
      Collateral.

            (iii) In the event OSG is no longer required under the indentures
      relating to its senior unsecured long-term indebtedness to continue to
      have such indebtedness rated, the Borrowers shall (A) on or prior to the
      120th day after the expiration of OSG's credit ratings and (B) annually
      thereafter until the later of the Final Payment Date or payment in full of
      all amounts due under this Agreement, deliver to the Administrative Agent,
      with sufficient copies for the Banks, a letter from either S&P or Moody's
      providing a rating of the Facility as BB or better, in the case of S&P, or
      as Ba2 or better, in the case of Moody's, and upon any failure to deliver
      a letter rating in accordance with (A) above, provide collateral in
      accordance with the provisions of subsections (i) and (ii) above.

            (u) Ownership of OSG Bulk and OSG International. In respect of OSG
only, cause OSG Bulk and OSG International to be direct or indirect wholly-owned
Subsidiaries (excluding only directors' qualifying shares).

            (v) Exchange Listing. In respect of OSG only, remain listed on the
New York Stock Exchange, NASDAQ or such other exchange as is satisfactory to the
Banks.

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

            (x) Termination of Existing Credit Facility. Reduce the commitments
and repay any outstandings of the banks and other lenders under the Existing
Credit Facility to less than $126,000,000 on or prior to December 12, 2001 and
terminate, cancel and prepay all amounts outstanding thereunder on or before
February 1, 2002.

8.2. Negative Covenants. Each of the Borrowers hereby jointly and severally
covenants and undertakes with each of the Banks 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 or the Notes or any of them, the Borrowers, without the prior written
consent of the Majority Banks (or the Administrative Agent acting with the
written consent of the Majority Banks):

            (a) Limitation on Secured Debt. Will not, and will not permit any
Recourse Subsidiary to, create, assume, incur or in any manner become liable in
respect of any Secured Debt unless immediately after giving effect thereto and
to the application of the proceeds thereof, the ratio of Unencumbered Assets to
Unsecured Debt shall not be less than 1.50 to 1.

                                       44
<PAGE>

            (b) Limitations on Funded Debt. Will not, and will not permit any
Recourse Subsidiary to, create, assume or incur or in any manner be or become
liable in respect of any Funded Debt, except:

            (i) Funded Debt of OSG and the Recourse Subsidiaries outstanding as
      of September 30, 2001 as the same is set forth on Schedule III attached
      hereto;

            (ii) Funded Debt of OSG and the Recourse Subsidiaries; provided,
      however, that at the time of issuance thereof and immediately after giving
      effect thereto the Borrowers shall be in compliance with Section 8.1(s);

            (iii) Renewals, extensions or refundings of Funded Debt referred to
      in Section 8.2(b)(i) or incurred pursuant to the provisions of Section
      8.2(b)(ii), without increase in the ranking or priority thereof or
      principal amount thereof; provided, that in the case of any refunding of
      any such Funded Debt, the newly issued Funded Debt shall have a weighted
      average life to maturity at least equal to the remaining weighted average
      life to maturity of the Funded Debt being refunded; and

            (iv) Funded Debt under the Facility.

            (c) Conduct of Business. Will not, and will not permit any Recourse
Subsidiary to, acquire any Operating Assets or make any Investment in Operating
Assets unless, after giving effect to such acquisition or Investment at least
70% (based on the most recent consolidated balance sheet of OSG and the Recourse
Subsidiaries required to be provided pursuant to Section 8.1(d)) of the
Operating Assets of OSG and the Recourse Subsidiaries are (on a consolidated
basis) in Shipping and Related Businesses; provided, however, that the foregoing
shall not limit or restrict the acquisition of assets to be used in the Shipping
and Related Businesses of OSG and the Recourse Subsidiaries or of any equity
interest in any Person engaged primarily in Shipping and Related Businesses.

            (d) Limitation on Sale and Leasebacks. Will not, and will not permit
any Recourse Subsidiary to, enter into any Sale and Leaseback Transaction unless
either:

            (i) after giving effect to such Sale and Leaseback Transaction, the
      ratio of Unencumbered Assets to Unsecured Debt shall be not less than 1.50
      to 1; or

            (ii) the proceeds of the sale of the assets to be leased are at
      least equal to their fair market value and such proceeds are applied (or
      committed pursuant to a binding written contract to be applied within 24
      months of receipt thereof to (A) the purchase, acquisition or construction
      of assets to be used in the business of OSG and the Subsidiaries or (B)
      retire Funded Debt ; provided, that, the percentage of proceeds, if any,
      applied to pay Subordinated Funded Debt shall not exceed the percentage
      which Subordinated Funded Debt represents of Consolidated Funded Debt.
      Pending the actual application of such proceeds for the purposes described
      in clauses (A) or (B) above, such proceeds shall be held by OSG or the
      relevant Subsidiary in Permitted Investments only.

                                       45
<PAGE>

            (e) Mergers, Consolidations and Sales of Assets.

            (i) (A) Will not, and will not permit any Material Subsidiary 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 OSG and the Subsidiaries, taken as a whole; provided, however, that OSG
      or any Subsidiary 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 OSG (unless the
      Majority Banks otherwise consent, such consent not to be unreasonably
      withheld) and shall have assumed all liabilities and obligations of the
      parties thereto and the Borrowers shall have provided the Administrative
      Agent, not less than ten (10) Business Days in advance of such
      consolidation or merger, (i) a certificate declaring that no Default or
      Event of Default exists or would result from the intended consolidation or
      merger, and (ii) pro forma financial statements of the surviving entity
      together with a Compliance Certificate demonstrating the compliance of the
      Borrowers with all the covenants under this Agreement; and provided
      further, that OSG or any Recourse Subsidiary may consolidate or merge with
      any Recourse Subsidiary, in the case of OSG, or OSG or any other Recourse
      Subsidiary, in the case of a Recourse Subsidiary.

            (ii) In addition to the restrictions contained in Section 8.2(e)(i)
      OSG will not, and will not permit any Recourse Subsidiary to, sell, lease
      or otherwise dispose of (other than in the ordinary course of business)
      any Substantial Part (as defined in Section 8.2(e)(iii)) of the assets of
      OSG and the Subsidiaries, taken as a whole (including the creation of
      Minority Interests); provided that any Subsidiary may sell, lease or
      otherwise dispose of all or substantially all of its assets to OSG or a
      wholly-owned Subsidiary. For the purposes of any determination under this
      Section 8.2(e)(ii), a sale or other disposition of assets of OSG and the
      Subsidiaries shall include, but not be limited to, the creation of any
      Minority Interests and any other sale, transfer or other disposition of
      the capital stock or assets of any Subsidiary (other than to OSG or a
      wholly-owned Subsidiary) including any merger, consolidation or sale of
      all or substantially all of the assets of any Subsidiary if the surviving
      or continuing or acquiring corporation is not a Subsidiary.

            (iii) As used in this Section 8.2(e), a sale, lease or other
      disposition of assets shall be deemed to be a "Substantial Part" of the
      assets of OSG and the Recourse Subsidiaries, taken as a whole, if the Book
      Value of such assets, when added to the Book Value of all other assets
      sold, leased or otherwise disposed of by OSG and the Subsidiaries (other
      than in the ordinary course of business) during the 365 day period ending
      with the date of such sale, lease or other disposition, exceeds 15% of
      Consolidated Net Tangible Assets, determined as of the end of the
      immediately preceding fiscal quarter. For the purposes of any
      determination of "Substantial Part" under this Section 8.2(e), a Qualified
      Joint Venture Transaction shall not be deemed a sale, lease or other
      disposition of assets by OSG and the Subsidiaries. A "Qualified Joint
      Venture Transaction" shall mean a contribution of property by OSG or a
      Subsidiary to a Joint Venture which property, in the good faith judgment
      of the Board of Directors of OSG, is substantially equivalent in value to
      the property contributed by the other co-venturers in

                                       46
<PAGE>

      such Joint Venture; provided (A) there are one or more co-venturers other
      than OSG or a Subsidiary and (B) OSG or a Subsidiary maintains at least a
      50% equity interest or exercises (and is entitled to exercise) at least
      equivalent control of the management and administration of such Joint
      Venture as the co-venturers, either singularly or in the aggregate,
      exercise (and are entitled to exercise).

            For the purpose of making any determination of "Substantial Part,"
      sales, leases and other dispositions of assets of OSG and its Subsidiaries
      shall not be included if, within twenty-four (24) months after such sale,
      lease or disposition, the net proceeds thereof are either (1) committed,
      pursuant to a binding written contract, to the purchase or construction of
      other assets of Shipping or Related Businesses that are to be used in the
      business of OSG and its Subsidiaries or (2) used to retire Funded Debt;
      provided, that, the percentage of proceeds, if any, applied to pay
      Subordinated Funded Debt shall not exceed the percentage which
      Subordinated Funded Debt represents of Consolidated Funded Debt; provided
      further that pending the actual application of such proceeds for the
      purposes described in clause (1) or (2) above, such net proceeds shall be
      invested only in Permitted Investments.

            (f) Transactions with Affiliates. Will not, and will not permit any
Recourse Subsidiary to, enter into or become a party to any material transaction
or arrangement with any Affiliate (including, without limitation, the purchase
from, sale to, or exchange of property with, or the rendering of any service by
or for, any Affiliate), except pursuant to the reasonable requirements of OSG's
or such Subsidiary's business and upon terms which are fair and reasonable and
in the best interests of OSG or such Subsidiary.

            (g) Use of Proceeds. Will not use the proceeds of the Advances in
violation of Regulation T, U or X or 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.

            (h) Maximum Investments in Joint Ventures. Will not, and will not
permit any Recourse Subsidiary to, make any Investment in any Joint Venture on
any date if, immediately after giving effect to such Investment, the aggregate
amount of all such Investments made by OSG and the Recourse Subsidiaries after
December 31, 2000 would exceed 30% of Consolidated Net Tangible Assets based on
the most recent consolidated balance sheet of OSG required to be provided
pursuant to Section 8.1(d).

            (i) 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.

            (j) No Violation. Will not, and will not permit any Subsidiary to,
enter into any instrument or agreement with terms, conditions and provisions
therein which will conflict with or result in a breach or violation of Section
8.1(p) through (s) or any other provision of this Agreement.

                                       47
<PAGE>

9. EVENTS OF DEFAULT

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

            (a) Principal Payments Any principal of the Advances is not paid on
the date due (whether at stated maturity or by prepayment, acceleration or
otherwise); or

            (b) Interest and other Payments. Any interest on the Advances or any
other amount becoming payable under this Agreement and under the Notes 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 or deemed made by or on behalf of the Borrowers or any Subsidiary
thereof in this Agreement or in any other instrument, document or other
agreement delivered in connection herewith (including, without limitation, any
amendment, or modification or waiver) proves to have been untrue or misleading
in any material respect as at the date as of which it was made or deemed to be
made; or

            (d) Impossibility, Illegality. It becomes impossible or unlawful for
the Borrowers to fulfill any of the covenants and obligations contained herein
or in the Notes, or (in the event of any illegality which arises solely as a
result of the domicile of any Bank and the Borrower fails to obtain a
Replacement Bank in accordance with Section 11.8 within thirty (30) days
thereof) for any of the Banks to exercise any of the rights vested in any of
them hereunder or under the Notes and such impossibility or illegality, in the
reasonable opinion of such Bank, will have a material adverse effect on any of
its rights hereunder or under the Notes or on any of its rights to enforce any
thereof; or

            (e) Certain Covenants. One or more of the Borrowers default in the
performance or observance of any covenant contained in Sections 8.1(b),
8.1(d)(v), 8.1(l), 8.1(p) through (u), 8.1(x), 8.2(a) through 8.2(e), and 8.2(h)
; or

            (f) Covenants. One or more of the Borrowers default in the
performance of any term, covenant or agreement contained in this Agreement or in
the Notes, or in any other instrument, document or other agreement delivered in
connection herewith or therewith, in each case other than an Event of Default
referred to elsewhere in this Section 9.1, and such default continues unremedied
for a period of fifteen (15) days after written notice thereof has been given to
the Borrowers by the Administrative Agent at the request of any Bank; or

            (g) Indebtedness and Other Obligations. OSG or any Recourse
Subsidiary 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 any event or condition occurs that
enables or permits (with or without the giving or notice of the lapse of time,
or both) the holder or holders of Material Financial Obligations of OSG or any
Subsidiary or any agent or trustee on their behalf to accelerate Indebtedness;
or

                                       48
<PAGE>

            (h) Bankruptcy. Any of the Borrowers or Material Subsidiaries
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 the Notes or any material provision
thereof or any Borrower asserts that any such agreement or provision thereof is
invalid; or one or more judgments or orders for the payment of money aggregating
in excess of $10,000,000 for OSG and all Subsidiaries (or its equivalent in any
other currency) shall be rendered against OSG and/or any Subsidiary and such
judgments or orders shall continue unsatisfied and unstayed for a period of 30
consecutive days or any action shall be legally taken by the judgment creditor
to attach or levy upon assets of OSG or its Subsidiary to enforce such judgment;
or

            (j) Inability to Pay Debts. Any Borrower or Material Subsidiary is
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) 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 $30,000,000;

            then, and in every such event, the Banks' obligation to make the
Facility available shall cease and the Administrative Agent on behalf of the
Banks may, with the Majority Banks' consent and shall, upon the Majority Banks'
instruction, by notice to the Borrowers, declare the entire Commitments
terminated and the Facility Balance, accrued interest and any other sums payable
by the Borrowers hereunder and under the Notes due and payable whereupon the
same shall forthwith be due and payable immediately 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 9.1, the Commitments shall automatically terminate without
further action of any kind and the Facility Balance, accrued interest and any
other sums payable by the Borrowers hereunder and under the Notes shall
automatically be immediately due and payable without declaration, presentment,
demand, protest or other notice to the Borrowers, all of which are expressly
waived by the Borrowers. 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 or in the Notes or in aid of the exercise of any
power granted herein

                                       49
<PAGE>

or therein, or the Banks or the Administrative Agent may proceed to enforce the
payment of the Notes when due or to enforce any other legal or equitable right
of the Banks, 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 Borrowers to any of the Creditors hereunder and/or under the Notes (whether
or not then due) all moneys and other amounts of the Borrowers then or
thereafter in possession of any Creditor, the balance of any deposit account
(demand or time, matured or unmatured, provisional or final) of the Borrowers
then or thereafter with any Creditor and every other claim of the Borrowers then
or thereafter against any of the Creditors.

9.2. Application of Moneys. All moneys received by any of the Creditors under or
pursuant to this Agreement or the Notes after the happening of any Event of
Default shall be turned over to the Administrative Agent and applied by the
Administrative Agent in the following manner:

            (a) 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 Notes;

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

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

            (d) fourthly, in or towards payment of all other sums which may be
owing to any of the Creditors under this Agreement or under the Notes; and

            (e) fifthly, the surplus (if any) shall be paid to the Borrowers or
to whomsoever else may be entitled thereto.

10. ASSIGNMENTS; PARTICIPATIONS; PLEDGES

10.1. Assignments.

            (a) This Agreement shall be binding upon, and inure to the benefit
of, the Borrowers and each of the Creditors and their respective successors and
assigns, except that the Borrowers may not assign any of their rights or
obligations hereunder without the prior written consent of all the Banks. Any
Bank may assign all or part of its rights and obligations under this Agreement
to any one or more financial institutions or collateralized loan obligation
funds or trusts ("CLO") approved by the Administrative Agent and the Borrowers,
which approval shall not be unreasonably withheld; provided, however, (i) that
no consent of the Borrowers shall be required if a Default has occurred and is
continuing at the time of such assignment (ii) that no such consent shall be
required if the assignee is immediately prior to such assignment another Bank,
an Affiliate of the assigning Bank or a CLO advised by a Bank (the expenses of
any Bank in connection with any such assignment shall be for its own or the
assignee's account); (iii) 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 (including assignments to CLOs) been
made; (iv) that any assignment shall be made pursuant to an

                                       50
<PAGE>

Assignment and Assumption Agreement substantially in the form of Exhibit B
hereto; and (v) that, in the case of a partial assignment by any Bank of its
rights and obligations hereunder, unless such assignment is to another Bank, an
Affiliate of a Bank, or, upon the consent of the Borrowers such consent not to
be unreasonably withheld, a CLO the minimum amount which may be assigned shall
be $5,000,000 and, after giving effect to any such assignment, each such
assigning Bank's pro rata portion of the Commitments and Advances shall
aggregate not less than $10,000,000; unless, in each case, otherwise agreed by
the Borrowers and the Administrative Agent. The Borrowers will take all
reasonable actions requested by the Banks to effect any such assignment,
including, without limitation, the execution of a written consent to any
Assignment and Assumption Agreement for which such consent is required by this
Section 10.1.

            (b) Notwithstanding the foregoing, any Bank may at any time assign
all or any portion of its rights under this Agreement and the Notes to a Federal
Reserve Bank to secure extensions of credit by such Federal Reserve Bank to such
Bank; provided that no such assignment shall release a Bank from any of its
obligations hereunder or substitute any such Federal Reserve Bank for such Bank
as a party hereto.

10.2. Participations. Any Bank 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 any of the Advances, its Commitment or other interests of such Bank
hereunder; provided, however, that

            (a) no participation contemplated in this Section 10.2 shall relieve
such Bank from its Commitment or its other obligations hereunder;

            (b) such Bank 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
Bank, shall be entitled to require such Bank to take or refrain from taking any
action hereunder, except that such Bank may agree with any Participant that such
Bank will not, without such Participant's consent, approve any amendment or
waiver of any provision of this Agreement or any Note, or consent to any
departure by the Borrowers therefrom, if any such amendment, waiver or consent
would require the affirmative consent of such Bank pursuant to the terms hereof;
and

            (d) 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 participating interest been sold.

10.3. Promissory Notes. In order to facilitate assignments and participations
hereunder, the Borrowers shall, at the request of any Bank assigning or selling
participating interests in all or any portion of its rights under this Agreement
and its Note pursuant to Section 10.1 or 10.2, duly execute and deliver to such
Bank a promissory note or notes evidencing the portion of the Facility Balance
owing by the Borrowers to such Bank hereunder for delivery to the assignee.

10.4. Security Interest. Notwithstanding any other provision set forth in this
Agreement, any Bank or Participant may at any time create a security interest in
all or any portion of its rights

                                       51
<PAGE>

under this Agreement, including, without limitation, in the Advances owing to
such Bank or Participant and the Note held by it.

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

11.1. 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, a Bank or Participant has a reasonable
basis to conclude that it has become unlawful for such Bank or Participant to
maintain or give effect to its obligations as contemplated by this Agreement,
such Bank or Participant shall inform the Borrowers and the Administrative Agent
to that effect, whereupon the Commitment of such Bank or obligation of such
Participant shall forthwith terminate and the Borrowers shall be required to
repay to such Bank or Participant that portion of the Facility Balance advanced
by such Bank or Participant immediately. In any such event, but without
prejudice to the aforesaid obligations of the Borrowers to prepay the relevant
portion of the Facility Balance, the Borrowers and such Bank 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.

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

            (a) subject any Bank or Participant or the parent holding company
thereof to any Taxes; or

            (b) change the basis of taxation to any Bank or Participant or the
parent holding company thereof payments of principal or interest or any other
payment due or to become due pursuant to this Agreement (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 Bank, Participant, or parent holding company (unless such
jurisdiction is asserted solely by reason of the activities of OSG or any
Subsidiary) or such other jurisdiction where the Advances may be payable); or

            (c) impose, modify or deem applicable any reserve or capital
adequacy requirements to 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 Bank or Participant or the parent holding company thereof;
or

            (d) impose on any Bank or Participant or the parent holding company
thereof any other condition affecting the Facility or any part thereof;

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

                                       52
<PAGE>

                  (i) such Bank or Participant shall notify the Borrowers and
the Administrative Agent in writing of the happening of such event;

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

            Any such notice referred to in subsections (i) and (ii) of this
Section 11.2 may be made by a Bank or Participant at any time before or within
one (1) year after any repayment of the Facility Balance; provided, however,
that before making any such demand, such Bank or Participant agree 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 Bank or
Participant, be otherwise disadvantageous to such Bank or Participant.

11.3. Nonavailability of Funds. If the Administrative 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
Administrative Agent shall give notice of such determination to the Borrowers
and the Banks. The Borrowers and the Administrative Agent, acting in accordance
with the instruction of the Banks, 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 Borrowers and the Administrative 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 Administrative Agent shall set an
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 Applicable Margin plus the cost to the Banks and Participants (as
certified by each Bank and Participant) of funding such Advance. In the event
the state of affairs referred to in this Section 11.3 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.

11.4. Determination of Losses. A certificate or determination notice of the
Administrative Agent or any affected Bank or Participant, as the case may be, as
to any of the matters referred to in this Section 11 shall, absent manifest
error, be conclusive and binding on the Borrowers.

11.5. Compensation for Losses. Where any portion of the Facility Balance is to
be prepaid by the Borrowers pursuant to Section 11.1 or otherwise, the Borrowers
agree simultaneously with such prepayment to pay to the affected Bank or
Participant all accrued interest to the date of actual payment and all other
sums payable by the Borrowers to such Bank or Participant pursuant to this
Agreement together with such amounts as may be certified by such Bank or
Participant to be necessary to compensate such Bank 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 Facility Balance for
the remainder (if any) of the then current Interest Period or Periods, but
otherwise without penalty or premium.

                                       53
<PAGE>

11.6. Compensation for Breakage Costs. The Borrowers shall pay to the Banks,
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 Banks
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 2.7, 4.2 and 9.1) of an Advance on a date other than the
last day of an Interest Period for such Advance; or

            (b) any failure by the Borrowers to borrow (including without
limitation any such failure resulting from a condition precedent set forth in
Section 3) or prepay an Advance held by any Banks 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 4.2,
respectively;

            such compensation to include, without limitation, an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount so paid, prepaid or not borrowed for the period from the
date of such payment, prepayment or failure to borrow to the last day of the
then current Interest Period for such Advance or, in the case of a failure to
borrow, the Interest Period for such Advance which would have commenced on the
date of such failure to borrow, in each case at the applicable rate of interest
for such Advance provided for herein over (ii) the amount of interest which
otherwise would have accrued on such principal amount at a rate per annum equal
to the interest component (as reasonably determined by the relevant Banks and/or
Participants) of the amount (as reasonably determined by such Banks and/or
Participants) the Banks and/or Participants would have bid in the Eurocurrency
market for Dollar deposits of amounts comparable to such principal amount and
maturities comparable to such Interest Period. Any certification of a relevant
Bank or Participant shall, absent manifest error, be conclusive and binding on
the Borrowers as to the extent of any such losses.

11.7. 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
Notes, then the conversion shall be made, in the discretion of the
Administrative 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").

            (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
Borrowers 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 into Dollars at the rate of exchange prevailing
on the date of payment will produce the amount then due under this Agreement
and/or the Notes, in Dollars; any excess over the amount due received or
collected by the Creditors and Participants shall be remitted to the Borrowers.

                                       54
<PAGE>

            (c) Any amount due from the Borrowers under Section 11.7(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 Notes and
such obligation shall survive the termination of this Agreement and the payment
of all other amounts due hereunder.

            (d) The term "rate of exchange" in this Section 11.7 means the rate
at which the Administrative 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.

11.8. Replacement of Bank or Participant. If the obligation of any Bank to make
its pro rata share of any Advance has been suspended or terminated pursuant to
Section 11.1, or if any Bank shall notify the Borrowers of the happening of any
event leading to increased costs as described in Section 11.2, the Borrowers
shall have the right, upon twenty (20) Banking Days' prior written notice to
such Bank, to cause one or more banks (a "Replacement Bank(s)") (which may be
one or more of the Banks), each such Replacement Bank to be reasonably
satisfactory to the Majority Banks (determined for this purpose as if such
transferor Bank had no Commitment and held no interest in the Note issued to it
hereunder) and, in each case, with the written acknowledgment of the
Administrative Agent, to purchase such Bank's pro rata share of the Advances and
assume the Commitment of such Bank pursuant to an Assignment and Assumption
Agreement. If one or more such banks are identified by the Borrowers and
approved as being reasonably satisfactory to the Majority Banks (determined as
provided above), the transferor Bank shall consent to such sale and assumption
by executing and delivering an Assignment and Assumption Agreement. Upon
execution and delivery of an Assignment and Assumption Agreement by the
Borrowers, the transferor Bank, the Replacement Bank and the Administrative
Agent, and payment by the Replacement Bank to the transferor Bank of an amount
equal to the purchase price agreed between such transferor Bank and such
Replacement Bank, such Replacement Bank shall become a Bank party to this
Agreement (if it is not already a party hereto as applicable) and shall have all
the rights and obligations of a Bank with a Commitment (which, if such
Replacement Bank is already a party hereto, shall take into account such
Replacement Bank's then existing Commitment hereunder) as set forth in such
Assignment and Assumption Agreement and the transferor Bank shall be released
from its obligations hereunder and no further consent or action by any other
Person shall be required. In the event that the Administrative Agent, in its
capacity as a Bank, is required to sell its pro rata share of the Advances and
its Commitment hereunder pursuant to this Section 11.8, the Administrative Agent
shall, promptly upon the consummation of any assignment pursuant to this Section
11.8, resign as Administrative Agent hereunder and the Borrowers shall (subject
to the consent of the Majority Banks) have the right to appoint another Agent as
successor Administrative Agent, all in accordance with Section 14.8.

12. FEES, EXPENSES AND INDEMNIFICATION

12.1. Fees. OSG shall pay the Administrative Agent (for the account of the
Banks) a commitment fee, which fee shall be a per annum fee of forty-five
percent (45%) of the Applicable Margin (the "Commitment Fee") and will accrue
daily on the amount of the undrawn portion of the Facility, during the period
from and including the date hereof to, but excluding the date on which the
Commitment terminates. Said Fee shall be payable during the Facility Period
quarterly in arrears payable on December 31, 2001 and on the last day of each
March, June, September and December of each year. Such Commitment Fee shall be
calculated

                                       55
<PAGE>

on the basis of actual days elapsed over a 365/366 day year. The Borrowers shall
also pay to the Banks such other fees, including agency fees, as the parties
have agreed pursuant to the Fee Letter.

12.2. Expenses; Indemnity; Damage Waiver. (a) The Borrowers jointly and
severally agree to pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, and the other Agents and their
Affiliates, including the reasonable fees, charges and disbursements of counsel
therefor, in connection with the syndication of the Facility, the preparation
and administration of this Agreement or any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all out-of-pocket expenses incurred by the
Administrative Agent, or any Bank, including the fees, charges and disbursements
of any counsel for the Administrative Agent or any Bank, in connection with the
enforcement or protection of its rights in connection with this Agreement,
including its rights under this Section, or in connection with the Advances
made, including all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Advances.

            (b) The Borrowers shall , jointly and severally, indemnify the
Administrative Agent, each Bank, their respective Affiliates, and the respective
directors, officers, agents and employees of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the making of
the Advances or consummation of any other transaction contemplated hereby, (ii)
any Advances or the use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Materials of Environmental Concern on or from any
property owned or operated by any of the Borrowers or any of their Subsidiaries,
or any Environmental Claims related in any way to any Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided, however, that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and non-appealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnitee; and provided, further, that to the extent
permitted by law, an Indemnitee shall provide the Borrowers with prompt notice
of any such investigative, administrative or judicial proceeding after such
Indemnitee becomes aware of such proceeding; provided, however, that an
Indemnitee's failure to provide such notice in a timely manner shall not relieve
the Borrowers of their obligations hereunder.

            (c) To the extent that the Borrowers fail to pay any amount required
to be paid by them to the Administrative Agent under paragraph (a) or (b) of
this Section, each Bank severally agrees to pay to the Administrative Agent such
Bank's applicable percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss,

                                       56
<PAGE>

claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.

            (d) To the extent permitted by applicable law, the Borrowers shall
not assert, and hereby waives any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Advances, or the use of the proceeds thereof.

            (e) All amounts due under this Section shall be payable not later
than ten (10) Banking Days after written demand therefor.

13. APPLICABLE LAW, JURISDICTION AND WAIVER

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

13.2. Jurisdiction. Each of the Borrowers hereby irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York 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 agrees that service of summons or
other legal process thereon may be made by serving a copy of the summons or
other legal process in any such action or proceeding (i) on OSG or OSG Bulk by
mailing or delivering the same by hand to OSG or OSG Bulk, as the case may be,
at the address indicated for notices in Section 15 or, (ii) in the case of OSG
International, on OSG Ship Management, Inc., 511 Fifth Avenue, New York, New
York 10017 by mailing or delivering the same by hand at the address of OSG Ship
Management, Inc. The service, as herein provided, of such summons or other legal
process in any such action or proceeding shall be deemed personal service and
accepted by the Borrowers as such, and shall be legal and binding upon the
Borrowers 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 Borrowers to any of the Creditors)
against the Borrowers 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 Borrowers shall not be conveniently available for such service,
each Borrower 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
Borrowers will advise the Administrative 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.

13.3. Waiver of Jurisdiction, Forum Non Conveniens. Each of the Borrowers
hereby and irrevocably and unconditionally waives, to the fullest extent it may
legally do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or in any way connected
with this Agreement and the Notes in any court referred to in Section 13.2. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.

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<PAGE>

13.4. Waiver Of Jury Trial. IT IS MUTUALLY AGREED BY AND AMONG THE BORROWERS 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 NOTES.

14. THE AGENTS

14.1. Appointment and Authorization. Each Bank irrevocably appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the Notes as are delegated to such Agent by
the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.

14.2. Agents and Affiliates. So long as Administrative Agent and Syndication
Agent remain Banks hereunder, they shall have the same rights and powers under
this Agreement as any other Bank and may exercise or refrain from exercising the
same as though it were not an Agent and the terms "Bank" and "Banks" shall
include each Agent in its capacity as a Bank. Each Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with, the Borrowers, the Subsidiaries or any Affiliate thereof as if it
were not an Agent hereunder.

14.3. Action by Agents. The obligations of each Agent 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 Administrative Agent, as expressly provided in
Section 9. Each of the Agents shall be entitled to use its 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 Notes, unless an Agent shall have been instructed by the Majority Banks
(or, to the extent provided herein, all of the Banks) to exercise such rights or
to take or refrain from taking such action; provided, however, that none of the
Agents shall be required to take any action which exposes it to personal
liability or which is contrary to this Agreement or Applicable Law and no Agent
has any fiduciary or implied duties to any other party to this Agreement
regardless of whether a Default occurs. Except as set forth expressly herein,
the Agents shall not have any duty to disclose and shall not be liable for
failure to disclose any information relating to any Borrower or any of its
Subsidiaries that is communicated to or obtained by the Agents serving as agents
or any of its Affiliates serving in such capacity.

14.4. Consultation with Experts. Each Agent may consult with legal counsel (who
may be counsel for one or more of the Borrowers), independent public accountants
and other experts selected by it and shall not be liable to any Bank 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.

14.5. Liability of the Agents. No Agent nor any of its respective directors,
officers, agents or employees shall be liable to any Bank for any action taken
or not taken by it in connection herewith (a) with the consent or at the request
of the Majority Banks or (b) in the absence of its own gross negligence or
willful misconduct. No Agent nor any of its respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into

                                       58
<PAGE>

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 any Borrower; or any other party hereto
(iii) the satisfaction of any condition specified in Section 3, except receipt
of items required to be delivered to such Agent; or (iv) the validity,
effectiveness or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. Each Agent shall be
entitled to assume that this Agreement, the Notes 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. No
Agent 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 or sent by the
proper party or parties. The Agent shall be entitled to rely upon, and shall not
incur any liability for relying on oral statements of counsel and acting in
reliance on counsel.

14.6. Indemnification. Each Bank shall, ratably in accordance with its
Commitment, indemnify the Administrative Agent, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrowers) 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 Notes 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 Bank agrees to reimburse each Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees and disbursements) incurred by such 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 Notes, to the extent that such
Agent is not reimbursed for such expenses by the Borrowers and to the extent the
same does not result from the gross negligence or willful misconduct of such
Agent. Under no circumstances shall any Agent be obligated to expend its own
funds for the protection of the interests of the Banks, but each Agent shall be
entitled to be indemnified to its satisfaction hereunder by the Banks prior to
taking any action or expending any funds hereunder.

14.7. Credit Decision. Each Bank acknowledges that it has, independently and
without reliance upon any Agent or any other Bank, 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 Bank also acknowledges that it will,
independently and without reliance upon any Agent or any other Bank, 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.

14.8. Successor Administrative Agent. The Administrative Agent may resign at any
time by giving written notice thereof to the Banks and OSG. Upon any such
resignation, the Banks shall appoint a successor Administrative Agent, subject
to the consent of OSG, such consent not to be unreasonably withheld. OSG hereby
consents to the appointment of any successor Agent that is

                                       59
<PAGE>

a Creditor. If no successor Administrative Agent shall have been so appointed by
the Banks, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent gives notice of resignation, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, 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 Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent.

14.9. Administrative Fee. In connection with any assignment pursuant to Section
10.1, on or after ninety (90) days following the date hereof, the transferor
Bank shall pay to the Administrative Agent an administrative fee for processing
such assignment in the amount of $3,000.

14.10. Distribution of Payments. Whenever any payment is received by the
Administrative Agent from the Borrowers for the account of the Banks, or any of
them, whether of principal or interest on the Notes, Commitment Fees under
Section 12.1, or otherwise, it will thereafter cause like funds relating to such
payment to be promptly distributed ratably to the Banks according to their
respective Commitments, or if the Commitments have terminated, in proportion to
the aggregate outstanding amounts of Advances made by the Banks, in each case to
be applied according to the terms of this Agreement. Notwithstanding any other
provision of this Agreement, the Administrative Agent (a) may, before making an
amount available to a Bank, deduct and withhold from that amount any sum which
is then due and payable to the Administrative Agent from that Bank under this
Agreement or any sum which the Administrative Agent is then entitled under this
Agreement to require that Bank to pay on demand, and (b) shall not be obliged to
make available to the Borrowers or any Bank any sum which the Administrative
Agent is expecting to receive for remittance or distribution to the Borrowers or
that Bank until the Administrative Agent has satisfied itself that it has
received that sum.

14.11. Holder of Interest in Notes. The Administrative Agent may treat each Bank
as the holder of all of the interest of such Bank in its Note unless and until
the Administrative Agent has received a duly executed copy of an Assignment and
Assumption Agreement evidencing the transfer of all or any part of such Bank's
interest in the Facility and the requirements for assignment set forth in
Section 10.1 have been met.

14.12. Assumption re Event of Default. Except as otherwise provided in Section
14.13, the Administrative Agent shall be entitled to assume that no Default or
Event of Default, has occurred and is continuing, unless the Administrative
Agent has been notified by the Borrowers of such fact or has been notified by a
Bank by means of a notice bearing the title "Notice of Default" or "Event of
Default" that such Bank considers that a Default or Event of Default (specifying
in detail the nature thereof) has occurred and is continuing. In the event that
the Administrative 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
Administrative Agent shall notify the Banks and shall take such action and
assert such rights under this Agreement and under the

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<PAGE>

Notes as the Majority Banks (or, to the extent provided herein, all of the
Banks) shall request in writing.

14.13. Notification of Event of Default. The Administrative Agent hereby
undertakes promptly to notify the Banks, and each of the Banks hereby undertakes
promptly to notify the Administrative Agent and the other Banks, of the
existence of any Default or Event of Default which shall have occurred and be
continuing of which the Administrative Agent or such Bank has actual knowledge.

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

            (a) to any 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 Notes;

            (b) to any other Creditor as a consequence of any failure or delay
in performance by, or any breach by, any Borrower of any of its respective
obligations under this Agreement or under the Notes; 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
Notes or any document or instrument delivered in connection with the
transactions hereby contemplated.

15. 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 Borrowers and the
Administrative Agent at their respective addresses or telecopy numbers set forth
below and to any Bank at the address or telecopy number set forth in its
Administrative Questionnaire or at such other address or telecopy 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 telecopy or e-mail, when such telecopy or e-mail is transmitted to
the telecopy number or e-mail address, as the case may be, specified in this
Section and (telephonic, in the case of a telecopy) 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 the Borrowers:

                  511 Fifth Avenue
                  New York, New York 10017
                  Attention: Robert N. Cowen
                             Senior Vice President and Chief Operating Officer
                  Telephone: (212) 578-1870
                  Fax: (212) 578-1794

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<PAGE>

                  E-mail:  rcowen@osgship.com

                  with a copy to:

                  Myles R. Itkin
                  Senior Vice President and Chief Financial Officer
                  Overseas Shipholding Group, Inc.
                  511 Fifth Avenue
                  New York, New York 10017
                  Telephone: (212) 578-1839
                  Fax: (212) 578-1832
                  E-mail: mitkin@osgship.com

                  If to the Administrative Agent:

                  One Chase Manhattan Plaza, 8th Floor
                  New York, New York 10005-1401
                  Attention: Melanie Lubitch
                  Telephone: (212) 552-1109
                  Fax: (212) 552-5650
                  E-mail: melanie.lubitch@jpmorgan.com

                  with a copy to:

                  270 Park Avenue, 38th Floor
                  New York, New York 10017
                  Attention: Richard C. Smith
                  Telephone: (212) 270-5435
                  Fax: (212) 270-5100
                  E-mail: richard.c.smith@jpmorgan.com

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

16.1. Limitation of Liability. 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 Borrower or its respective assets of
this Agreement and that under such principles, this Agreement would not be
enforceable against such Borrower or its assets unless the following provisions
of this Section 16.1 had effect, then, the maximum liability of each Borrower
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 Advances drawn by such Borrower and (ii) an amount equal to the
aggregate, without double counting, of (a) ninety-five percent (95%) of such
Borrower'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

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<PAGE>

(b) the amount of any Valuable Transfer (as hereinafter defined) to such
Borrower; provided that such Borrower's liability under this Agreement shall be
further limited to the extent, if any, required so that the obligations of such
Borrower 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 Borrower
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 Borrower over (ii) the amount that
will be required to pay such Borrower'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 Borrower's property at a fair valuation over (ii)
the amount of all liabilities of such Borrower, 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 Borrower for purposes of
calculating the Maximum Liability Amount for such Borrower, the liabilities of
such Borrower 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
Borrower under this Agreement and (b) the liabilities of such Borrower
subordinated in right of payment to this Agreement. As used herein "Valuable
Transfer" shall mean, in respect of such Borrower, (a) all loans, advances or
capital contributions made to such Borrower with proceeds of the Facility, (b)
all debt securities or other obligations of such Borrower acquired from such
Borrower or retired by such Borrower 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 Borrower, (d) all equity
securities of such Borrower acquired from such Borrower with proceeds of the
Facility, and (e) the value of any other economic benefits in accordance with
applicable laws governing determinations of the insolvency of debtors, in each
such case accruing to such Borrower as a result of the Facility and this
Agreement.

17. MISCELLANEOUS

17.1. 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.

17.2. Severability. In case any one or more of the provisions contained in this
Agreement or in the Notes 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.

17.3. 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 Notes, as applicable, unless the context
otherwise requires.

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<PAGE>

17.4. Further Assurances. Each of the Borrowers agrees that if this Agreement or
the Notes shall at any time be deemed by the Banks 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 Banks may be required in order more
effectively to accomplish the purposes of this Agreement and/or the Notes.

17.5. Prior Agreements, Merger. Any and all prior understandings and agreements
heretofore entered into between the Borrowers 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 Notes as to the subject matter hereof or
thereof, which alone fully and completely express the agreements between the
Borrowers and the Creditors as to such subject matter, except for the
syndication and indemnification provisions set forth in the Commitment Letter
and any terms which are expressly provided to survive the execution of this
Agreement.

17.6. Entire Agreement, Amendments. This Agreement and the Notes 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 or the Notes may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrowers and the Majority Banks (and, if the rights or duties of
the Administrative Agent are affected thereby, by the Administrative Agent);
provided that no amendment or waiver shall, unless signed by all the Banks, (a)
increase or decrease the Commitment of any Bank or subject any Bank to any
additional obligation, (b) reduce the principal of or rate of interest on any
Advance or any fees hereunder, (c) postpone, appeal or amend 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) if any collateral shall have been
granted pursuant to Section 8.1(t), release any such collateral, (g) consent to
the assignment or transfer by the Borrowers of any of their rights and
obligations under this Agreement or the Notes or (h) amend or modify the
definition of "Majority Banks" or this Section 17.6 or otherwise change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Facility Balance, or the number or category of Banks, which shall be required
for the Banks or any of them to take any action under this Section or any other
provision of this Agreement.

17.7. 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.

17.8. Survival. The obligations of the Borrowers under Sections 6, 11, 12, and
13 shall survive the termination of this Agreement and the payment in full of
all obligations hereunder.

17.9. Confidentiality. Each Creditor 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 Borrowers)
obtained pursuant to the requirements of this Agreement confidential for so long
as such information remains non-public in accordance with such Creditor's
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, potential bona

                                       64
<PAGE>

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 a Borrower are
parties; provided, however, that:

            (a) unless specifically prohibited by Applicable Law or court order,
such Agent or Bank shall notify the Borrowers of any request by any Authority
(other than any such request in connection with an examination of the financial
condition of such Agent or Bank 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 17.9 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 17.9;

            (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 17.9 (except that subparagraph (d) shall not apply
unless such Person becomes a transferee or Participant) or incorporating the
same by reference; and

            (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 Borrowers 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 Borrowers.

17.10. 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.

17.11. Waiver Of Immunity. TO THE EXTENT THAT ANY BORROWER 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 BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE NOTES.

                                       65
<PAGE>

            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.

                                       OVERSEAS SHIPHOLDING GROUP, INC., as
                                       Borrower

                                         By_____________________________________
                                        Name:
                                        Title:

                                       OSG BULK SHIPS, INC., as
                                       Borrower

                                         By_____________________________________
                                        Name:
                                        Title:

                                       OSG INTERNATIONAL, INC., as
                                       Borrower

                                         By_____________________________________
                                        Name:
                                        Title:

                                       JPMORGAN CHASE BANK ,
                                       as Administrative Agent and Bank

                                         By_____________________________________
                                        Name:
                                        Title:

                                       DEN NORSKE BANK ASA,
                                       as Syndication Agent and Bank

                                         By_____________________________________
                                        Name:
                                        Title:

                                         By_____________________________________
                                        Name:
                                        Title:

                                       66
<PAGE>

                                       NORDEA, acting through NORDEA BANK
                                       FINLAND PLC, New York Branch,
                                       as Syndication Agent and Bank

                                         By_____________________________________
                                        Name:
                                        Title:

                                         By_____________________________________
                                        Name:
                                        Title:

                                       LANDESBANK SCHLESWIG-HOLSTEIN
                                       GIROZENTRALE,
                                       as Documentation Agent and Bank

                                         By_____________________________________
                                        Name:
                                        Title:

                                         By_____________________________________
                                        Name:
                                        Title:

                                       HAMBURGSICHE LANDESBANK
                                       -GIROZENTRALE-,
                                       as Bank

                                         By_____________________________________
                                        Name:
                                        Title:

                                         By_____________________________________
                                        Name:
                                        Title:

                                       67
<PAGE>

                                       NIB CAPITAL BANK, N.V.
                                       as Bank

                                         By_____________________________________
                                        Name:
                                        Title:

                                         By_____________________________________
                                        Name:
                                        Title:

                                       68
<PAGE>

                                                                      SCHEDULE I

                                      BANKS

<TABLE>
<CAPTION>
Name of Entity                                                     Commitment
--------------                                                     ----------
<S>                                                  <C>
Nordea, acting through Nordea Bank Finland Plc,      Forty Million Dollars ($40,000,000.00)
New York Branch
11 West 42nd Street, 7th Floor
New York, N.Y. 10036
Attn: Hans Chr. Kjelsrud
Facsimile No.:  (212) 827-4888
telephone No.:  (212) 827-4814

Den Norske Bank ASA                                  Forty Million Dollars ($40,000,000.00)
New York Branch
200 Park Avenue
New York, New York 10166
Attn: Nikolai Nachamkin
Facsimile No.: (212) 681-3900
Telephone No.: (212) 681-3860

Hamburgische Landesbank -Girozentrale-               Forty Million Dollars ($40,000,000.00)
Gerhart-Hauptmann-Platz 50
D-20095 Hamburg
Federal Republic of Germany
Attn: Uta Urbaniak
Facsimile No.: 011-49-40-3333-3048
Telephone No.: 011-49-40-3333-1769

Landesbank Schleswig-Holstein Girozentrale           Forty Million Dollars ($40,000,000.00)
Martensdamm 6
D-24103 Kiel
Federal Republic of Germany
Attn: Aziz Teksoy
Facsimile No.: +49-431-900-1791
Telephone No.:  +49-431-900-1130

JPMorgan Chase Bank                                  Forty Million Dollars ($40,000,000)
270 Park Avenue, 38th Floor
New York, N.Y. 10017
Attn.: Richard C. Smith
Facsimile No.: (212) 270-5100
Telephone No.: (212) 270-5435
</TABLE>

<PAGE>

<TABLE>
<S>                                                  <C>
NIB Capital Bank N.V.                                Forty Million Dollars ($40,000,000)
Carnegieplein 4, 2417 KJ
P.O. Box 380, 2501 BH
The Hague
The Netherlands
Attn.: Peter Bergman
Facsimile No.: +31-70-342-5577
Telephone No.: +31-70-342-5459                       ________________

TOTAL                                                $240,000,000
</TABLE>

<PAGE>

                                                                     SCHEDULE II

                                APPLICABLE MARGIN

      The Applicable Margin will vary as set forth hereunder based upon the
rating levels assigned to OSG's senior long-term unsecured debt (without
third-party credit enhancement) by S&P and Moody's.

                         Rating Level                        Applicable Margin
                         (S&P/Moody's)
                         -------------------------------------------------------

                                  BBB+/Baa1 or better            100.0 bps

                                       BBB/Baa2                  115.0 bps

                                       BBB-/Baa3                 135.0 bps

                                        BB+/Ba1                  150.0 bps

                                        BB/Ba2                   175.0 bps

                                   BB-/Ba3 or worse              200.0 bps

If there is a split between the S&P and Moody's ratings of one level, then the
higher rating level shall be used for purposes of determining the Applicable
Margin. In the event of a split rating of more than one level, the rating which
is one level above the lower rating shall apply and the Borrowers may seek to
obtain a rating from Fitch as a substitute for the lower rating from either S&P
or Moody's, as the case may be. If the Borrowers obtain a rating from Fitch (the
rating levels of which have designations similar to S&P) and such rating is
higher than the rating from S&P or Moody's, as the case may be, the rating from
Fitch shall, from the date such rating is obtained, be used for purposes of
determining the Applicable Margin.

      If OSG is no longer rated, the Applicable Margin will be two hundred basis
points (200.0 bps) per annum.

      The Applicable Margin for an Advance shall be determined by the Interest
Notice and such determination of the Applicable Margin, absent manifest error,
shall be conclusive and binding upon the Borrowers;

      In addition, the Applicable Margin shall be increased by twenty basis
points (20.0 bps) per annum if the ratio of Cash Adjusted Funded Debt to
Consolidated EBITDA is equal to or more than 5.0 to 1 or decreased by twenty
basis points (20.0 bps) per annum if the ratio of Cash Adjusted Funded Debt to
Consolidated EBITDA is equal to or less than 3.0 to 1, such determination to be
made and become effective on the earlier of (a) the date on which the

<PAGE>

Compliance Certificate was required to be delivered under Section 8.1(d)(iii) or
(b) the first day following the delivery of a Compliance Certificate.

      For any period during the term of the Facility wherein the Facility
Balance exceeds fifty percent (50%) of the Facility Amount, the Applicable
Margin shall be increased by twenty basis points (20.0 bps) per annum.

                                       2
<PAGE>

                                                                    SCHEDULE III

                        FUNDED DEBT AT SEPTEMBER 30, 2001

In thousands at September 30,                                  2001
--------------------------------------------------------------------------------

<PAGE>

                                                                     SCHEDULE IV

                               ACCEPTABLE BROKERS

P.F. Bassoe A/S (Norway)

Platou (Norway)

Fearnleys (Norway)

H. Clarkson (UK)

E.A. Gibson (UK)

A.L. Burbank (Shipbrokers) Ltd. (USA)

Jacq. Pierot Jr. & Sons, Inc. (USA)

<PAGE>

                                                                       EXHIBIT A

                      FORM OF ADMINISTRATIVE QUESTIONNAIRE

<PAGE>

                                                                       EXHIBIT B
================================================================================

                                     FORM OF

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

<PAGE>

                                                                       EXHIBIT C

                             FORM OF PROMISSORY NOTE

<PAGE>

                                                                       EXHIBIT D
================================================================================

                                     FORM OF

                                 DRAWDOWN NOTICE

================================================================================

<PAGE>

                                                                       EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

<PAGE>

                                                                       EXHIBIT F

                             FORM OF INTEREST NOTICE

<PAGE>

                                                                       EXHIBIT G

            FORM OF OPINION OF PROSKAUER ROSE LLP, SPECIAL COUNSEL TO
                                  THE BORROWERS

<PAGE>

                                                                       EXHIBIT H

            FORM OF OPINION OF ROBERT COWEN, ESQ., COUNSELTO OSG AND
                                    OSG BULK

<PAGE>

                                                                       EXHIBIT I

               FORM OF OPINION OF MARK LOWE, ESQ., COUNSEL TO OSG
                                  INTERNATIONAL

<PAGE>

                                                                       EXHIBIT J

                     FORM OF OPINION OF SEWARD & KISSEL LLP,
                          SPECIAL COUNSEL TO THE AGENTS

<PAGE>

                                                                       EXHIBIT A

                                 [LOGO] JPMorgan

The Chase Manhattan Bank
One Chase Manhattan Plaza, 8th Floor
New York, NY 10081
Tel 212-552-1109
Fax 212-552-5650

                        OVERSEAS SHIPHOLDING GROUP, INC.
                          ADMINISTRATIVE QUESTIONNAIRE

Please accurately complete the following information and return via FAX or
E-Mail to the attention of Ms. Melanie Lubitch at Chase Manhattan Bank as soon
as possible. It is very important that all of the requested information is
accurately completed and returned promptly.

                             TELEPHONE: 212-552-1109
                                FAX: 212-552-5650

                  E-MAIL ADDRESS: Melanie.Lubitch@JPMorgan.com

LEGAL NAME OF LENDING INSTITUTION TO APPEAR IN DOCUMENTATION:

________________________________________________________________________________

NUMBER OF LINES NEEDED FOR SIGNATURE PAGE: _____________________________________

GENERAL INFORMATION - DOMESTIC LENDING OFFICE:

Institution Name:       ________________________________________________________

Street Address:         ________________________________________________________

City, State, Zip Code:  ________________________________________________________

GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:

Institution Name:       ________________________________________________________

Street Address:         ________________________________________________________

City, State, Zip Code:  ________________________________________________________

CONTACTS/NOTIFICATION METHODS:

CREDIT CONTACT:

Contact Name:           ________________________________________________________

Street Address:         ________________________________________________________

City, State, Zip Code:  ________________________________________________________

Telephone Number:       ________________________________________________________

Fax Number:             ________________________________________________________

E-Mail Address:         ________________________________________________________

WEB SITE ADDRESS:

________________________________________________________________________________

<PAGE>

TAX STATUS:

Is your institution a non-Resident Alien, foreign corporation or partnership?

      Yes _____________ No ______________

If yes:

      o     What is the country of incorporation or organization?
            ___________________________________

      o     Tax Form W-8BEN or W-8ECI should be enclosed as per the Tax Section
            of the referenced Credit Agreement. Failure to properly complete and
            return the applicable form will subject your institution to
            withholding tax.

If no:

      o     Please submit Tax Form W-9

Lender's Tax Identification Number: ___________________________________

CONTACTS/NOTIFICATION METHODS:

ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.

Contact Name:           ________________________________________________________

Street Address:         ________________________________________________________

City, State, Zip Code:  ________________________________________________________

Telephone Number:       ________________________________________________________

Fax Number:             ________________________________________________________

E-Mail Address:         ________________________________________________________

BID LOAN NOTIFICATION: (IF APPLICABLE)

Contact Name:           ________________________________________________________

Street Address:         ________________________________________________________

City, State, Zip Code:  ________________________________________________________

Telephone Number:       ________________________________________________________

Fax Number:             ________________________________________________________

E-Mail Address:         ________________________________________________________

PAYMENT INSTRUCTIONS:

Name of Bank where funds are to be transferred:

________________________________________________________________________________
Routing Transit/ABA Number of Bank where funds are to be transferred:

________________________________________________________________________________
Name of Account, if applicable:

________________________________________________________________________________

Account Number: ________________________________________________________________

Additional Information: ________________________________________________________

                        ________________________________________________________
<PAGE>
                                                                       EXHIBIT B

                                    [FORM OF]

                            ASSIGNMENT AND ACCEPTANCE

            Reference is made to (A) the Credit Agreement dated as of December
12, 2001 (as amended and in effect on the date hereof, the "Credit Agreement"),
among (i) OVERSEAS SHIPHOLDING GROUP, INC., OSG BULK SHIPS, INC., and OSG
INTERNATIONAL, INC., as borrowers, (ii) the banks and financial institutions
whose names and addresses are set out in Schedule 1 thereto, (iii) JPMorgan
Chase Bank, as administrative agent (the "Administrative Agent") and lender (iv)
Den norske Bank ASA, as syndication agent and lender, (v) Nordea, as syndication
agent and lender (vi) Landesbank Schleswig-Holstein Girozentrale, as
documentation agent and lender, (vii) Hamburgische Landesbank -Girozentrale-, as
lender, and (viii) NIB Capital Bank N.V., as lender, and (B) each promissory
note made by the Borrowers payable to the order of each Bank dated ______, 2001
(collectively, the "Notes") evidencing the Advances. Terms defined in the Credit
Agreement are used herein with the same meanings.

            The Assignor named on the reverse hereof hereby sells and assigns,
without recourse, to the Assignee named on the reverse hereof, and the Assignee
hereby purchases and assumes, without recourse, from the Assignor, effective as
of the Assignment Date set forth on the reverse hereof, the interests set forth
on the reverse hereof (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth on the reverse hereof in the Commitment of the Assignor on
the Assignment Date, but excluding accrued interest and fees to and excluding
the Assignment Date. The Assignee hereby acknowledges receipt of a copy of the
Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interest, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the Assigned Interest,
relinquish its rights and be released from its obligations under the Credit
Agreement.

            This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section 6.2
of the Credit Agreement, duly completed and executed by the Assignee, and (ii)
if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay to the
Administrative Agent a fee of $3,000. .

            This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

Date of Assignment:

<PAGE>

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:

Effective Date of Assignment
("Assignment Date"):

================================================================================
                                                   Percentage Assigned of
                                                   ----------------------
                                                   Facility/Commitment
                                                   ----------------------
                                                   (set forth, to at least 8
                                                   decimals, as a percentage of
                                                   the Facility and the
Facility               Principal Amount Assigned   aggregate Commitments of
--------               -------------------------   all Lenders thereunder)
--------------------------------------------------------------------------------
Commitment Assigned:   $                           %
================================================================================

The terms set forth above and on the reverse side hereof are hereby agreed to:

                                            [Name of Assignor] , as Assignor

                                            By:______________________________
                                               Name:
                                               Title:

                                            [Name of Assignee] , as Assignee

                                            By:______________________________
                                                 Name:
                                                 Title:

<PAGE>

The undersigned hereby consent to the within assignment: (1)/

The Chase Manhattan Bank,               [OVERSEAS SHIPHOLDING GROUP, INC.]
as Administrative Agent,

By:__________________________            By:__________________________
Name:                                    Name:
Title:                                   Title:

[OSG BULKS SHIPS, INC.]                  [OSG INTERNATIONAL, INC.]

By:__________________________            By:__________________________
Name:                                    Name:
Title:                                   Title:

--------
(1)/  Consents to be included to the extent required by Section 10.1 of the
      Credit Agreement.

<PAGE>

                                                                       EXHIBIT C

                                 PROMISSORY NOTE

US $                                                          ________, 2001
                                                              New York, New York

            FOR VALUE RECEIVED, each of the undersigned, OVERSEAS SHIPHOLDING
GROUP, INC., a corporation incorporated under the laws of Delaware, OSG BULK
SHIPS, INC., a corporation incorporated under the laws of New York, and OSG
INTERNATIONAL, INC., a corporation incorporated under the laws of the Republic
of the Marshall Islands (each, a "Borrower" and collectively, the "Borrowers"),
hereby jointly and severally promises to pay to the order of [INSERT NAME OF
BANK], [INSERT JURISDICTION OF ORGANIZATION OF BANK AND TYPE OF ENTITY] ("the
Bank"), with offices at [INSERT ADDRESS OF BANK], the principal sum of [INSERT
AMOUNT OF COMMITMENT OF BANK] United States Dollars (US $___________) or, if
less, the aggregate unpaid principal amount of the Advances from time to time
outstanding made by the Bank to the Borrowers pursuant to the Credit Agreement,
dated as of December 12, 2001, by and among the (i) Borrowers, (ii) the banks
and financial institutions whose names and addresses are set out in Schedule 1
thereto, (iii) JPMorgan Chase Bank, as administrative agent (the "Administrative
Agent") and lender (iv) Den norske Bank ASA, as syndication agent and lender,
(v) Nordea, as syndication agent and lender (vi) Landesbank Schleswig-Holstein
Girozentrale, as documentation agent and lender, (vii) Hamburgische Landesbank
-Girozentrale-, as lender, and (viii) NIB Capital Bank N.V., as lender (as
amended, restated, modified or supplemented from time to time, the "Credit
Agreement"). The Borrowers shall repay the principal amount of such Advances as
provided in Section 4 of the Credit Agreement, but in any event no later than
the Final Payment Date.

            Words and expressions used herein (including those in the foregoing
paragraph) and defined in the Credit Agreement shall have the same meaning
herein as therein defined.

            Each Advance shall bear interest at the rate or rates determined in
accordance with and shall be payable at the times specified in Section 5.1 of
the Credit Agreement. Any principal payment not paid when due, whether by
acceleration or otherwise, shall bear interest thereafter at the Default Rate.
All interest shall accrue and be calculated on the actual number of days elapsed
and on the basis of a 360 day year and be payable as provided in the Credit
Agreement.

            Both principal and interest are payable in immediately available
Dollars to the Administrative Agent, at its office located at One Chase
Manhattan Plaza, 8th Floor, New York, New York 10005-1401 (or to such other
office of the Administrative Agent as the Administrative Agent may direct).

            The Bank may endorse the amount, maturity and the date of the making
of each Advance evidenced hereby and each payment of principal hereunder on the
grid annexed hereto and made a part hereof, which endorsement shall constitute
prima facie evidence of the accuracy

<PAGE>

of the information so endorsed; provided, however, that any failure to endorse
such information on such grid shall not in any manner affect the obligation of
the Borrowers to make payment of principal and interest in accordance with the
terms of this Promissory Note.

            If this Promissory Note or any payment required hereunder becomes
due and payable on a day which is not a Banking Day the due date thereof shall
be extended until the next following Banking Day (in which event, interest shall
be payable during such extension at the rate applicable immediately prior
thereto), unless such next following Banking Day falls in the following month in
which case such payment shall be payable on the Banking Day next preceding the
day on which such payment would otherwise be payable.

            Amounts due hereunder may be prepaid in accordance with the terms of
the Credit Agreement.

            This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. Upon the occurrence of any
Event of Default, the principal hereof and accrued interest hereon may become,
or may be declared to be and shall thereupon become, forthwith due and payable.

            Presentment, demand, protest and notice of dishonor of this
Promissory Note and any other notice of any kind are hereby expressly waived.

            THE BORROWERS AND, BY ITS ACCEPTANCE HEREOF, THE BANK HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS PROMISSORY NOTE.

            THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

<PAGE>

            IN WITNESS WHEREOF, the Borrowers have executed and delivered this
Promissory Note on the date and year first above written.

                                            OVERSEAS SHIPHOLDING GROUP, INC.

                                            By_____________________________
                                              Name:
                                              Title:

                                            OSG BULK SHIPS, INC.

                                            By_____________________________
                                              Name:
                                              Title:

                                            OSG INTERNATIONAL, INC.

                                            By_____________________________
                                              Name:
                                              Title:

<PAGE>

                        OVERSEAS SHIPHOLDING GROUP, INC.

                                    Amount of         Unpaid
                                    Principal Paid    Principal   Notation
    Date       Amount of Advance    or Prepaid        Balance     Made By
--------------------------------------------------------------------------------

<PAGE>

                              OSG BULK SHIPS, INC.

                        OVERSEAS SHIPHOLDING GROUP, INC.

                                    Amount of         Unpaid
                                    Principal Paid    Principal   Notation
    Date       Amount of Advance    or Prepaid        Balance     Made By
--------------------------------------------------------------------------------

<PAGE>

                             OSG INTERNATIONAL, INC.

                        OVERSEAS SHIPHOLDING GROUP, INC.

                                    Amount of         Unpaid
                                    Principal Paid    Principal   Notation
    Date       Amount of Advance    or Prepaid        Balance     Made By
--------------------------------------------------------------------------------

                                       2
<PAGE>

                                                                       EXHIBIT D

                           DRAWDOWN NOTICE

                                                           ___________  __, ____

JPMorgan Chase Bank
270 Park Avenue, 38th Floor

Attn: ______________New York, N.Y. 10017______

Ladies and Gentlemen:

            Please be advised that, in accordance with the terms of Section 2.2
of the Credit Agreement, dated as of December 12, 2001, among (i) Overseas
Shipholding Group, Inc., OSG Bulk Ships, Inc. and OSG International, Inc., as
borrowers (the "Borrowers"), (ii) the banks and financial institutions listed on
Schedule I thereto, as lenders, (iii) JPMorgan Chase Bank, as administrative
agent (the "Administrative Agent") and lender (iv) Den norske Bank ASA, as
syndication agent and lender, (v) Nordea, as syndication agent and lender, (vi)
Landesbank Schleswig-Holstein Girozentrale, as documentation agent and lender,
(vii) Hamburgische Landesbank -Girozentrale, as lender and (viii) NIB Capital
Bank N.V., as lender (the "Credit Agreement"), the undersigned hereby gives you
notice of drawdown of an Advance. All terms used herein shall have the meanings
given thereto in the Credit Agreement.

      Name(s) of Borrower(s) (and allocation if
      more than one Borrower):                        _______________________

      Total Amount of Advance:                        US$___________________

      Drawdown Date
      (at least 3 Banking Days after date of
      Notice):                                        _______________________

      Initial Interest Period
      (may not end later than____________)            [7 days/1/3/6/12 month(s)]

      Disbursement Instructions:                      ________________________
      (account name, number and location for each     ________________________
      Borrower)                                       ________________________

<PAGE>

            We hereby warrant that the representations and warranties stated in
Section 7 of the Credit Agreement are true and correct on the date hereof and
will be true and correct on the date that the Advance requested by this Drawdown
Notice is made(1) and that no Default or Event of Default has occurred and is
continuing or will have occurred and be continuing as of the Drawdown Date.

            In the event that the Banks and Participants, if any, shall not be
obliged under the terms of the Credit Agreement to make the above requested
Advance (including, without limitation any such failure resulting from the
failure of the Borrowers to satisfy a condition precedent set forth in Section 3
of the Credit Agreement)(2), the Borrowers shall indemnify and hold fully
harmless the Banks, Participants or any of them, against any losses which the
Banks, Participants or any of them, may sustain as a result of borrowing or
agreeing to borrow funds to meet the requested drawdown and the certificate of
the relevant Bank or Participant shall, absent manifest error, be conclusive and
binding on the Borrowers as to the extent of any such losses.

            This Drawdown Notice is effective upon receipt by you and shall be
irrevocable.

                                     OVERSEAS SHIPHOLDING GROUP, INC.

                                     By__________________________________
                                         Name:
                                         Title:

                                     OSG BULK SHIPS, INC.

                                     By__________________________________
                                         Name:
                                         Title:

                                     OSG INTERNATIONAL, INC.

                                     By__________________________________
                                         Name:
                                         Title:

------------------
(1)   Insert the following if the Advance would not result in an incremental
      increase in the aggregate amount of Advances outstanding under the
      Facility and such Advance is to be made after the initial Drawdown Date --
      "provided , however that [(i) the representations and warranties set forth
      in Section 7.1(e) and (o) of the Credit Agreement shall be deemed
      inapplicable as of the date hereof and as of the date of the Advance and
      (ii)] any representation and warranty which, by its express terms, relates
      solely to an earlier date shall be true and accurate on and as of such
      earlier date";

(2)   Insert the following in the initial Drawdown Notice -- "or the failure of
      the Credit Agreement to become effective"

<PAGE>

                                                                       EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

                   CERTIFICATE OF THE CHIEF FINANCIAL OFFICER
                                       OF
                        OVERSEAS SHIPHOLDING GROUP, INC.
                       FOR THE PERIOD ENDED ______________

            Reference is made to that certain Credit Agreement, dated as of
December 12, 2001 (as amended from time to time, the "Credit Agreement"), among
(i) OVERSEAS SHIPHOLDING GROUP, INC. ("OSG"), OSG BULK SHIPS, INC. ("OSG Bulk")
and OSG INTERNATIONAL, INC. (collectively with OSG and OSG Bulk, the
"Borrowers"), (ii) the banks and financial institutions which are parties to the
Credit Agreement (the "Banks"), (iii) JPMorgan Chase Bank, as administrative
agent (the "Administrative Agent") and lender, (iv) Den norske Bank ASA, as
syndication agent and lender, (v) Nordea, as syndication agent, lead arranger
and lender, (vi) Landesbank Schleswig-Holstein Girozentrale, as documentation
agent, lead arranger and lender,(vii) Hamburgische Landesbank -Girozentrale, as
lead arranger and lender, (viii) NIB Capital Bank N.V., as lead arranger and
lender and (ix) J.P. Morgan Securities Inc. as lead arranger. Capitalized terms
used herein without definition have the meanings ascribed thereto in the Credit
Agreement. The undersigned, being the chief financial officer of OSG hereby
certifies, on behalf of each of the Borrowers, to the Administrative Agent and
the Banks as follows:

            (i)   I have reviewed the [audited] consolidated balance sheet of
                  OSG and the Subsidiaries dated as of ________________ and the
                  related [audited] consolidated statements of operations and
                  retained earnings and cash flows for the ________ period then
                  ended and such financial statements fairly present the
                  financial condition of OSG and the Subsidiaries as of the
                  dates indicated and the results of their operations and cash
                  flows for the periods indicated; and

            (ii)  I have reviewed the terms of the Credit Agreement and have
                  made, or caused to be made under my supervision, a review in
                  reasonable detail of the transactions and the condition of OSG
                  and the Subsidiaries during the accounting period covered by
                  the financial statements referred to in clause (i) above; and

            (iii) such review has not disclosed the existence during or at the
                  end of such accounting period of any condition or event that
                  constitutes a Default or an Event of Default, nor do I have
                  knowledge of the existence of any such condition or event as
                  at the date of this Certificate [EXCEPT, [IF SUCH

<PAGE>

                  CONDITION OR EVENT EXISTED OR EXISTS, DESCRIBE THE NATURE AND
                  PERIOD OF EXISTENCE THEREOF AND WHAT ACTION OSG OR ANY
                  SUBSIDIARY, AS THE CASE MAY BE, HAS TAKEN, IS TAKING AND
                  PROPOSES TO TAKE WITH RESPECT THERETO]]; and

            (iv)  the Borrowers are in compliance with the covenants contained
                  in Section 8 of the Credit Agreement, including, without
                  limitation the covenants set forth in Sections 8.1(p) through
                  8.1(t), 8.2(a), (c), (e) and (h), and Annex A attached hereto
                  shows the calculation thereof in sufficient detail as to
                  permit the verification thereof by the Administrative Agent.

                  IN WITNESS WHEREOF, the undersigned has executed this
                  Certificate as of this _____ day of ______________.

                                            OVERSEAS SHIPHOLDING GROUP, INC.

                                            By:__________________________
                                                 Name:
                                                 Title

<PAGE>

                                                                       EXHIBIT F

                                 Interest Notice

                                                                          [Date]

JPMORGAN CHASE BANK
270 Park Avenue, 38th Floor
New York, New York 10017
Attention: Richard C. Smith

Ladies and Gentlemen:

            Please be advised that, in accordance with the Credit Agreement
dated as of December 12, 2001, between, (i) Overseas Shipholding Group, Inc.
("OSG"), OSG Bulk Ships, Inc. and OSG International, Inc., as borrowers (the
"Borrowers"), (ii) the banks and financial institutions listed on Schedule I
thereto, as lenders, (iii) yourselves, as administrative agent and lender (iv)
Den norske Bank ASA, as syndication agent and lender, (v) Nordea, as syndication
agent and lender, (vi) Landesbank Schleswig-Holstein Girozentrale, as
documentation agent and lender, (vii) Hamburgische Landesbank -Girozentrale, as
lender and (viii) NIB Capital Bank N.V., as lender (the "Credit Agreement"), the
undersigned hereby notify you of OSG's current rating level, and that the
duration and Applicable Margin in respect of the Interest Period to commence
[insert date of commencement of next Interest Period] shall be as follows:

         Interest Period:          [seven day][one, three, six or twelve] months

         Current Rating:           S&P:     ________

                                   Moody's: ________

         Applicable Margin:        _________________

            The undersigned hereby represents and warrants that (a) the
representations and warranties stated in Section 7 of the Credit Agreement
(updated mutatis mutandis) are true and correct on the date hereof and will be
true and correct on the Drawdown Date specified above as if made on such date,
and (b) no Event of Default has occurred and is continuing or will have occurred
and be continuing on the Drawdown Date, and no event has occurred or is
continuing which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default.

<PAGE>

                                            Very truly yours,

                                            OVERSEAS SHIPHOLDING GROUP, INC.

                                            By_____________________________
                                              Name:
                                              Title:

                                            OSG BULK SHIPS, INC.

                                            By_____________________________
                                              Name:
                                              Title:

                                            OSG INTERNATIONAL, INC.

                                            By_____________________________
                                              Name:
                                              Title:

                                       2

<PAGE>

                                                                       EXHIBIT G

To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 1

December __, 2001

To the Banks and the Agents
set forth on Schedule I
c/o JP Morgan Chase Bank
One Chase Manhattan Plaza, 8th Floor
New York, New York 10005-1401

Gentlemen and Ladies:

We have acted as special counsel to Overseas Shipholding Group, Inc., a Delaware
corporation ("OSG"), OSG Bulk Ships, Inc., a New York corporation ("OSG Bulk")
and OSG International, Inc., a Marshall Islands corporation ("OSG International"
and together with OSG and OSG Bulk, the "Borrowers"), in connection with the
Credit Agreement (the "Credit Agreement"), dated as of December 12, 2001, among
the Borrowers, the Banks listed on Schedule I thereto, JPMorgan Chase Bank, as
administrative agent and lender, Den Norske Bank ASA, as syndication agent, and
lender, Nordea, as syndication agent and lender, Landesbank Schleswig-Holstein
Girozentrale, as document agent and lender, Hamburgische Landesbank -
Girozentrale, as lender andNIB Capital Bank N.V., as lender. We are rendering
this opinion to you at the request of the Borrowers pursuant to Section 3.1
(f)(i) of the Credit Agreement. Capitalized terms used herein without definition
shall have the meanings ascribed thereto in the Credit Agreement.

In rendering this opinion, we have examined originals or copies of the Credit
Agreement and the Notes (collectively, the "Financing Documents"). We have also
examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion. In that regard, we have assumed the due execution, delivery and
authorization of the Credit Agreement by the Banks and Agents and that the
Credit Agreement is a valid and binding agreement of the Banks and Agents. We
also have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as copies and the accuracy and
completeness of all corporate records made available to us by the Borrowers. As
to certain factual matters material to the opinions expressed herein, we have
relied upon and have assumed the accuracy of factual matters contained in (a)
certificates of corporate officers of the Borrowers and (b) certificates and
oral and written information from various state authorities and public

<PAGE>
To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 2

officials. References herein "to our knowledge" mean actual present knowledge of
attorneys at our firm directly involved in our firm's acting as special counsel
to the Borrowers in connection with the transactions contemplated by the Credit
Agreement.

Upon the basis of the foregoing, and subject to the limitations set forth below,
we are of the opinion that:

      1.    Each of OSG and OSG Bulk is a corporation duly incorporated, validly
            existing and in good standing under the laws of its jurisdiction of
            incorporation, and has all corporate power, and, to our knowledge,
            all material governmental licenses, authorizations, consents and
            approvals, required to carry on its business as now conducted and to
            own its properties and to enter into and perform its obligations
            under the Financing Documents to which it is a party.

      2.    The execution, delivery and performance by each of OSG and OSG Bulk
            of the Financing Documents to which it is a party are within its
            corporate powers, have been duly authorized by all requisite
            corporate action, and do not contravene, or constitute a default
            under, its certificate of incorporation or by-laws. The execution,
            delivery and performance by each Borrower of the Financing Documents
            to which it is a party require no action by or in respect of, or
            filing with (except for disclosure in periodic filings made by OSG
            with the Securities and Exchange Commission), or authorization,
            approval, consent, license, order, registration, qualification or
            decree of, any court or governmental authority, body, agency or
            official. The execution, delivery and performance by each Borrower
            of the Financing Documents executed and delivered by it do not
            contravene, or constitute a default under, any provision of any
            federal of New York State statute, rule or regulation known to us to
            be applicable to the Borrowers.

      3.    The Credit Agreement constitutes a valid and binding agreement of
            each Borrower, and the Note executed and delivered by the Borrowers
            constitutes a valid and binding obligation of such Borrower, in each
            case enforceable in accordance with their respective terms, except
            as the enforceability thereof may be limited as follows:

                  (a)   by bankruptcy, insolvency, reorganization, moratorium or
                        other similar laws affecting creditors' rights
                        generally;

                  (b)   by equitable principles of general applicability and the
                        discretion of the court before which any proceedings
                        therefor may be brought (regardless of whether they are
                        considered in a proceeding in equity or at law),
                        including limitations (whether at law or in equity) on
                        the

<PAGE>
To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 3

                        right of a lender to exercise remedies or impose
                        penalties for late payments or other default by the
                        borrower if it is determined that (i) the defaults by
                        the borrower are not material, the penalties bear no
                        reasonable relation to the damage suffered by the lender
                        as a result of the delinquencies or defaults, or it
                        cannot be demonstrated that the enforcement of the
                        restrictions or burdens is reasonably necessary for the
                        protection of the lender, or (ii) the lender's
                        enforcement of the covenants or provisions under the
                        circumstances would violate the lender's implied
                        covenant of good faith and fair dealing; and

                  (c)   provisions for indemnification pursuant to the Credit
                        Agreement may be held to be against public policy and
                        therefore unenforceable to the extent any purported
                        beneficiary of those provisions seeks to enforce the
                        same to obtain indemnity from any liabilities, losses,
                        damages, costs or expenses arising from its violation of
                        any applicable law.

      4.    None of the Borrowers is an "investment company" within the meaning
            of the Investment Company Act of 1940, as amended.

      5.    To our knowledge, without independent investigation, (a) there is no
            action, suit or proceeding (collectively "actions") pending or
            threatened against OSG or any of its Subsidiaries before any court
            or arbitrator or any governmental body, agency or official other
            than actions disclosed in any filing by OSG under the Securities
            Exchange Act of 1934 and other than actions which could not be
            reasonably expected to result in any Material Adverse Change, and
            (b) there are no actions pending or threatened against any of the
            Borrowers which in any manner draws into question the validity or
            enforceability of any of the Financing Documents.

In rendering the foregoing opinion, we express no opinion as to (a) the effect
of any fraudulent conveyance or fraudulent transfer laws on any pledge,
assignment or mortgage of, or grant of a security interest in, any Collateral
that may be required to be made after the date hereof pursuant to Section 8.1(t)
of the Credit Agreement or the validity, perfection, or priority of any such
pledge, assignment, mortgage or security interest; (b) the subject matter
jurisdiction of courts of the United States to adjudicate any controversy
relating to the Financing Documents; (c) Section 11.7 of the Credit Agreement
insofar as it provides for indemnity to any Creditor or Participant against any
loss in obtaining Dollars from a court judgment rendered in a currency other
than Dollars; (d) the effect of any laws of any jurisdiction other than the
federal laws of the United States of America (except that we express no opinion
as to the effect of any maritime or

<PAGE>
To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 4

admiralty laws or regulations), the laws of the State of New York, the corporate
law of the State of Delaware and (solely with respect to paragraph 3 above and
solely based upon the opinion referred to in clause (i) below) the corporate law
of the Republic of the Marshall Islands; or (e) with respect to paragraph 5
above, any action, suit or proceeding to the extent it involves any matter of
maritime or admiralty law or regulation. In addition:

                  (i)   with respect to paragraph 3 above, insofar as it relates
                        to OSG International, we have relied exclusively as to
                        matters of law of the Republic of the Marshall Islands
                        on paragraphs 1, 2, 4, 5, 6 and 8 of the opinion of Mark
                        A. Lowe, Esq., counsel to OSG International, delivered
                        to you on the date hereof pursuant to Section
                        3.1(f)(iii) of the Credit Agreement; and

                  (ii)  with respect to paragraph 4 above, we have relied,
                        without independent investigation, upon a certificate of
                        a corporate officer of each of the Borrowers (A) to the
                        effect that (1) the Borrowers do not hold themselves out
                        as being, and do not propose to be, engaged primarily in
                        the business of investing, reinvesting or trading in
                        securities and (2) the Borrowers are not, and do not
                        propose to be, engaged in the business of issuing
                        face-amount certificates of the installment type, and do
                        not have any such certificate outstanding, and (B) as to
                        such other factual matters as we considered necessary to
                        enable us to render the opinion expressed in paragraph 4
                        above.

This opinion is solely for your information in connection with the transaction
described above and, except to the extent necessary to fulfill your obligations
under law or pursuant to a governmental, administrative, or judicial request or
order or the request or demand of any regulatory agency or authority having
jurisdiction over you or in connection with any litigation to which you or any
of your Affiliates may be a party, may not be quoted in whole or in part or
otherwise referred to in any financial statement or document or furnished to any
other person (other than your counsel), or relied on by any other Person (other
than any actual or proposed Participant or assignee of any Bank permitted by
Section 10 of the Credit Agreement, except that this opinion is only given as of
the date hereof) without our prior written consent. This opinion is as of the
date hereof, and we assume no obligation to advise you of any changes that may
arise in the future.

We note that Stanley Komaroff, a member of this firm, is a director of OSG.

Very truly yours,

PROSKAUER ROSE LLP

By:___________________________

<PAGE>
To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 5

      James M. Waddington, a Partner

<PAGE>

To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 6

                                   SCHEDULE I
                                BANKS AND AGENTS

Nordea, acting through Nordea Bank Finland Plc,
New York Branch
11 West 42nd Street, 7th Floor New York, N.Y. 10036

Den Norske Bank ASA
New York Branch
200 Park Avenue
New York, New York 10166

Hamburgische Landesbank -Girozentrale-
Gerhart-Hauptmann-Platz 50
D-20095 Hamburg
Federal Republic of Germany

Landesbank Schleswig-Holstein Girozentrale
Martensdamm 6
D-24103 Kiel
Federal Republic of Germany

JPMorgan Chase Bank
270 Park Avenue, 38th Floor
New York, N.Y. 10017

NIB Capital Bank N.V.
Carnegieplein 4, 2417 KJ
P.O. Box 380, 2501 BH
The Hague
The Netherlands

Landesbank Schleswig-Holstein
Gironzentrale
Martensdamm 6
24103 Kiel, Germany

The Bank of New York
One Wall Street
New York, New York 10286

NIB Capital Bank N.V.
4 Carnegieplein, P.O. Box 380
2501 BH The Hague

<PAGE>
To the Banks and Agents
set forth on Schedule I
December __, 2001
Page 7

The Netherlands

<PAGE>

                                                                       EXHIBIT H

                 Letterhead of Overseas Shipholding Group., Inc.

December , 2001

To the Banks and the Agents
  Set forth on Schedule I
c/o  JPMorgan Chase Bank
One Chase Manhattan Plaza, 8th Floor
New York, New York 10005-1401

Ladies and Gentlemen:

            I have acted as counsel for Overseas Shipholding Group, Inc., a
Delaware corporation ("OSG") and OSG Bulk Ships, Inc., a New York corporation
("OSG Bulk") in connection with the preparation, execution and delivery of that
certain Credit Agreement (the "Credit Agreement"), dated as of December 12,
2001, among OSG, OSG Bulk, OSG International, Inc., the Banks set forth on
Schedule I thereto, JPMorgan Chase Bank, as administrative agent and lender, Den
Norske Bank ASA, as syndication agent and lender, Nordea, as syndication agent
and lender, Landesbank Schleswig-Holstein Girozentrale, as document agent and
lender, Hamburgische Landesbank - Girozentrale, as lender, and NIB Capital Bank
N.V., as lender . This letter is furnished to you pursuant to Section 3.1
(f)(ii) of the Credit Agreement. Capitalized terms not defined in this letter
shall have the meanings ascribed thereto in the Credit Agreement.

            In rendering this opinion, I have examined originals of the Credit
Agreement and the Notes executed by OSG and OSG Bulk (collectively, the
"Facility Documents") and such corporate documents and records of OSG and OSG
Bulk, certificates of public officials and directors of OSG and OSG Bulk, and
such other documents, certificates and corporate or other records as I have
deemed necessary as a basis for the opinions expressed in this letter.

            In my examination, I have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to me as original

<PAGE>
Overseas Shipholding Group, Inc.

To the Banks and the Agents                                    December __, 2001
 Set forth on Schedule I                                                  Page 2

documents and the conformity to authentic originals submitted to me as certified
or photostatic copies. I have further assumed that the Credit Agreement has been
duly authorized, executed and delivered by each Bank and the Agents, and
constitutes the Banks' and the Agents' valid and binding obligations,
enforceable against such persons in accordance with their respective terms.

            I have investigated such questions of law for the purpose of
rendering the opinions in this letter as I have deemed necessary. In rendering
the opinions expressed below, I express no opinion as to the effect of any laws
of any jurisdiction other than the federal laws of the United States of America,
the laws of the State of New York and the corporate law of the State of
Delaware.

            On the basis of and in reliance on the foregoing, and subject to the
limitations, qualifications and exceptions set forth below, I am of the opinion
that:

            1. OSG is a corporation duly incorporated, validly existing and in
      good standing under the laws of the State of Delaware.

            2. OSG Bulk is a corporation duly incorporated, validly existing and
      in good standing under the laws of the State of New York.

            3. Each of OSG and OSG Bulk has the corporate power and authority to
      enter into, execute, deliver and perform its obligations under the
      Facility Documents to which it is a party and has taken all necessary
      action to authorize the execution, delivery and performance of the
      Facility Documents to which it is a party.

            4. Each of the Facility Documents to which it is a party has been
      duly executed and delivered by each of OSG and OSG Bulk and constitutes
      the valid and binding obligation of OSG and OSG Bulk, enforceable against
      each of them in accordance with its terms.

            5. There is no action, suit or proceeding pending against, or to the
      best of my knowledge threatened against or affecting, OSG or OSG Bulk or
      any of their respective subsidiaries before any court or arbitrator or any
      governmental body, agency or official in which there is a reasonable
      possibility of an adverse decision which in my reasonable judgment could
      result in a Material Adverse Change, or that in any manner draws into
      question the validity or enforceability of any of the Facility Documents
      to which OSG or OSG Bulk are a party.

            6. The execution and delivery of the Facility Documents and the
      consummation of the transactions contemplated by the Facility Documents
      (i) are not in conflict with, nor constitute a breach or violation of, nor
      constitute a default under, any of the terms, conditions or provisions of
      the Certificate of Incorporation or bylaws of OSG or OSG Bulk, (ii) do not
      result in the creation of any Lien upon any of the properties or assets of
      OSG or OSG Bulk, and (iii) do not constitute a breach or violation of, or
      constitute a

                                       2
<PAGE>

Overseas Shipholding Group, Inc.

To the Banks and the Agents                                    December __, 2001
 Set forth on Schedule I                                                  Page 3

      default under, or permit the acceleration of any obligation liability in,
      or but for any requirement of the giving of notice or passage of time (or
      both) would constitute such a conflict with, breach or violation of, or
      default under, or permit any such acceleration in, any contractual
      obligation or any agreement, document, indenture, instrument, order, writ,
      judgment or decree to which OSG or OSG Bulk is a party or by which any of
      their respective properties or assets are bound.

            7. No governmental consents, licenses, permits, notarizations,
      approvals, exemptions of, authorizations, registrations, declarations or
      filings (except for disclosure in periodic filings made by OSG with the
      Securities and Exchange Commission) or other action by, and no notices to,
      consents of, orders of or filings with, or any withholding payments to,
      any governmental authority or regulatory body are required by OSG or OSG
      Bulk in connection with (i) the due execution, delivery and performance by
      either OSG or OSG Bulk of the Facility Documents to which it is a party;
      (ii) the legality, validity, performance, enforceability or admissibility
      of such Facility Documents; or (iii) the extensions of credit under the
      Credit Agreement.

            8. The choice of the laws of the State of New York as the governing
      law of the Facility Documents is a valid choice of law and would be upheld
      as a valid choice of law by the courts of the State of New York and
      applied by such courts in proceedings in relation thereto as the governing
      law thereof and the submission by OSG and OSG Bulk to the non-exclusive
      jurisdiction of the courts of the State of New York and the courts of the
      United States of America located in New York City is a legal and binding
      submission.

            The above opinions are subject to the following additional
limitations, qualifications and exceptions:

            A.    The effect and application of bankruptcy, insolvency,
                  fraudulent conveyance, reorganization, moratorium, and other
                  laws now or hereafter in effect which relate to or limit
                  creditors' rights generally;

            B.    The effect and application of general principles of equity,
                  whether considered in a proceeding in equity or at law,

            C.    Limitations imposed by or resulting from the exercise by any
                  court of its discretion; and

            D.    Limitations imposed by reason of generally applicable public
                  policy principles or considerations.

            The opinions in this letter are rendered only to the Banks and the
Agents in connection with the Credit Agreement. The opinions may not be relied
upon by any Bank or Agent for any other purpose, or relied upon by any other
person, firm or entity for any purpose

                                       3
<PAGE>

Overseas Shipholding Group, Inc.

To the Banks and the Agents                                    December __, 2001
 Set forth on Schedule I                                                  Page 4

(other than any actual or proposed Participant or assignee, your legal counsel
and your independent auditors) without my prior written consent.

                                                        Very truly yours,

                                                        Robert N. Cowen, Esq.

                                       4
<PAGE>

                                   SCHEDULE I
                                BANKS AND AGENTS

Nordea, acting through Nordea Bank Finland Plc
New York Branch
11 West 42nd Street, 7th
Floor New York, N.Y. 10036

Den Norske Bank ASA
New York Branch
200 Park Avenue
New York, New York 10166

Hamburgische Landesbank -Girozentrale-
Gerhart-Hauptmann-Platz 50
D-20095 Hamburg
Federal Republic of Germany

Landesbank Schleswig-Holstein Girozentrale
Martensdamm 6
D-24103 Kiel
Federal Republic of Germany

JPMorgan Chase Bank
270 Park Avenue, 38th Floor
New York, N.Y. 10017

NIB Capital Bank N.V.
Carnegieplein 4, 2417 KJ
P.O. Box 380, 2501 BH
The Hague
The Netherlands

<PAGE>

                                                                       EXHIBIT I

                      LETTERHEAD Of OSG INTERNATIONAL, INC.

                                                              December __, 2001

To the Banks and the Agents
  Set Forth on Schedule I
c/o JPMorgan Chase Bank
One Chase Manhattan Plaza, 8th Floor
New York, New York 10005-1401

Ladies and Gentlemen:

            I have acted as counsel to OSG International, Inc., a corporation
incorporated under the laws of the Republic of the Marshall Islands ("OSG
International") in connection with the preparation, execution and delivery of
that certain Credit Agreement (the "Credit Agreement"), dated as of December 12,
2001, among Overseas Shipholding Group, Inc., OSG Bulk Ships, Inc. and OSG
International, the banks listed on Schedule I thereto and JPMorgan Chase Bank,
as administrative agent and lender, Den Norske Bank ASA, as syndication agent
and lender, Nordea, as syndication agent and lender, Landesbank
Schleswig-Holstein Girozentrale, as document agent and lender, Hamburgische
Landesbank - Girozentrale, as lender, and NIB Capital Bank N.V., as lender. We
are rendering this opinion to you pursuant to Section 3.1 (f)(iii) of the Credit
Agreement. Capitalized terms not defined in this letter have the meanings
ascribed thereto in the Credit Agreement.

            In rendering this opinion, I have examined originals of the Credit
Agreement and the Note executed and delivered by OSG International
(collectively, the "Facility Documents") and such corporate documents and
records of OSG International, certificates of public officials and directors of
OSG International, and such other documents, certificates and corporate or other
records as I have deemed necessary as a basis for the opinions expressed in this
letter.

            In my examination, I have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to me as original documents and the conformity to authentic originals
submitted to me as certified or photostatic copies. I have further assumed that
the Facility Documents have been duly authorized, executed and delivered by each
Bank and Agent, and constitute the Banks' and the Agents' valid and binding
obligations, enforceable against such persons in accordance with their
respective terms.

                                       1
<PAGE>

            I have investigated such questions of law for the purpose of
rendering the opinions in this letter as I have deemed necessary. The opinions
expressed below are subject to the qualification that I do not profess to be an
expert in any laws other than those of the United States of America and the
State of New York. This opinion is limited to the laws of the State of New York,
the Federal Laws of the United States and the laws of the Republic of the
Marshall Islands. Insofar as Marshall Islands law is involved in the opinions
hereinafter expressed, I have relied upon opinions and advice of Marshall
Islands counsel rendered in transactions which I consider to be sufficiently
similar to those contemplated by the Financing Documents as to afford a
satisfactory basis for such opinions, upon my independent examination of the
Associations Law of the Republic of the Marshall Islands as published in April
2001 by the Marshall Islands Maritime and Corporate Administrators, Inc. and
covering all laws enacted by the Nitijela through the August 2000 legislative
session, and upon my knowledge of the interpretation of analogous laws in the
United States of America. In rendering the opinions set forth below, I have
assumed that the Marshall Islands laws and regulations examined by me have not
been the subject of any further amendments and that the persons who executed the
aforementioned certificates of public officials are duly authorized to act in
such capacity on behalf of the Registrar of Corporations of the Republic of the
Marshall Islands.

            On the basis of and in reliance on the foregoing, and subject to the
limitations, qualifications and exceptions set forth below, I am of the opinion
that:

            1.    OSG International is a corporation duly formed, validly
                  existing and in good standing as a corporation under the laws
                  of the Republic of the Marshall Islands.

            2.    OSG International has the corporate power and authority to
                  enter into, execute, deliver and perform its obligations under
                  the Facility Documents to which it is a party and has taken
                  all necessary action to authorize the execution, delivery and
                  performance of the Facility Documents to which it is a party.

            3.    Each of the Facility Documents to which it is a party has been
                  duly executed and delivered by OSG International and
                  constitutes the valid and binding obligation of OSG
                  International, enforceable against OSG International in
                  accordance with its terms.

            4.    There is no action, suit or proceeding pending against, or to
                  the best of my knowledge threatened against or affecting, OSG
                  International or any of its subsidiaries before any court or
                  arbitrator or any governmental body, agency or official in
                  which there is a reasonable possibility of an adverse decision
                  which in my reasonable judgment could result in a Material
                  Adverse Change, or that in any manner draws into question the
                  validity or enforceability of any of the Facility Documents.

            5.    The execution and delivery of the Facility Documents and the
                  consummation of the transactions contemplated by the Facility
                  Documents

                                       2
<PAGE>

                  (i) will not conflict with or contravene any existing Marshall
                  Islands law, statute, rule or regulation of general
                  application to which OSG International is subject; (ii) are
                  not in conflict with, nor constitute a breach or violation of,
                  nor constitute a default under, any of the terms, conditions
                  or provisions of the Articles of Incorporation or By-laws of
                  OSG International; (iii) do not result in the creation of any
                  Lien upon any of the properties or assets of OSG
                  International; and (iv) do not constitute a breach or
                  violation of, or constitute a default under, or permit the
                  acceleration of any obligation or liability in, or but for any
                  requirement of the giving of notice or passage of time (or
                  both) would constitute such a conflict with, breach or
                  violation of, or default under, or permit any such
                  acceleration in, any contractual obligation or any agreement,
                  document, indenture, instrument, order, writ, judgment or
                  decree to which OSG International is a party or by which any
                  of its properties or assets are bound.

            6.    No governmental consents, licenses, permits, notarizations,
                  approvals, exemptions of, authorizations, registrations,
                  declarations or filings or other action by, and no notices to,
                  consents of, orders of or filings with, or any withholding
                  payments to, any governmental authority or regulatory body,
                  including any exchange control approvals, are required by OSG
                  International in connection with (i) the due execution,
                  delivery and performance by OSG International of the Facility
                  Documents to which it is a party; (ii) the legality, validity,
                  performance, enforceability or admissibility of such Facility
                  Documents or the consummation of the transactions contemplated
                  thereby; or (iii) the extensions of credit under the Credit
                  Agreement.

            7.    It is not necessary under the laws of the Republic of the
                  Marshall Islands in order to assure the validity,
                  effectiveness or enforceability of the Financing Documents
                  that any of the Financing Documents be filed, registered or
                  recorded in any public office or elsewhere in the Republic of
                  the Marshall Islands. 8. The choice of the laws of the State
                  of New York as the governing law of the Facility Documents is
                  a valid choice of law and would be upheld as a valid choice of
                  law by the courts of the State of New York and applied by such
                  courts in proceedings in relation thereto as the governing law
                  thereof and the submission by OSG International to the
                  non-exclusive jurisdiction of the courts of the State of New
                  York and the courts of the United States of America located in
                  New York City is a legal and binding submission.

            9.    The choice of New York law to govern the Financing Documents
                  should be recognized by the courts of the Republic of the
                  Marshall Islands as valid choices of law and the submission by
                  OSG International in the Financing Documents to the
                  non-exclusive jurisdiction of the courts of the

                                       3
<PAGE>

                  State of New York and the courts of the United States of
                  America located in New York City are valid and binding and do
                  not contravene Marshall Islands law.

            10.   A judgment entered by the courts of the State of New York or
                  the courts of the United States of America located in New York
                  City in any suit, action or proceeding arising out of or in
                  connection with any of the Financing Documents would be
                  enforceable in the courts of the Republic of the Marshall
                  Islands without a retrial of the merits of the matter provided
                  that:

                  (a)   the judgment was for a sum of money and was final in the
                        jurisdiction granting the judgment;

                  (b)   the court granting the judgment had jurisdiction under
                        the laws of the place where it sat and the judgment did
                        not offend principles of the Republic of the Marshall
                        Islands as to due process, propriety or public order;
                        and

                  (C)   the defendant was actually present in person or by a
                        duly appointed representative and the judgment did not
                        constitute in effect a default judgment.

            11.   Assuming such is the case under the law otherwise governing
                  the enforceability of each Financing Document, as a matter of
                  Marshall Islands law, the obligations of OSG International
                  under the Financing Documents are direct, general and
                  unconditional obligations of such Marshall Islands Company and
                  rank at least pari passu with all other present or future
                  unsecured and unsubordinated indebtedness of OSG
                  International, except such as are mandatorily preferred by
                  law.

            12.   Under existing law, OSG International is not required or
                  entitled to make any withholding or deduction with respect to
                  any tax from any payment which it is or might be required to
                  make under any of the Financing Documents, provided that OSG
                  International is not now, nor will in the future be:

                  (a)   engaged in:

                        (i)   the retailing, wholesaling, trading or importing
                              of goods or services for or with residents of the
                              Republic of the Marshall Islands;

                        (ii)  any extractive industry in the Republic of the
                              Marshall Islands;

                        (iii) any regulated professional service activity in the
                              Republic of the Marshall Islands;

                                       4
<PAGE>

                        (iv)  the export of any commodity or goods manufactured,
                              processed, mined or made in the Republic of the
                              Marshall Islands; or

                        (v)   the ownership of real property in the Republic of
                              the Marshall Islands; and

                  b.    doing business in the Republic of the Marshall Islands
                        except that OSG International may have its registered
                        office in the Republic of the Marshall Islands and
                        maintain its registered agent in the Republic of the
                        Marshall Islands as required by the provisions of the
                        Associations Law of 1990, as amended.

            13.   It is not necessary under the laws of the Republic of the
                  Marshall Islands that any Creditor be authorized or qualified
                  to carry on business in the Republic of the Marshall Islands
                  solely by reason of its entry into, execution, delivery and
                  performance of the Financing Documents outside the Republic of
                  the Marshall Islands, or for its enforcement of the Financing
                  Documents against OSG International in a court of competent
                  jurisdiction in the Republic of the Marshall Islands.

            14.   Assuming none of the Financing Documents was executed in the
                  Republic of the Marshall Islands, there are no stamp or
                  registration duties or similar taxes or charges payable in the
                  Republic of the Marshall Islands in respect of the execution,
                  delivery, performance, enforcement or admissibility into
                  evidence of the Financing Documents other than (i) nominal
                  documentary stamp taxes which must be paid if any Financing
                  Document is submitted to a Marshall Islands court and (ii)
                  court fees consequent upon litigation in the Republic of the
                  Marshall Islands.

            15.   Each of the Financing Documents is in proper form for
                  enforcement in the Republic of the Marshall Islands.

            16.   None of the Creditors will be deemed to be resident,
                  domiciled, carrying on business or subject to taxation in the
                  Republic of the Marshall Islands solely by reason of the
                  execution and/or enforcement of the Financing Documents.

            The above opinions are subject to the following additional
limitations, qualifications and exceptions:

            A.    The effect and application of bankruptcy, insolvency,
                  fraudulent conveyance, reorganization, moratorium, and other
                  laws now or hereafter in effect which relate to or limit
                  creditors' rights generally;

            B.    The effect and application of general principles of equity,
                  whether considered in a proceeding in equity or at law;

                                       5
<PAGE>

            C.    Limitations imposed by or resulting from the exercise by any
                  court of its discretion; and

            D.    Limitations imposed by reason of generally applicable public
                  policy principles or considerations.

            The opinions in this letter are rendered only to the Banks and the
Agents in connection with the Credit Agreement. The opinions may not be relied
upon by any Bank or Agent for any other purpose, or relied upon by any other
person, firm or entity for any purpose (other than any actual or proposed
Participant or assignee, your legal counsel and your independent auditors)
without my prior written consent. Proskauer Rose LLP who has acted as special
counsel to the Borrowers may rely on this opinion as if it were also addressed
to it.

                                                          Very truly yours,

                                                          Mark A. Lowe, Esq.

<PAGE>

                                   SCHEDULE I
                                BANKS AND AGENTS

Nordea, acting through Nordea Bank Finland Plc
New York Branch
11 West 42nd Street, 7th Floor New York, N.Y. 10036

Den Norske Bank ASA
New York Branch
200 Park Avenue
New York, New York 10166

Hamburgische Landesbank -Girozentrale-
Gerhart-Hauptmann-Platz 50
D-20095 Hamburg
Federal Republic of Germany

Landesbank Schleswig-Holstein Girozentrale
Martensdamm 6
D-24103 Kiel
Federal Republic of Germany

JPMorgan Chase Bank
270 Park Avenue, 38th Floor
New York, N.Y. 10017

NIB Capital Bank N.V.
Carnegieplein 4, 2417 KJ
P.O. Box 380, 2501 BH
The Hague
The Netherlands

<PAGE>

                                                                       EXHIBIT J

To the Banks and Agents                                 December 12, 2001
set forth on Schedule I
c/o JPMorgan Chase Bank
One Chase Manhattan Plaza, 8th Floor
New York, New York 10005-1401

                        Re: OSG Revolving Credit Facility

Ladies and Gentlemen:

            We have participated in the preparation of the Credit Agreement,
dated as of December 12, 2001 (the "Credit Agreement"), among Overseas
Shipholding Group, Inc., OSG Bulk Ships, Inc. and OSG International, Inc.
(collectively, the "Borrowers"), the Banks set forth on Schedule I thereto,
JPMorgan Chase Bank, as administrative agent and lender, Den Norske Bank ASA, as
syndication agent and lender, Nordea, as syndication agent and lender,
Landesbank Schleswig-Holstein Girozentrale, as document agent and lender,
Hamburgische Landesbank - Girozentrale, as lender, and NIB Capital Bank N.V., as
lender, and have acted as special counsel to the Agents (as such term is defined
in the Credit Agreement) for the purpose of rendering this opinion pursuant to
Section 3.1(f)(iv) of the Credit Agreement. Capitalized terms used herein
without definition shall have the meanings ascribed thereto in the Credit
Agreement.

            In connection herewith we have reviewed and relied on executed
originals or photocopies of executed originals of the Credit Agreement and the
Notes (together, the "Financing Documents").

            In addition, we have examined and relied, as to factual matters,
upon originals or copies certified to our satisfaction of all such other
records, instruments and documents, including certificates of public officials
and of officers of the parties to the Financing Documents, as we have deemed
necessary as a basis for the opinion herein rendered.

            In such examination we have assumed the genuineness of all
signatures on all documents, the authenticity of all documents submitted to us
as originals and the completeness and conformity to the originals of such
documents as have been submitted to us as copies thereof. We have, with your
approval, also assumed the due organization, valid existence and good standing
of all parties to the Financing Documents, the power, authority and legal right
of all parties to the Financing Documents to enter into and to perform their
respective obligations thereunder and the due authorization, execution and
delivery of the Financing Documents by all parties thereto. We have also assumed
the due compliance of the Financing Documents with all matters of, and the

<PAGE>

validity and enforceability thereof under, all such laws as govern or relate to
them other than the laws of the State of New York and the federal laws of the
United States of America in respect of which we are opining. We have further
assumed for the purposes of our opinion that all parties to the Financing
Documents have complied with all legal requirements pertaining to their status
as such status relates to their rights to enforce the Financing Documents. In
addition, we have assumed that any required consents, licenses, permits,
approvals, or exemptions of, or authorizations by, any governmental authority or
regulatory body of any jurisdiction other than the State of New York and the
United States of America in connection with the transactions contemplated by the
Financing Documents have been duly obtained. We have conducted no independent
investigation as to any factual matters relevant to the opinions expressed
herein and with respect to such factual matters we have relied exclusively on
the documents which we have examined and have assumed the accuracy of the
matters stated therein.

            Based upon and subject to the foregoing and to the qualifications
and limitations hereafter expressed, we are of the opinion that, insofar as the
laws of the State of New York and the federal laws of the United States of
America are concerned, the Credit Agreement and the Notes constitute valid and
binding obligations of the Borrowers enforceable against the Borrowers in
accordance with their respective terms.

            We qualify our foregoing opinion to the extent that:

            (a)   the enforceability of the rights and remedies provided for in
                  the Financing Documents is subject to bankruptcy,
                  reorganization, insolvency, moratorium, fraudulent conveyance,
                  fraudulent transfer and other similar laws affecting generally
                  the enforceability of creditors' rights from time to time in
                  effect;

            (b)   the enforceability of the Financing Documents may be limited
                  by the application of principles of good faith, fair dealing,
                  commercial reasonableness, materiality, unconscionability and
                  conflict with public policy and other similar principles;

            (c)   provisions in the Financing Documents specifying that
                  provisions thereof may only be waived in writing may not be
                  enforceable to the extent that an oral agreement or implied
                  agreement by trade practice or course of conduct has been
                  created modifying provisions of the Financing Documents;

            (d)   our opinion is based upon statutory law and judicial decisions
                  in effect on the date hereof, and we do not express any
                  opinion with respect to any law, rule, regulation or
                  governmental policy which may be enacted or adopted after the
                  date hereof;

            (e)   the enforceability of the Financing Documents is subject to
                  general principles of equity with respect to the
                  enforceability of any of the remedies, covenants or other
                  provisions of the Financing Documents and to the availability
                  of specific performance or injunctive relief or other
                  equitable remedies, regardless of whether such enforceability
                  is considered in a proceeding in equity or at law;

                                       2
<PAGE>

            (f)   with regard to any certificate or determination notice of the
                  Banks delivered under the Financing Documents, we express no
                  opinion as to the conclusiveness of such certificate or
                  determination notice which, save for manifest error, purports
                  to be conclusive and binding on the Borrowers; and

            (g)   with respect to the submissions to the jurisdiction of the
                  United States District Court for the Southern District of New
                  York in the Financing Documents we note the limitations of 28
                  U.S.C. ss. 1332 on federal court jurisdiction in cases where
                  diversity of citizenship is lacking and we also note that such
                  submissions cannot supersede that court's discretion in
                  determining whether to transfer an action from one federal
                  court to another under 28 U.S.C. ss. 1404(a); and

            (h)   provisions for indemnification pursuant to the Credit
                  Agreement may be held to be against public policy and
                  therefore unenforceable to the extent any purported
                  beneficiary of those provisions seeks to enforce the same to
                  obtain indemnity from any liabilities, losses, damages, costs
                  or expenses arising from its violation of any applicable law.

            In rendering the foregoing opinion, we express no opinion as to (i)
the effect (if any) of any law of any jurisdiction (except the State of New
York) in which any Bank is located which limits the rate of interest that such
Bank may charge or collect, (ii) the laws of any jurisdiction other than the
laws of the State of New York and the federal laws of the United States of
America, or (iii) the provisions of Section 11.7 of the Credit Agreement to the
extent that such provisions provide for the creation of a separate debt of the
Borrowers or any of them resulting from any currency exchange losses suffered by
the Creditors or Participants.

            We are members of the bar of the State of New York. Our opinion is
limited to the laws of the State of New York and the federal laws of the United
States of America as in effect on the date hereof. We express no opinion with
respect to the laws of any other jurisdiction.

            The foregoing opinion is addressed to you solely for your benefit,
may be relied upon by you (and any Participant or any assignee of any Bank
permitted by Section 10 of the Credit Agreement, except that this opinion is
given only as of the date hereof) only in connection with the transactions
described herein, and may not be relied upon by, or delivered to, any other
person, firm or entity.

                                                         Very truly yours,

                                       3
<PAGE>

                                   SCHEDULE I
                                BANKS AND AGENTS

Nordea, acting through Nordea Bank Finland Plc,
New York Branch
11 West 42nd Street, 7th Floor New York, N.Y. 10036

Den Norske Bank ASA
New York Branch
200 Park Avenue
New York, New York 10166

Hamburgische Landesbank -Girozentrale-
Gerhart-Hauptmann-Platz 50
D-20095 Hamburg
Federal Republic of Germany

Landesbank Schleswig-Holstein Girozentrale
Martensdamm 6
D-24103 Kiel
Federal Republic of Germany

JPMorgan Chase Bank
270 Park Avenue, 38th Floor
New York, N.Y. 10017

NIB Capital Bank N.V.
Carnegieplein 4, 2417 KJ
P.O. Box 380, 2501 BH
The Hague
The NetherlandsExhibit 4(e)

--------------------------------------------------------------------------------

                                 AMENDMENT NO. 1
                                       TO

                                CREDIT AGREEMENT
                          DATED AS OF DECEMBER 12, 2001
                                 PROVIDING FOR A

                            REVOLVING CREDIT FACILITY
                                MADE AVAILABLE TO

                        OVERSEAS SHIPHOLDING GROUP, INC.

                              OSG BULK SHIPS, INC.

                             OSG INTERNATIONAL, INC.

--------------------------------------------------------------------------------

                                January 22, 2002

<PAGE>

                       AMENDMENT NO. 1 TO CREDIT AGREEMENT

            THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (this "Amendment") is made
as of the 22nd day of January, 2002 by and among (1) Overseas Shipholding Group,
Inc., a corporation incorporated under the laws of the State of Delaware
("OSG"), (2) OSG Bulk Ships, Inc., a corporation incorporated under the laws of
the State of New York ("OSG Bulk"), (3) OSG International, Inc., a corporation
incorporated under the laws of the Republic of the Marshall Islands ("OSG
International," jointly and severally with OSG and OSG Bulk, the "Borrowers,"
each a "Borrower"), (4) the banks and financial institutions whose names and
addresses are set out in Schedule 1 to the Credit Agreement, as hereinafter
defined (together with any assignee pursuant to Section 10 of the Credit
Agreement, the "Original Banks"), (5) JPMorgan Chase Bank, in its capacity as
administrative agent for the Banks (the "Administrative Agent") and lender, (6)
Den norske Bank ASA ("DnB"), as syndication agent for the Banks and lender, (7)
Nordea, acting through Nordea Bank Finland Plc, New York Branch, as syndication
agent for the Banks and lender (together with DnB, the "Syndication Agents"),
and (8) Landesbank Schleswig-Holstein Girozentrale, as documentation agent for
the Banks and lender (the "Documentation Agent" and together with the
Administrative Agent and the Syndication Agents, the "Agents"), (9) Hamburgische
Landesbank -Girozentrale-, as lender, (10) NIB Capital Bank N.V., as lender,
(11) The Bank of Nova Scotia ("BNS"), as an additional lender, (12) The Governor
and Company of the Bank of Scotland ("BoS"), as an additional lender, (13)
Dresdner Bank A.G. ("Dresdner"), as an additional lender, (14) ING Bank N.V.
("ING"), as an additional lender, (15) Lloyds TSB Band Plc ("Lloyds"), as an
additional lender, (16) Vereins- und Westbank AG ("VuW"), as an additional
lender, (17) The Dai-Ichi Kangyo Bank, Ltd. ("DKB"), as an additional lender,
(18) Deutsche Bank AG in Hamburg ("DB"), as an additional lender, and (19) Union
Bank of Norway ("UBN", and together with BNS, BoS, Dresdner, ING, Lloyds, VuW,
DKB and DB, the "New Banks"), as an additional lender and amends and is
supplemental to the Credit Agreement made as of the 12th day of December, 2001
(the "Credit Agreement") made by and among (1) the Borrowers, (2) the Original
Banks and (3) the Agents.

                                WITNESSETH THAT:

            WHEREAS, pursuant to the Credit Agreement, the Original Banks made
available to the Borrowers a credit facility in an aggregate principal amount
not to exceed U.S.$300,000,000 of which U.S.$240,000,000 was committed and made
available by the Original Banks (the "Original Credit Facility");

            WHEREAS, the Borrowers, the Original Banks, the Agents and the New
Banks have agreed that each of the New Banks be made party to the Credit
Agreement as a Bank (as such term is defined in the Credit Agreement as amended
hereby) and that the New Banks commit amounts to the Original Credit Facility;

            WHEREAS, the Borrowers have requested, and the Original Banks and
the New Banks have agreed, subject to the terms and conditions herein contained,
to increase the

<PAGE>

aggregate principal amount of the Original Credit Facility by U.S.$50,000,000
(the "Additional Credit Facility Amount") up to a maximum of U.S.$350,000,000
(the "Credit Facility").

            NOW, THEREFORE, in consideration of the premises, covenants and
agreements hereinafter set forth, and such other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged by the
parties, it is hereby agreed as follows:

            1. Definitions. Unless otherwise defined herein, words and
expressions defined in the Credit Agreement shall bear the same meanings when
used herein.

            2. Representations and Warranties. Each of the Borrowers hereby
reaffirms, as of the date hereof, each and every representation and warranty
made thereby in the Credit Agreement and the Notes and the Borrowers hereby,
jointly and severally, represent and warrant (which representations and
warranties shall survive the execution and delivery of this Amendment and the
Notes and each drawdown of the Facility) that:

            (a)   All necessary corporate action has been taken to duly
                  authorize, and all necessary consents and authorities have
                  been obtained and remain in full force and effect to permit,
                  each of the Borrowers to enter into and perform its
                  obligations under this Amendment and the Notes;

            (b)   Each of this Amendment and the Notes constitutes a legal,
                  valid and binding obligation of each Borrower enforceable
                  against such Borrower in accordance with its terms; and

            (c)   Neither the execution and delivery by the Borrowers of this
                  Amendment or the Notes, or any instrument or agreement
                  referred to herein or therein, or contemplated hereby or
                  thereby, nor the consummation of the transactions herein or
                  therein contemplated, nor compliance with the terms,
                  conditions and provisions hereof or thereof by each of them,
                  will (i) conflict with, or result in a breach or violation of,
                  or constitute a default under the organizational documents of
                  the Borrowers; (ii) conflict with or contravene any Applicable
                  Law or any contractual restriction binding on or affecting the
                  Borrowers or any of their respective assets or properties;
                  (iii) result in a breach or violation of, or constitute a
                  default under, or permit the acceleration of any material
                  obligation or liability in, or but for any requirement of the
                  giving of notice or the passage of time (or both) would
                  constitute such a conflict with, breach or violation of, or
                  default under, or permit any such acceleration in, any
                  material contractual obligation or any material agreement or
                  document to which any of the Borrowers is a party or by which
                  any of the Borrowers or any of their respective assets or
                  properties is bound (or to which any such obligation,
                  agreement or document relates); or (iv) result in any Lien
                  upon any of the Borrowers' respective material assets or
                  properties.

                                       2
<PAGE>

            3. No Defaults. Each of the Borrowers hereby represents and warrants
that as of the date hereof there exists no Event of Default or any condition
which, with the giving of notice or passage of time, or both, would constitute
an Event of Default.

            4. Performance of Covenants. Each of the Borrowers hereby reaffirms
that it has duly performed and observed the covenants and undertakings set forth
in the Credit Agreement, on its part to be performed, and covenants and
undertakes to continue to duly perform and observe such covenants and
undertakings, as amended hereby in accordance with the terms thereof.

            5. Amendment to the Credit Agreement. Subject to the terms and
conditions of this Amendment, the Credit Agreement is hereby amended and
supplemented, effective as of the date all conditions in Section 7 have been
satisfied, as follows:

            (a)   all references to "this Agreement' shall be deemed to refer to
                  the Credit Agreement as amended hereby;

            (b)   Section 1.1 is amended as follows

                        (i)   in the definition of "Facility," the words "in an
                              initial amount of Two Hundred Forty Million
                              Dollars ($240,000,000) and not to exceed Three
                              Hundred Million Dollars ($300,000,000)" shall be
                              deleted and replaced with the words "not to exceed
                              Three Hundred Fifty Million Dollars
                              ($350,000,000)";

            (c)   Schedule 1 to the Credit Agreement is deleted and replaced in
                  its entirety with Schedule 1 hereto;

            6. No Other Amendment. All other terms and conditions of the Credit
Agreement shall remain in full force and effect and the Credit Agreement shall
be read and construed as if the terms of this Amendment were included therein by
way of addition or substitution, as the case may be.

            7. Conditions. The effectiveness of this Amendment is subject to the
following terms and conditions:

            (a)   Each of the Original Banks shall have returned to the
                  Borrowers the Note executed by the Borrowers in favor of such
                  Original Bank in relation to the Original Credit Facility;

            (b)   The Borrowers shall have executed and delivered to each
                  Original Bank and each New Bank a new Note in the amount of
                  such Bank's Commitment;

                                       3
<PAGE>

            (c)   The Administrative Agent shall have received the following
                  documents in form and substance satisfactory to the
                  Administrative Agent and its legal advisers:

                  (i)   copies of the resolutions adopted by the board of
                        directors of each Borrower, certified as true and
                        complete by an officer of such Borrower, evidencing
                        approval of this Amendment and the Notes and authorizing
                        an appropriate officer or officers or attorney-in-fact
                        or attorneys-in-fact of each such Borrower to execute
                        the same on its behalf;

                  (ii)  copies from each Borrower, certified as true and
                        complete by an officer of such Borrower, of all
                        documents evidencing any other necessary action,
                        approvals or consents with respect to this Amendment and
                        the Notes and the transactions contemplated hereby and
                        thereby; and

                  (iii) a certificate signed by the President, Treasurer,
                        Comptroller, Controller or chief financial officer of
                        each of the Borrowers to the effect that (A) no Default
                        or Event of Default shall have occurred and be
                        continuing and (B) the representations and warranties of
                        the Borrowers contained in this Amendment are true and
                        correct as of the date of such certificate;

            (d)   The Borrowers shall have duly executed and delivered this
                  Amendment and the Notes to the Administrative Agent;

            (e)   The Borrowers shall have duly executed and delivered to the
                  Administrative Agent the fee letter of even date herewith of
                  the Original Banks, supplemental to the Fee Letter (the
                  "Supplemental Fee Letter"); and

            (f)   The Administrative Agent shall have received executed
                  counterparts of this Agreement from each of the Banks and the
                  Agents (or, in the case of any Bank as to which an executed
                  counterpart shall not have been received, the Administrative
                  Agent shall have received in form satisfactory to it a telex,
                  facsimile or other written confirmation from such Bank of the
                  execution of a counterpart of this Agreement by such Bank).

            8. Other Documents. By the execution and delivery of this Amendment,
each of the Borrowers hereby consents and agrees that all references in the
Notes to the Credit Agreement shall be deemed to refer to the Credit Agreement
as further amended by this Amendment.

            9. Fees and Expenses. Each of the Borrowers agree to pay promptly
all costs and expenses (including reasonable legal fees) of the Agents and any
Banks in connection with the

                                       4
<PAGE>

preparation and execution of this Amendment and all fees and expenses due
pursuant to the Supplemental Fee Letter.

            10. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of New York.

            11. Counterparts. This Amendment may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts each of which, when so executed, shall
be deemed to be an original but all such counterparts shall constitute but one
and the same agreement.

            12. Headings; Amendment. In this Amendment, Section headings are
inserted for convenience of reference only and shall be ignored in the
interpretation of this Amendment. This agreement cannot be amended other than by
written agreement signed by the parties hereto.

                            [Signature Page Follows]

                                       5
<PAGE>

            IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment by its duly authorized representative on the day and year first above
written.

                                       6
<PAGE>

OVERSEAS SHIPHOLDING GROUP, INC.,           OSG BULK SHIPS, INC.,
as Borrower                                 as Borrower

By________________________________          By________________________________
  Name: Myles R. Itkin                       Name: Myles R. Itkin
  Title: Sr. Vice President, CFO             Title: Sr. Vice President
  and Treasurer                               and Treasurer

OSG INTERNATIONAL, INC.,                    JPMORGAN CHASE BANK,
as Borrower                                 as Administrative Agent and Bank

By________________________________          By_______________________________
  Name: Myles R. Itkin                        Name:
  Title: Sr. Vice President                   Title:

DEN NORSKE BANK ASA,                        NORDEA, acting through NORDEA BANK
as Syndication Agent and Bank               FINLAND PLC, New York Branch,
                                            as Syndication Agent and Bank

By________________________                  By__________________________
  Name:                                       Name:
  Title:                                      Title:

By_________________________                 By__________________________
  Name:                                       Name:
  Title:                                      Title:

LANDESBANK SCHLESWIG-HOLSTEIN               HAMBURGISCHE LANDESBANK
GIROZENTRALE,                               -GIROZENTRALE-,
as Documentation Agent and Bank             as Bank

By_____________________________             By____________________________
  Name:                                       Name:
  Title:                                      Title:

By_____________________________             By____________________________
  Name:                                       Name:
  Title:                                      Title:

                                       7
<PAGE>

NIB CAPITAL BANK, N.V.,                     THE BANK OF NOVA SCOTIA,
as Bank                                     as Bank

By____________________________              By____________________________
  Name:                                       Name:
  Title:                                      Title:

By____________________________
  Name:
  Title:

THE GOVERNOR AND COMPANY OF                 DRESDNER BANK AG,
THE BANK OF SCOTLAND,                       as Bank
as Bank

By_____________________________             By_______________________________
  Name:                                       Name:
  Title:                                      Title:

By_____________________________             By_______________________________
  Name:                                       Name:
  Title:                                      Title:

ING BANK N.V.,                              LLOYDS TSB BANK PLC,
as Bank                                     as Bank

By________________________________          By_______________________________
  Name:                                       Name:
  Title:                                      Title:

By________________________________          By_______________________________
  Name:                                       Name:
  Title:                                      Title:

VEREINS- UND WESTBANK AG,                   THE DAI-ICHI KANGYO BANK, LTD.,
as Bank                                     as Bank

By_________________________________         By________________________________
  Name:                                       Name:
  Title:                                      Title:

By_________________________________         By________________________________
  Name:                                       Name:
  Title:                                      Title:

                                       8
<PAGE>

DEUTSCHE BANK AG                            UNION BANK OF NORWAY,
IN HAMBURG,                                 as Bank
as Bank

By_____________________________             By_____________________________
  Name:                                       Name:
  Title:                                      Title:

By_____________________________             By_____________________________
  Name:                                       Name:
  Title:                                      Title:

                                       9
<PAGE>

                                                                      SCHEDULE I
                                      BANKS

Name of Entity                                                Commitment

Nordea, acting through Nordea                        Twenty Five Million Dollars
Bank Finland Plc,                                    ($25,000,000)
New York Branch
11 West 42nd Street, 7th Floor
New York, N.Y. 10036
Attn: Hans Chr. Kjelsrud
Facsimile No.: (212) 827-4888
Telephone No.: (212) 827-4814

Den Norske Bank ASA                                  Twenty Five Million Dollars
New York Branch                                      ($25,000,000)
200 Park Avenue
New York, New York 10166
Attn: Nikolai Nachamkin
Facsimile No.: (212) 681-3900
Telephone No.: (212) 681-3860

Hamburgische Landesbank -Girozentrale-               Thirty Five Million Dollars
Gerhart-Hauptmann-Platz 50                           ($35,000,000)
D-20095 Hamburg
Federal Republic of Germany
Attn: Uta Urbaniak
Facsimile No.: 011-49-40-3333-3048
Telephone No.: 011-49-40-3333-1769

Landesbank Schleswig-Holstein Girozentrale           Twenty Five Million Dollars
Martensdamm 6                                        ($25,000,000)
D-24103 Kiel
Federal Republic of Germany
Attn: Aziz Teksoy
Facsimile No.: +49-431-900-1791
Telephone No.: +49-431-900-1130

JPMorgan Chase Bank                                  Twenty Five Million Dollars
270 Park Avenue, 38th Floor                          ($25,000,000)
New York, N.Y. 10017
Attn.: Richard C. Smith
Facsimile No.: (212) 270-5100
Telephone No.: (212) 270-5435

<PAGE>

NIB Capital Bank N.V.                                Twenty Five Million Dollars
Carnegieplein 4, 2417 KJ                             ($25,000,000)
P.O. Box 380, 2501 BH
The Hague
The Netherlands
Attn.: Peter Bergman
Facsimile No.: +31-70-342-5577
Telephone No.: +31-70-342-5459

The Bank of Nova Scotia                              Twenty Five Million Dollars
One Liberty Plaza                                    ($25,000,000)
New York, NY 10005
Attn.: Kevin McCarthy
Facsimile No.: 212-225-5091
Telephone No.: 212-225-5074

The Governor and Company                             Twenty Five Million Dollars
of the Bank of Scotland                              ($25,000,000)
New Uberior House, 11 Earl Grey Street
Edinburgh
Scotland EH3 9BN
Attn: John Lowe
Facsimile No.: +44 131 659 0387
Telephone No.: +44 131 659 0320

Dresdner Bank AG                                     Twenty Five Million Dollars
Jungfernstieg 22                                     ($25,000,000)
20354 Hamburg, Germany
Attn.: Thomas Witte
Facsimile No.: +49-40-3501 4007
Telephone No.: +49-40-3501 4360

ING Bank N.V.                                        Twenty Five Million Dollars
60 London Wall                                       ($25,000,000)
London, EC2M 5TQ
United Kingdom
Attn.: Hugh Baker
Facsimile No.: +44 207 767 7252
Telephone No.: +44 207 767 1992

<PAGE>

Lloyds TSB Bank Plc                                  Twenty Five Million Dollars
Specialized Products                                 ($25,000,000)
PO Box 787
6 - 8 Eastcheap
London EC3M 1AE
United Kingdom
Attn.: Kirsten Kaarre Jensen
Facsimile No.: +44 207 661 4638
Telephone No.: +44 207 661 4261

Vereins- und Westbank AG                             Twenty Five Million Dollars
MT Shipping/Syndication                              ($25,000,000)
Alter Wall 22
D-20457 Hamburg
Attn.: Jorn Schepler
Facsimile No.: +49-40-3692-3696
Telephone No.: +49-40-3692-6548

The Dai-Ichi Kangyo Bank, Ltd.                       Fifteen Million Dollars
1633 Broadway, 40th Floor                            ($15,000,000)
New York, N.Y. 10019
Attn.: Perzemek T. Blaziak
Facsimile No.: 212 541-4822
Telephone No.: 212 649-0324

Deutsche Bank AG in Hamburg                          Fifteen Million Dollars
Adolphsplatz 7                                       ($15,000,000)
20457 Hamburg
Federal Republic of Germany
Attn.: Kerstin Seefeld
Facsimile No.: 0049 40 3701 4649
Telephone No.: 0049 40 3701 4635

Union Bank of Norway                                 Ten Million Dollars
Kirkegaten 18                                        ($10,000,000)
0107 Oslo
Norway
Attn.: Jan A. Solemslie
Facsimile No.: +47 22 319 830
Telephone No.: +47 22 319 307                        _____________________

TOTAL                                                $350,000,000

                                       2

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