20-F

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UNITED STATES
SECURITIES EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)
o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
	OR
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2003
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from                        to

Commission file number 0-29106

KNIGHTSBRIDGE TANKERS LIMITED
(Exact name of Registrant as specified in its charter)

ISLANDS OF BERMUDA
(Jurisdiction of incorporation or organization)

Par-la-Ville Place
14 Par-la-Ville Road
Hamilton, HM 08 Bermuda
(Address of principal executive offices)

Securities registered or to be registered pursuant to section 12(b) of the Act: None

Securities registered or to be registered pursuant to section 12(g) of the Act.

Common Shares, $0.01 Par Value
(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

17,100,000 Common Shares, $0.01 Par Value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 o    Item 18 ý

TABLE OF CONTENTS

		PAGE
	PART I
Item 1.	Identity of Directors, Senior Management and Advisors	1
Item 2.	Offer Statistics and Expected Timetable	1
Item 3.	Key Information	1
Item 4.	Information on the Company	7
Item 5.	Operating and Financial Review and Prospects	18
Item 6.	Directors, Senior Management and Employees	26
Item 7.	Major Shareholders and Related Party Transactions	28
Item 8.	Financial Information	28
Item 9.	The Offer and Listing	30
Item 10.	Additional Information	31
Item 11.	Quantitative and Qualitative Disclosures about Market Risk	33
Item 12.	Description of Securities Other Than Equity Securities	33
	PART II
Item 13.	Defaults, Dividend Arrearages and Delinquencies	34
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	34
Item 15.	Controls and Procedures	34
Item 16A.	Audit Committee Financial Expert	34
Item 16B.	Code of Ethics	34
Item 16C.	Principal Accountant Fees	34
Item 16D.	Exemptions from the Listing Standards for Audit Committees	35
Item 16E.	Purchasees of equity securities by the issuer and affiliated persons	35
	PART III
Item 17.	Financial Statements	36
Item 18.	Financial Statements	36
Item 19.	Exhibits

(i)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        Matters discussed in this document may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

        Knightsbridge Tankers Limited desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. The words "believe," "except," "anticipate," "intends," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" and similar expressions identify forward-looking statements.

        The forward-looking statements in this document are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

        In addition to these important factors and matters discussed elsewhere herein and in the documents incorporated by reference herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including fluctuations in charterhire rates and vessel values, changes in demand in the tanker market, as a result of changes in OPEC's petroleum production levels and world wide oil consumption and storage, changes in the company's operating expenses, including bunker prices, drydocking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by Knightsbridge Tanker Limited with the Securities and Exchange Commission.

(ii)

PART I

ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

        Not Applicable

ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE

        Not Applicable

ITEM 3.    KEY INFORMATION

A.    SELECTED FINANCIAL DATA

        The selected consolidated income statement data of Knightsbridge Tankers Limited and its subsidiaries (the "Company") with respect to the fiscal years ended December 31, 2003, 2002, and 2001 and the selected consolidated balance sheet data of the Company with respect to the fiscal years ended December 31, 2003 and 2002 have been derived from the Company's Consolidated Financial Statements included herein and should be read in conjunction with such statements and the notes thereto. The selected consolidated income statement data with respect to the fiscal years ended December 31, 2000 and 1999 and the selected consolidated balance sheet data with respect to the fiscal years ended December 31, 2001, 2000 and 1999 has been derived from consolidated financial statements of the Company not included herein. The following table should also be read in conjunction with Item 5 "Operating and Financial Review and Prospects" and the Company's Consolidated Financial Statements and Notes thereto included herein.

	Year Ended December 31
	2003		2002		2001		2000		1999
(in US$, except share data)
INCOME STATEMENT DATA:
Charter hire revenues	$	75,246,200	$	40,275,925	$	61,534,355	$	76,335,975	$	40,275,925
Net operating income	$	56,789,244	$	21,877,636	$	43,140,556	$	57,935,758	$	21,842,043
Net income	$	47,461,231	$	12,550,786	$	33,915,432	$	48,723,745	$	12,572,476
Earnings per share—basic and diluted	$	2.78	$	0.73	$	1.98	$	2.85	$	0.74
Cash dividends per share	$	2.74	$	1.81	$	4.24	$	2.66	$	1.80
BALANCE SHEET DATA (at December 31):
Cash and cash equivalents	$	6,311,829	$	226,215	$	278,268	$	247,370	$	70,695
Vessels under capital lease, net	$	319,408,192	$	337,001,052	$	354,593,912	$	372,186,772	$	389,779,632
Total assets	$	348,442,802	$	347,824,729	$	366,204,004	$	404,739,841	$	403,265,501
Long-term debt (including current portion)	$	125,397,399	$	125,397,399	$	125,397,399	$	125,397,399	$	127,078,937
Shareholders' equity	$	215,526,852	$	208,639,114	$	229,077,216	$	277,218,288	$	273,980,543
Common Shares	$	171,000	$	171,000	$	171,000	$	171,000	$	171,000
Common shares outstanding		17,100,000		17,100,000		17,100,000		17,100,000		17,100,000

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B.    CAPITALIZATION AND INDEBTEDNESS

        Not Applicable

C.    REASONS FOR THE OFFER AND USE OF PROCEEDS

        Not Applicable

D.    RISK FACTORS

        Please note: In this section, "we", "us" and "our" all refer to the Company and its subsidiaries.

Industry Specific Risk Factors

The cyclical nature of the tanker industry may lead to volatile changes in charter rates which may adversely affect our earnings

        Our charters with Shell International Petroleum Company Limited ("Shell International") expired in the first quarter of 2004. If the tanker industry, which has been cyclical, is depressed in the future, our earnings and available cash flow may decrease. The charter rates payable under time charters or in the spot market will depend upon, among other things, economic conditions in the tanker market. Fluctuations in charter rates and vessel values result from changes in the supply and demand for tanker capacity and changes in the supply and demand for oil and oil products.

        The factors affecting the supply and demand for tanker vessels are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable. The factors that influence demand for tanker capacity include:

•

demand for oil and oil products;



•

global and regional economic conditions;



•

the distance oil and oil products are to be moved by sea; and



•

changes in seaborne and other transportation patterns.

        The factors that influence the supply of tanker capacity include:

•

the number of newbuilding deliveries;



•

the scrapping rate of older vessels; and



•

the number of vessels that are out of service.

        If the number of new ships delivered exceeds the number of tankers being scrapped and lost, tanker capacity will increase. If the supply of tanker capacity increases and the demand for tanker capacity does not increase correspondingly, the charter rates paid for our tankers could materially decline.

Any decrease in shipments of crude oil from the Arabian Gulf may adversely affect our financial performance

        The demand for our very large crude carrier, or VLCC, oil tankers derives primarily from demand for Arabian Gulf crude oil, which, in turn, primarily depends on the economies of the world's industrial countries and competition from alternative energy sources. A wide range of economic, social and other factors can significantly affect the strength of the world's industrial economies and their demand for

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Arabian Gulf crude oil. One such factor is the price of worldwide crude oil. The world's oil markets have experienced high levels of volatility in the last 25 years. If oil prices were to rise dramatically, the economies of the world's industrial countries may experience a significant downturn.

        Any decrease in shipments of crude oil from the Arabian Gulf would have a material adverse effect on our financial performance. Among the factors which could lead to such a decrease are:

•

increased crude oil production from non-Arabian Gulf areas;



•

increased refining capacity in the Arabian Gulf area;



•

increased use of existing and future crude oil pipelines in the Arabian Gulf area;



•

a decision by Arabian Gulf oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;



•

armed conflict in the Arabian Gulf and political or other factors; and



•

the development and the relative costs of nuclear power, natural gas, coal and other alternative sources of energy.

Some of our vessels operate on a spot charter basis and any decrease in spot charter rates in the future may adversely affect our earnings

        Beginning in 2004, some of our vessels operate on a spot charter basis. Although spot chartering is common in the tanker industry, the spot charter market is highly competitive and spot charter rates may fluctuate significantly based upon tanker and oil supply and demand. The successful operation of our vessels in the spot charter market depends upon, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent travelling unladen to pick up cargo. We cannot assure you that future spot charters will be available at rates sufficient to enable our vessels trading in the spot market to operate profitably. In addition, bunkering, or fuel, charges that account for a substantial portion of the operating costs of our spot chartered vessels, and generally reflect prevailing oil prices, are subject to sharp fluctuations.

The value of our vessels may fluctuate and adversely affect our liquidity and may result in breaches under our financial arrangements and sales of our vessels at a loss

        Tanker values have generally experienced high volatility. Investors can expect the fair market value of our VLCC oil tankers to fluctuate, depending on general economic and market conditions affecting the tanker industry and competition from other shipping companies, types and sizes of vessels, and other modes of transportation. In addition, as vessels grow older, they generally decline in value. While we have refinanced our previous secured debt during 2004, declining tanker values could affect our ability to raise cash by limiting our ability to refinance vessels in the future and thereby adversely impact our liquidity. If we determine at any time that a tanker's future limited useful life and earnings require us to impair its value on our financial statements, that could result in a charge against our earnings and the reduction of our shareholders' equity. Due to the cyclical nature of the tanker market, if for any reason we sell tankers at a time when tanker prices have fallen, the sale may be at less than the tanker's carrying amount on our financial statements, with the result that we would also incur a loss and a reduction in earnings.

Our operating results may fluctuate seasonally

        We operate our tankers in markets that have historically exhibited seasonal variations in tanker demand and, as a result, in charter rates. Tanker markets are typically stronger in the fall and winter

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months (the fourth and first quarters of the calendar year) in anticipation of increased oil consumption in the northern hemisphere during the winter months. Unpredictable weather patterns and variations in oil reserves disrupt vessel scheduling.

Company Specific Risk Factors

We may incur additional expenses now that the charters to Shell International have expired and we may not be able to recharter our vessels profitably

        Each of our charters with Shell International has expired and our vessels were redelivered to us in March 2004. At a special meeting of the shareholders held on September 26, 2003, the shareholders of the Company voted to continue the Company in business, authorizing the directors to make alternative arrangements such as attempting to obtain replacement charters for the Shell International charters. As of the date hereof we have procured long-term and medium-term charters for three of our five vessels. We expect that the remaining two vessels will trade on the spot charter market (which is subject to greater fluctuation than the time charter market). These new arrangements for our vessels will likely require us to incur greater expenses which may reduce the amounts available, if any, to pay distributions to shareholders.

We operate in the highly competitive international tanker market and we may not be able to effectively compete which would negatively affect our results of operations

        The operation of tanker vessels and transportation of crude and petroleum products and the other businesses in which we operate are extremely competitive. Competition arises primarily from other tanker owners, including major oil companies as well as independent tanker companies, some of whom have substantially greater resources than we do. Competition for the transportation of oil and oil products can be intense and depends on price, location, size, age, condition and the acceptability of the tanker and its operators to the charterers. Following the expiration of the Shell International charters in 2004, we compete with other tanker owners, including major oil companies as well as independent tanker companies for charterers. Due in part to the fragmented tanker market, competitors with greater resources could enter and operate larger fleets through acquisitions or consolidations and may be able to offer better prices and fleets, which could result in our achieving lower revenues from our VLCC oil tankers.

Compliance with environmental laws or regulations may adversely affect our operations

        The shipping industry in general, our business and the operation of our tankers in particular, are affected by a variety of governmental regulations in the form of numerous international conventions, national, state and local laws and national and international regulations in force in the jurisdictions in which such tankers operate, as well as in the country or countries in which such tankers are registered. These regulations include:

•

the U.S. Oil Pollution Act of 1990, or OPA, which imposes strict liability for the discharge of oil into the 200-mile United States exclusive economic zone, the obligation to obtain certificates of financial responsibility for vessels trading in United States waters and the requirement that newly constructed tankers that trade in United States waters be constructed with double-hulls;



•

the International Convention on Civil Liability for Oil Pollution Damage of 1969 entered into by many countries (other than the United States) relating to strict liability for pollution damage caused by the discharge of oil;



•

the International Maritime Organization, or IMO, International Convention for the Prevention of Pollution from Ships with respect to strict technical and operational requirements for tankers;

4

•

the IMO International Convention for the Safety of Life at Sea of 1974, or SOLAS, with respect to crew and passenger safety;



•

the International Convention on Load Lines of 1966 with respect to the safeguarding of life and property through limitations on load capability for vessels on international voyages; and



•

the U.S. Marine Transportation Security Act of 2002.

        More stringent maritime safety rules are also more likely to be imposed worldwide as a result of the oil spill in November 2002 relating to the loss of the m.t. Prestige, a 26-year old single-hull tanker owned by a company not affiliated with us. Additional laws and regulations may also be adopted that could limit our ability to do business or increase the cost of our doing business and that could have a material adverse effect on our operations. In addition, we are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our operations. In the event of war or national emergency, our tankers may be subject to requisition by the government of the flag flown by the tanker without any guarantee of compensation for lost profits. We believe our tankers are maintained in good condition in compliance with present regulatory requirements, are operated in compliance with applicable safety/environmental laws and regulations and are insured against usual risks for such amounts as our management deems appropriate. The tankers' operating certificates and licenses are renewed periodically during each tanker's required annual survey. However, government regulation of tankers, particularly in the areas of safety and environmental impact may change in the future and require us to incur significant capital expenditures on our ships to keep them in compliance.

Shipping is an inherently risky business and we may not have adequate insurance

        There are a number of risks associated with the operation of ocean-going vessels, including mechanical failure, collision, human error, war, terrorism, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. Any of these events may result in loss of revenues, increased costs and decreased cash flows. In addition, following the terrorist attack in New York City on September 11, 2001, and the military response of the United States, the likelihood of future acts of terrorism may increase, and our vessels may face higher risks of attack. Future hostilities or other political instability, as shown by the attack on the Limburg in Yemen in October 2002, could affect our trade patterns and adversely affect our operations and our revenues, cash flows and profitability. In addition, the operation of any vessel is subject to the inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade.

        We cannot assure investors that we will adequately insure against all risks and we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet in the future and the insurers may not pay particular claims. For example, a catastrophic spill could exceed our insurance coverage and have a material adverse effect on our financial condition. In addition, we may not be able to procure adequate insurance coverage at commercially reasonable rates in the future and we cannot guarantee that any particular claim will be paid. In the past, new and stricter environmental regulations have led to higher costs for insurance covering environmental damage or pollution, and new regulations could lead to similar increases or even make this type of insurance unavailable. Furthermore, even if insurance coverage is adequate to cover our losses, we may not be able to timely obtain a replacement ship in the event of a loss. We may also be subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which we receive indemnity insurance coverage for tort liability. Our payment of these calls could result in significant expenses to us which could reduce our cash flows and place strains on our liquidity and capital resources.

5

Our revenues may be adversely affected if we do not successfully employ our tankers

        Following the expiration of the Shell International charters in 2004, we have determined to deploy our tankers between spot market voyage charters and time charters. Currently, three of our tankers are contractually committed to time charters, with the remaining terms of these charters expiring on dates between 2007 and 2009. Although these time charters generally provide reliable revenues, they also limit the portion of our fleet available for spot market voyages during an upswing in the tanker industry cycle, when spot market voyages might be more profitable.

        The spot charter market is highly competitive, and spot market voyage charter rates may fluctuate dramatically based on tanker and oil supply and demand and other factors. We cannot assure you that future spot market voyage charters will be available at rates that will allow us to operate our tankers profitably.

Incurrence of expenses or liabilities may reduce or eliminate distributions

        Our policy has been to pay out available cash, less reserves for contingencies, and we currently intend to continue that policy. However, with the termination of Shell International charters in 2004, we could incur other expenses or contingent liabilities that would reduce or eliminate the cash available for distribution by us as dividends. Our loan agreement prohibits the declaration and payment of dividends if we are in default under such loan agreement. In addition, the declaration and payment of dividends is subject at all times to the discretion of our Board. We cannot assure you that we will pay dividends.

We have a limited business purpose which limits our flexibility

        Our bye-laws limit our business to engaging in the acquisition, disposition, ownership, leasing and chartering of our five VLCC oil tankers. As a result, we expect that the only source of operating revenue from which we may pay distributions will be from operating the five VLCCs we currently own under time charter or on the spot market.

Arrests of our tankers by maritime claimants could cause a significant loss of earnings for the related off hire period

        Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by "arresting" or "attaching" a vessel through foreclosure proceedings. The arrest or attachment of one or more of our tankers could result in a significant loss of earnings for the related off-hire period.

        In addition, in jurisdictions where the "sister ship" theory of liability applies, a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel, which is any vessel owned or controlled by the same owner. In countries with "sister ship" liability laws, claims might be asserted against us, any of our subsidiaries or our tankers for liabilities of other vessels that we own.

Governments could requisition our vessels during a period of war or emergency without adequate compensation, resulting in a loss of earnings

        A government could requisition for title or seize our vessels. Requisition for title occurs when a government takes control of a vessel and becomes her owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes her charterer at dictated charter rates. This amount could be materially less than the charterhire

6

that would have been payable otherwise. In addition, we would bear all risk of loss or damage to a vessel under requisition for hire.

ITEM 4.    INFORMATION ON THE COMPANY

A.    HISTORY AND DEVELOPMENT OF THE COMPANY

        Knightsbridge Tankers Limited (the "Company") was incorporated in Bermuda on September 18, 1996. The Company's registered and principal executive offices are located at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda, and its telephone number is +1 (441) 295-0182. The Company was incorporated for the purpose of the acquisition, disposition, ownership, leasing and chartering of, through wholly-owned subsidiaries (the "Original Subsidiaries"), five very large crude oil carriers ("VLCCs") (the "Vessels") that were on bareboat charters to Shell International Petroleum Company Limited and certain related activities. References herein to the Company include the Company and all of its subsidiaries, unless otherwise indicated.

        The business of the Company is limited by its Bye-Laws to the transactions described above and related activities including the ownership of subsidiaries engaged in the acquisition, disposition, ownership, leasing and chartering of the Vessels following the termination of the Shell International charters in 2004, and engaging in activities necessary, suitable or convenient to accomplish, or in connection with or incidental to, the foregoing, including refinancing its original debt obligation related to its initial public offering (the "Credit Facility). The Company expects that its only source of operating revenue from which the Company may pay distributions to shareholders on its common shares, par value $.01 per share, (the "Common Shares") will be cash payments from subsidiaries to the Company. The Company's Bye-Laws may be amended only upon the affirmative vote of 66²/3% of the outstanding Common Shares, and the consent of the lender under the Loan Agreement described below.

        The Company used the net proceeds of its initial public offering and bank debt to fund the purchase by the Original Subsidiaries of the Vessels. Upon their purchase from their previous owners on February 27, 1997 (the "Delivery Date"), the Vessels were delivered by the Company to Shell International under long-term "hell and high water" bareboat charters, each with an initial term of seven years, which expired on February 27, 2004.

        Upon expiration of the Shell International charters and the termination of the U.K. finance leases, the Vessels were redelivered to the Original Subsidiaries in March 2004 and transferred to newly-formed, wholly-owned subsidiaries of the Company (the "New Subsidiaries" and together with the Old Subsidiaries, the "Subsidiaries"). Each Vessel was registered in the Republic of the Marshall Islands by the relevant New Subsidiary. The Company also repaid its existing loans and together with the New Subsidiaries entered into a new loan agreement (the "Loan Agreement") with The Royal Bank of Scotland plc (the "Lender"), pursuant to which the Company borrowed $140 million in the form of five loans of $28 million each in respect of a Vessel (together, the "Loan"). The Company is obligated to repay the Loan in twenty-eight quarterly installments of $2.8 million and a final installment of $61.6 million on the last payment date. The Loan Agreement provides for payment of interest on the outstanding principal balance of the Loan, quarterly in arrears, at the annual rate of LIBOR plus a margin. If a New Subsidiary sells or disposes of the related Vessel, the Company will be obligated to make a loan prepayment which will be applied against the principal balance of the Loan relating to the Vessel. The Loan Agreement is secured by, among other things, a guarantee from each New Subsidiary, a mortgage on each Vessel and an assignment of any charter with respect to a Vessel. The failure by the Company to make payments due and payable under the Loan Agreement could result in the acceleration of all principal and interest on the Loan Agreement, the enforcement by the Lender of its rights with respect to the security therefor, and the consequent forfeiture by the Company of one or more of the Vessels. The Loan Agreement also provides for other customary events of default.

7

        The Loan Agreement contains a number of covenants made by the Company and each of the New Subsidiaries that, among other things, restrict the ability of the Company to incur additional indebtedness, pay dividends if the Company is in default, create liens on assets or dispose of assets. In addition, the Company and the relevant New Subsidiary is subject to additional covenants pursuant to the Loan Agreement pertaining primarily to the maintenance and operation of the Vessels.

B.    BUSINESS OVERVIEW

        We are an international tanker company and our primary business activity is the international seaborne transportation of crude oil. Our fleet consists of five double-hull very large crude oil carriers, one of which was built in 1996 and four of which were built in 1995.

Expired Long-Term Charters

        On February 27, 2004 the long-term "hell and highwater" bareboat charters under which our Vessels were chartered to Shell International expired.

        Pursuant to the Shell International charters, Shell International paid a daily charterhire commencing on the Delivery Date at a rate comprised of two primary components: (i) the Base Rate, a fixed minimum rate of charterhire equal to $22,069 per Vessel per day, payable quarterly in arrears, and (ii) Additional Hire, an additional charterhire equal to the excess, if any, of a weighted average of the daily time charter rates for three round-trip trade routes traditionally served by VLCCs, less an agreed amount of $10,500, representing daily operating costs over the Base Rate. This charterhire computation enabled the Company to receive the greater of (i) an average of prevailing spot charter rates for VLCCs trading on such routes after deducting daily operating costs of $10,500 during the initial term of the Charters.

New Operations

        Each of the Vessels is now owned by a New Subsidiary and has been renamed and reflagged in the Marshall Islands and is currently deployed either on time charters or in the spot market, operating on routes between the Arabian Gulf and the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port. The following chart provides information on the current deployment of our Vessels:

Vessel Name	Flag	Employment Status	Expiration Date
Camden	Marshall Islands	Time charter	March, 2009
Chelsea	Marshall Islands	Spot market	n/a
Hampstead	Marshall Islands	Time charter	April, 2007
Kensington	Marshall Islands	Time charter	April, 2007
Mayfair	Marshall Islands	Spot Market	n/a

        We believe that operating our Vessels between time charter and the spot market will enable us to take advantage of higher charter rates in the spot market, while maintaining stability through long-term charters.

Management Agreement

        Upon expiration of the Shell International charters in February 2004, we amended our agreement with ICB Shipping (Bermuda) Ltd. (the "Manager") pursuant to which the Manager now assumes operational responsibility for the Vessels and has agreed to recharter the Vessels, subject to the approval of the Board of Directors. Under the Management Agreement the Manager is required to manage the day-to-day business of the Company subject, always, to the objectives and policies of the Company as established from time to time by the Board. All decisions of a material nature concerning the business of the Company are reserved to the Company's Board of Directors. The Management Agreement will terminate in 2012, unless earlier terminated pursuant to the terms thereof, as discussed below.

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        For its services under the Management Agreement during the period of the charters with Shell International, the Manager was entitled to a Management Fee equal to $750,000 per annum. In view of the increase in expenses to be borne directly by the Company due to the Company undertaking to perform certain operational responsibilities with respect to the Vessels since the termination of the Charters, the Management Fee has been reduced to $630,000 per year. The Company will be responsible for paying its own administrative expenses including such items as audit fees, legal and professional fees, registrar's fees, and director's and officer's fees and expenses. The Company believes that these management fees are substantially on the same terms that would be obtained from a non-affiliated party. The Manager was not affiliated with the Company, the Charterer or Guarantors at the time these fees were negotiated.

        Pursuant to the Management Agreement, as amended, the Manager is required to pay from the Management Fee, on behalf of the Company, certain of the Company's expenses; provided, however, that the Manager is not obligated to pay, and the Company is required to pay from its own funds (i) all expenses, including attorneys' fees and expenses, incurred on behalf of the Company in connection with (A) the closing of the Company's public offering and all fees and expenses related thereto and to the documents and agreements described herein, including in connection with the Finance Leases, the Credit Facility and the Loan Agreement, (B) any litigation commenced by or against the Company unless arising from the Manager's gross negligence or willful misconduct, and (C) any investigation by any governmental, regulatory or self-regulatory authority involving the Company or the Offerings unless arising from the Manager's gross negligence or willful misconduct, (ii) all premiums for insurance of any nature, including directors' and officers' liability insurance and general liability insurance, (iii) all costs in connection with the administration and the registration and listing of the Common Shares, (iv) principal and interest on the Loan, (v) brokerage commissions, if any, payable by the Company, (vi) all costs and expenses required to be incurred or paid by the Company in connection with the redelivery of any Vessel following the expiration or earlier termination of the related charter, (including, without limitation, any drydocking fees and the cost of special surveys and appraisals) and (vii) any amount due to be paid by the Company pursuant to the Loan Agreement. The Manager shall, at its own cost and expense, provide all office accommodation, equipment, office stationery, staff, staff salaries and ancillary office expenses required for the performance of its services as Manager for the Company. Remuneration to technical managers for technical and accounting services with respect to the Vessels is paid directly by the relevant New Subsidiary to the relevant technical manager.

        Notwithstanding the foregoing, the Manager will have no liability to the Company under the Management Agreement for errors of judgment or negligence other than its gross negligence or willful misconduct.

        Upon the expiration of the Shell International charters on February 27, 2004 and the Company's shareholders' decision to continue the Company in business and not sell the Vessels, the Manager became obligated under the Management Agreement to attempt to recharter each Vessel on an arms-length basis upon such terms as the Manager deems appropriate, subject to the approval of the Board. The Manager will receive a commission equal to 1.25% of the gross freight earned from such rechartering (which is the standard industry commission). The Manager, on behalf of the Company, may utilize the services of brokers and lawyers, and enter into such compensation arrangements with them, subject to the Board's approval, as the Manager deems appropriate.

        The Company may terminate the Management Agreement at any time upon 30 days' notice to the Manager for any reason, provided that any such termination shall have been approved by a resolution duly adopted by the affirmative vote of the holders of at least 66²/3% of the Company's outstanding Common Shares. The Company may terminate the Management Agreement at any time upon five business days' prior written notice to the Manager in the event of the Manager's material breach thereof, the failure of the Manager to maintain adequate authorization to perform its duties thereunder, the Manager's insolvency, in the event that it becomes unlawful for the Manager to perform its duties thereunder or if the Manager ceases to be wholly-owned, directly or indirectly, by ICB Shipping Aktiebolag (publ) or its

9

successor as ultimate parent of the Manager. Frontline, with its acquisition of ICB Shipping Aktiebolag (publ), is ICB's successor as ultimate parent of the Manager. The Manager may terminate the Management Agreement upon ten business days' prior written notice to the Company in the event that the Company undergoes a "change of control" which is the election of any director whose election was not recommended by the then current Board. Upon any termination of the Management Agreement, the Manager is required to promptly wind up its services thereunder in such a manner as to minimize any interruption to the Company's business and submit a final accounting of funds received and disbursed under the Management Agreement to the Company and any undisbursed funds of the Company in the Manager's possession or control will be promptly paid by the Manager as directed by the Company. The Company believes that in the case of any termination of the Management Agreement, the Company could obtain an appropriate alternative arrangement for the management of the Company, although there can be no assurance that such alternative arrangement would not cause the Company to incur additional cash expenses. In the case of a termination without cause by the Company upon a resolution adopted by the holders of at least 66²/3% of the Company's Common Shares (as described above) or by the Manager in the case of a "change in control," the Company shall pay to the Manager an amount equal to the present value calculated at a discount rate 5% per annum of all fees which the Manager would have received through the fifteenth anniversary of February 27, 1997, the date the vessels were originally delivered to the Company, in the absence of such termination.

Industry Conditions

        The oil tanker industry has been highly cyclical, experiencing volatility in charterhire rates and vessel values resulting from changes in the supply of and the demand for crude oil and tanker capacity. The demand for tankers is influenced by, among other factors, the demand for crude oil, global and regional economic conditions, developments in international trade, changes in seaborne and other transportation patterns, weather patterns, oil production, armed conflicts, port congestion, canal closures, embargoes and strikes. In addition, the Company anticipates that the future demand for VLCCs, such as the Vessels, will also be dependent upon continued economic growth in the United States, Continental Europe and the Far East and competition from pipelines and other sizes of tankers. Adverse economic, political, social or other developments in any of these regions could have an adverse effect on the Company's business and results of operations. In addition, even if demand for crude oil grows in these areas, demand for VLCCs may not necessarily grow and may even decline. Demand for crude oil is affected by, among other things, general economic conditions, commodity prices, environmental concerns, taxation, weather and competition from alternatives to oil. Demand for the seaborne carriage of oil depends partly on the distance between areas that produce crude oil and areas that consume it and their demand for oil. The incremental supply of tanker capacity is a function of the delivery of new vessels and the number of older vessels scrapped, in lay-up, converted to other uses, reactivated or lost. Such supply may be affected by regulation of maritime transportation practices by governmental and international authorities. All of the factors influencing the supply of and demand for oil tankers are outside the control of the Company, and the nature, timing and degree of changes in industry conditions are unpredictable.

        VLCCs are specifically designed for the transportation of crude oil and, due to their size, are used to transport crude oil primarily from the Arabian Gulf to the Far East, Northern Europe, the Caribbean and the Louisiana Offshore Oil Port ("LOOP"). While VLCCs are increasingly being used to carry crude oil from other areas, any decrease in shipments of crude oil from the Arabian Gulf would have a material adverse effect on the Company.

        Among the factors which could lead to such a decrease are (i) increased crude oil production from non-Arabian Gulf areas, (ii) increased refining capacity in the Arabian Gulf area, (iii) increased use of existing and future crude oil pipelines in the Arabian Gulf area, (iv) a decision by Arabian Gulf oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production, (v) armed conflict in the Arabian Gulf or along VLCC trading routes, (vi) political or other

10

factors and (vii) the development and the relative costs of nuclear power, natural gas, coal and other alternative sources of energy.

        VLCC demand is primarily a function of demand for Arabian Gulf crude oil, which in turn is primarily dependent on the economies of the world's industrial countries and competition from alternative energy sources. A wide range of economic, political, social and other factors can significantly affect the strength of the world's industrial economies and their demand for Arabian Gulf crude oil. One such factor is the price of worldwide crude oil. The world's oil markets have experienced high levels of volatility in the last 25 years. If oil prices were to rise dramatically, the economies of the world's industrial countries may experience a significant downturn. See Item 5. Operating and Financial Review and Prospects—Operating Results—The Tanker Market.

Vessel Values

        Tanker values have generally experienced high volatility. The fair market value of oil tankers, including the Vessels, can be expected to fluctuate, depending upon general economic and market conditions affecting the tanker industry and competition from other shipping companies, types and sizes of vessels, and other modes of transportation. In addition, as vessels grow older, they may be expected to decline in value.

        Since the mid-1970s, during most periods there has been a substantial worldwide oversupply of crude oil tankers, including VLCCs. In addition, the market for secondhand VLCCs has generally been weak since the mid-1970s. Notwithstanding the aging of the world tanker fleet and the adoption of new environmental regulations which will result in a phaseout of many single hull tankers, significant deliveries of new VLCCs would adversely affect market conditions.

Loss and Liability Insurance

        There are a number of risks associated with the operation of ocean-going vessels, including mechanical failure, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, the operation of any vessel is subject to the inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. The United States Oil Pollution Act of 1990, or OPA, which imposes virtually unlimited liability upon owners, operators and demise charterers of any vessel trading in the United States exclusive economic zone for certain oil pollution accidents in the United States, has made liability insurance more expensive for ship owners and operators trading in the United States market and has also caused insurers to consider reducing available liability coverage. We bear all risks associated with the operation of the Vessels, including, without limitation, any total loss of one or more Vessels.

        The Manager is responsible for arranging for the insurance of our vessels in line with standard industry practice. In accordance with that practice, we maintain hull and machinery and war risks insurance, which includes the risk of actual or constructive total loss, and protection and indemnity insurance with mutual assurance associations. Our protection and indemnity insurance, or P&I insurance, covers third-party liabilities and other related expenses from, among other things, injury or death of crew, passengers and other third parties, claims arising from collisions, damage to cargo and other third-party property, and pollution arising from oil or other substances. Our current P&I insurance coverage for pollution is the maximum commercially available amount of $1.0 billion per tanker per incident and is provided by mutual protection and indemnity associations. Each of the Vessels is entered in a protection and indemnity association which is a member of the International Group of Protection and Indemnity Mutual Assurance Associations. The 14 protection and indemnity associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. Each protection and indemnity association has

11

capped its exposure to this pooling agreement at $4.3 billion. As a member of protection and indemnity associations, which are, in turn, members of the International Group, we are subject to calls payable to the associations based on its claim records as well as the claim records of all other members of the individual associations and members of the pool of protection and indemnity associations comprising the International Group.

        We believe that our current insurance coverage is adequate to protect us against the accident-related risks involved in the conduct of our business and that we maintain appropriate levels of environmental damage and pollution insurance coverage, consistent with standard industry practice. However, there is no assurance that all risks are adequately insured against, that any particular claims will be paid or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future.

Environmental and Other Regulations

        International conventions and national, state and local laws and regulations of the jurisdictions where our tankers operate or are registered significantly affect the ownership and operation of our tankers. We believe we are currently in substantial compliance with applicable environmental and regulatory laws regarding the ownership and operation of our tankers. However, because existing laws may change or new laws may be implemented, we cannot predict the ultimate cost of complying with all applicable requirements or the impact they will have on the resale value or useful lives of our tankers. Future, non-compliance could require us to incur substantial costs or to temporarily suspend operation of our tankers.

        We believe the heightened environmental and quality concerns of insurance underwriters, regulators and charterers are leading to greater inspection and safety requirements on all vessels and creating an increasing demand for modern vessels that are able to conform to the stricter environmental standards. We maintain high operating standards for our vessels that emphasizes operational safety, quality maintenance, continuous training of our crews and officers and compliance with United States and international regulations. Our vessels are subject to both scheduled and unscheduled inspections by a variety of governmental and private entities, each of which may have unique requirements. These entities include the local port authorities such as the U.S. Coast Guard, harbour master or equivalent, classification societies, flag state administration or country of registry, and charterers, particularly terminal operators and major oil companies which conduct frequent vessel inspections. Each of these entities may have unique requirements that we must comply with.

Environmental Regulation—IMO

        The United Nation's International Maritime Organization, or IMO, has adopted regulations that set forth pollution prevention requirements for tankers. These regulations, which have been implemented in many jurisdictions in which our tankers operate, provide, in part, that:

•

25-year old tankers must be of double-hull construction or of a mid-deck design with double-sided construction, unless:

(1)    they have wing tanks or double-bottom spaces not used for the carriage of oil which cover at least 30% of the length of the cargo tank section of the hull or bottom; or

(2)    they are capable of hydrostatically balanced loading, which means that they are loaded in such a way that if the hull is breached, water flows into the tanker, displacing oil upwards instead of into the sea;

•

30-year old tankers must be of double-hull construction or mid-deck design with double-sided construction.

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        Also under IMO regulations, a tanker must be of double-hull construction or a mid-deck design with double-sided construction, or be of another approved design ensuring the same level of protection against oil pollution, if the tanker:

•

is the subject of a contract for a major conversion or original construction on or after July 6, 1993;



•

commences a major conversion or has its keel laid on or after January 6, 1994; or



•

completes a major conversion or is a newbuilding delivered on or after July 6, 1996.

        The IMO recently adopted regulations that require the phase-out of most single hull tankers by 2015 or earlier, depending on the age of the vessel and whether or not it complies with requirements for protectively located segregated ballast tanks. Under these new regulations, which became effective in September 2002, the maximum permissible age for tankers after 2007 will be 26 years. The new regulations also provide for increased inspection and verification requirements. However, as a result of the oil spill in November 2002 relating to the loss of the m.t. Prestige, which was owned by a company not affiliated with us, in December 2003 the Marine Environmental Protection Committee of the IMO adopted a proposed amendment to the International Convention for the Prevention of Pollution from Ships to accelerate the phase out of single hull tankers from 2015 to 2010 unless the relevant flag states extend the date to 2015. This proposed amendment will come into effect in April 2005 unless objected to by a sufficient number of member states. We do not know whether any of our vessels will be subject to this accelerated phase-out, but this could result in a number of our vessels being unable to trade in many markets after 2010. Moreover, the IMO may still adopt regulations in the future that could adversely affect the remaining useful lives of our single hull tankers as well as our ability to generate income from them. All of our Vessels are double hull tankers that were built in 1995 or later.

        The IMO has also negotiated international conventions that impose liability for oil pollution in international waters and a signatory's territorial waters. In September 1997, the IMO adopted Annex VI to the International Convention for the Prevention of Pollution from Ships to address air pollution from ships. Annex VI is expected to be ratified during 2004, and will become effective 12 months after ratification. Annex VI, when it becomes effective, will set limits on sulfur oxide and nitrogen oxide emissions from ship exhausts and prohibit deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions. The Manager is formulating a plan to comply with the Annex VI regulations once they come into effect. Compliance with these regulations could require the installation of expensive emission control systems and could have an adverse financial impact on the operation of our vessels. Additional or new conventions, laws and regulations may be adopted that could adversely affect the Manager's ability to manage our ships.

        The IMO's International Safety Management Code, or ISM Code, also affects our operations. The ISM Code requires the party with operational control of a vessel to develop a safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. The Manager will rely upon the safety management system that the Manager and its third party technical managers have developed.

        The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel's management with ISM Code requirements for a safety management system. No vessel can obtain a certificate unless its manager has been awarded a Document of Compliance, issued by each flag state, under the ISM Code. All of our vessels and their operators have received ISM certification. The Manager is required to renew these documents of compliance and safety management certificates annually.

        Non-compliance with the ISM Code and other IMO regulations may subject the vessel owner or a bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected

13

vessels and may result in a tankers denial of access to, or detention in, some ports. Both the U.S. Coast Guard and European Union authorities have indicated that vessels not in compliance with the ISM Code by the applicable deadlines will be prohibited from trading in U.S. and European Union ports, as the case may be.

        The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on the operation of oil tankers.

Environmental Regulation—OPA/CERCLA

        The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for environmental protection and cleanup of oil spills. OPA affects all owners and operators whose vessels trade with the United States or its territories or possessions, or whose vessels operate in the waters of the United States, which include the U.S. territorial waters and the two hundred nautical mile exclusive economic zone of the United States. The Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which also impacts our operations, applies to the discharge of hazardous substances (other than oil) whether on land or at sea.

        Under OPA, vessel owners, operators and bareboat or "demise" charterers are "responsible parties" who are liable regardless of fault, individually and as a group, for all containment costs, clean-up costs and for other damages arising from oil spills from their vessels. These other damages may include natural resources damages and related assessment costs, real and personal property damages, loss of subsistence use of natural resources, the loss of taxes, rents, royalties, profits and earnings capacity resulting from an oil spill and the cost of public services necessitated by an oil spill. OPA limits a responsible party's liability to the greater of $1,200 per gross ton or $10 million per vessel over 3,000 gross tons, subject to adjustment for inflation. OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters. In some cases, states that have enacted this type of legislation have not yet issued implementing regulations defining tanker owners' responsibilities under these laws.

        CERCLA, which applies to owners and operators of vessels, contains a liability regime similar to OPA and provides for cleanup, removal and natural resource damages. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million. These limits of liability do not apply, however, where the incident is caused by violation of applicable U.S. federal safety, construction or operating regulations, or by the responsible party's gross negligence or wilful misconduct. These limits do not apply if the responsible party fails or refuses to report the incident or to co-operate and assist in connection with the substance removal activities. OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. We believe that we are in substantial compliance with OPA, CERCLA and all applicable state regulations in the ports where our Vessels will call.

        OPA requires owners and operators of vessels to establish and maintain with the U.S. Coast Guard evidence of financial responsibility sufficient to meet the limit of their aggregate potential strict liability under OPA and CERCLA. The U.S. Coast Guard has enacted regulations requiring evidence of financial responsibility in the amount of $1,500 per gross ton for tankers, coupling the OPA limitation on liability of $1,200 per gross ton with the CERCLA liability limit of $300 per gross ton. Under the regulations, evidence of financial responsibility may be demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA regulations, an owner or operator of more than one tanker must demonstrate evidence of financial responsibility for the entire fleet in an amount equal only to the financial responsibility requirement of the tanker having the greatest maximum liability under OPA/CERCLA. The Manager has provided requisite guarantees and received certificates of financial responsibility from the U.S. Coast Guard for each of our tankers required to have one.

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        Under OPA, with limited exceptions, all newly built or converted tankers operating in U.S. waters must be built with double-hulls. Existing vessels that do not comply with the double-hull requirement must be phased out over a 20-year period beginning in 1995 based on size, age and place of discharge, unless retrofitted with double-hulls. Notwithstanding the phase-out period, OPA currently permits existing single-hull tankers to operate until the year 2015 if their operations within U.S. waters are limited to discharging at the Louisiana Offshore Oil Port or unloading with the aid of another vessel, a process referred to as "lightering," within authorized lightering zones more than 60 miles off-shore.

        OPA also amended the Federal Water Pollution Control Act to require owners or operators of tankers operating in the waters of the United States must file vessel response plans with the U.S. Coast Guard, and their tankers are required to operate in compliance with their U.S. Coast Guard approved plans. These response plans must, among other things:

•

address a "worst case" scenario and identify and ensure, through contract or other approved means, the availability of necessary private response resources to respond to a "worst case discharge";



•

describe crew training and drills; and



•

identify a qualified individual with full authority to implement removal actions.

        Vessel response plans for our tankers operating in the waters of the United States have been approved by the U.S. Coast Guard. In addition, the U.S. Coast Guard has announced it intends to propose similar regulations requiring certain vessels to prepare response plans for the release of hazardous substances. The Manager is responsible for ensuring our Vessels comply with any additional regulations.

Environmental Regulation—Other

        Although the United States is not a party to these conventions, many countries have ratified and follow the liability plan adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage of 1969 and the Convention for the Establishment of an International Fund for Oil Pollution of 1971. Under these conventions, and depending on whether the country in which the damage results is a party to the 1992 Protocol to the International Convention on Civil Liability for Oil Pollution Damage, a vessel's registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain complete defenses. Under an amendment that became effective November 1, 2003 for vessels of 5,000 to 140,000 gross tons (a unit of measurement for the total enclosed spaces within a vessel), liability will be limited to approximately $6.7 million plus $938 for each additional gross ton over 5,000. For vessels of over 140,000 gross tons, liability will be limited to approximately $133.4 million. The current maximum amount is approximately $81.2 million. As the convention calculates liability in terms of a basket of currencies, these figures are based on currency exchange rates on January 2, 2004. The right to limit liability is forfeited under the International Convention on Civil Liability for Oil Pollution Damage where the spill is caused by the owner's actual fault and under the 1992 Protocol where the spill is caused by the owner's intentional or reckless conduct. Vessels trading to states that are parties to these conventions must provide evidence of insurance covering the liability of the owner. In jurisdictions where the International Convention on Civil Liability for Oil Pollution Damage has not been adopted, various legislative schemes or common law governs, and liability is imposed either on the basis of fault or in a manner similar to that convention. We believe that our P&I insurance covers the liability under the plan adopted by the IMO.

        In July 2003, in response to the m.t. Prestige oil spill in November 2002, the European Union adopted legislation that prohibits all single hull tankers from entering into its ports or offshore terminals by 2010. The European Union has also banned all single hull tankers carrying heavy grades of oil from entering or leaving its ports or offshore terminals or anchoring in areas under its jurisdiction. Commencing in 2005, certain single hull tankers above 15 years of age will also be restricted from entering or leaving European Union ports or offshore terminals and anchoring in areas under European Union jurisdiction. The

15

European Union is considering legislation that would: (1) ban manifestly sub-standard vessels (defined as those over 15 years old that have been detained by port authorities at least twice in a six month period) from European waters and create an obligation of port states to inspect vessels posing a high risk to maritime safety or the marine environment; and (2) provide the European Commission with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies. The sinking of the m.t. Prestigeand resulting oil spill in November 2002 has lead to the adoption of other environmental regulations by certain European Union nations. For example, Italy announced a ban of single-hull crude oil tankers over 5,000 dwt from most Italian ports, effective April 2001. Spain has announced a similar prohibition. It is impossible to predict what legislation or additional regulations, if any, may be promulgated by the European Union or any other country or authority.

        In addition, most U.S. states that border a navigable waterway have enacted laws that impose strict liability for clean-up costs and damages resulting from a discharge of oil or a release of a hazardous substance. As permitted by OPA, these state laws may provide for unlimited liability for oil spills occurring within their boundaries.

Vessel Security Regulations

        Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Security Act of 2002 (MTSA) came into effect. To implement certain portions of the MTSA, in July 2003, the U.S. Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to the International Convention for the Safety of Life at Sea (SOLAS) created a new chapter of the convention dealing specifically with maritime security. The new chapter is scheduled to go into effect in July 2004 and will impose various detailed security obligations on vessels and port authorities, most of which are contained in the newly created International Ship and Port Facilities Security (ISPS) Code. Among the various requirements are:

•

on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications;



•

on-board installation of ship security alert systems;



•

the development of vessel security plans; and



•

compliance with flag state security certification requirements.

        The U.S. Coast Guard regulations, intended to align with international maritime security standards, exempt non-U.S. tankers from MTSA vessel security measures provided such vessels have on board, by July 1, 2004, a valid International Ship Security Certificate (ISSC) that attests to the vessel's compliance with SOLAS security requirements and the ISPS Code. The Manager will implement the various security measures addressed by the MTSA, SOLAS and the ISPS Code and ensure that our tankers attain compliance with all applicable security requirements within the prescribed time periods. We do not believe these additional requirements will have a material financial impact on our operations.

Inspection by Classification Societies

        Every commercial vessel's hull and machinery is "classed" by a classification society authorised by its country of registry. The classification society certifies that the vessel has been built and maintained in accordance with the rules of such classification society and complies with applicable rules and regulations of the country of registry of the vessel and the international conventions to which that country is a member. Our vessels have all been certified as "in class." Each vessel is inspected by a surveyor of the classification society every year, every two and a half years and every four to five years. Should any defects be found, the

16

classification surveyor will issue a "recommendation" for appropriate repairs which have to be made by the shipowner within the time limit prescribed.

Competition

        The market for international seaborne crude oil transportation services is highly fragmented and competitive. Seaborne crude oil transportation services generally are provided by two main types of operators: major oil company captive fleets (both private and state-owned) and independent shipowner fleets. In addition, several owners and operators pool their vessels together on an ongoing basis, and such pools are available to customers to the same extent as independently owned and operated fleets. Many major oil companies and other oil trading companies, the primary charterers of the vessels owned or controlled by the Company, also operate their own vessels and use such vessels not only to transport their own crude oil but also to transport crude oil for third party charterers in direct competition with independent owners and operators in the tanker charter market. Competition for charters is intense and is based upon price, location, size, age, condition and acceptability of the vessel and its manager. Competition is also affected by the availability of other size vessels to compete in the trades in which the Company engages.

C.    ORGANIZATIONAL STRUCTURE

        The Company has ten wholly-owned Subsidiaries. The following table sets out the details of the Subsidiaries:

Name	Country Of Incorporation	Ownership Interest		Vessel Owned
New Subsidiaries:
KTL Camden, Inc.	Republic of Liberia	100	%	Camden
KTL Chelsea, Inc.	Republic of Liberia	100	%	Chelsea
KTL Kensington, Inc.	Republic of Liberia	100	%	Kensington
KTL Hampstead, Inc.	Republic of Liberia	100	%	Hampstead
KTL Mayfair, Inc.	Republic of Liberia	100	%	Mayfair
Original Subsidiaries:
Cedarhurst Tankers LDC	Cayman Islands	100	%	—
Hewlett Tankers LDC	Cayman Islands	100	%	—
Inwood Tankers LDC	Cayman Islands	100	%	—
Lawrence Tankers LDC	Cayman Islands	100	%	—
Woodmere Tankers LDC	Cayman Islands	100	%	—

        The New Subsidiaries acquired the Vessels from the Original Subsidiaries following the expiration of the Shell International charters in February 2004. As of December 31, 2003, the Vessels were owned by the Original Subsidiaries.

D.    PROPERTY, PLANT AND EQUIPMENT

        Each Vessel is an approximately 298,000 deadweight tonne ("dwt") double hull VLCC built by Daewoo Heavy Industries, Ltd. (the "Builder") at its shipyard in Korea. The Vessels meet all material

17

existing regulatory requirements affecting the Vessels and their operations. The name, dwt, hull type and date of original delivery from the Builder's yard are set forth below.

Vessel Name	Approximate DWT	Hull Type	Date Of Delivery From Builder's Yard
Camden	298,000	Double	June 2, 1995
Chelsea	298,000	Double	August 1, 1995
Mayfair	298,000	Double	September 28, 1995
Kensington	298,000	Double	November 15, 1995
Hampstead	298,000	Double	March 5, 1996

        The Vessels are modern, high-quality double hull tankers designed for enhanced safety and reliability and for relatively low operating and maintenance costs. Design features include a cargo system designed for optimum port performance, a high grade anti-corrosion paint system and pipeline materials which have been specified with a view to long service, an efficient power generation system including shaft generator, additional firefighting and safety equipment over and above minimum standards and improved structural design.

        The Vessels are all registered in the Republic of the Marshall Islands.

        Other than its interests in the Vessels, the Company has no interest in any other property.

ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A.    OPERATING RESULTS

        In February 1997, the Company's five Original Subsidiaries existing at that time each purchased one VLCC from their previous owner and immediately delivered the Vessels to Shell International under five separate "hell and high water" bareboat charters, each with a minimum term of seven years that expired on February 27, 2004, plus up to 30 days at Shell International's option.

        Under the charters, Shell International paid the higher of a base rate of hire or a spot market related rate. The charterhire was paid quarterly in arrears and the spot market rate of hire was assessed on a quarterly basis. In each quarter where the spot market related rate was lower than the base rate the charterhire paid was the base rate. In each quarter where the spot market related rate was higher than the base rate, the spot market related rate was paid.

        The base rate was calculated as the aggregate of a bareboat charter component of $22,069 per vessel per day and an operating element of $10,500 per day (over the initial term of the charters) which resulted in a time charter equivalent rate of $32,569 per day.

        The spot market related rate is assessed through a formula agreed between the Company and Shell International and based on market awards provided by the London Tanker Broker Panel. The London Tanker Broker Panel provided for each quarter the average spot rates for three standard notional round voyages for ships similar to the Vessels:

i)

Arabian Gulf to Rotterdam with 280,000 tonnes of cargo;



ii)

Arabian Gulf to Singapore with 260,000 tonnes of cargo; and



iii)

Arabian Gulf to Japan with 260,000 tonnes of cargo.

        The relevant spot rates were weighted with (i) representing 50% and (ii) and (iii) each representing 25% when the spot market related rate is determined.

18

        The calculated spot market related rates for each of the years ended December 31, 2003, 2002, and 2001 were:

	2003		2002		2001
First Quarter	$	61,713	$	16,327	$	68,506
Second Quarter	$	53,186	$	13,057	$	42,949
Third Quarter	$	25,063	$	9,093	$	25,163
Fourth Quarter	$	59,688	$	31,347	$	33,360

Recent Developments

        Following the expiration of the Shell International charters, the Company has entered into a long-term time charter for one of the Vessels with the Malaysian International Shipping Corporation (MISC). The five-year agreement will help to provide a steady and predictable flow of revenue with secured income of approximately $31,000 per day for the duration of the charter. The arrangement commenced in mid March 2004 upon the redelivery of the Vessel from Shell International.

        Two of the Company's Vessels will be chartered to Tankers International, LLC on medium-term charters each for a period of three years at a rate of $30,000 per day plus a 50:50 profit sharing arrangement for earnings in excess of $30,000 per day calculated by reference to the BITR Index. The Baltic International Trading Route (BITR) Index is reported daily and combines daily spot market rates for 16 international oil routes. Tankers International LLC is a pool for the commercial operations of four large tanker owners and operators: A.P. Moller, Euronav Luxembourg SA., Overseas Shipholding Group, Inc and Reederei "Nord" Klaus E. Oldendorff. The two time charters commenced in April 2004.

        The Company's remaining two vessels are trading on the spot market. It is expected that these two vessels will continue on the spot market although the Company will evaluate market opportunities and employment options that may become available.

Factors Affecting Our Future Results

        The principal factors that are expected to affect our future results of operations and financial position include:

•

the earnings of our vessels in the charter market;



•

vessel expenses;



•

administrative expenses;



•

depreciation; and



•

interest expense.

        We have derived our historical earnings from the bareboat charters with Shell International. In the future our Vessels may be operated under bareboat charters, time charters, voyage charters and contracts of affreightment. A bareboat charter is a contract for the use of a vessel for a specified period of time where the charterer pays substantially all of the vessel voyage costs and operating costs. A time charter is a contract for the use of a vessel for a specific period of time during which the charterer pays substantially all of the vessel voyage costs but the vessel owner pays the operating costs. A voyage charter is a contract for the use of a vessel for a specific voyage in which the vessel owner pays substantially all of the vessel voyage costs and operating costs. A contract of affreightment is a form of voyage charter in which the owner agrees to carry a specific type and quantity of cargo in two or more shipments over an agreed period of time. Accordingly, for equivalent profitability, charter income under a voyage charter would be greater than that under a time charter to take account of the owner's payment of the vessel voyage costs. In order to compare vessels trading under different types of charters, it is standard industry practice to measure the

19

revenue performance of a vessel in terms of average daily time charter equivalent earnings, or TCEs. For voyage charters, this is calculated by dividing net operating revenues by the number of days on charter. Days spent offhire are excluded from this calculation.

        The tanker industry has historically been highly cyclical, experiencing volatility in profitability, vessel values and freight rates. In particular, freight and charter rates are strongly influenced by the supply of tanker vessels and the demand for oil transportation services. We will be exposed to such volatility with our Vessels operating on the spot market and it will affect the profit sharing arrangement that we have for our Vessels on time charter to Tankers International, LLC.

        Operating costs are the direct costs associated with running a vessel and include crew costs, vessel supplies, repairs and maintenance, drydockings, lubricating oils and insurance. We will bear the operating costs for our Vessels that are operating on the spot market and for the three Vessels that have been fixed under time charters.

        Administrative expenses are composed of general corporate overhead expenses, including audit fees, directors' fees and expenses, registrar's fees, investor relations and publication expenses, legal and professional fees and other general administrative expenses. In accordance with the terms of the Management Agreement, as amended, we will be responsible for such costs from February 1, 2004.

        Depreciation, or the periodic cost charged to our income for the reduction in usefulness and long-term value of our vessels, is also related to the number of vessels we own. We depreciate the cost of our vessels, less their estimated residual value, over their estimated useful life on a straight-line basis.

        Interest expense depends on our overall borrowing levels and will change with prevailing interest rates, although the effect of these changes may be reduced by interest rate swaps or other derivative instruments. As at December 31, 2003, all of our debt was floating rate debt that was swapped to a fixed rate of approximately 7.14% through the use of an interest rate swap. In March 2004 we refinanced our debt with a loan of $140 million which bears interest at the annual rate of LIBOR plus a margin. We may enter into further interest rate swap arrangements if we believe it is advantageous to do so.

        Although inflation may moderate impact on our vessel operating expenses and corporate overheads, management does not consider inflation to be a significant risk to direct costs in the current and foreseeable economic environment. In addition, in a shipping downturn, costs subject to inflation can usually be controlled because shipping companies typically monitor costs to preserve liquidity and encourage suppliers and service providers to lower rates and prices in the event of a downturn.

The Tanker Market

        Fiscal year 2003 started with extremely strong charter rates which were mainly driven by factors such as the strike in Venezuela which interrupted crude oil production and resulted in longer haul imports, a cold winter in the northern hemisphere resulting in increased demand for heating oil and increased consumption in the Far East especially China, all of which have resulted in spot market rates being significantly stronger than in 2002.

        The second and third quarters experienced a weakening in rates as compared to the first quarter, largely due to the recovery of Venezuelan exports following the period of civil unrest. In addition, the outbreak of SARS set off a decline in Chinese oil demand in the second half of 2003, along with the official cessation of hostilities in Iraq, which relieved concerns over the security of oil supplies from the Middle East.

        In the fourth quarter of 2003 VLCC rates rallied back as Chinese demand for oil increased, forcing OPEC to exceed production quotas set earlier in the quarter. Oil demand experienced its strongest growth in 15 years with and increase of approximately 3.5% for the 2003 calendar year.

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Critical Accounting Policies and Estimates

        The Company's accounting policies are more fully described in Note 2 of the Notes to Consolidated Financial Statements. As disclosed in Note 2 of the Notes to Consolidated Financial Statements, the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic and industry conditions, present and expected conditions in the financial markets, and in some cases, the credit worthiness of counter parties to contracts held by the Company. The Company constantly re-evaluates these significant factors and makes adjustments where facts and circumstances dictate. Historically, actual results have not significantly deviated from those determined using the estimates described above. In addition, the Company's accounting policies may change as a result of the change in the Company's business and operations in 2004 after the expiration of the Shell International charters. The following is a discussion of the accounting policies applied by the Company that are considered to involve a higher degree of judgment in their application.

Vessels, Depreciation and Impairment

        The cost of the Company's vessels is depreciated on a straight-line basis over the vessels' remaining economic useful lives. Management estimates the useful life of the Company's vessels to be 25 years. This is a common life expectancy applied in the shipping industry. If the estimated economic useful life is incorrect, or circumstances change and the estimated economic useful life has to be revised, an impairment loss could result in future periods and/or annual depreciation expense could be increased. Our vessels are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Factors we consider important that could affect recoverability and trigger impairment include significant underperformance relative to expected operating results, new regulations that change the estimated useful economic lives of our vessels and significant negative industry or economic trends. In assessing the recoverability of the vessels' carrying amounts when an indicator of impairment is present, the Company must make assumptions regarding estimated future cash flows. These assumptions include assumptions about the spot market rates for vessels, the revenues the vessel could earn under time charter, voyage charter or bareboat charter, the operating costs of our vessels and the estimated economic useful life of our vessels. In making these assumptions, the Company refers to historical trends and performance as well as any known future factors. If our review indicates impairment, an impairment charge is recognized based on the difference between carrying value and fair value. Fair value is typically established using an average of three independent valuations.

YEAR ENDED DECEMBER 31, 2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

Charterhire

        In 2003, charterhire revenue totaled $75,246,200, an increase of 87% compared with $40,275,925 in the year ended December 31, 2002. In 2002, the conditions prevailing in the tanker market meant that only the base rate charterhire of $22,069 per day per vessel was received. In the fourth quarter of 2002 the market began to strengthen and this continued into 2003. In 2003, the company benefited from this continued strengthening, and in accordance with the terms of the charters to Shell International, received Additional Hire. The Additional Hire which is calculated on a quarterly basis, totaled $34,970,275 for 2003.

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Operating Expenses

        Operating expenses increased in 2003 due to an increase in administrative expenses. This was the result of an increase in the premium paid for the Company's directors' and officers' liability insurance. During the term of the charters to Shell International, the Company did not incur significant administrative expenses, apart from premiums in respect of the Company's directors' and officers' and general liability insurance, which the Company prepays on an annual basis. Due to the expiration of the charters to Shell International and the change in the Company's operations in 2004, however, the Company's operating expenses will increase starting in the year 2004 due to vessel operating expenses, which mainly consist of crewing, repairs and maintenance, spare parts, insurance, stores and lubricants. There can be no assurance that the Company will not have other cash expenses or contingent liabilities for which reserves will be required.

Interest Income and Expense

        Interest income increased by $22,441 to $55,481 in 2003. This reflects the increased cash in 2003 due to the Additional Hire revenues in this period. In addition, the Board made the decision to withhold cash reserves for new operations to commence after the expiration of the Shell International charters, which resulted in an increase in interest income from funds on short term deposit.

        Interest expense increased by 0.2% to $8,961,950 in 2003 from $8,938,483 in 2002. Interest expense relates entirely to the primary loans made to the Company under the Credit Facility net of the hedging effects of the Company's interest rate swap agreement. The Company entered into an interest rate swap agreement (the "Swap") with Goldman Sachs Capital Markets, L.P., an affiliate of Goldman, Sachs & Co. (the "Swap Counterparty"), which effectively converted the Company's variable-rate Credit Facility to a fixed rate, assuming the Swap Counterparty performed its obligations thereunder.

        Amortization of the Credit Facility expense, the main component of other financial expenses, was $371,543 in both 2002 and 2003. In addition, during 2003 and 2002, the Company incurred a fee to the agent bank for the Credit Facility in the amount of $50,000. There can be no assurance that the Company will not have other financial expenses for which reserves will be required.

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

Charterhire

        In 2002, charterhire revenue totaled $40,275,925, a decrease of 35% compared with $61,534,335 in the year ended December 31, 2001. In 2001 the Company received total Additional Hire of $21,258,410, primarily relating to earnings in the first half of the year. In the second half of 2001 the market began to weaken and this continued into 2002 with no recovery until the fourth quarter of 2002. The strengthening in the fourth quarter was not sufficient to require any Additional Hire payment and therefore no Additional Hire was paid in fiscal 2002.

Operating Expenses

        Operating expenses increased in 2002 due to an increase in administrative expenses. This was the result of an increase in the premium paid for the Company's directors' and officers' liability insurance. During the term of the Charters, the Company did not incur significant administrative expenses, apart from premiums in respect of the Company's directors' and officers' and general liability insurance, which the Company prepays on an annual basis. There can be no assurance, however, that the Company will not have other cash expenses or contingent liabilities for which reserves will be required.

22

Interest Income and Expense

        Interest income decreased by $172,334 to $33,040 in 2002. This reflects the lower cash in 2002 due to the lack of Additional Hire revenues in this period.

        Interest expense decreased by 0.8% to $8,938,483 in 2002 from $9,008,839 in 2001. Interest expense relates entirely to the primary loans made to the Company pursuant to the Credit Facility net of the hedging effects of the Company's interest rate swap agreement. The Company entered into an interest rate swap agreement (the "Swap") with Goldman Sachs Capital Markets, L.P., an affiliate of Goldman, Sachs & Co. (the "Swap Counterparty"), which effectively converted the Company's variable-rate Credit Facility to a fixed rate, assuming the Swap Counterparty performed its obligations thereunder.

        Amortization of the Credit Facility expense, the main component of other financial costs, was $371,543 in both 2002 and 2001. In addition, during 2002 and 2001, the Company incurred a fee to the agent bank for the Credit Facility in the amount of $50,000.

B.    LIQUIDITY AND CAPITAL RESOURCES

        Total assets of the Company at December 31, 2003, were $28,796,816 compared with $347,824,729 at December 31, 2002. The Company's shareholders' equity at December 31, 2003, was $215,526,852 compared with $208,639,114 at December 31, 2002. This increase in shareholders' equity of $6,887,738 is due to net income for 2003 of $47,461,231 less distributions to the shareholders of $46,854,000 plus $6,280,507 of effects of the Company's hedge accounting which is recorded directly to shareholders' equity.

        Under the hedge accounting policy, at each year end the fair value of the interest rate swap contract is recorded as a liability at its negative fair value with an offsetting balance directly reducing shareholders' equity in the form of other comprehensive income. At December 31, 2003 the derivative liability was $5,309,885 compared with $11,590,392 at December 31, 2002, reflecting the unfavourable fair value of the interest rate swap at that date.

        Cash generated from operating activities in 2003 was $52,939,613 and $46,854,000 was distributed to shareholders.

        Although the Company's activities are conducted worldwide, the international shipping industry's functional currency is the United States Dollar and virtually all of the Company's operating revenues and most of its anticipated cash expenses are expected to be denominated in United States Dollars. Accordingly, the Company's operating results following expiration of Shell International charters in 2004 are not expected to be adversely affected by movements in currency exchange rates or the imposition of currency controls in the jurisdictions in which the vessels operate.

        In March 2004, the Company refinanced its existing Credit Facility with a Loan of $140 million. The Company is obligated to repay the Loan in twenty-eight quarterly installments of $2.8 million and a final installment of $61.6 million on the last payment date. The Loan Agreement provides for payment of interest on the outstanding principal balance of the Loan, quarterly in arrears at the annual rate of LIBOR plus a margin. The Company has not entered into any interest rate swap agreements in respect to the variable rate on the Loan Agreement.

        The Company's sources of capital have been the proceeds of its initial public offering, bank loans and the Finance Leases. While the Manager is required to bear certain of the Company's expenses, the Manager has no additional obligation to make additional capital contributions to the Company. The Company has had sufficient sources of income through the payment of charterhire by the Shell International during the term of the Shell International charters to pay ordinary recurring expenses that are not borne by the Manager and the Company expects that charterhire paid for time charters or in the spot market now that the Charters have expired will be sufficient sources of income for the Company to continue to pay ordinary recurring expenses including instalments due under the Loan Agreement.

23

Accordingly, it is the Company's opinion that the working capital is sufficient for the Company's present requirements. However, there can be no assurance that the Company will be able to pay or refinance its borrowings when the Loan becomes due, or that is will not incur extraordinary expenses.

Recently Issued Accounting Standards

        In June 2001, the U.S. Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for the Asset Retirement Obligations". Under SFAS No. 143, an entity shall recognize the fair value of a legal liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. If a reasonable estimate of fair value cannot be made in the period the asset retirement obligation is incurred, the liability shall be recognized when a reasonable estimate of fair value can be made. Upon initial recognition of a liability for an asset retirement obligation, an entity shall capitalize an asset retirement cost by increasing the carrying amount of the related long-lived asset by the same amount as the liability. An entity shall subsequently allocate that asset retirement cost to expense using a systematic and rational method over its useful life. SFAS No. 143 applies to legal obligations associated with the retirement of a tangible long-lived asset that result from the acquisition, construction, or development and/or the normal operation of a long-lived asset, with limited exceptions. SFAS No. 143 does not apply to obligations that arise solely from a plan to dispose of a long-lived asset, nor does it apply to obligations that result from the improper operation of an asset. The adoption of SFAS No. 143 by the Company on January 1, 2003 did not have any impact on the Company's consolidated financial position or results of operations.

        In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." Under SFAS No. 146, the Company will measure costs associated with an exit or disposal activity at fair value and recognize costs in the period in which the liability is incurred rather than at the date of a commitment to an exist or disposal plan. The Company was required to adopt SFAS No. 146 for all exit and disposal activities initiated after December 31, 2002. The adoption of SFAS No. 146 by the Company did not have any impact on the Company's consolidated financial position or results of operations.

        In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt," and SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145 also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers." SFAS No. 145 also amends SFAS No. 13, "Accounting for Leases," to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Lastly, SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Certain provisions of SFAS No. 145 became effective during 2002 while other provisions became effective in 2003. The adoption of SFAS No. 145 by the Company did not have any impact on the Company's consolidated financial position or results of operations.

        In November 2002, the FASB issued Interpretation 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." Interpretation 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value, or market value, of the obligations it assumes under the guarantee and must disclose that information in its interim and annual financial statements. The provisions related to recognizing a liability at inception of the guarantee for the fair value of the guarantor's obligations does not apply to product warranties or to guarantees accounted for as derivatives. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or

24

modified after December 31, 2002. The adoption of Interpretation 45 by the Company did not have any impact on the Company's consolidated financial position or results of operations.

        In January 2003, the FASB issued Interpretation 46, Consolidation of Variable Interest Entities. In December 2003, the FASB issued Interpretation 46 Revised, Consolidation of Variable Interest Entities. In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. The consolidation requirements of Interpretation 46 apply in the first fiscal year or interim period ending after December 15, 2003 to variable interest entities created after January 31, 2003. The consolidation requirements apply in the first fiscal year or interim period ending after December 15, 2003 for "Special Purpose Entities" created before January 31, 2003. The consolidation requirements apply in the first fiscal year or interim period ending after March 15, 2004 for other entities created before February 1, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The adoption of the applicable provisions of Interpretation 46 did not have any impact on the Company's consolidated financial position as of December 31, 2003 or results of operations for the year ended December 31, 2003. The remaining provisions become effective in 2004, but management does not expect that such provisions will have a material impact on the Company's consolidated financial position or results of operations.

C.    RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

        Not Applicable

D.    TREND INFORMATION

        The oil tanker industry has been highly cyclical, experiencing volatility in charterhire rates and vessel values resulting from changes in the supply of and demand for crude oil and tanker capacity. See Item 4. Information on the Company—Business Overview—Industry Conditions.

        According to preliminary data from industry sources, which the Company has not verified, there was a marginal increase in global oil demand in 32 OPEC production, which has a significant impact on demand for VLCCs, increased by 1.9 million barrels per day and oil production from countries outside of OPEC increase by 0.9 million barrels per day. World oil demand is projected to grow by approximately 2% in 2004 and 2005.

E.    OFF BALANCE SHEET ARRANGEMENTS

        Not Applicable

25

F.    TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

	Payments due by Period
Contractual Obligation (in thousands)	Total		Less than 1 years		1-3 years		3-5 years		more than 5 years
Long-Term Debt Obligations	$	125,397.4	$	8,400.0	$	22,400.0	$	22,400.0	$	72,197.4
Capital (Finance) Lease Obligations		—		—		—		—		—
Operating Lease Obligations		—		—		—		—		—
Purchase Obligations		—		—		—		—		—
Other Long-Term Liabilities Reflected on the Company's Balance Sheet under the GAAP of the primary financial statements		—		—		—		—		—
Total	$	125,397.4	$	8,400.0	$	22,400.0	$	22,400.0	$	72,197.4

        As discussed in Note 9 to the consolidated financial statements, the $125,397,399 debt obligation at December 31, 2003 was repaid from the proceeds of new long-term borrowings of $140,000,000 contracted in the first quarter of 2004. The repayment terms of the $125,397,399 has been scheduled above in accordance with the repayment schedule of the new borrowings. See Note 9 for discussion of repayment terms.

ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.    DIRECTORS AND SENIOR MANAGEMENT

        Set forth below are the names and positions of the directors and executive officers of the Company.

The Company

Name	Age	Position
Ola Lorentzon	54	Director and Chairman
Tor Olav Troim	41	Director, Chief Executive Officer and Vice-Chairman
Douglas C. Wolcott	72	Director
David M. White	62	Director
Timothy J. Counsell	45	Director
Kate Blankenship	39	Chief Financial Officer and Secretary

        Pursuant to the Management Agreement with the Company, the Manager provides management, administrative and advisory services to the Company. Set forth below are the names and positions of the directors and executive officers of the Manager.

Name	Age	Position
Kate Blankenship	39	Director, Chairman and Secretary
Tom E. Jebsen	46	Director and Vice-Chairman
Iain Cawte	36	Director

        Directors of both the Company and the Manager are elected annually, and each director elected holds office until a successor is elected. Officers of both the Company and the Manager are elected from time to time by vote of the respective board of directors and hold office until a successor is elected. Certain biographical information with respect to each director and executive officer of the Company and the Manager is set forth below.

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Ola Lorentzon has been a director of the Company since September 18, 1996 and Chairman since May 26, 2000. Mr. Lorentzon was also Managing Director of Frontline Management AS, a subsidiary of Frontline, from April 2000 until September 2003. Mr. Lorentzon was a director of the United Kingdom Protection and Indemnity Club until 2002. Until 2000 Mr. Lorentzon was a director of The Swedish Protection and Indemnity Club (SAAF), Swedish Ships Mortgage Bank and The Swedish Shipowners' Association, Deputy Chairman of the Liberian Shipowners Council and a member of the International Association of Tanker Owners (Intertanko) Council.

Tor Olav Trøim has been a director, Vice-Chairman and Chief Executive Officer of the Company since May 26, 2000. Mr. Trøim has been a director of Frontline since July 1, 1996. He is a director of Aktiv Inkasso ASA, Northern Oil ASA, both Norwegian Oslo Stock Exchange listed companies. He is also a director of Northern Offshore Ltd., a Bermuda company listed on the Oslo Stock Exchange and Golar LNG Limited, a Bermuda company listed on the Oslo Stock Exchange and the Nasdaq National Market. Prior to his service with Frontline, from January 1992, Mr. Trøim served as Managing Director and a member of the board of Directors of DNO AS, a Norwegian oil company.

Douglas C. Wolcott has been a director of the Company since September 18, 1996. Mr. Wolcott has also served as President of Chevron Shipping Corporation until 1994. Mr. Wolcott previously served as Deputy Chairman and Director of the United Kingdom Protection and Indemnity Club and as a director of London & Overseas Freighters Limited. He is currently a director of the American Bureau of Shipping.

David M. White has been a director of the Company since September 18, 1996. Mr. White was Chairman of Dan White Investment Limited which is now closed. Mr. White has also served as a director of NatWest Equity Primary Markets Limited from January 1992 to March 1996, and was previously a director of both NatWest Markets Corporate Finance Limited and NatWest Markets Securities Limited until December 1991.

Timothy J. Counsell has been a director of the Company since March 27, 1998. Mr. Counsell is a partner of the law firm of Appleby Spurling & Kempe, Bermudian counsel to the Company and has been with that firm since 1990.

Kate Blankenship has been Chief Financial Officer of the Company since April 17, 2000 and Secretary of the Company since December 27, 2000. Mrs. Blankenship has been a director and Chairman of the Manager since March 2000 and Secretary of the Manager since December 28, 2000. Mrs. Blankenship has been Chief Accounting Officer and Secretary of Frontline since 1994. Mrs. Blankenship also serves as a director of Golar LNG Limited. She is a member of the Institute of Chartered Accountants in England and Wales.

Tom E. Jebsen has been a director of the Manager since March 2000. Mr. Jebsen has served as Chief Financial Officer of Frontline Management since June 1997. From December 1995 until June 1997, Mr. Jebsen served as Chief Financial Officer of Tschudi & Eitzen Shipping ASA, a publicly traded Norwegian shipowning company. From 1991 to December 1995, Mr. Jebsen served as Vice President of Dyno Industrier ASA, a publicly traded Norwegian explosives producer. Mr. Jebsen is also a director of Asuranceforeningen Skuld, Unitas, a mutual hull and machinery club Hugin AS, an internet company.

B.    COMPENSATION

        Pursuant to the Management Agreement, in 2003 the Manager paid from the Management Fee the annual directors' fees of the Company of $82,000 in the aggregate. No separate compensation was paid to the Company's officers. The directors' fees for the year 2004 will be paid by the Company pursuant to the amended Management Agreement.

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C.    BOARD PRACTICES

        As provided in the Company's Bye-Laws, each Director shall hold office until the next Annual General Meeting following his election or until his successor is elected. The Officers of the Company are elected by the Board of Directors as soon as possible following each Annual General Meeting and shall hold office for such period and on such terms as the Board may determine. There are no service contracts between the Company or any of its subsidiaries and any Director that provides benefits to the Director upon termination of his directorship.

        The Company has established an audit committee comprised of Messrs. White and Wolcott, independent directors of the Company. The Company does not have an audit committee financial expert.

D.    EMPLOYEES

        Neither the Company nor the Manager have had any employees since inception.

E.    SHARE OWNERSHIP

        As of March 31, 2004, none of the directors or officers of the Company owned any Common Shares of the Company.

ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.    MAJOR SHAREHOLDERS

        The Company is not directly or indirectly controlled by another corporation, by a foreign government or by any other natural or legal person.

        The Company is not aware of any person who owns more than 5 per cent of the Company's outstanding Ordinary Shares as of March 31, 2004.

        As of March 31, 2004, none of the directors or officers of the Company owned any Common Shares of the Company.

B.    RELATED PARTY TRANSACTIONS

        Not Applicable

C.    INTERESTS OF EXPERTS AND COUNSEL

        Not Applicable

ITEM 8.    FINANCIAL INFORMATION

A.    CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

        See Item 18.

Legal Proceedings

        To the best of the Company's knowledge, there are no legal or arbitration proceedings existing or pending which have had or may have, significant effects on the Company's financial position or profitability and no such proceedings are pending or known to be contemplated by governmental authorities.

28

Dividend Policy

        The Company policy has been to pay quarterly distributions to holders of record of Common Shares in each January, April, July and October in amounts substantially equal to the charterhire received by the Company under the Charters, less cash expenses and less any reserves required in respect of any contingent liabilities. Following the expiration of the Charters and the Company intends to continue to pay distributions on a quarterly basis. The timing and amount of distributions will be dependent upon the Company's earnings, financial condition, cash requirements and availability, the provisions of Bermuda law affecting the payment of distributions to shareholders and other factors.

        Declaration and payment of any distribution is subject to the discretion of the Company's Board of Directors. The declaration and payment of distributions to shareholders is prohibited by the Loan Agreement if the Company is in default under the Loan Agreement or if such payment would be or is reasonably likely to reduce the liquid assets of the Company to below $10,000,000. Any payment of distributions to shareholders by the Company in any year may also be dependent upon the adoption by the holders of a majority of the Common Shares voting at the annual meeting of shareholders of the Company of a resolution effectuating a reduction in the Company's share premium and a credit to the Company's contributed capital surplus account. The Company's shareholders adopted such a resolution at the Company's annual general meeting in March, 1999.

        There can be no assurance that the Company will not have expenses, including extraordinary expenses, which could include costs of claims and related litigation expenses or that the Company will not have contingent liabilities for which reserves are required. As an "exempted" Bermuda company, the Company does not expect to pay any income taxes in Bermuda. The Company also does not expect to pay any income taxes in the Republic of Liberia (the jurisdiction of organization of the New Subsidiaries) or the Republic of the Marshall Islands (the jurisdiction in which the Vessels are registered).

        In 2003, 2002 and 2001, the Company paid the following distributions to shareholders.

Record Date	Payment Date	Amount Per Share
2003
January 27, 2003	February 7, 2003	$	0.45
April 25, 2003	May 8, 2003	$	1.19
July 25, 2003	August 8, 2003	$	0.65
October 27, 2003	November 10, 2003	$	0.45
2002
January 25, 2002	February 8, 2002	$	0.46
April 25, 2002	May 8, 2002	$	0.45
July 25, 2002	August 7, 2002	$	0.45
October 25, 2002	November 7, 2002	$	0.45
2001
January 26, 2001	February 9, 2001	$	1.68
April 27, 2001	May 11, 2001	$	1.39
July 26, 2001	August 9, 2001	$	0.72
October 25, 2001	November 8, 2001	$	0.45

        It is expected that any cash distributions by the Company will exceed the Company's earnings and profits for U.S. tax purposes, with the result that for each full year that the Charters are in place a portion of such distributions may be treated as a return of the "basis" of a U.S. holder's Common Shares. The Company was a passive foreign investment company ("PFIC") in the year 2003. As a result U.S. Holders must make a timely tax election known as "QEF Election" with respect to the Company in order to prevent certain tax penalties from applying to such U.S. holder. The Company provided all necessary tax

29

information to shareholders during February of 2004 in order that they may make such election. U.S. holders who previously made a QEF Election with respect to the Company must include in their taxable income their pro rata share of the Company's ordinary income and net capital gain for the Company's taxable year which ends with or within such shareholder's taxable year and satisfy certain filing requirements. For the year ended December 31, 2003, the Company mailed such tax information to its shareholders in February, 2004.

B.    SIGNIFICANT CHANGES

        Since December 31, 2003, the date of the latest financial statements, the Company became an operating company after the expiration of the Shell International charters on February 27, 2004. As a result, the Manager expects that the operating expenses of the Company will be greater for the year 2004 than for the year 2003, when the Vessels were still under the Shell International charters. In addition, due to the change to an operating company, the Company should no longer be considered a PFIC for U.S. federal income tax purposes in the year 2004, and our non-corporate U.S. shareholders will be subject to a lower U.S. federal income tax rate on dividends paid by the Company for the year 2005 and subsequent years.

ITEM 9.    THE OFFER AND LISTING

        Not applicable except for Item 9.A.4. and Item 9.C

        The following table sets forth, for the five most recent fiscal years during which the Company's Common Shares were traded on the Nasdaq National Market, the annual high and low closing prices for the Common Shares as reported by the Nasdaq National Market.

Fiscal Year Ended December 31	High		Low
2003	$	17.560	$	8.450
2002	$	18.850	$	11.510
2001	$	27.800	$	14.320
2000	$	25.250	$	11.938
1999	$	21.875	$	11.500

        The following table sets forth, for the two most recent fiscal years, the high and low closing prices for the Common Shares as reported by the Nasdaq National Market.

Fiscal Year Ended December 31, 2003	High		Low
First quarter	$	17.560	$	13.590
Second quarter	$	14.600	$	9.100
Third quarter	$	9.920	$	8.450
Fourth quarter	$	13.29	$	8.630
Fiscal Year Ended December 31, 2002
First quarter	$	18.700	$	15.500
Second quarter	$	18.850	$	14.360
Third quarter	$	14.620	$	11.770
Fourth quarter	$	15.490	$	11.510

30

        The following table sets forth, for the most recent six months, the high and low closing prices for the Common Shares as reported by the Nasdaq National Market.

	High		Low
April 2004	$	21.150	$	16.840
March 2004	$	21.270	$	17.880
February 2004	$	17.810	$	14.230
January 2004		17.060	$	13.370
December 2003	$	13.290	$	10.120
November 2003	$	10.660	$	8.990

        The Company's Common Shares have been quoted on the Nasdaq National Market under the symbol "VLCCF" since its initial public offering in February 1997.

ITEM 10.    ADDITIONAL INFORMATION

A.    SHARE CAPITAL

        Not Applicable

B.    MEMORANDUM AND ARTICLES OF ASSOCIATION

        Incorporated by reference to "Description of Capital Stock" in the prospectus contained in the Company's Registration Statement on Form F-1, filed December 13, 1996 (File No. 333-6170).

C.    MATERIAL CONTRACTS

        Not Applicable

D.    EXCHANGE CONTROLS

        The Company has been designated as a non-resident of Bermuda for exchange control purposes by the Bermuda Monetary Authority, whose permission for the issue of the Common Shares was obtained prior to the offering thereof.

        The transfer of shares between persons regarded as resident outside Bermuda for exchange control purposes and the issuance of Common Shares to or by such persons may be effected without specific consent under the Bermuda Exchange Control Act of 1972 and regulations thereunder. Issues and transfers of Common Shares involving any person regarded as resident in Bermuda for exchange control purposes require specific prior approval under the Bermuda Exchange Control Act 1972.

        Subject to the foregoing, there are no limitations on the rights of owners of the Common Shares to hold or vote their shares. Because the Company has been designated as non-resident for Bermuda exchange control purposes, there are no restrictions on its ability to transfer funds in and out of Bermuda or to pay dividends to United States residents who are holders of the Common Shares, other than in respect of local Bermuda currency.

        In accordance with Bermuda law, share certificates may be issued only in the names of corporations or individuals. In the case of an applicant acting in a special capacity (for example, as an executor or trustee), certificates may, at the request of the applicant, record the capacity in which the applicant is acting. Notwithstanding the recording of any such special capacity, the Company is not bound to investigate or incur any responsibility in respect of the proper administration of any such estate or trust.

        The Company will take no notice of any trust applicable to any of its shares or other securities whether or not it had notice of such trust.

31

        As an "exempted company", the Company is exempt from Bermuda laws which restrict the percentage of share capital that may be held by non-Bermudians, but as an exempted company, the Company may not participate in certain business transactions including: (i) the acquisition or holding of land in Bermuda (except that required for its business and held by way of lease or tenancy for terms of not more than 21 years) without the express authorization of the Bermuda legislature; (ii) the taking of mortgages on land in Bermuda to secure an amount in excess of $50,000 without the consent of the Minister of Finance of Bermuda; (iii) the acquisition of securities created or issued by, or any interest in, any local company or business, other than certain types of Bermuda government securities or securities of another "exempted company, exempted partnership or other corporation or partnership resident in Bermuda but incorporated abroad; or (iv) the carrying on of business of any kind in Bermuda, except in so far as may be necessary for the carrying on of its business outside Bermuda or under a license granted by the Minister of Finance of Bermuda.

        There is a statutory remedy under Section 111 of the Companies Act 1981 which provides that a shareholder may seek redress in the Bermuda courts as long as such shareholder can establish that the Company's affairs are being conducted, or have been conducted, in a manner oppressive or prejudicial to the interests of some part of the shareholders, including such shareholder. However, this remedy has not yet been interpreted by the Bermuda courts.

        The Bermuda government actively encourages foreign investment in "exempted" entities like the Company that are based in Bermuda but do not operate in competition with local business. In addition to having no restrictions on the degree of foreign ownership, the Company is subject neither to taxes on its income or dividends nor to any exchange controls in Bermuda. In addition, there is no capital gains tax in Bermuda, and profits can be accumulated by the Company, as required, without limitation. There is no income tax treaty between the United States and Bermuda pertaining to the taxation of income other than applicable to insurance enterprises.

E.    TAXATION

        The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not subject to tax on income or capital gains, and no Bermuda withholding tax will be imposed upon payments of dividends by the Company to its shareholders. No Bermuda tax is imposed on holders with respect to the sale or exchange of Common Shares. Furthermore, the Company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966, as amended, an assurance that, in the event that Bermuda enacts any legislation imposing any tax computed on profits or income, including any dividend or capital gains withholding tax, or computed on any capital asset, appreciation, or any tax in the nature of an estate, duty or inheritance tax, then the imposition of any such tax shall not be applicable. The assurance further provides that such taxes, and any tax in the nature of estate duty or inheritance tax, shall not be applicable to the Company or any of its operations, nor to the shares, debentures or other obligations of the Company, until March 2016.

        There are no provisions of any reciprocal tax treaty between Bermuda and the United States affecting withholding.

F.    DIVIDENDS AND PAYING AGENTS

        Not Applicable

G.    STATEMENT BY EXPERTS

        Not Applicable

32

H.    DOCUMENTS ON DISPLAY

        The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements we file reports and other information with the Securities and Exchange Commission. These materials, including this annual report and the accompanying exhibits may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at 500 West Madison Street, Suite 1400, Northwestern Atrium Center, Chicago, Illinois 60661 and are also available on our website located at www.knightsbridgetankers.com. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330, and you may obtain copies at prescribed rates from the Public Reference Section of the Commission at its principal office in Washington, D.C. 20549. The SEC maintains a website (http://www.sec.gov.) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. In addition, documents referred to in this annual report may be inspected at the Company's headquarters at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, Bermuda.

I.    SUBSIDIARY INFORMATION

        Not Applicable

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company is exposed to market risk from changes in interest rates primarily resulting from the floating rate of the Company's borrowings. The Company uses interest rate swaps to manage such interest rate risk. The Company has not entered into any financial instruments for speculative or trading purposes.

        The Company's borrowings under the Credit Facility at December 31, 2003 of $125,397,399 bear interest at a floating rate which is reset quarterly based on the underlying London interbank eurocurrency market. The obligations of the Company under the Credit Facility were refinanced under the Loan Agreement on March 3, 2004. The fair value of the Credit Facility at December 31, 2003 was equal to the carrying amount of the facility at the same date.

        The Company entered into an interest rate swap transaction to hedge the interest rate variability on the Credit Facility. The swap has a notional amount equal to the outstanding principal under the Credit Facility and the swap expires on the same date as that of the Credit Facility. At December 31, 2003, the pay-fixed interest rate of the swap was 6.74% and the receive-variable rate was 1.55%. As a hedge against the Credit Facility, the swap effectively resulted in a fixed borrowing rate to the Company of 7.13% for the year ended December 31, 2003. Periodic cash settlements under the swap agreement occur quarterly corresponding with the interest payments under the Credit Facility. The fair value of the interest rate swap agreement was an unfavorable $5,309,885 at December 31, 2003 (compared to an unfavorable $11,590,392 at December 31, 2002) calculated by taking into account the cost of entering into an interest rate swap to offset the existing swap.

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

        Not Applicable

33

PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

        Not Applicable

ITEM 14.    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

        Not Applicable

ITEM 15.    CONTROLS AND PROCEDURES

(a)

Evaluation of disclosure controls and procedures.

As of December 31, 2003, the Company carried out an evaluation, under the supervision and with the participation of the Company's manager ICB Shipping Bermuda, including the Company's Chief Executive Officer and principal financial officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and principal financial officer concluded that the Company's disclosure controls and procedures are effective in alerting them timely to material information relating to the Company required to be included in the Company's periodic SEC filings.

(b)

Not Applicable

(c)

Not Applicable

(d)

Changes in internal controls over financial reporting

There have been no changes in internal controls over financial reporting (identified in connection with management's evaluation of such internal controls over financial reporting) that occurred during the year covered by this annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

ITEM 16.    RESERVED

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT

        The Company's Board of Directors has determined that the Company's Audit Committee does not currently have an Audit Committee Financial Expert because no member of the Audit Committee has the relevant experience required under the definition of an "audit committee financial expert". The Company expects to have an audit committee financial expert in the year 2005.

ITEM 16B.    CODE OF ETHICS

        The Company has adopted a Code of Ethics, filed as Exhibit 11.1 that applies to the Chairman, Chief Executive Officer, Chief Financial Officer and Secretary.

ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

(a) Audit Fees

        The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by the principal accountant for the audit of the Company's annual financial

34

statements and services provided by the principal accountant in connection with statutory and regulatory filings or engagements for the two most recent fiscal years.

FISCAL YEAR ENDED DECEMBER 31, 2003	$	50,000
FISCAL YEAR ENDED DECEMBER 31, 2002	$	45,000

(b) Audit-Related Fees

        For the fiscal years ended December 31, 2002 and 2003 there have been no assurance and related services rendered by the principal accountant related to the performance of the audit or review of the Company's financial statements which have not been reported under the heading "Audit Fees" above.

(c) Tax Fees

        The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

FISCAL YEAR ENDED DECEMBER 31, 2003
Preparation of annual information statement	$	5,500
FISCAL YEAR ENDED DECEMBER 31, 2002
Preparation of annual information statement	$	5,500

(d) All Other Fees

        For the fiscal years ended December 31, 2002 and 2003 there have been no aggregate fees billed for professional services rendered by the principal accountant for services other than Audit Fees, Audit-Related Fees and Tax Fees set forth above.

(e) Audit Committee's Pre-Approval Policies and Procedures

        The Company's Audit Committee has adopted pre-approval policies and procedures in compliance with paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X that require the Audit Committee to approve the appointment of the independent auditor of the Company before such auditor is engaged and approve each of the audit and non-audit related services to be provided by such auditor under such engagement by the Company. All services provided by the principal auditor in 2003 were approved by the Audit Committee pursuant to the pre-approval policy.

(f) Not Applicable

ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

        Not Applicable

ITEM 16E.    PURCHASEES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS

        Not Applicable

35

PART III

ITEM 17.    FINANCIAL STATEMENTS

        Not Applicable

ITEM 18.    FINANCIAL STATEMENTS

        The following financial statements listed below and set forth on pages F-1 through F-12 together with the independent auditors' report of Deloitte & Touche AB thereon, are filed as part of this annual report:

Index to Financial Statements

	Page
Independent Auditors' Report	F-1
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2003 and 2002	F-2
Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001	F-3
Consolidated Statements of Comprehensive Income for the years ended December 31, 2003, 2002 and 2001	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001	F-5
Consolidated Statements of Changes in Shareholders' Equity for the years ended December 31, 2003, 2002 and 2001	F-6
Notes to Consolidated Financial Statements	F-7

36

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of
Knightsbridge Tankers Limited

        We have audited the accompanying consolidated balance sheets of Knightsbridge Tankers Limited and subsidiaries (the "Company") as of December 31, 2003 and 2002 and the related consolidated statements of operations, comprehensive income, cash flows and changes in shareholders' equity for each of the three years in the period ended December 31, 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of Knightsbridge Tankers Limited and subsidiaries as of December 31, 2003 and 2002 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America.

        As discussed in Note 2 to the consolidated financial statements, in 2001 the Company changed its method of accounting for derivative instruments and hedging activities to conform to Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities."

Deloitte & Touche AB
Stockholm, Sweden
May 17, 2004

F-1

KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2003 AND 2002
(in U.S. Dollars)

	2003			2002
ASSETS
Current assets
Cash and cash equivalents	$	6,311,829		$	226,215
Charter hire receivable		22,626,480			10,151,740
Prepaid expenses		26,883			16,384
Accrued income		11,624			—
Total current assets		28,976,816			10,394,339
Vessels under capital lease, net		319,408,192			337,001,052
Capitalized financing fees and expenses, net		57,794			429,338
TOTAL ASSETS	$	348,442,802		$	347,824,729
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of credit facility	$	8,400,000		$	—
Accrued expenses and other current liabilities		2,208,666			2,197,824
Interest rate swap agreement at fair value		5,309,885			—
Total current liabilities		15,918,551			2,197,824
Long-term portion of credit facility		116,997,399			125,397,399
Interest rate swap agreement at fair value		—			11,590,392
Total liabilities		132,915,950			139,185,615
Commitments and contingencies		—			—
Shareholders' equity
Common shares, par value $0.01 per share:
Authorized, issued and outstanding 17,100,000		171,000			171,000
Contributed capital surplus account		220,058,506			220,058,506
Accumulated other comprehensive income (loss)—Net unrealized loss on derivative instrument		(5,309,885	)		(11,590,392	)
Retained earnings		607,231			—
Total shareholders' equity	$	215,526,852		$	208,639,114
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	348,442,802		$	347,824,729

        See accompanying notes to consolidated financial statements.

F-2

KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(in U.S. Dollars)

	2003			2002			2001
Charterhire revenue	$	75,246,200		$	40,275,925		$	61,534,335
Operating expenses:
Depreciation of vessels under capital leases		17,592,860			17,592,860			17,592,860
Management fee		750,000			750,000			750,000
Administration expenses		114,096			55,429			50,919
Net operating income		56,789,244			21,877,636			43,140,556
Interest income		55,481			33,040			205,374
Interest expense		(8,961,950	)		(8,938,483	)		(9,008,839	)
Other financial expenses		(421,544	)		(421,407	)		(421,659	)
Net income	$	47,461,231		$	12,550,786		$	33,915,432
Earnings per common share—basic and diluted	$	2.78		$	0.73		$	1.98
Weighted average number of shares outstanding—basic and diluted		17,100,000			17,100,000			17,100,000

        See accompanying notes to consolidated financial statements.

F-3

KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(in U.S. Dollars)

	2003		2002			2001
Net income	$	47,461,231	$	12,550,786		$	33,915,432
Other comprehensive income (loss):
Cumulative effect of change in accounting for derivative instruments and hedging activities		—		—			(3,496,905	)
Net unrealized gain (loss) on derivative instrument during the year		6,280,507		(2,037,888	)		(6,055,599	)
Total other comprehensive income (loss)		6,280,507		(2,037,888	)		(9,552,504	)
Comprehensive income	$	53,741,738	$	10,512,898		$	24,362,928

See accompanying notes to consolidated financial statements.

F-4

KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(in U.S. Dollars)

		2003			2002			2001
Cash flows from operating activities
Net income		$	47,461,231		$	12,550,786		$	33,915,432
Items to reconcile net income to net cash provided by operating activities:
Depreciation			17,592,860			17,592,860			17,592,860
Amortization of capitalized financing fees and expenses			371,544			371,544			371,544
Changes in operating assets and liabilities:
	Charter hire receivable, prepaid expenses and accrued income		(12,496,863	)		362,818			20,602,331
	Accrued expenses and other current liabilities		10,842			20,939			52,731
Net cash provided by operating activities			52,939,614			30,898,947			72,534,898
Cash flows from financing activities
Repayments of loan			—			—			—
Distributions to shareholders			(46,854,000	)		(30,951,000	)		(72,504,000	)
Net cash used in financing activities			(46,854,000	)		(30,951,000	)		(72,504,000	)
Net increase (decrease) in cash and cash equivalents			6,085,614			(52,053	)		30,898
Cash and cash equivalents at beginning of year			226,215			278,268			247,370
Cash and cash equivalents at end of year		$	6,311,829		$	226,215		$	278,268
Supplemental cash flow information:
Interest paid		$	8,951,886		$	8,917,488		$	8,955,981

See accompanying notes to consolidated financial statements.

F-5

KNIGHTSBRIDGE TANKERS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
(in U.S. Dollars)

	2003			2002			2001
SHARE CAPITAL
Balance at the beginning of the year	$	171,000		$	171,000		$	171,000
Shares issued		—			—			—
Shares bought back		—			—			—
Balance at the end of the year		171,000			171,000			171,000
CONTRIBUTED CAPITAL SURPLUS ACCOUNT
Balance at the beginning of the year		220,058,506			238,458,720			273,809,543
Distributions to shareholders		—			(18,400,214	)		(35,350,823	)
Balance at the end of the year		220,058,506			220,058,506			238,458,720
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance at the beginning of the year		(11,590,392	)		(9,552,504	)		—
Other comprehensive income (loss)		6,280,507			(2,037,888	)		(9,552,504	)
Balance at the end of the year		(5,309,885	)		(11,590,392	)		(9,552,504	)
RETAINED EARNINGS
Balance at the beginning of the year		—			—			3,237,745
Net income		47,461,231			12,550,786			33,915,432
Distributions to shareholders		(46,854,000	)		(12,550,786	)		(37,153,177	)
Balance at the end of the year		607,231			—			—
Total Stockholders' Equity	$	215,526,852		$	208,639,114		$	229,077,216

See accompanying notes to consolidated financial statements.

F-6

KNIGHTSBRIDGE TANKERS LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

1.    DESCRIPTION OF BUSINESS

General

        Knightsbridge Tankers Limited (the "Company") was incorporated in Bermuda in September, 1996, for the purpose of the acquisition, disposition, ownership, leasing and chartering of five very large crude oil carriers (the "Vessels"), and certain related activities. The Vessels are owned through wholly-owned subsidiaries (the "Subsidiaries").

        Since February 1997, the Company has chartered the Vessels to Shell International Petroleum Company Limited (the "Charterer") on long-term "hell and high water" bareboat charters (the "Charters"). The obligations of the Charterer under these charters are jointly and severally guaranteed by Shell Petroleum N.V. and The Shell Petroleum Company Limited (the "Charter Guarantors"). The Charter and the Charter Guarantors are all companies of the Royal Dutch/Shell Group of Companies. The term of each of these Charters was a minimum of seven years, with an option for the Charterer to extend the period for each Vessel's Charter for an additional seven-year term, to a maximum of approximately 14 years per Charter. In June 2003, the Company received notice that Shell has chosen not to extend the bareboat charters for any of the Vessels for a second seven year period. Consequently, the existing bareboat charters to Shell International expired for all five Vessels, in accordance with their terms, during March 2004 and the Vessels have been redelivered to the Company (see Note 9).

        The daily charterhire rate payable under each Charter is comprised of two primary components: (i) the base rate, which is a fixed minimum rate of charterhire equal to $22,069 per Vessel per day, payable quarterly in arrears ("Base Rate"), and (ii) additional hire, which is additional charterhire (determined and paid quarterly in arrears) that will equal the excess, if any, of a weighted average of the daily time charter rates for three round-trip trade routes traditionally served by VLCCs, less an agreed amount of $10,500 during the initial term of the Charters, representing daily operating costs over the Base Rate.

Ownership and management of the company

        In February 1997, the Company offered and sold to the public 16,100,000 common shares, par value $0.01 per share, at an initial offering price of $20 per share. Simultaneously, the Company sold 1,000,000 common shares at a price of $20 per share to ICB International Limited ("ICB International"), a company which since 1999 has been an indirect wholly-owned subsidiary of Frontline Ltd., a Bermuda publicly traded oil tanker owning and operating company. As of December 31, 2003, ICB International owned approximately 0.01% of the outstanding Common Shares.

        ICB Shipping (Bermuda) Limited (the "Manager"), an indirect wholly-owned subsidiary of Frontline Ltd., manages the business of the Company.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

        The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include the assets and liabilities of Knightsbridge Tankers Limited and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

        The preparation of financial statements in accordance with generally accepted accounting principles requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Reporting currency

        The Company's functional currency is the U.S. dollar as all revenues are received in U.S. dollars and a majority of the Company's expenditures are made in U.S. dollars. The Company reports in U.S. dollars. The Company's subsidiaries report in U.S. dollars.

        Transactions in foreign currencies during the year are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency monetary assets and liabilities are translated using rates of exchange at the balance sheet date. Foreign currency non-monetary assets and liabilities are translated using historical rates of exchange. Foreign currency translation gains or losses are included in the consolidated statements of operations.

Revenue and expense recognition

        Revenues and expenses are recognised on the accrual basis. Revenues are generated from the Charters and such revenues are recorded over the term of the Charters as service is provided.

Comprehensive income

        Comprehensive income is defined as the change in the Company's equity during the year from transactions and other events and circumstances from nonowner sources. Comprehensive income of the Company includes not only net income but also unrealized losses on derivative instruments used in cash flow hedges of future variable-rate interest payments on the Company's debt. Such items are reported as accumulated other comprehensive income (loss), a separate component of shareholders' equity, until such time as the amounts are included in net income.

Leases

        In connection with the original Vessels purchase transaction, the Company entered into a conditional sale/leaseback transaction with a third party banking institution. The lease agreements do not encumber or obligate the Company's current or future cash flows and has no effect on the Company's financial position. The leasebacks have been classified as capital leases by the Company. Accordingly, during the term of the leases, the Vessels will remain on the Company's consolidated balance sheet and the relevant subsidiaries will retain title to the related Vessels.

        The Company has subleased the Vessels to a third party in the form of bareboat charters (the "Charters"). Such Charters are classified as operating leases by the Company.

Cash and cash equivalents

        For the purposes of the consolidated statements of cash flows, all demand and time deposits and highly liquid, low risk investments with maturities of three months or less at the date of purchase are considered equivalent to cash.

Charter hire receivable

        There is a concentration of credit risk in that all revenues are due solely from the Charterer. See Note 9 regarding the expiration of the Charters in 2004.

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Derivative instruments and hedging activities

        Interest rate swap agreements are contractual agreements between the Company and other parties to exchange the net difference between a fixed and variable interest rate periodically over the life of the contract without the exchange of the underlying principal amount of the agreement. The interest rate swaps were executed as integral elements of the Company's original financing transactions and risk management policies to achieve specific interest rate management objectives. At the time of obtaining its original financing, the Company entered into pay-fixed, receive-floating interest rate swap agreements to hedge its exposure to future cash flow variability resulting from variable interest rates on the Company's debt.

        On January 1, 2001 the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivatives Instruments and Hedging Activities," as amended. SFAS No. 133 requires that all derivative instruments be recorded on the balance sheet at their fair value. Changes in the fair value of each derivative is recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.

        Upon the adoption of SFAS No. 133 the Company recorded the fair value of its interest rate swap agreements which were designated as cash flow hedges against future variable-rate interest payments on the Company's debt. The amount recorded as a transition derivative liability was $3,496,905 and an equal amount was recorded as accumulated other comprehensive income (loss), which is a component of shareholders' equity. The adoption of SFAS No. 133 had no impact upon the Company's consolidated net income for the year ended December 31, 2001. Subsequent to adopting SFAS No. 133 on January 1, 2001, the derivative liability has been adjusted to its current fair value with equal adjustments to accumulated other comprehensive income (loss) reflecting the effectiveness of the cash flow hedge. As described in Note 9, the Company's accounting for the interest rate swap agreement changed in 2004 as a result of the repayment of the Credit Facility in 2004 which resulted in the interest rate swap agreement being de-designated from being a cash flow hedge.

        Prior to the 2001 change in accounting principle referred to in the preceding paragraph, settlement hedge accounting was used by the Company whereby the fair values of the interest rate swap agreements were not recorded on the balance sheet. As the swap agreements effectively altered the interest-rate characteristics of the hedged debt, the interest rate differential between the swap agreements and the underlying hedged debt was accrued as interest rates changed and recognized as an adjustment to interest expense.

Vessels and depreciation

        Vessels are stated at cost less accumulated depreciation. Depreciation is calculated based on cost, using the straight-line method, over the useful life of each vessel. The useful life of each vessel is deemed to be 25 years.

Capitalized financing fees and expenses

        Costs relating to the Credit Facility are capitalized and amortized over the term of the Credit Facility which is seven years.

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Earnings per share

        Earnings per share are based on the weighted average number of common shares outstanding for the period presented. For all periods presented, the Company had no potentially dilutive securities outstanding and therefore basic and dilutive earnings per share are the same.

Impairment of long-lived assets

        Long-lived assets that are held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, long-lived assets to be disposed of by sale are reported at the lower of their carrying amount or fair value less estimated costs to sell.

Distributions to shareholders

        Distributions to shareholders are applied first to retained earnings. When retained earnings are not sufficient, distributions are applied to the contributed capital surplus account.

New accounting standards

        In June 2001, the U.S. Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for the Asset Retirement Obligations". Under SFAS No. 143, an entity shall recognize the fair value of a legal liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. If a reasonable estimate of fair value cannot be made in the period the asset retirement obligation is incurred, the liability shall be recognized when a reasonable estimate of fair value can be made. Upon initial recognition of a liability for an asset retirement obligation, an entity shall capitalize an asset retirement cost by increasing the carrying amount of the related long-lived asset by the same amount as the liability. An entity shall subsequently allocate that asset retirement cost to expense using a systematic and rational method over its useful life. SFAS No. 143 applies to legal obligations associated with the retirement of a tangible long-lived asset that result from the acquisition, construction, or development and/or the normal operation of a long-lived asset, with limited exceptions. SFAS No. 143 does not apply to obligations that arise solely from a plan to dispose of a long-lived asset, nor does it apply to obligations that result from the improper operation of an asset. The adoption of SFAS No. 143 by the Company on January 1, 2003 did not have any impact on the Company's consolidated financial position or results of operations.

        In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." Under SFAS No. 146, the Company will measure costs associated with an exit or disposal activity at fair value and recognize costs in the period in which the liability is incurred rather than at the date of a commitment to an exist or disposal plan. The Company was required to adopt SFAS No. 146 for all exit and disposal activities initiated after December 31, 2002. The adoption of SFAS No. 146 by the Company did not have any impact on the Company's consolidated financial position or results of operations.

        In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt," and SFAS No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145 also rescinds SFAS No. 44, "Accounting for Intangible Assets of Motor Carriers." SFAS No. 145 also amends SFAS No. 13, "Accounting for Leases," to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the

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required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Lastly, SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. Certain provisions of SFAS No. 145 became effective during 2002 while other provisions became effective in 2003. The adoption of SFAS No. 145 by the Company did not have any impact on the Company's consolidated financial position or results of operations.

        In November 2002, the FASB issued Interpretation 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." Interpretation 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee, the company must recognize an initial liability for the fair value, or market value, of the obligations it assumes under the guarantee and must disclose that information in its interim and annual financial statements. The provisions related to recognizing a liability at inception of the guarantee for the fair value of the guarantor's obligations does not apply to product warranties or to guarantees accounted for as derivatives. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. The adoption of Interpretation 45 by the Company did not have any impact on the Company's consolidated financial position or results of operations.

        In January 2003, the FASB issued Interpretation 46, Consolidation of Variable Interest Entities. In December 2003, the FASB issued Interpretation 46 Revised, Consolidation of Variable Interest Entities. In general, a variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. Interpretation 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. The consolidation requirements of Interpretation 46 apply in the first fiscal year or interim period ending after December 15, 2003 to variable interest entities created after January 31, 2003. The consolidation requirements apply in the first fiscal year or interim period ending after December 15, 2003 for "Special Purpose Entities" created before January 31, 2003. The consolidation requirements apply in the first fiscal year or interim period ending after March 15, 2004 for other entities created before February 1, 2003. Certain of the disclosure requirements apply in all financial statements issued after January 31, 2003, regardless of when the variable interest entity was established. The adoption of the applicable provisions of Interpretation 46 did not have any impact on the Company's consolidated financial position as of December 31, 2003 or results of operations for the year ended December 31, 2003. The remaining provisions become effective in 2004, but management does not expect that such provisions will have a material impact on the Company's consolidated financial position or results of operations.

3.    VESSELS UNDER CAPITAL LEASE

(in US Dollars)	2003			2002
Cost	$	439,821,545		$	439,821,545
Accumulated depreciation		(120,413,353	)		(102,820,493
Net book value at end of year	$	319,408,192		$	337,001,052

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4.    CAPITALIZED FINANCING FEES AND EXPENSES

        Capitalized financing fees and expenses are amortised on a straight-line basis over the life of the Credit Facility. The capitalized financing fees and expenses are comprised of the following amounts:

(in US Dollars)	2003			2002
Capitalized financing fees and expenses	$	2,600,804		$	2,600,804
Accumulated amortization		(2,543,010	)		(2,171,466	)
Net book value at end of year	$	57,794		$	429,338

        As described in Note 9, the capitalized financing fees and expenses were written-off in 2004 in connection with the repayment of the Credit Facility to which such fees and expenses related.

5.    CREDIT FACILITY AND RELATED INTEREST RATE SWAP AGREEMENT

        The Company has entered into a Credit Facility with a syndicate of international lenders, pursuant to which the Company originally borrowed $145.6 million in the form of two term loans (the "Loans", or the "Primary Loan" and the "Amortizing Loan"). Of such amount, $125.4 million was in respect of the Primary Loan, and $20.2 million was in respect of the Amortizing Loan.

        The Credit Facility is secured by, among other things, a pledge by the Company of 100% of the issued and outstanding capital stock of the Subsidiaries, a guarantee from each Subsidiary, a mortgage on each Vessel, assignments of the Charters and the Charter Guaranties and an assignment of the rights to take title to the Vessels and the proceeds from the sale or any novation thereof.

        The Credit Facility provides for payment of interest on the outstanding principal balance of the Loans quarterly, in arrears, at a floating interest rate based on the rate in the London interbank eurocurrency market.

        During 2000, the final portion of the Amortizing Loan was repaid. The outstanding Credit Facility of $125.4 million as of December 31, 2003 consists of the Primary Loan and is repayable in its entirely in August 2004. The variable rate on the Primary Loan was 1.55% at December 31, 2003. As described in Note 9, the $125.4 million Credit Facility was repaid in March 2004 from the proceeds of new long-term borrowings. As a consequence, the $125.4 million Credit Facility at December 31, 2003 has been classified as long-term except for $8.4 million which has been classified as current to reflect those principal installments of the new long-term borrowings which are due to be repaid in 2004.

        At the time of entering into the Credit Facility, the Company entered into an interest rate swap agreement with Goldman Sachs Capital Markets, L.P., an affiliate of Goldman, Sachs & Co., to hedge the future variable rate interest payments on the Primary Loan. The cash flow hedge effectively fixes the Company's interest rate obligations on the Primary Loan at the rate of approximately 7.13% per annum.

        The terms of the interest rate swap agreement outstanding at December 31, 2003 are as follows:

Notional amount	$125,397,399
Trade date	February 6, 1997
Effective date	February 27, 1997
Termination date	August 27, 2004
Pay-fixed rate	6.74	%
Receive-variable rate	1.55	%

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        The fair value of the interest rate swap agreement was an unfavorable $5,309,885 at December 31, 2003 (2002—$11,590,392) calculated by taking into account the cost of entering into an interest rate swap to offset the existing swap. The Company's accounting policy applied to the interest rate swap agreement changed effective January 1, 2001 and is described in more detail in Note 2. As described in Note 9, the Company's accounting for the interest rate swap agreement changed in 2004 as a result of the repayment of the Credit Facility in 2004. The credit risk under the swap agreement is not considered to be significant due to the counterparty's high credit rating.

6.    LEASES

        The minimum future revenues, in the form of operating lease rentals, to be received on the Charters as of December 31, 2003 is as follows:

Year ending December 31:
2004	$	6,400,010
Total minimum lease rental revenues	$	6,400,010

        As described in Note 9, the Charters in effect at December 31, 2003 all expired in February 2004. As a consequence, the above rentals solely relate to those Charters in effect at December 31, 2003 and do not include any rentals expected from agreements contracted in 2004 relating to the Vessels which are described in more detail in Note 9.

7.    TAXATION

        The Company is incorporated in Bermuda. Under current Bermuda law, the Company is not required to pay taxes in Bermuda on either income or capital gains. The Company has received written assurance from the Minister of Finance in Bermuda that, in the event of any such taxes being imposed, the Company will be exempted from taxation until the year 2016.

8.    RELATED PARTY TRANSACTION

        On February 12, 1997, the Company entered into a management agreement with ICB Shipping (Bermuda) Limited (the "Manager") under which the Manager provides certain administrative, management and advisory services to the Company for an amount of $750,000 per year. The management agreement will terminate in 2012 unless earlier termination is approved pursuant to the terms of the agreement. See Note 9 regarding the amendment to the management agreement after December 31, 2003.

9.    SUBSEQUENT EVENTS

        In June 2003, the Company received notice that Shell International Petroleum Limited ("Shell") had chosen not to extend the bareboat charters (the "Charters") for any of the Vessels for a second seven-year period beginning in March 2004. Consequently, the existing Charters to Shell expired for all five Vessels, in accordance with their terms on February 27, 2004, and the Vessels were redelivered to the Company in March 2004. In regards to the redelivered Vessels, the Company has contracted three of its five VLCCs on new medium or long-term charters. Beginning in March 2004, one of these Vessels was chartered to the Malayasian International Shipping Corporation for a five-year period at a rate of approximately $31,000 per day. This arrangement commenced in mid March 2004 upon the redelivery of the vessel from Shell. Beginning in April 2004, two of the Company's Vessels were chartered to Tankers International, LLC on medium-term charters each for a period of three years at a rate of $30,000 per day plus a 50:50 profit

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sharing arrangement for earnings in excess of $30,000 per day calculated by reference to the BITR Index. Tankers International LLC is a pool for the commercial operations of four large tanker owners and operators: A.P. Moller, Euronav Luxembourg SA., Overseas Shipholding Group, Inc. and Reederie "Nord" Klaus E. Olendorff. The two time charters commenced in April 2004.

        Upon termination of the Charters with Shell in February 2004, the Vessels were redelivered to the original subsidiaries of the Company and subsequently sold to newly-formed wholly-owned subsidiaries of the Company (the "New Subsidiaries"). Each Vessel was registered in the Republic of the Marshall Islands by the relevant New Subsidiary. In connection with the termination of the Charters with Shell, the Company and the New Subsidiaries entered into a loan agreement with The Royal Bank of Scotland plc (the "Lender"), pursuant to which the Company borrowed $140 million in the form of five loans of $28 million each in respect of a Vessel (together, the "Loan"). The Company is obligated to repay the Loan in twenty-eight quarterly installments of $2.8 million (plus interest) and a final installment of $61.6 million (plus interest) on the last payment date. The Loan provides for payment of interest on the outstanding principal balance of the Loan quarterly in arrears at the annual rate of LIBOR plus a margin. If a New Subsidiary sells or disposes of the related Vessel, the Company will be obligated to make a loan prepayment principal balance of the Loan relating to the Vessel. The Loan is secured by, among other things, a guarantee from each New Subsidiary, a mortgage on each Vessel and an assignment of any charter with respect to a Vessel.

        In March of 2004, using the proceeds from the new $140 million Loan, the Company repaid the existing $125 million credit facility described in Note 5 incurring losses on the debt extinguishment of $16,000. As a consequent of the new long-term financing, the $125 million credit facility at December 31, 2003 has been classified as long-term except for amounts equal to the principal installments due in 2004 under the new Loan. Also as a consequence of the repayment of the $125 million credit facility, the cash flow hedge associated with the $125 million facility was de-designated in March 2004 and cash flow hedge accounting was discontinued. As a result of the de-designation, the fair value adjustments in accumulated other comprehensive income arising from the swap and the discontinued hedging relationship was reclassified to the income statement at the date of de-designation, and a loss of $4.2 million was recorded. The interest rate swap agreement was not terminated but matures in August 2004.

        Effective February 2004, the Company has entered into an amendment to the existing management agreement with the Manager. In view of the change in the employment of the Vessels and the responsibilities of the Manager and the Board of Directors of the Company since the termination of the Charters, the management fee has been amended to $630,000 per year. The Company will be responsible for paying its own administrative expenses including such items as audit fees, legal and professional fees, registrars fees, and Directors and officers fees and expenses.

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ITEM 19.    EXHIBITS

Number	Description of Exhibit
1	Underwriting Agreement among Knightsbridge Tankers Limited (the "Company"), Cedarhurst Tankers LDC ("Cedarhurst"), Hewlett Tankers LDC ("Hewlett"), Inwood Tankers LDC ("Inwood"), Lawrence Tankers LDC ("Lawrence") and Woodmere Tankers LDC ("Woodmere") (each of Cedarhurst, Hewlett, Inwood, Lawrence and Woodmere a "Subsidiary" and collectively the "Subsidiaries"), Lazard Freres & Co. LLC and Goldman, Sachs & Co., as representatives for the U.S. underwriters (the "Representatives"), ICB Shipping (Bermuda) Limited (the "Manager") and ICB International Ltd. ("ICB International").**
4.1	Memorandum of Association of the Company.*
4.2	Bye-Laws of the Company.*
4.2.1	Execution version of Bareboat Charter dated February 12, 1997 between Woodmere and Shell International Petroleum Company Limited ("SIPC") relating to the M.T. Myrina.**
4.2.2	Execution version of Bareboat Charter dated February 12, 1997 between Hewlett and SIPC relating to the M.T. Megara.**
4.2.3	Execution version of Bareboat Charter dated February 12, 1997 between Inwood and SIPC relating to the M.T. Murex.**
4.2.4	Execution version of Bareboat Charter dated February 12, 1997 between Lawrence and SIPC relating to the M.T. Macoma.**
4.2.5	Execution version of Bareboat Charter dated February 12, 1997 between Cedarhurst and SIPC relating to the M.T. Magdala.**
4.3.1	Execution version of Charter Guaranty dated February 12, 1997 made by Shell Petroleum N.V. ("SPNV") and The Shell Petroleum Company Limited ("SPCo") (collectively the "Guarantors") in favor of Woodmere relating to the M.T. Myrina.**
4.3.2	Execution version of Charter Guaranty dated February 12, 1997 made by the Guarantors in favor of Hewlett relating to the M.T. Megara.**
4.3.3	Execution version of Charter Guaranty dated February 12, 1997 made by the Guarantors in favor of Inwood relating to the M.T. Murex.**
4.3.4	Execution version of Charter Guaranty dated February 12, 1997 made by the Guarantors in favor of Lawrence relating to the M.T. Macoma.**
4.3.5	Execution version of Charter Guaranty dated February 12, 1997 made by the Guarantors in favor of Cedarhurst relating to the M.T. Magdala.**
4.3.6	Execution version of Pooling Agreement dated February 27, 1997 among the Subsidiaries as owners, and Shell International Trading and Shipping Company Limited on behalf of SIPC (collectively the "Charterers") relating to the fleet spares.**
4.4	Execution version of Charter Guaranty dated February 12, 1997 made by the Guarantors in favor of the Company.**
4.5.1	Execution version of Management Agreement dated February 12, 1997 between the Manager and the Company (incorporated by reference from Exhibit 10.5 of the Registration Statement).**
4.5.2	Execution version of Amendment No. 1 to Management Agreement and Accession Agreement dated March 1, 2004 between the Manager and the Company.

4.6.1	Memorandum of Agreement dated October 24, 1996 among Ocala Shipping Limited ("Ocala"), the Charterers and Shell Tankers (UK) Limited ("STUK"), as buyer, relating to the M.T. Myrina (incorporated by reference from Exhibit 10.6 of the Registration Statement).**
4.6.2	Memorandum of Agreement dated October 24, 1996 among Kerbela Shipping Corp. ("Kerbela") the Charterers and STUK relating to the M.T. Megara (incorporated by reference from Exhibit 10.7 of the Registration Statement).**
4.6.3	Memorandum of Agreement dated October 24, 1996 among Trevose Shipping Corp. ("Trevose"), the Charterers and STUK relating to the M.T. Murex (incorporated by reference from Exhibit 10.8 of the Registration Statement).**
4.6.4	Memorandum of Agreement dated October 24, 1996 among Tourmaline Shipping Limited ("Tourmaline"), the Charterers and STUK relating to the M.T. Macoma (incorporated by reference from Exhibit 10.9 of the Registration Statement).**
4.6.5	Memorandum of Agreement dated October 24, 1996 among Fluid Navigation Ltd. ("Fluid"), the Charterers and STUK relating to the M.T. Magdala (incorporated by reference from Exhibit 10.10 of the Registration Statement).**
4.7.1	Assignment Agreement dated November 25, 1996 from STUK and Shell International Trading & Shipping Company Limited to the Company and the Subsidiaries relating to the relevant Memorandum of Agreement (incorporated by reference from Exhibit 10.11 of the Registration Statement).**
4.7.2	Assignment of Rights dated February 27, 1997 between Ocala as seller and Woodmere as buyer relating to the M.T. Myrina.**
4.7.3	Assignment of Rights dated February 27, 1997 between Kerbela as seller and Hewlett as buyer regarding the M.T. Megara.**
4.7.4	Assignment of Rights dated February 27, 1997 between Trevose as seller and Inwood as buyer regarding the M.T. Murex.**
4.7.5	Assignment of Rights dated February 27, 1997 between Tourmalene as seller and Lawrence as buyer regarding the M.T. Macoma.**
4.7.6	Assignment of Rights dated February 27, 1997 between Fluid as seller and Cedarhurst as buyer regarding the M.T. Magdala.**
4.8.1	Execution version of Letter Agreement dated February 6, 1997 among the Company, SIPC, ICB International, the Subsidiaries and the Manager (incorporated by reference from Exhibit 10.12.1 of the Registration Statement).**
4.8.2	Execution version of Letter Agreement dated February 6, 1997 among the Company, the Manager, ICB International, SIPC and the Guarantors (incorporated by reference from Exhibit 10.12.2 of the Registration Statement).**
4.9	U.K. Finance Lease Transaction Offer Letter dated November 12, 1996 made by National Westminster Bank Plc in favor of the Company and SIPC (incorporated by reference from Exhibit 10.13 of the Registration Statement).**
4.10.1	Conditional Sale Agreement dated November 25, 1996 between NatWest Leasing (GB) Limited ("NLL") and Woodmere relating to the M.T. Myrina (incorporated by reference from Exhibit 10.14 of the Registration Statement).**
4.10.2	Conditional Sale Agreement dated November 25, 1996 between NLL and Hewlett relating to the M.T. Megara (incorporated by reference from Exhibit 10.15 of the Registration Statement).**

4.10.3	Conditional Sale Agreement dated November 25, 1996 between NLL and Inwood relating to the M.T. Murex (incorporated by reference from Exhibit 10.16 of the Registration Statement).**
4.10.4	Conditional Sale Agreement dated November 25, 1996 between NLL and Lawrence relating to the M.T. Macoma (incorporated by reference from Exhibit 10.17 of the Registration Statement).**
4.10.5	Conditional Sale Agreement dated November 25, 1996 between NLL and Cedarhurst relating to the M.T. Magdala (incorporated by reference from Exhibit 10.18 of the Registration Statement).**
4.11.1	Execution version of Charterparty by way of Demise dated February 12, 1997 between NLL as lessor and Woodmere as leasee relating to the M.T. Myrina.**
4.11.2	Execution version of Charterparty by Way of Demise dated February 12, 1997 between NLL as lessor and Hewlett as leasee relating to the M.T. Megara.**
4.11.3	Execution version of Charterparty by Way of Demise dated February 12, 1997 between NLL as lessor and Inwood as leasee relating to the M.T. Murex.**
4.11.3(a)	Amendment Agreement to the Charterparty by Way of Demise dated February 27, 1997 among NLL, Inwood and SIPC.**
4.11.4	Execution version of Charterparty by Way of Demise dated February 12, 1997 between NLL as lessor and Lawrence as leasee relating to the M.T. Macoma.**
4.11.5	Execution version of Charterparty by Way of Demise dated February 12, 1997 between NLL as lessor and Cedarhurst as leasee relating to the M.T. Magdala.**
4.12.1	Execution version of Direct Support Agreement dated February 12, 1997 among NLL as lessor, SIPC and Woodmere as leasee.**
4.12.2	Execution version of Direct Support Agreement dated February 12, 1997 among NLL as lessor, SIPC and Hewlett as leasee.**
4.12.3	Execution version of Direct Support Agreement dated February 12, 1997 among NLL as lessor, SIPC and Inwood as leasee.**
4.12.4	Execution version of Direct Support Agreement dated February 12, 1997 among NLL as lessor, SIPC and Lawrence as leasee.**
4.12.5	Execution version of Direct Support Agreement dated February 12, 1997 among NLL as lessor, SIPC and Cedarhurst as leasee.**
4.13	Execution version of Lessor Direct Agreement dated February 12, 1997 among the Company as borrower, the Subsidiaries as leasees, NLL as lessor and GSI.**
4.13(a)	Amendment Agreement to the Lessor Direct Agreement dated February 27, 1997 among the Company as borrower, the Subsidiaries as leasees, NLL as lessor and The Royal Bank of Scotland Plc ("RBS") as agent.**
4.14.1	Execution version of Lessor Mortgage and Assignment dated February 12, 1997 from NLL as chargor to Woodmere as chargee.**
4.14.2	Execution version of Lessor Mortgage and Assignment dated February 12, 1997 from NLL as chargor to Hewlett as chargee.**
4.14.3	Execution version of Lessor Mortgage and Assignment dated February 12, 1997 from NLL as chargor to Inwood as chargee.**

4.14.4	Execution version of Lessor Mortgage and Assignment dated February 12, 1997 from NLL as chargor to Lawrence as chargee.**
4.14.5	Execution version of Lessor Mortgage and Assignment dated February 12, 1997 from NLL as chargor to Cedarhurst as chargee.**
4.15.1	Execution version of Deposit Agreement and Deposit Charge dated February 12, 1997 between Woodmere as leasee and Midland Bank PLC as a letter of credit issuing bank ("Midland").**
4.15.2	Execution version of Deposit Agreement and Deposit Charge dated February 12, 1997 between Hewlett as leasee and Midland.**
4.15.3	Execution version of Deposit Agreement and Deposit Charge dated February 12, 1997 between Inwood as leasee and Royal Bank of Canada Europe Limited as a letter of credit issuing bank ("RBC").**
4.15.4	Execution version of Deposit Agreement and Deposit Charge dated February 12, 1997 between Lawrence as leasee and National Australia Bank Limited as a letter of credit issuing bank ("NAB").**
4.15.5	Execution version of Deposit Agreement and Deposit Charge dated February 12, 1997 between Cedarhurst as leasee and NAB.**
4.16.1	Execution version of Irrevocable Standby Letter of Credit by Midland in favor of Woodmere as leasee.**
4.16.2	Execution version of Irrevocable Standby Letter of Credit by Midland in favor of Hewlett as leasee.**
4.16.3	Execution version of Irrevocable Standby Letter of Credit by RBC in favor of Inwood as leasee.**
4.16.4	Execution version of Irrevocable Standby Letter of Credit by NAB in favor of Lawrence as leasee.**
4.16.5	Execution version of Irrevocable Standby Letter of Credit by NAB in favor of Cedarhurst as leasee.**
4.17.1	Execution version of Reimbursement Agreement dated February 12, 1997 between Woodmere as leasee and Midland.**
4.17.2	Execution version of Reimbursement Agreement dated February 12, 1997 between Hewlett as leasee and Midland.**
4.17.3	Execution version of Reimbursement Agreement dated February 12, 1997 between Inwood as leasee and RBC.**
4.17.4	Execution version of Reimbursement Agreement dated February 12, 1997 between Lawrence as leasee and NAB.**
4.17.5	Execution version of Reimbursement Agreement dated February 12, 1997 between Cedarhurst as leasee and NAB.**
4.18.1	Execution version of Residual Obligation Agreement dated February 12, 1997 between SIPC as obligor and Midland relating to Woodmere as lessee.**
4.18.2	Execution version of Residual Obligation Agreement dated February 12, 1997 between SIPC as obligor and Midland relating to Hewlett as lessee.**
4.18.3	Execution version of Residual Obligation Agreement dated February 12, 1997 between SIPC as obligor and RBC relating to Inwood as lessee.**

4.18.4	Execution version of Residual Obligation Agreement dated February 12, 1997 between SIPC as obligor and NAB relating to Lawrence as lessee.**
4.18.5	Execution version of Residual Obligation Agreement dated February 12, 1997 between SIPC as obligor and NAB relating to Cedarhurst as lessee.**
4.19	Execution version of Term Loan Facility Agreement dated February 6, 1997 among the Company as borrower, the Subsidiaries as guarantors, GSI as arranger and as agent, Goldman Sachs Capital Partners L.P. as bank ("GSCP") and Goldman Sachs Capital Markets L.P. as swap counterparty ("GSCM").**
4.19(a)	Amendment Agreement to Term Loan Facility Agreement dated February 27, 1997 among the Company as borrower, the Subsidiaries as guarantors, GSI as arranger and retiring agent, Goldman Sachs International Bank as bank ("GSIB"), GSCM as swap counterparty and RBS as successor agent.**
4.19(b)	Side Letter to the Term Loan Facility Agreement dated February 27, 1997 among the Company, the Subsidiaries, SIPC, NLL and GSI.**
4.20.1	Vessel Mortgage dated February 27, 1997 granted by Woodmere in favor of GSI relating to the M.T. Myrina.**
4.20.2	Vessel Mortgage dated February 27, 1997 granted by Hewlett in favor of GSI relating to the M.T. Megara.**
4.20.3	Vessel Mortgage dated February 27, 1997 granted by Inwood in favor of GSI relating to the M.T. Murex.**
4.20.4	Vessel Mortgage dated February 27, 1997 granted by Lawrence in favor of GSI relating to the M.T. Macoma.**
4.20.5	Vessel Mortgage dated February 27, 1997 granted by Cedarhurst in favor of GSI relating to the M.T. Magdala.**
4.21.1	Execution version of Floating Charge dated February 12, 1997 between Woodmere as chargor and GSI as agent.**
4.21.2	Execution version of Floating Charge dated February 12, 1997 between Hewlett as chargor and GSI as agent.**
4.21.3	Execution version of Floating Charge dated February 12, 1997 between Inwood as chargor and GSI as agent.**
4.21.4	Execution version of Floating Charge dated February 12, 1997 between Lawrence as chargor and GSI as agent.**
4.21.5	Execution version of Floating Charge dated February 12, 1997 between Cedarhurst as chargor and GSI as agent.**
4.22	Execution version of Floating Charge dated February 12, 1997 between the Company as chargor and GSI as agent.**

Number	Description of Exhibit
4.23	Execution version of Mortgage of Shares dated February 12, 1997 between the Company as chargor and GSI as agent.**
4.24	Execution version of Borrower Assignment dated February 12, 1997 between the Company as assignor and GSI as agent.**
4.25.1	Execution version of Guarantor (Subsidiary) Assignment dated February 12, 1997 between Woodmere as assignor and GSI as agent.**
4.25.2	Execution version of Guarantor (Subsidiary) Assignment dated February 12, 1997 between Hewlett as assignor and GSI as agent.**
4.25.3	Execution version of Guarantor (Subsidiary) Assignment dated February 12, 1997 between Inwood as assignor and GSI as agent.**
4.25.4	Execution version of Guarantor (Subsidiary) Assignment dated February 12, 1997 between Lawrence as assignor and GSI as agent.**
4.25.5	Execution version of Guarantor (Subsidiary) Assignment dated February 12, 1997 between Cedarhurst as assignor and GSI as agent.**
4.26	Execution version of ISDA Master Agreement dated February 6, 1997 between GSCM and the Company.**
4.27	Execution version of Intercreditor Agreement dated February 12, 1997 among the Company as borrower, the Subsidiaries as leasees (collectively with the Company as Obligors), GSI as arranger and as agent, GSCP as bank and GSCM as swap bank and SIPC, SPCo, SPNV and the Manager, each as a subordinated creditor.**
4.27(a)	Amendment Agreement dated February 27, 1997 to the Intercreditor Agreement among the Company as borrower, the Subsidiaries as leasees (collectively with the Company as Obligors), GSI as arranger, RBS as agent, GSIB as bank, GSCM as swap bank and SIPC, SPCo, SPNV and the Manager, each as a subordinated creditor.**
4.27(b)	Finance Party Accession/Designation Agreement dated February 27, 1997 among the Company and the Subsidiaries as obligors, GSI as existing party and arranger, RBS as new party, NLL as lessor, GSIB as bank, GSCM as swap bank and SIPC, SPCo, SPNV and the Manager, each as a subordinated creditor.**
4.28	Execution version of Multipartite Agreement dated February 12, 1997 among the Company as borrower, the Subsidiaries as guarantors, SIPC as charterer, GSI as arranger and agent, GSCP as bank and GSCM as swap bank.**
4.29	Execution version of Subordination Agreement dated February 12, 1997 among the Company, the Subsidiaries, ICB International, the Manager, the Guarantors, SIPC and Goldman, Sachs & Co. as representative of the U.S. Underwriters, and GSI as representative of the International Underwriters.**
4.31	Execution version of Share Purchase Agreement dated February 12, 1997 between the Company and ICB International (incorporated by reference from Exhibit 10.37 of the Company's Registration Statement on Form F-1, filed December 13, 1996 (File No. 333-6170).
4.32.1	Execution version of Novation Agreement dated March 15, 2004 between Inwood, Calico Leasing (GB) Limited ("Calico") and KTL Camden, Inc. ("Camden").
4.32.2	Execution version of Novation Agreement dated March 5, 2004 between Lawrence, Calico and KTL Chelsea, Inc. ("Chelsea").
4.32.3	Execution version of Novation Agreement dated March 18, 2004 between Cedarhurst, Calico and KTL Mayfair, Inc. ("Mayfair").

4.32.4	Execution version of Novation Agreement dated March 11, 2004 between Hewlett, Calico and KTL Hampstead, Inc. ("Hampstead").
4.32.5	Execution version of Novation Agreement dated March 29, 2004 between Woodmere, Calico and KTL Kensington, Inc. ("Kensington").
4.33.1	Execution version of a Deed of Release dated March 15, 2004 between Inwood, Calico and RBS relating to a Lessor Mortgage and Assignment dated February 27, 1997.
4.33.2	Execution version of a Deed of Release dated March 5, 2004 between Lawrence, Calico and RBS relating to a Lessor Mortgage and Assignment dated February 27, 1997.
4.33.3	Execution version of a Deed of Release dated March 18, 2004 between Cedarhurst, Calico and RBS relating to a Lessor Mortgage and Assignment dated February 27, 1997.
4.33.4	Execution version of a Deed of Release dated March 11, 2004 between Hewlett, Calico and RBS relating to a Lessor Mortgage and Assignment dated February 27, 1997.
4.33.5	Execution version of a Deed of Release dated March 29, 2004 between Woodmere, Calico and RBS relating to a Lessor Mortgage and Assignment dated February 27, 1997.
4.34	Form of Loan Agreement dated March 2, 2004 between the Company as borrower, the New Subsidiaries as new owners and RBS as lender.
4.35	Form of ISDA Master Agreement dated March 2, 2004 between the Company and RBS.
4.36.1	Execution version of General Assignment dated March 15, 2004 between Camden as owner and RBS as lender.
4.36.2	Execution version of General Assignment dated March 5, 2004 between Chelsea as owner and RBS as lender.
4.36.3	Execution version of General Assignment dated March 11, 2004 between Hampstead as owner and RBS as lender.
4.36.4	Execution version of General Assignment dated March 29, 2004 between Kensington as owner and RBS as lender.
4.36.5	Execution version of General Assignment dated March 18, 2004 between Mayfair as owner and RBS as lender.
4.37	Execution version of Account Security Deed dated March 2, 2004 between the Company as borrower, each of Camden, Chelsea, Hampstead, Kensington and Mayfair as a new owner, and RBS as bank.
4.38	[RESERVED]
4.39	Execution version of Master Agreement Security Deed dated March 2, 2004 between the Company and RBS.
4.40.1	Execution version of First Preferred Marshall Islands Mortgage dated March 15, 2004 between Camden as owner and RBS as mortgagee.
4.40.2	Execution version of First Preferred Marshall Islands Mortgage dated March 5, 2004 between Chelsea as owner and RBS as mortgagee.
4.40.3	Execution version of First Preferred Marshall Islands Mortgage dated March 11, 2004 between Hampstead as owner and RBS as mortgagee.
4.40.4	Execution version of First Preferred Marshall Islands Mortgage dated March 29, 2004 between Kensington as owner and RBS as mortgagee.

4.40.5	Execution version of First Preferred Marshall Islands Mortgage dated March 18, 2004 between Mayfair as owner and RBS as mortgagee.
4.41.1	Execution version of Deed of Release dated March 29, 2004 relating to a Floating Charge dated February 12, 1997 between the Company as the chargor and RBS as the Agent.
4.41.2	Execution version of Deed of Release dated March 15, 2004 relating to a Floating Charge dated February 12, 1997 between Inwood as the chargor and RBS as the Agent.
4.41.3	Execution version of Deed of Release dated March 5, 2004 relating to a Floating Charge dated February 12, 1997 between Lawrence as the chargor and RBS as the Agent.
4.41.4	Execution version of Deed of Release dated March 11, 2004 relating to a Floating Charge dated February 12, 1997 between Hewlett as the chargor and RBS as the Agent.
4.41.5	Execution version of Deed of Release dated March 29, 2004 relating to a Floating Charge dated February 12, 1997 between Woodmere as the chargor and RBS as the Agent.
4.41.6	Execution version of Deed of Release dated March 18, 2004 relating to a Floating Charge dated February 12, 1997 between Cedarhurst as the chargor and RBS as the Agent.
4.42.1	Execution version of Deed of Release and Reassignment relating to a Guarantor Assignment dated February 12, 1997 dated March 15, 2004 between Inwood as the assignor and RBS as the Agent.
4.42.2	Execution version of Deed of Release and Reassignment dated March 5, 2004 relating to a Guarantor Assignment dated February 12, 1997 between Lawrence as the assignor and RBS as the Agent.
4.42.3	Execution version of Deed of Release and Reassignment dated March 11, 2004 relating to a Guarantor Assignment dated February 12, 1997 between Hewlett as the assignor and RBS as the Agent.
4.42.4	Execution version of Deed of Release and Reassignment dated March 29, 2004 relating to a Guarantor Assignment dated February 12, 1997 between Woodmere as the assignor and RBS as the Agent.
4.42.5	Execution version of Deed of Release and Reassignment dated March 18, 2004 relating to a Guarantor Assignment dated February 12, 1997 between Cedarhurst as the assignor and RBS as the Agent.
4.42.6	Execution version of Deed of Release and Reassignment dated March 29, 2004 relating to a Borrower Assignment dated February 12, 1997 between the Company as the assignor and RBS as the Agent.
4.43	Execution version of Deed of Release dated March 29, 2004 relating to a Mortgage of Shares dated February 12, 1997 between the Company as the assignor and RBS as the Agent.
4.44.1	Execution version of Daylight Overdraft Facility dated March 18, 2004 between Mayfair as borrower, Cedarhurst as lessee, each of Lawrence and the Company as shareholders and RBS as lender.
4.44.2	Execution version of Daylight Overdraft Facility dated March 29, 2004 between Kensington as borrower, Woodmere as lessee, each of Hewlett and the Company as shareholders and RBS as lender.
4.44.3	Execution version of Daylight Overdraft Facility dated March 5, 2004 between Chelsea as borrower, Lawrence as lessee, each of Inwood and the Company as shareholders and RBS as lender.

4.44.4	Execution version of Daylight Overdraft Facility dated March 11, 2004 between Hampstead as borrower, Hewlett as lessee, each of Cedarhurst and the Company as shareholders and RBS as lender.
4.44.5	Execution version of Daylight Overdraft Facility dated March 15, 2004 between Camden as borrower, Inwood as lessee, each of Woodmere and the Company as shareholders and RBS as lender.
11.1	Code of Ethics.
12.1	Certification of the Chief Executive Officer.
12.2	Certification of the Chief Financial Officer.
13	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*

Incorporated by reference to same Exhibit No. in the Company's Registration Statement on Form F-1, filed December 13, 1996 (File No. 333-6170)

**

Incorporated by reference to same Exhibit No. in the Company's Report on Form 6-K, filed March 20, 1997 (File No. 0-29106)

SIGNATURES

        The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf.

	KNIGHTSBRIDGE TANKERS LIMITED
	By:	/s/  KATE BLANKENSHIP Kate Blankenship Chief Financial Officer
Dated: June 1, 2004

QuickLinks

TABLE OF CONTENTS
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
PART I

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
ITEM 8. FINANCIAL INFORMATION

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
ITEM 15. CONTROLS AND PROCEDURES
ITEM 16. RESERVED
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
ITEM 16B. CODE OF ETHICS
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
ITEM 16E. PURCHASEES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS

PART III

ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS

INDEPENDENT AUDITORS' REPORT
KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2003 AND 2002 (in U.S. Dollars)
KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 (in U.S. Dollars)
KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 (in U.S. Dollars)
KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 (in U.S. Dollars)
KNIGHTSBRIDGE TANKERS LIMITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001 (in U.S. Dollars)
KNIGHTSBRIDGE TANKERS LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
SIGNATURES

EX-4.5.2

Exhibit 4.5.2

AMENDMENT NO. 1 TO
MANAGEMENT AGREEMENT AND ACCESSION AGREEMENT

This Accession Agreement and Amendment No. 1 to Management Agreement is made as of the 1 day of March, 2004, by and between KNIGHTSBRIDGE TANKERS  LIMITED, a company organized and existing under the laws of Bermuda (the “Company”), acting on behalf of itself, the companies set forth on Schedule A hereto (the “Original Subsidiaries”) (as defined below) and the companies set forth on Schedule B hereto (the “Additional Subsidiaries” and together with the Original Subsidiaries, the “Subsidiaries”), and ICB SHIPPING (BERMUDA) LTD., a company organized and existing under the laws of Bermuda (the “Manager”).

W I T N E S S E T H:

WHEREAS, the Company, the Original Subsidiaries and the Manager are parties to a Management Agreement, dated February 12, 1997 (the “Management Agreement”); and

WHEREAS, the Original Subsidiaries own the vessels set forth opposite their respective names on Schedule A (the “Vessels”), and chartered the Vessels to the Charterer (as defined below) pursuant to the Charters (as defined below); and

WHEREAS, the Charterer has determined not to exercise its option to extend the Charters, and is redelivering the Vessels; and

WHEREAS, upon such redelivery, the Original Subsidiaries intend to convey the Vessels to the Additional Subsidiaries, as set forth on Schedule B hereto, and the Additional Subsidiaries and the Company intend to refinance the Credit Agreement (as defined below); and

WHEREAS, the Company’s shareholders have determined to continue the Company in business, and the Company has requested the Manager, and the Manager has agreed, to assume operational responsibility for the Vessels and to recharter the Vessels, subject to the Board’s approval; and

WHEREAS, Section 6(c) of the Management Agreement provides that if, upon the expiration of the Charters, the Company undertakes any operational responsibilities with respect to the Vessels and requests the Manager to perform any of such responsibilities on the Company’s behalf, the parties shall negotiate the terms of such responsibilities and renegotiate the fee and expenses payable to the Manager, and

WHEREAS, the Additional Subsidiaries wish to accede to the Management Agreement as amended by this Amendment No. 1.

NOW, THEREFORE, it is hereby agreed as follows:

1.             Defined Terms.  Unless otherwise defined herein, all defined terms when used herein shall have the meanings ascribed to them in the Management Agreement.  The term

“Company” shall include, where necessary, not only the Original Subsidiaries, but also the Additional Subsidiaries.

2.             Services.

Section 2.1 of the Management Agreement is amended by adding the following subsections:

“(q)         as agent only on behalf of the Company, supervising the commercial trading of the Vessels and the conclusion of all charter parties, contracts of affreightment, consecutive voyage charter parties, and other contracts of employment in respect thereof;

(r)            if a Vessel would be employed in any trade or service which might prejudice the Company by reason of trade or political difficulties, consulting with the Company before committing the Vessel to such service or trade and only fixing with the Company’s prior approval and at all times keeping the Company advised as to those countries and/or trades which might prejudice the operation of the Vessels;

(s)           negotiating and collecting offers for the refinancing of the Credit Agreement, selecting the most competitive bids and presenting the Company with a proposal for refinancing the Vessels, subject to the Board’s  final determination on any refinancing;

(t)            being responsible for all communication and contact between the Company and its lenders and banks that provide financing and other services to the Company and ensuring, to the best of its abilities (without taking any responsibility for the Company’s ability to meet its obligations), that the Company observes and complies with all its obligations in and towards the lenders;

(u)           procuring and supervising, as agent only on behalf of the Company, the following services rendered by or in cooperation with one or more Technical Managers (as defined below):

(i)conducting all operation/performance of the Vessels, including but not limited to all matters with respect to voyages, cargoes and persons to be carried, and procuring or providing all services incident thereto including, but not limited to, cargo handling, port activities (including pilotage, towing, wharfage and dockage), bunkering, stevedoring, canal transits, services of agents, brokers and consultants and arranging for payment of all expenses in respect of the foregoing as necessary for the operation of the Vessels;

(ii)issuing or causing to be issued all necessary shipping documents;

(iii)executing voyage schedules, routing, loading and discharging;

(iv)handling all post-fixture claims and arranging for all collections arising out of the operation of the Vessels, including the collection

2

and handling of all freight and/or hire payments, demurrage and dispatch; and

(v)arranging for the entry and clearance of the Vessels and for berth and terminal facilities when necessary.

(v)           As agent only on behalf of the Company, supervising the technical operation of the Vessels and having the power in its name or in the name of the Company, without the need for any further formal power of attorney, to do and perform all acts, deeds, matters and things which may be necessary or expedient for the supervision, performance or provision of all or any of such services or ancillary thereto or otherwise in relation to the proper and efficient operation of the Vessels, including (but not limited to) the following:

(i)providing the technical ship managers (the “Technical Managers”) appointed by the Company with appropriate instructions;

(ii)proposing an insurance arrangement for the Vessels including a budget and allowing the Company to enter the Vessels into the Manager’s long-term H&M and LoH program and its War scheme  provided they are approved by the Company.  Such coverage shall include H&M, LoH, war, P&I, Excess oil, Defense and to the extent required by its lenders, MII including AP;

(iii)based on instructions from the Company entering the Vessels in protection and indemnity, defense and other such clubs or associations and all matters pertaining thereto;

(iv)handling and settling all insurance, particular and general average, salvage and other claims in connection with the Vessels and all matters pertaining thereto; provided, however, that no individual claim exceeds USD 100,000.  The Manager shall not commence legal proceedings without the approval of the Company;

(v)performing or causing to be performed all necessary services in connection with salvage and general average in respect of the Vessels;

(vi)keeping the Company advised with respect to the operation of the Vessels and the performance of the services hereunder;

(vii)providing the Company with benchmarking information (between the Company’s vessels and the Technical Managers’ performance of services to the Manager’s own vessels);

(viii)deciding on standards of ship operation with the approval of the Company and instructing the Technical Managers when requirements are outside such standards;

3

(ix)by regular visits (at least annually) onboard the Vessels, verifying the Vessels’ technical condition and memorializing such visits in reports and - where appropriate - taking necessary actions with respect to instructions to the Technical Manager, and visiting the Vessels on passages or in ports in order to attend onboard at loading or discharge operation where appropriate;

(x)allowing the Vessels to benefit from the Manager’s bulk purchasing arrangements  and it being understood that any bonus, rebate or similar negotiated or received benefit shall pass to the Company;

(xi)in co-operation with the Technical Managers:

(A)following up and pursuing the development of planning regarding oil spill actions and other safety routines;

(B)verifying that all actions, instructions and training in respect of the Vessels’ safety have been carried through diligently, and

(C)arranging for oil spill contingency plans and taking all actions provided for in the US Oil Pollution Act of 1990 including, but not limited to, appointing and liaising with the “Qualified Individual” required and to enter into necessary agreements with clean-up contractors in the US and other relevant countries.

(xii)procuring and supervising the following services rendered by or in co-operation with the Technical Managers:

(A)keeping books, records and accounts relating to the activities and business of the Vessels in such form as may be required by the Company;

(B)procuring dry-docking plans and negotiating with shipyards in relation to major repairs and dry-dockings and attending and supervising all such works;

(xiii)procuring that the Technical Manager applies for and maintains, as operator of the Vessel, a Certificate of Financial Responsibility under §138.30(b) of the Regulations of the United States Coast Guard under the Oil Pollution Act of 1990 and filing periodic submissions in connection therewith. In connection with such applications, the Technical Manager may obtain a financial guarantee from any entity selected by the Manager in consultation with the Company;

4

(xiv)procuring that the Technical Manager obtains and maintains for itself ISO and ISM Documents or Certificates of Compliance and obtains and maintains for the Vessel an ISO Certificate of Compliance and an ISM Safety Management Certificate.

(xv)On behalf of the Company, supervising the services to be provided by the Technical Managers in relation to the overall accounting for the Company and ensuring that the Board is provided with:

(A)an annual budget of the Company’s operating costs delivered to the Company by November 30th of the preceding year, with deviations from the budget being disclosed and explaining in the annual report, deviations greater than USD $100,000 (per Vessel, per incident) that must be approved by the Company;

(B)annual report of all bonuses, rebates or similarly negotiated benefit received;

(C)such other budgets and projections as the Company shall request from time to time;

(D)quarterly statements of the Company’s overall operating costs and the Vessels’ operating costs to be delivered within 40 days of the end of such quarter;

(E)annual reports for the Company;

(F)periodic reports regarding the Manager’s and various other brokers’ analysis of the shipping market;

(G)weekly reports, including quarterly forecasts, of the result of trading the Company’s Vessels (or its pool earnings, as the case may be) presented in electronic form;

(H)comprehensive benchmarking of the Manager’s bunkers purchasing activity, including the benchmarking with the Frontline VLCC fleet, as the Company shall request from time to time; and

(I)such other accounts, reports (including voyage reports) and budget follow-ups as the Company shall reasonably require from time to time.”

5

3.             Term.

Section 3 of the Management Agreement is amended to read as follows:

“The term of this Agreement shall commence on February 12, 1997, with respect to the Company and the Original Subsidiaries, and on                       , 2004, with respect to the Additional Subsidiaries, and shall terminate on the fifteenth anniversary of the Delivery Date, unless earlier terminated pursuant to Section 6(c) or Section 7 hereof.”

4.             Fees and Expenses.

(a)Section 4 of the Management Agreement is amended by adding the following to the end of Section 4(a):

“Commencing on 1 February, 2004, the Company shall pay to the Manager an annual fee of $630,000, payable quarterly in arrears.  The fee for 2004 shall be paid pro rata from 1 February, 2004.”

(b)Section 4(b) of the Management Agreement is amended by deleting the word “and” before (viii), changing the period at the end thereof to a comma and adding the following to the end of the last sentence thereof:

“(ix) directors’ fees and meeting expenses; (x) third-party public relations services; (xi) registrars’ fees’; (xii) audit fees; (xiii) legal fees and other professional fees; (xiv) company franchise fees (xv) Bank Fees; (xvi) D&O Insurance.”

(c)The following are added as Sections 4(c), 4(d) and 4(e), respectively:

“4(c)  The Manager shall, at its own cost and expense, provide all office accommodation, equipment, office stationery, staff, staff salaries and ancillary office expenses required for the performance of its services as Manager for the Company.

4(d)  All travel expenses, as well as all costs for the services rendered by external contractors/subcontractors shall be invoiced separately. For the avoidance of doubt, any remuneration to the Technical Managers for their technical services and to the Technical Managers for their accounting services shall be paid directly by the relevant Subsidiary to the relevant Technical Manager.

4(e)  Upon reasonable notice, the relevant Subsidiary shall provide the Manager with any funds that the Manager may reasonably

6

request to cover reasonable estimated disbursements and expenses.”

5.             Expiration of Charters.

(a)Section 6(b) of the Management Agreement amended by inserting the following at the end of the second to last sentence thereof:  “including any time charter, bareboat charter, voyage charter, contract of affreightment or pool participation”, so that such sentence shall read:

“The Manager shall receive a commission equal to 1.25% of the gross freight earned on the rechartering of the Vessel in the spot market or from any time or other period charter employment for the Vessel, including any time charter, bareboat charter, voyage charter, contract of affreightment or pool participation.”

(b)Section 6(c) of the Management Agreement is hereby deleted.

6.             Notices.

Section 10 of the Management Agreement is hereby amended to read as follows:

“All notices, consents and other communications hereunder or necessary to exercise any rights granted hereunder, shall be in writing, either by prepaid registered mail or telefax as follows:

If to the Company:

P.O. Box HM 1593
Par-la-Ville Place, 4th Floor
Par-la-Ville Road
Hamilton HM GX, Bermuda
Attn.:  Company Secretary

Telefax no:  +441 295-3494

with a copy to:

Frontline Management AS
P.O. Box 1327 Vika
N-0112 Oslo
Norway

Attn:  President

Telefax no.  +47-23-11-40-40

7

If to the Manager:

ICB Shipping (Bermuda) Limited
P.O. Box HM 1593
Par-la-Ville Place, 4th Floor
Par-la-Ville Road
Hamilton HM GX, Bermuda

Attn.: Company Secretary

Telefax no.:  +441 295-3494

in each case with a copy to:

Frontline Management AS
P.O. Box 1327 Vika
N-0112 Oslo
Norway

Attn:  President

Telefax no.:  +47-23-11-40-40”

7.             Entire Agreement, etc.

Section 11 of the Management Agreement is amended to read as follows:

“This Agreement embodies the entire agreement and understanding between the parties hereto relating to the management services to be provided by the Manager to the Company and may not be amended, waived or discharged except by an instrument in writing executed by the party against whom enforcement of such amendment, waiver or discharge is sought.  Whenever appropriate, references to ‘this Agreement’ shall mean ‘this Agreement, as amended from time to time’.”

8.             Assignment, Subcontracting and Delegation.

The following is added as Section 12A to the Management Agreement:

“The Manager may subcontract its duties hereunder to Frontline Management (Bermuda) Ltd., Frontline Management AS, or any other party, including Technical Managers (which may be evidenced in separate agreements between such Technical Managers and the applicable Subsidiaries) approved by the Company’s lenders if applicable loan documents so require; provided, however, that such parties execute subordinations if required by applicable loan documents, and further provided that the Manager shall remain fully responsible for its performance hereof.”

8

9.             Accession

By their signature hereof, the Additional Subsidiaries accede to the Management Agreement, as amended, and become parties thereto.

10.           Counterparts.

This Amendment No. 1 and Accession Agreement may be executed in one or more written counterparts each of which shall be deemed an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 and Accession Agreement as of the date first above written.

KNIGHTSBRIDGE TANKERS  LIMITED
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
ICB SHIPPING (BERMUDA) LTD.
By	/s/ Kjell Langva
	Name: Kjell Langva
	Title:
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of CEDARHURST TANKERS LDC
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of HEWLETT TANKERS LDC
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director

9

KNIGHTSBRIDGE TANKERS LIMITED, on behalf of INWOOD TANKERS LDC
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of LAWRENCE TANKERS LDC
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of WOODMERE TANKERS LDC
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of KTL CAMDEN, INC.
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of KTL MAYFAIR, INC.
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director

10

KNIGHTSBRIDGE TANKERS LIMITED, on behalf of KTL KENSINGTON, INC.
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of KTL CHELSEA, INC.
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director
KNIGHTSBRIDGE TANKERS LIMITED, on behalf of KTL HAMPSTEAD, INC.
By	/s/ Ola Lorentzon
	Name: Ola Lorentzon
	Title: Director

11

SCHEDULE A

Vessel Name	Original Subsidiary
Murex	Inwood Tankers, LDC
Magdala	Cedarhurst Tankers, LDC
Myrina	Woodmere Tankers, LDC
Macoma	Lawrence Tankers, LDC
Megara	Hewlett Tankers, LDC

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SCHEDULE B

Additional Subsidiary	Vessel
KTL Camden, Inc.	Camden (ex-Murex)
KTL Mayfair, Inc.	Mayfair (ex-Magdala)
KTL Kensington, Inc.	Kensington (ex-Myrina)
KTL Chelsea, Inc.	Chelsea (ex-Macoma)
KTL Hampstead, Inc.	Hampstead (ex-Megara)

13

EX-4.32.1

Exhibit 4.32.1

NOVATION AGREEMENT

Dated 15 March, 2004

INWOOD TANKERS LDC

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

and

KTL CAMDEN, INC.

relating to a Conditional Sale Agreement

dated 25th November, 1996

m.v. Murex

LONDON

CONTENTS

Clause

1.	Definitions
2.	Novation
3.	Conditions Precedent
4.	Consideration
5.	Costs
6.	Representations and Warranties
7.	Disclaimers and Exclusions
8.	Counterparts
9.	Applicable Law

THIS NOVATION AGREEMENT is made on  15 March, 2004 between:

(1)INWOOD TANKERS LDC a company incorporated in the Cayman Islands whose registered office is at third floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman, Cayman Islands (the Seller);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited) a company incorporated in England and Wales whose offices is at 30 St Mary Axe Avenue, London EC3A 8EP (the Old Purchaser); and

(3)KTL CAMDEN INC, a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the New Purchaser)

WHEREAS:

(A)The Seller and the Old Purchaser entered into a conditional sale agreement (the Conditional Sale Agreement) dated 25th November 1996 relating to one approximately 298,000 dwt double hulled very large crude carrier M.V. “Murex” (the Vessel);

(B)The Old Purchaser and the Seller entered into a charterparty by way of demise dated 12th February 1997 relating to the Vessel (the Charterparty);

(C)Following the termination of the charterparty of the Vessel the Old Purchaser wishes to effect a Conditional Sale Agreement Transfer in accordance with the provisions of Clause 18 of the Charterparty.

THIS DEED WITNESSES as follows:

1.DEFINITIONS

(a)In this Agreement words and expressions defined in the Charterparty shall have the same meanings when used herein and the following expressions shall, unless otherwise specified, have the following meanings:

Deed of Release means the agreement so entitled and to be made between the Seller, the Old Purchaser and the Agent pursuant to which the Seller will release and discharge the Lessor Mortgage and Assignment.

Effective Time means the date on, and time at, which the Old Purchaser notifies the Seller and the New Purchaser in writing that the conditions precedent listed in Clause 3 (Conditions Precedent) are in a form and substance satisfactory to the Old Purchaser or have been waived by the Old Purchaser.

Lessor Proceeds Account means the account of the Old Purchaser with National Westminster Bank Plc at PO Box 34, 15 Bishopsgate, London EC2P 2AP, Sort Code 50-00-00, account name “NatWest Leasing (GB) Limited, re: Inwood Tankers LDC” account number 95484469.

Old Purchaser’s Group means European International Reinsurance Company Limited (EIR) any company which is a Subsidiary from time to time of EIR, the Holding Company from time to time of EIR and any company (besides EIR) which is from time to time a Subsidiary of its Holding Company.

1

(b)The principles of construction set out in Clause 1.2 (Interpretation of the Charterparty) shall have effect as if set out in this Agreement.

(c)A person who is not a party to this Agreement has no rights under the Contract (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

2.NOVATION

(a)The novation to be effected pursuant to this Agreement shall have effect from the Effective Time.

(b)The New Purchaser undertakes to the Seller and to the Old Purchaser to perform, discharge and observe all such obligations and liabilities on the part of the Old Purchaser under the Conditional Sale Agreement as fall to be performed, discharged or observed from the Effective Time as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(c)In consideration of the New Purchaser’s undertaking in Clause 2(b), the Seller releases and discharges the Old Purchaser from all claims, demands, obligations and liabilities whatsoever in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(d)The Seller undertakes to the New Purchaser to perform, discharge and observe all obligations and liabilities on the part of the Seller under the Conditional Sale Agreement and acknowledges that the New Purchaser shall be entitled to the rights and benefits of the Conditional Sale Agreement as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(e)In consideration of the Seller’s undertaking in Clause 2(d), the Old Purchaser releases and discharges the Seller from all claims, demands, obligations and liabilities whatsoever to the Old Purchaser in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(f)Subject as amended by this Agreement, the Conditional Sale Agreement shall continue in full force and effect and the transfer effected by this Agreement shall be subject to, and with the benefit of, the Initial Sub-Charter, if any.

3.CONDITIONS PRECEDENT

Clause 2 shall have effect on the date and time at which the Old Purchaser notifies the Seller and the New Purchaser that the Old Purchaser has received the following conditions precedent in form and substance satisfactory to the Old Purchaser:

(i)a certified copy of the resolution of the board of directors of the Seller and the New Purchaser approving the transactions contemplated by this Agreement, together with any power of attorney issued pursuant thereto;

(ii)this Agreement duly executed by the parties hereto;

(iii)the Deed of Release duly executed by the Seller;

(iv)the written confirmation referred to in Clause 18.9(ix) of the Charterparty;

2

(v)evidence that the consideration referred to in Clause 4 (Consideration) has been credited to the Lessor Proceeds Account;

(vi)confirmation from the Agent and the Seller that the Lease Discharge Date (as defined in the Lessor Direct Agreement) will, subject to the Agent unconditionally and irrevocably withdrawing the Net Novation Proceeds from the Lessor Proceeds Account, occur on the Effective Time;

(vii)an appraisal from an independent reputable appraisor appointed by the Seller (which appraisal shall be dated no more than 15 days prior to the date hereof) evidencing the open market value of the Vessel.

The conditions precedent in this Clause 3 are for the benefit of the Old Purchaser and the Old Purchaser may waive any of them by written notice given to the Seller and the New Purchaser.

4.CONSIDERATION

(a)As consideration for the novation under Clause 2 (Novation) above, the New Purchaser shall pay to the Old Purchaser, by crediting the Lessor Proceeds Account, the sum of £34,529,386.74 on the Effective Time.

(b)The consideration referred to in Clause 4(a) shall be applied in accordance with the provisions of Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

5.COSTS

The Seller shall pay all costs and expenses (including legal fees and expenses) properly incurred by the Old Purchaser in connection with this Agreement (including, without limitation the preparation, negotiation and execution of this Agreement and all documents, agreements, approvals and consents required in connection herewith).

6.REPRESENTATIONS AND WARRANTIES

(a)Each of the parties to this Agreement represents and warrants to the other party to this Agreement, that as at the date hereof:

(i)it has full power and authority to enter into, and perform all its obligations under this Agreement;

(ii)this Agreement constitutes its legal, valid and binding obligations; and

(iii)the entry into and performance by it of this Agreement does not and will not violate in any respect any existing law or regulation, its constitutional documents or any agreement to which it is a party.

(b)The Old Purchaser further represents and warrants to the New Purchaser that:

(i)it has not created any Lessor’s Lien;

(ii)the Old Purchaser has not, save for the Lessor Granted Security Documents and the Charterparty, executed any instrument or entered into any arrangements whereby its rights to take title to the Vessel under Clause 5 of the Conditional Sale Agreement have been encumbered or otherwise disposed of by the Old Purchaser;

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(iii)the Old Purchaser has not exercised its right to take title to the Vessel under Clause 5 of the Conditional Sale Agreement;

(iv)the Old Purchaser has not revoked the appointment of the Seller or the Agent as exclusive sales agent of the Lessor in relation to the Vessel; and

(v)the Old Purchaser has not revoked, and will not revoke, the authority given to the Agent to instruct the Account Bank to pay to the Agent the Net Novation Proceeds from the Lessor Proceeds Account pursuant to Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

7.DISCLAIMERS AND EXCLUSIONS

(a)The New Purchaser acknowledges and agrees that:

(i)the Vessel has been designed, manufactured, assembled, constructed, tested, trialed and examined without reference to or involvement of the Old Purchaser or any other member of the Old Purchaser’s Group;

(ii)neither the Old Purchaser nor any other member of the Old Purchaser’s Group has made or given or shall be deemed to have made or given any representation, warranty, term or condition, express or implied (whether statutory or otherwise), as to the seaworthiness, capacity, state, value, quality, durability, condition, design, construction, operation, performance, description, merchantability, fitness for use or purpose or suitability of the Vessel or any part thereof, as to the absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any patent, trademark, copyright, intellectual property or other rights, or as to title to the Vessel or any other representation, warranty, term or condition whatsoever, express or implied, with respect to the Vessel, all of which are hereby excluded;

(iii)the New Purchaser is taking possession of the Vessel from the Seller on an “as is, where is, and with all faults” basis.

(b)Save as otherwise expressly and specifically provided by this Agreement the New Purchaser hereby waives as between itself and the Old Purchaser all its rights, express or implied (whether statutory or otherwise), against the Old Purchaser or in respect of the Vessel.

(c)Without prejudice to the generality of the other provisions of this Clause 7 the Old Purchaser shall be under no liability to the New Purchaser whatsoever and howsoever arising and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability, damage (including death, injury or disease) or Unavailability of, or to, or in connection with, the Vessel or any person or property whatsoever.

8.COUNTERPARTS

(a)This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same Agreement and any party may enter into this Agreement by executing a counterpart.

4

9.APPLICABLE LAW

(a)This Agreement is governed by the laws of England.

(b)For the benefit of the Old Purchaser, each of the Seller and the New Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

(c)Each the Seller and the New Purchaser:

(i)waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement; and

(ii)agrees that a judgment or order of an English court in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

5

IN WITNESS of which this Agreement has been entered into on the date which appears first on page 1.

SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
INWOOD TANKERS LDC	)
SIGNED by Bob Ratcliffe	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)	/s/ P.E. Shaw
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
KTL CAMDEN, INC	)

6

EX-4.32.2

Exhibit 4.32.2

NOVATION AGREEMENT

Dated  5 March, 2004

LAWRENCE TANKERS LDC

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

and

KTL CHELSEA, INC.

relating to a Conditional Sale Agreement

dated 25th November, 1996

m.v. Macoma

LONDON

CONTENTS

Clause

1.	Definitions
2.	Novation
3.	Conditions Precedent
4.	Consideration
5.	Costs
6.	Representations and Warranties
7.	Disclaimers and Exclusions
8.	Counterparts
9.	Applicable Law

THIS NOVATION AGREEMENT is made on 5 March, 2004 between:

(1)LAWRENCE TANKERS LDC a company incorporated in the Cayman Islands whose registered office is at third floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman, Cayman Islands (the Seller);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited) a company incorporated in England and Wales whose offices is at 30 St Mary Axe Avenue, London EC3A 8EP (the Old Purchaser); and

(3)KTL CHELSEA INC, a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the New Purchaser)

WHEREAS:

(A)The Seller and the Old Purchaser entered into a conditional sale agreement (the Conditional Sale Agreement) dated 25th November 1996 relating to one approximately 298,000 dwt double hulled very large crude carrier M.V. “Macoma” (the Vessel);

(B)The Old Purchaser and the Seller entered into a charterparty by way of demise dated 12th February 1997 relating to the Vessel (the Charterparty);

(C)Following the termination of the charterparty of the Vessel the Old Purchaser wishes to effect a Conditional Sale Agreement Transfer in accordance with the provisions of Clause 18 of the Charterparty.

THIS DEED WITNESSES as follows:

1.DEFINITIONS

(a)In this Agreement words and expressions defined in the Charterparty shall have the same meanings when used herein and the following expressions shall, unless otherwise specified, have the following meanings:

Deed of Release means the agreement so entitled and to be made between the Seller, the Old Purchaser and the Agent pursuant to which the Seller will release and discharge the Lessor Mortgage and Assignment.

Effective Time means the date on, and time at, which the Old Purchaser notifies the Seller and the New Purchaser in writing that the conditions precedent listed in Clause 3 (Conditions Precedent) are in a form and substance satisfactory to the Old Purchaser or have been waived by the Old Purchaser.

Lessor Proceeds Account means the account of the Old Purchaser with National Westminster Bank Plc at PO Box 34, 15 Bishopsgate, London EC2P 2AP, Sort Code 50-00-00, account name “NatWest Leasing (GB) Limited, re: Lawrence Tankers LDC” account number 95484477.

Old Purchaser’s Group means European International Reinsurance Company Limited (EIR) any company which is a Subsidiary from time to time of EIR, the Holding Company from time to time of EIR and any company (besides EIR) which is from time to time a Subsidiary of its Holding Company.

1

(b)The principles of construction set out in Clause 1.2 (Interpretation of the Charterparty) shall have effect as if set out in this Agreement.

(c)A person who is not a party to this Agreement has no rights under the Contract (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

2.NOVATION

(a)The novation to be effected pursuant to this Agreement shall have effect from the Effective Time.

(b)The New Purchaser undertakes to the Seller and to the Old Purchaser to perform, discharge and observe all such obligations and liabilities on the part of the Old Purchaser under the Conditional Sale Agreement as fall to be performed, discharged or observed from the Effective Time as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(c)In consideration of the New Purchaser’s undertaking in Clause 2(b), the Seller releases and discharges the Old Purchaser from all claims, demands, obligations and liabilities whatsoever in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(d)The Seller undertakes to the New Purchaser to perform, discharge and observe all obligations and liabilities on the part of the Seller under the Conditional Sale Agreement and acknowledges that the New Purchaser shall be entitled to the rights and benefits of the Conditional Sale Agreement as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(e)In consideration of the Seller’s undertaking in Clause 2(d), the Old Purchaser releases and discharges the Seller from all claims, demands, obligations and liabilities whatsoever to the Old Purchaser in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(f)Subject as amended by this Agreement, the Conditional Sale Agreement shall continue in full force and effect and the transfer effected by this Agreement shall be subject to, and with the benefit of, the Initial Sub-Charter, if any.

3.CONDITIONS PRECEDENT

Clause 2 shall have effect on the date and time at which the Old Purchaser notifies the Seller and the New Purchaser that the Old Purchaser has received the following conditions precedent in form and substance satisfactory to the Old Purchaser:

(i)a certified copy of the resolution of the board of directors of the Seller and the New Purchaser approving the transactions contemplated by this Agreement, together with any power of attorney issued pursuant thereto;

(ii)this Agreement duly executed by the parties hereto;

(iii)the Deed of Release duly executed by the Seller;

(iv)the written confirmation referred to in Clause 18.9(ix) of the Charterparty;

2

(v)evidence that the consideration referred to in Clause 4 (Consideration) has been credited to the Lessor Proceeds Account;

(vi)Confirmation from the Agent and the Seller that the Lease Discharge Date (as defined in the Lessor Direct Agreement) will, subject to the Agent unconditionally and irrevocably withdrawing the Net Novation Proceeds from the Lessor Proceeds Account, occur on the Effective Time;

(vii)an appraisal from an independent reputable appraisor appointed by the Seller (which appraisal shall be dated no more than 15 days prior to the date hereof) evidencing the open market value of the Vessel.

The conditions precedent in this Clause 3 are for the benefit of the Old Purchaser and the Old Purchaser may waive any of them by written notice given to the Seller and the New Purchaser.

4.CONSIDERATION

(a)As consideration for the novation under Clause 2 (Novation) above, the New Purchaser shall pay to the Old Purchaser, by crediting the Lessor Proceeds Account, the sum of £34,339,659.34 on the Effective Time.

(b)The consideration referred to in Clause 4(a) shall be applied in accordance with the provisions of Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

5.COSTS

The Seller shall pay all costs and expenses (including legal fees and expenses) properly incurred by the Old Purchaser in connection with this Agreement (including, without limitation the preparation, negotiation and execution of this Agreement and all documents, agreements, approvals and consents required in connection herewith).

6.REPRESENTATIONS AND WARRANTIES

(a)Each of the parties to this Agreement represents and warrants to the other party to this Agreement, that as at the date hereof:

(i)it has full power and authority to enter into, and perform all its obligations under this Agreement;

(ii)this Agreement constitutes its legal, valid and binding obligations; and

(iii)the entry into and performance by it of this Agreement does not and will not violate in any respect any existing law or regulation, its constitutional documents or any agreement to which it is a party.

(b)The Old Purchaser further represents and warrants to the New Purchaser that:

(i)it has not created any Lessor’s Lien;

(ii)the Old Purchaser has not, save for the Lessor Granted Security Documents and the Charterparty, executed any instrument or entered into any arrangements whereby its rights to take title to the vessel under Clause 5 of the Conditional Sale Agreement have been encumbered or otherwise disposed of by the Old Purchaser.

3

(iii)the Old Purchaser has not exercised its right to take title to the Vessel under Clause 5 of the Conditional Sale Agreement;

(iv)the Old Purchaser has not revoked the appointment of the Seller or the Agent as exclusive sales agent of the Lessor in relation to the Vessel; and

(v)the Old Purchaser has not revoked, and will not revoke, the authority given to the Agent to instruct the Account Bank to pay to the Agent the Net Novation Proceeds from the Lessor Proceeds Account pursuant to Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

7.DISCLAIMERS AND EXCLUSIONS

(a)The New Purchaser acknowledges and agrees that:

(i)the Vessel has been designed, manufactured, assembled, constructed, tested, trialed and examined without reference to or involvement of the Old Purchaser or any other member of the Old Purchaser’s Group;

(ii)neither the Old Purchaser nor any other member of the Old Purchaser’s Group has made or given or shall be deemed to have made or given any representation, warranty, term or condition, express or implied (whether statutory or otherwise), as to the seaworthiness, capacity, state, value, quality, durability, condition, design, construction, operation, performance, description, merchantability, fitness for use or purpose or suitability of the Vessel or any part thereof, as to the absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any patent, trademark, copyright, intellectual property or other rights, or as to title to the Vessel or any other representation, warranty, term or condition whatsoever, express or implied, with respect to the Vessel, all of which are hereby excluded;

(iii)the New Purchaser is taking possession of the Vessel from the Seller on an “as is, where is, and with all faults” basis.

(b)Save as otherwise expressly and specifically provided by this Agreement the New Purchaser hereby waives as between itself and the Old Purchaser all its rights, express or implied (whether statutory or otherwise), against the Old Purchaser or in respect of the Vessel.

(c)Without prejudice to the generality of the other provisions of this Clause 7 the Old Purchaser shall be under no liability to the New Purchaser whatsoever and howsoever arising and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability, damage (including death, injury or disease) or Unavailability of, or to, or in connection with, the Vessel or any person or property whatsoever.

8.COUNTERPARTS

(a)This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same Agreement and any party may enter into this Agreement by executing a counterpart.

9.APPLICABLE LAW

(a)This Agreement is governed by the laws of England.

4

(b)For the benefit of the Old Purchaser, each of the Seller and the New Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

(c)Each the Seller and the New Purchaser:

(i)waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement; and

(ii)agrees that a judgment or order of an English court in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

5

IN WITNESS of which this Agreement has been entered into on the date which appears first on page 1.

SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
LAWRENCE TANKERS LDC	)
SIGNED by Bob Ratcliffe	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
KTL CHELSEA, INC	)

6

EX-4.32.3

Exhibit 4.32.3

NOVATION AGREEMENT

Dated 18 March, 2004

CEDARHURST TANKERS LDC

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

and

KTL MAYFAIR, INC.

relating to a Conditional Sale Agreement

dated 25th November, 1996

m.v. Magdala

ALLEN & OVERY

LONDON

CONTENTS

Clause

1.	Definitions
2.	Novation
3.	Conditions Precedent
4.	Consideration
5.	Costs
6.	Representations and Warranties
7.	Disclaimers and Exclusions
8.	Counterparts
9.	Applicable Law

THIS NOVATION AGREEMENT is made on  18  March, 2004 between:

(1)CEDARHURST TANKERS LDC a company incorporated in the Cayman Islands whose registered office is at third floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman, Cayman Islands (the Seller);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited) a company incorporated in England and Wales whose offices is at 30 St Mary Axe Avenue, London EC3A 8EP (the Old Purchaser); and

(3)KTL MAYFAIR INC, a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the New Purchaser)

WHEREAS:

(A)The Seller and the Old Purchaser entered into a conditional sale agreement (the Conditional Sale Agreement) dated 25th November 1996 relating to one approximately 298,000 dwt double hulled very large crude carrier M.V. “Magdala” (the Vessel);

(B)The Old Purchaser and the Seller entered into a charterparty by way of demise dated 12th February 1997 relating to the Vessel (the Charterparty);

(C)Following the termination of the charterparty of the Vessel the Old Purchaser wishes to effect a Conditional Sale Agreement Transfer in accordance with the provisions of Clause 18 of the Charterparty.

THIS DEED WITNESSES as follows:

1.DEFINITIONS

(a)In this Agreement words and expressions defined in the Charterparty shall have the same meanings when used herein and the following expressions shall, unless otherwise specified, have the following meanings:

Deed of Release means the agreement so entitled and to be made between the Seller, the Old Purchaser and the Agent pursuant to which the Seller will release and discharge the Lessor Mortgage and Assignment.

Effective Time means the date on, and time at, which the Old Purchaser notifies the Seller and the New Purchaser in writing that the conditions precedent listed in Clause 3 (Conditions Precedent) are in a form and substance satisfactory to the Old Purchaser or have been waived by the Old Purchaser.

Lessor Proceeds Account means the account of the Old Purchaser with National Westminster Bank Plc at PO Box 34, 15 Bishopsgate, London EC2P 2AP, Sort Code 50-00-00, account name “NatWest Leasing (GB) Limited, re: Cedarhurst Tankers LDC” account number 95484485.

Old Purchaser’s Group means European International Reinsurance Company Limited (EIR) any company which is a Subsidiary from time to time of EIR, the Holding Company from time to time of EIR and any company (besides EIR) which is from time to time a Subsidiary of its Holding Company.

1

(b)The principles of construction set out in Clause 1.2 (Interpretation of the Charterparty) shall have effect as if set out in this Agreement.

(c)A person who is not a party to this Agreement has no rights under the Contract (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

2.NOVATION

(a)The novation to be effected pursuant to this Agreement shall have effect from the Effective Time.

(b)The New Purchaser undertakes to the Seller and to the Old Purchaser to perform, discharge and observe all such obligations and liabilities on the part of the Old Purchaser under the Conditional Sale Agreement as fall to be performed, discharged or observed from the Effective Time as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(c)In consideration of the New Purchaser’s undertaking in Clause 2(b), the Seller releases and discharges the Old Purchaser from all claims, demands, obligations and liabilities whatsoever in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(d)The Seller undertakes to the New Purchaser to perform, discharge and observe all obligations and liabilities on the part of the Seller under the Conditional Sale Agreement and acknowledges that the New Purchaser shall be entitled to the rights and benefits of the Conditional Sale Agreement as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(e)In consideration of the Seller’s undertaking in Clause 2(d), the Old Purchaser releases and discharges the Seller from all claims, demands, obligations and liabilities whatsoever to the Old Purchaser in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(f)Subject as amended by this Agreement, the Conditional Sale Agreement shall continue in full force and effect and the transfer effected by this Agreement shall be subject to, and with the benefit of, the Initial Sub-Charter, if any.

3.CONDITIONS PRECEDENT

Clause 2 shall have effect on the date and time at which the Old Purchaser notifies the Seller and the New Purchaser that the Old Purchaser has received the following conditions precedent in form and substance satisfactory to the Old Purchaser:

(i)a certified copy of the resolution of the board of directors of the Seller and the New Purchaser approving the transactions contemplated by this Agreement, together with any power of attorney issued pursuant thereto;

(ii)this Agreement duly executed by the parties hereto;

(iii)the Deed of Release duly executed by the Seller;

(iv)the written confirmation referred to in Clause 18.9(ix) of the Charterparty;

2

(v)evidence that the consideration referred to in Clause 4 (Consideration) has been credited to the Lessor Proceeds Account;

(vi)Confirmation from the Agent and the Seller that the Lease Discharge Date (as defined in the Lessor Direct Agreement) will, subject to the Agent unconditionally and irrevocably withdrawing the Net Novation Proceeds from the Lessor Proceeds Account, occur on the Effective Time;

(vii)an appraisal from an independent reputable appraisor appointed by the Seller (which appraisal shall be dated no more than 15 days prior to the date hereof) evidencing the open market value of the Vessel.

The conditions precedent in this Clause 3 are for the benefit of the Old Purchaser and the Old Purchaser may waive any of them by written notice given to the Seller and the New Purchaser.

4.CONSIDERATION

(a)As consideration for the novation under Clause 2 (Novation) above, the New Purchaser shall pay to the Old Purchaser, by crediting the Lessor Proceeds Account, the sum of £34,245,575.34 on the Effective Time.

(b)The consideration referred to in Clause 4(a) shall be applied in accordance with the provisions of Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

5.COSTS

The Seller shall pay all costs and expenses (including legal fees and expenses) properly incurred by the Old Purchaser in connection with this Agreement (including, without limitation the preparation, negotiation and execution of this Agreement and all documents, agreements, approvals and consents required in connection herewith).

6.REPRESENTATIONS AND WARRANTIES

(a)Each of the parties to this Agreement represents and warrants to the other party to this Agreement, that as at the date hereof:

(i)it has full power and authority to enter into, and perform all its obligations under this Agreement;

(ii)this Agreement constitutes its legal, valid and binding obligations; and

(iii)the entry into and performance by it of this Agreement does not and will not violate in any respect any existing law or regulation, its constitutional documents or any agreement to which it is a party.

(b)The Old Purchaser further represents and warrants to the New Purchaser that:

(i)it has not created any Lessor’s Lien;

(ii)the Old Purchaser has not, save for the Lessor Granted Security Documents and the Charterparty, executed any instrument or entered into any arrangements whereby its rights to take title to the vessel under Clause 5 of the Conditional Sale Agreement have been encumbered or otherwise disposed of by the Old Purchaser.

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(iii)the Old Purchaser has not exercised its right to take title to the Vessel under Clause 5 of the Conditional Sale Agreement;

(iv)the Old Purchaser has not revoked the appointment of the Seller or the Agent as exclusive sales agent of the Lessor in relation to the Vessel; and

(v)the Old Purchaser has not revoked, and will not revoke, the authority given to the Agent to instruct the Account Bank to pay to the Agent the Net Novation Proceeds from the Lessor Proceeds Account pursuant to Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

7.DISCLAIMERS AND EXCLUSIONS

(a)The New Purchaser acknowledges and agrees that:

(i)the Vessel has been designed, manufactured, assembled, constructed, tested, trialed and examined without reference to or involvement of the Old Purchaser or any other member of the Old Purchaser’s Group;

(ii)neither the Old Purchaser nor any other member of the Old Purchaser’s Group has made or given or shall be deemed to have made or given any representation, warranty, term or condition, express or implied (whether statutory or otherwise), as to the seaworthiness, capacity, state, value, quality, durability, condition, design, construction, operation, performance, description, merchantability, fitness for use or purpose or suitability of the Vessel or any part thereof, as to the absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any patent, trademark, copyright, intellectual property or other rights, or as to title to the Vessel or any other representation, warranty, term or condition whatsoever, express or implied, with respect to the Vessel, all of which are hereby excluded;

(iii)the New Purchaser is taking possession of the Vessel from the Seller on an “as is, where is, and with all faults” basis.

(b)Save as otherwise expressly and specifically provided by this Agreement the New Purchaser hereby waives as between itself and the Old Purchaser all its rights, express or implied (whether statutory or otherwise), against the Old Purchaser or in respect of the Vessel.

(c)Without prejudice to the generality of the other provisions of this Clause 7 the Old Purchaser shall be under no liability to the New Purchaser whatsoever and howsoever arising and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability, damage (including death, injury or disease) or Unavailability of, or to, or in connection with, the Vessel or any person or property whatsoever.

8.COUNTERPARTS

(a)This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same Agreement and any party may enter into this Agreement by executing a counterpart.

9.APPLICABLE LAW

(a)This Agreement is governed by the laws of England.

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(b)For the benefit of the Old Purchaser, each of the Seller and the New Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

(c)Each the Seller and the New Purchaser:

(i)waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement; and

(ii)agrees that a judgment or order of an English court in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

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IN WITNESS of which this Agreement has been entered into on the date which appears first on page 1.

SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
CEDARHURST TANKERS LDC	)
SIGNED by Bob Ratcliffe	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
KTL MAYFAIR, INC	)

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EX-4.32.4

Exhibit 4.32.4

NOVATION AGREEMENT

Dated 11 March, 2004

HEWLETT TANKERS LDC`

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

and

KTL HAMPSTEAD, INC.

relating to a Conditional Sale Agreement

dated 25th November, 1996

m.v. Megara

ALLEN & OVERY

LONDON

CONTENTS

Clause

1.	Definitions
2.	Novation
3.	Conditions Precedent
4.	Consideration
5.	Costs
6.	Representations and Warranties
7.	Disclaimers and Exclusions
8.	Counterparts
9.	Applicable Law

THIS NOVATION AGREEMENT is made on 11 March, 2004 between:

(1)HEWLETT TANKERS LDC a company incorporated in the Cayman Islands whose registered office is at third floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman, Cayman Islands (the Seller);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited) a company incorporated in England and Wales whose offices is at 30 St Mary Axe Avenue, London EC3A 8EP (the Old Purchaser); and

(3)KTL HAMPSTEAD INC, a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the New Purchaser)

WHEREAS:

(A)The Seller and the Old Purchaser entered into a conditional sale agreement (the Conditional Sale Agreement) dated 25th November 1996 relating to one approximately 298,000 dwt double hulled very large crude carrier M.V. “Megara” (the Vessel);

(B)The Old Purchaser and the Seller entered into a charterparty by way of demise dated 12th February 1997 relating to the Vessel (the Charterparty);

(C)Following the termination of the charterparty of the Vessel the Old Purchaser wishes to effect a Conditional Sale Agreement Transfer in accordance with the provisions of Clause 18 of the Charterparty.

THIS DEED WITNESSES as follows:

1.DEFINITIONS

(a)In this Agreement words and expressions defined in the Charterparty shall have the same meanings when used herein and the following expressions shall, unless otherwise specified, have the following meanings:

Deed of Release means the agreement so entitled and to be made between the Seller, the Old Purchaser and the Agent pursuant to which the Seller will release and discharge the Lessor Mortgage and Assignment.

Effective Time means the date on, and time at, which the Old Purchaser notifies the Seller and the New Purchaser in writing that the conditions precedent listed in Clause 3 (Conditions Precedent) are in a form and substance satisfactory to the Old Purchaser or have been waived by the Old Purchaser.

Lessor Proceeds Account means the account of the Old Purchaser with National Westminster Bank Plc at PO Box 34, 15 Bishopsgate, London EC2P 2AP, Sort Code 50-00-00, account name “NatWest Leasing (GB) Limited, re: Hewlett Tankers LDC” account number 95484507.

Old Purchaser’s Group means European International Reinsurance Company Limited (EIR) any company which is a Subsidiary from time to time of EIR, the Holding Company from time to time of EIR and any company (besides EIR) which is from time to time a Subsidiary of its Holding Company.

1

(b)The principles of construction set out in Clause 1.2 (Interpretation of the Charterparty) shall have effect as if set out in this Agreement.

(c)A person who is not a party to this Agreement has no rights under the Contract (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

2.NOVATION

(a)The novation to be effected pursuant to this Agreement shall have effect from the Effective Time.

(b)The New Purchaser undertakes to the Seller and to the Old Purchaser to perform, discharge and observe all such obligations and liabilities on the part of the Old Purchaser under the Conditional Sale Agreement as fall to be performed, discharged or observed from the Effective Time as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(c)In consideration of the New Purchaser’s undertaking in Clause 2(b), the Seller releases and discharges the Old Purchaser from all claims, demands, obligations and liabilities whatsoever in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(d)The Seller undertakes to the New Purchaser to perform, discharge and observe all obligations and liabilities on the part of the Seller under the Conditional Sale Agreement and acknowledges that the New Purchaser shall be entitled to the rights and benefits of the Conditional Sale Agreement as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(e)In consideration of the Seller’s undertaking in Clause 2(d), the Old Purchaser releases and discharges the Seller from all claims, demands, obligations and liabilities whatsoever to the Old Purchaser in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(f)Subject as amended by this Agreement, the Conditional Sale Agreement shall continue in full force and effect and the transfer effected by this Agreement shall be subject to, and with the benefit of, the Initial Sub-Charter, if any.

3.CONDITIONS PRECEDENT

Clause 2 shall have effect on the date and time at which the Old Purchaser notifies the Seller and the New Purchaser that the Old Purchaser has received the following conditions precedent in form and substance satisfactory to the Old Purchaser:

(i)a certified copy of the resolution of the board of directors of the Seller and the New Purchaser approving the transactions contemplated by this Agreement, together with any power of attorney issued pursuant thereto;

(ii)this Agreement duly executed by the parties hereto;

(iii)the Deed of Release duly executed by the Seller;

(iv)the written confirmation referred to in Clause 18.9(ix) of the Charterparty;

2

(v)evidence that the consideration referred to in Clause 4 (Consideration) has been credited to the Lessor Proceeds Account;

(vi)Confirmation from the Agent and the Seller that the Lease Discharge Date (as defined in the Lessor Direct Agreement) will, subject to the Agent unconditionally and irrevocably withdrawing the Net Novation Proceeds from the Lessor Proceeds Account, occur on the Effective Time;

(vii)an appraisal from an independent reputable appraisor appointed by the Seller (which appraisal shall be dated no more than 15 days prior to the date hereof) evidencing the open market value of the Vessel.

The conditions precedent in this Clause 3 are for the benefit of the Old Purchaser and the Old Purchaser may waive any of them by written notice given to the Seller and the New Purchaser.

4.CONSIDERATION

(a)As consideration for the novation under Clause 2 (Novation) above, the New Purchaser shall pay to the Old Purchaser, by crediting the Lessor Proceeds Account, the sum of £37,221,222.22 on the Effective Time.

(b)The consideration referred to in Clause 4(a) shall be applied in accordance with the provisions of Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

5.COSTS

The Seller shall pay all costs and expenses (including legal fees and expenses) properly incurred by the Old Purchaser in connection with this Agreement (including, without limitation the preparation, negotiation and execution of this Agreement and all documents, agreements, approvals and consents required in connection herewith).

6.REPRESENTATIONS AND WARRANTIES

(a)Each of the parties to this Agreement represents and warrants to the other party to this Agreement, that as at the date hereof:

(i)it has full power and authority to enter into, and perform all its obligations under this Agreement;

(ii)this Agreement constitutes its legal, valid and binding obligations; and

(iii)the entry into and performance by it of this Agreement does not and will not violate in any respect any existing law or regulation, its constitutional documents or any agreement to which it is a party.

(b)The Old Purchaser further represents and warrants to the New Purchaser that:

(i)it has not created any Lessor’s Lien;

(ii)the Old Purchaser has not, save for the Lessor Granted Security Documents and the Charterparty, executed any instrument or entered into any arrangements whereby its rights to take title to the vessel under Clause 5 of the Conditional Sale Agreement have been encumbered or otherwise disposed of by the Old Purchaser.

3

(iii)the Old Purchaser has not exercised its right to take title to the Vessel under Clause 5 of the Conditional Sale Agreement;

(iv)the Old Purchaser has not revoked the appointment of the Seller or the Agent as exclusive sales agent of the Lessor in relation to the Vessel; and

(v)the Old Purchaser has not revoked, and will not revoke, the authority given to the Agent to instruct the Account Bank to pay to the Agent the Net Novation Proceeds from the Lessor Proceeds Account pursuant to Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

7.DISCLAIMERS AND EXCLUSIONS

(a)The New Purchaser acknowledges and agrees that:

(i)the Vessel has been designed, manufactured, assembled, constructed, tested, trialed and examined without reference to or involvement of the Old Purchaser or any other member of the Old Purchaser’s Group;

(ii)neither the Old Purchaser nor any other member of the Old Purchaser’s Group has made or given or shall be deemed to have made or given any representation, warranty, term or condition, express or implied (whether statutory or otherwise), as to the seaworthiness, capacity, state, value, quality, durability, condition, design, construction, operation, performance, description, merchantability, fitness for use or purpose or suitability of the Vessel or any part thereof, as to the absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any patent, trademark, copyright, intellectual property or other rights, or as to title to the Vessel or any other representation, warranty, term or condition whatsoever, express or implied, with respect to the Vessel, all of which are hereby excluded;

(iii)the New Purchaser is taking possession of the Vessel from the Seller on an “as is, where is, and with all faults” basis.

(b)Save as otherwise expressly and specifically provided by this Agreement the New Purchaser hereby waives as between itself and the Old Purchaser all its rights, express or implied (whether statutory or otherwise), against the Old Purchaser or in respect of the Vessel.

(c)Without prejudice to the generality of the other provisions of this Clause 7 the Old Purchaser shall be under no liability to the New Purchaser whatsoever and howsoever arising and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability, damage (including death, injury or disease) or Unavailability of, or to, or in connection with, the Vessel or any person or property whatsoever.

8.COUNTERPARTS

(a)This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same Agreement and any party may enter into this Agreement by executing a counterpart.

9.APPLICABLE LAW

(a)This Agreement is governed by the laws of England.

4

(b)For the benefit of the Old Purchaser, each of the Seller and the New Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

(c)Each the Seller and the New Purchaser:

(i)waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement; and

(ii)agrees that a judgment or order of an English court in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

5

IN WITNESS of which this Agreement has been entered into on the date which appears first on page 1..

SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
HEWLETT TANKERS LDC	)
SIGNED by Bob Ratcliffe	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
KTL HAMPSTEAD, INC	)

6

EX-4.32.5

Exhibit 4.32.5

NOVATION AGREEMENT

Dated 29 March, 2004

WOODMERE TANKERS LDC

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

and

KTL KENSINGTON, INC.

relating to a Conditional Sale Agreement

dated 25th November, 1996

m.v. Myrina

Allen & Overy

LONDON

CONTENTS

Clause

1.	Definitions
2.	Novation
3.	Conditions Precedent
4.	Consideration
5.	Costs
6.	Representations and Warranties
7.	Disclaimers and Exclusions
8.	Counterparts
9.	Applicable Law

THIS NOVATION AGREEMENT is made on 29 March, 2004 between:

(1)WOODMERE TANKERS LDC a company incorporated in the Cayman Islands whose registered office is at third floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman, Cayman Islands (the Seller);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited) a company incorporated in England and Wales whose offices is at 30 St Mary Axe Avenue, London EC3A 8EP (the Old Purchaser); and

(3)KTL KENSINGTON INC, a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the New Purchaser)

WHEREAS:

(A)The Seller and the Old Purchaser entered into a conditional sale agreement (the Conditional Sale Agreement) dated 25th November 1996 relating to one approximately 298,000 dwt double hulled very large crude carrier M.V. “Myrina” (the Vessel);

(B)The Old Purchaser and the Seller entered into a charterparty by way of demise dated 12th February 1997 relating to the Vessel (the Charterparty);

(C)Following the termination of the charterparty of the Vessel the Old Purchaser wishes to effect a Conditional Sale Agreement Transfer in accordance with the provisions of Clause 18 of the Charterparty.

THIS DEED WITNESSES as follows:

1.DEFINITIONS

(a)In this Agreement words and expressions defined in the Charterparty shall have the same meanings when used herein and the following expressions shall, unless otherwise specified, have the following meanings:

Deed of Release means the agreement so entitled and to be made between the Seller, the Old Purchaser and the Agent pursuant to which the Seller will release and discharge the Lessor Mortgage and Assignment.

Effective Time means the date on, and time at, which the Old Purchaser notifies the Seller and the New Purchaser in writing that the conditions precedent listed in Clause 3 (Conditions Precedent) are in a form and substance satisfactory to the Old Purchaser or have been waived by the Old Purchaser.

Lessor Proceeds Account means the account of the Old Purchaser with National Westminster Bank Plc at PO Box 34, 15 Bishopsgate, London EC2P 2AP, Sort Code 50-00-00, account name “NatWest Leasing (GB) Limited, re: Woodmere Tankers LDC” account number 95484493.

Old Purchaser’s Group means European International Reinsurance Company Limited (EIR) any company which is a Subsidiary from time to time of EIR, the Holding Company from time to time of EIR and any company (besides EIR) which is from time to time a Subsidiary of its Holding Company.

1

(b)The principles of construction set out in Clause 1.2 (Interpretation of the Charterparty) shall have effect as if set out in this Agreement.

(c)A person who is not a party to this Agreement has no rights under the Contract (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

2.NOVATION

(a)The novation to be effected pursuant to this Agreement shall have effect from the Effective Time.

(b)The New Purchaser undertakes to the Seller and to the Old Purchaser to perform, discharge and observe all such obligations and liabilities on the part of the Old Purchaser under the Conditional Sale Agreement as fall to be performed, discharged or observed from the Effective Time as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(c)In consideration of the New Purchaser’s undertaking in Clause 2(b), the Seller releases and discharges the Old Purchaser from all claims, demands, obligations and liabilities whatsoever in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(d)The Seller undertakes to the New Purchaser to perform, discharge and observe all obligations and liabilities on the part of the Seller under the Conditional Sale Agreement and acknowledges that the New Purchaser shall be entitled to the rights and benefits of the Conditional Sale Agreement as if the New Purchaser were named in the Conditional Sale Agreement in place of the Old Purchaser with effect from the Effective Time.

(e)In consideration of the Seller’s undertaking in Clause 2(d), the Old Purchaser releases and discharges the Seller from all claims, demands, obligations and liabilities whatsoever to the Old Purchaser in respect of the Conditional Sale Agreement which relate to the period beginning on the Effective Time.

(f)Subject as amended by this Agreement, the Conditional Sale Agreement shall continue in full force and effect and the transfer effected by this Agreement shall be subject to, and with the benefit of, the Initial Sub-Charter, if any.

3.CONDITIONS PRECEDENT

Clause 2 shall have effect on the date and time at which the Old Purchaser notifies the Seller and the New Purchaser that the Old Purchaser has received the following conditions precedent in form and substance satisfactory to the Old Purchaser:

(i)a certified copy of the resolution of the board of directors of the Seller and the New Purchaser approving the transactions contemplated by this Agreement, together with any power of attorney issued pursuant thereto;

(ii)this Agreement duly executed by the parties hereto;

(iii)the Deed of Release duly executed by the Seller;

(iv)the written confirmation referred to in Clause 18.9(ix) of the Charterparty;

2

(v)evidence that the consideration referred to in Clause 4 (Consideration) has been credited to the Lessor Proceeds Account;

(vi)Confirmation from the Agent and the Seller that the Lease Discharge Date (as defined in the Lessor Direct Agreement) will, subject to the Agent unconditionally and irrevocably withdrawing the Net Novation Proceeds from the Lessor Proceeds Account, occur on the Effective Time;

(vii)an appraisal from an independent reputable appraisor appointed by the Seller (which appraisal shall be dated no more than 15 days prior to the date hereof) evidencing the open market value of the Vessel.

The conditions precedent in this Clause 3 are for the benefit of the Old Purchaser and the Old Purchaser may waive any of them by written notice given to the Seller and the New Purchaser.

4.CONSIDERATION

(a)As consideration for the novation under Clause 2 (Novation) above, the New Purchaser shall pay to the Old Purchaser, by crediting the Lessor Proceeds Account, the sum of £34,567,584.07 on the Effective Time.

(b)The consideration referred to in Clause 4(a) shall be applied in accordance with the provisions of Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

5.COSTS

The Seller shall pay all costs and expenses (including legal fees and expenses) properly incurred by the Old Purchaser in connection with this Agreement (including, without limitation the preparation, negotiation and execution of this Agreement and all documents, agreements, approvals and consents required in connection herewith).

6.REPRESENTATIONS AND WARRANTIES

(a)Each of the parties to this Agreement represents and warrants to the other party to this Agreement, that as at the date hereof:

(i)it has full power and authority to enter into, and perform all its obligations under this Agreement;

(ii)this Agreement constitutes its legal, valid and binding obligations; and

(iii)the entry into and performance by it of this Agreement does not and will not violate in any respect any existing law or regulation, its constitutional documents or any agreement to which it is a party.

(b)The Old Purchaser further represents and warrants to the New Purchaser that:

(i)it has not created any Lessor’s Lien;

(ii)the Old Purchaser has not, save for the Lessor Granted Security Documents and the Charterparty, executed any instrument or entered into any arrangements whereby its rights to take title to the vessel under Clause 5 of the Conditional Sale Agreement have been encumbered or otherwise disposed of by the Old Purchaser.

3

(iii)the Old Purchaser has not exercised its right to take title to the Vessel under Clause 5 of the Conditional Sale Agreement;

(iv)the Old Purchaser has not revoked the appointment of the Seller or the Agent as exclusive sales agent of the Lessor in relation to the Vessel; and

(v)the Old Purchaser has not revoked, and will not revoke, the authority given to the Agent to instruct the Account Bank to pay to the Agent the Net Novation Proceeds from the Lessor Proceeds Account pursuant to Clause 5.9 (Payment of Proceeds of Sale) of the Lessor Direct Agreement.

7.DISCLAIMERS AND EXCLUSIONS

(a)The New Purchaser acknowledges and agrees that:

(i)the Vessel has been designed, manufactured, assembled, constructed, tested, trialed and examined without reference to or involvement of the Old Purchaser or any other member of the Old Purchaser’s Group;

(ii)neither the Old Purchaser nor any other member of the Old Purchaser’s Group has made or given or shall be deemed to have made or given any representation, warranty, term or condition, express or implied (whether statutory or otherwise), as to the seaworthiness, capacity, state, value, quality, durability, condition, design, construction, operation, performance, description, merchantability, fitness for use or purpose or suitability of the Vessel or any part thereof, as to the absence of latent or other defects, whether or not discoverable, as to the absence of any infringement of any patent, trademark, copyright, intellectual property or other rights, or as to title to the Vessel or any other representation, warranty, term or condition whatsoever, express or implied, with respect to the Vessel, all of which are hereby excluded;

(iii)the New Purchaser is taking possession of the Vessel from the Seller on an “as is, where is, and with all faults” basis.

(b)Save as otherwise expressly and specifically provided by this Agreement the New Purchaser hereby waives as between itself and the Old Purchaser all its rights, express or implied (whether statutory or otherwise), against the Old Purchaser or in respect of the Vessel.

(c)Without prejudice to the generality of the other provisions of this Clause 7 the Old Purchaser shall be under no liability to the New Purchaser whatsoever and howsoever arising and from whatever cause, and whether in contract, tort or otherwise, in respect of any loss (consequential or otherwise), liability, damage (including death, injury or disease) or Unavailability of, or to, or in connection with, the Vessel or any person or property whatsoever.

8.COUNTERPARTS

(a)This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same Agreement and any party may enter into this Agreement by executing a counterpart.

9.APPLICABLE LAW

(a)This Agreement is governed by the laws of England.

4

(b)For the benefit of the Old Purchaser, each of the Seller and the New Purchaser agrees that the courts of England have jurisdiction to settle any disputes in connection with this Agreement and accordingly submits to the jurisdiction of the English courts.

(c)Each the Seller and the New Purchaser:

(i)waives objection to the English courts on grounds of inconvenient forum or otherwise as regards proceedings in connection with this Agreement; and

(ii)agrees that a judgment or order of an English court in connection with this Agreement is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction.

5

IN WITNESS of which this Agreement has been entered into on the date which appears first on page 1.

SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
WOODMERE TANKERS LDC	)
SIGNED by Bob Ratcliffe	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
for and on behalf of	)
KTL KENSINGTON, INC	)

6

EX-4.33.1

Exhibit 4.33.1

DEED OF RELEASE

Dated 15 March, 2004

BETWEEN

INWOOD TANKERS LDC

AND

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

AND

THE ROYAL BANK OF SCOTLAND PLC

ALLEN & OVERY

London

39625-00022 BK:1237324.2

THIS DEED OF RELEASE is dated 15 March, 2004 between:

(1)INWOOD TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the Chargee);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited), a company incorporated in England and Wales (registered number 1791957) whose office is at 30 St Mary Axe Avenue, London EC3A 8EP (the Chargor).

(3)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SCO90312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as agent and trustee for the Finance Parties (as defined in the Lessor Deposit Agreement) (the Agent).

BACKGROUND

Under the Lessor Mortgage and Assignment, the Chargor, as security for the Secured Obligations, mortgaged to the Chargee the Vessel by way of first priority mortgage and assigned to the Chargee all the Assigned Rights.

IT IS AGREED as follows:

1.INTERPRETATION

1.1Definitions

In this Deed:

Lessor Mortgage and Assignment means the lessor mortgage and assignment dated 12th February, 1997 between the Chargor and the Chargee, relating to one approximately 298,000 dwt double hulled very large crude carrier m.v. “Murex” (the Vessel).

1.2Construction

(a)Capitalised terms defined in the Lessor Mortgage and Assignment (whether expressly or by incorporation) have, unless expressly defined in this Deed, the same meaning in this Deed.

(b)The provisions of Clause 1.2(e) (Construction) of the Lessor Direct Agreement apply to this Deed as though they were set out in full in this Deed except that references to the Lessor Direct Agreement are to be construed as references to this Deed.

2.DISCHARGE, RELEASE AND REASSIGNMENT

(a)The Chargee without any warranty or representation (i) irrevocably and unconditionally releases and discharges all security created by the Chargor under the Lessor Mortgage and Assignment, (ii) re-assigns to the Chargor all the Assigned Rights and (ii) releases the Chargor from all obligations under the Lessor Mortgage and Assignment.

(b)The Agent consents to the release, discharge and re-assignment referred to in Clause 2(a).

3.FURTHER ASSURANCE

The Chargee shall from time to time execute and do all such further assurances, deeds, acts and things (including the giving of notices and the making of any filings and/or registrations consequent upon this Deed) as the Chargor may reasonably request in writing in connection with the release and discharge of the Lessor Mortgage and Assignment.

4.COUNTERPARTS

This Deed may be executed in any number of counterparts.  This has the same effect as if the signatures on the counterparts were on a single copy of the Deed.

5.GOVERNING LAW

This Deed is governed by English law.

6.EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

This Deed has been entered into as a deed on the date stated at the beginning of this Deed.

2

SIGNATORIES

Chargee

EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
for and on behalf of	)
INWOOD TANKERS LDC	)
acting by Nicholas Sherriff	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ illegible
Chargor
EXECUTED AS A DEED	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
(formerly Natwest	)
Leasing (GB) Limited)	)
acting by Bob Ratcliffe	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ illegible
Agent
EXECUTED AS A DEED	)	/s/ Robert J. Manners
for and on behalf of)	)
THE ROYAL BANK OF SCOTLAND	)
PLC	)
acting by Robert J. Manners	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ Daniel Perrott

3

EX-4.33.2

Exhibit 4.33.2

DEED OF RELEASE

Dated 5 March, 2004

BETWEEN

LAWRENCE TANKERS LDC

AND

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

AND

THE ROYAL BANK OF SCOTLAND PLC

ALLEN & OVERY

London

39625-00022 BK:1237326.2

THIS DEED OF RELEASE is dated                5 March, 2004 between:

(1)LAWRENCE TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the Chargee);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited), a company incorporated in England and Wales (registered number 1791957) whose office is at 30 St Mary Axe Avenue, London EC3A 8EP (the Chargor).

(3)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SCO90312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as agent and trustee for the Finance Parties (as defined in the Lessor Deposit Agreement) (the Agent).

BACKGROUND

Under the Lessor Mortgage and Assignment, the Chargor, as security for the Secured Obligations, mortgaged to the Chargee the Vessel by way of first priority mortgage and assigned to the Chargee all the Assigned Rights.

IT IS AGREED as follows:

1.INTERPRETATION

1.1Definitions

In this Deed:

Lessor Mortgage and Assignment means the lessor mortgage and assignment dated 12th February, 1997 between the Chargor and the Chargee, relating to one approximately 298,000 dwt double hulled very large crude carrier m.v. “Macoma” (the Vessel).

1.2Construction

(a)Capitalised terms defined in the Lessor Mortgage and Assignment (whether expressly or by incorporation) have, unless expressly defined in this Deed, the same meaning in this Deed.

(b)The provisions of Clause 1.2(e) (Construction) of the Lessor Direct Agreement apply to this Deed as though they were set out in full in this Deed except that references to the Lessor Direct Agreement are to be construed as references to this Deed.

2.DISCHARGE, RELEASE AND REASSIGNMENT

(a)The Chargee without any warranty or representation (i) irrevocably and unconditionally releases and discharges all security created by the Chargor under the Lessor Mortgage and Assignment, (ii) re-assigns to the Chargor all the Assigned Rights and (ii) releases the Chargor from all obligations under the Lessor Mortgage and Assignment.

(b)The Agent consents to the release, discharge and re-assignment referred to in Clause 2(a).

3.FURTHER ASSURANCE

The Chargee shall from time to time execute and do all such further assurances, deeds, acts and things (including the giving of notices and the making of any filings and/or registrations consequent upon this Deed) as the Chargor may reasonably request in writing in connection with the release and discharge of the Lessor Mortgage and Assignment.

4.COUNTERPARTS

This Deed may be executed in any number of counterparts.  This has the same effect as if the signatures on the counterparts were on a single copy of the Deed.

5.GOVERNING LAW

This Deed is governed by English law.

6.EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

This Deed has been entered into as a deed on the date stated at the beginning of this Deed.

2

SIGNATORIES

Chargee

EXECUTED AS A DEED	)			/s/ Nicholas Sherriff
for and on behalf of	)
LAWRENCE TANKERS LDC	)
acting by Nicholas Sherriff	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ Kavita Shah
Chargor
EXECUTED AS A DEED	)
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)	/s/ Bob Ratcliffe
(formerly Natwest	)
Leasing (GB) Limited)	)
acting by Bob Ratcliffe	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ Philip Shaw
Agent
EXECUTED AS A DEED	)
for and on behalf of	)
THE ROYAL BANK OF SCOTLAND	)		/s/ Robert J. Manners
PLC	)
acting by Robert J. Manners	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ illegible

3

EX-4.33.3

Exhibit 4.33.3

DEED OF RELEASE

Dated 18 March, 2004

BETWEEN

CEDARHURST TANKERS LDC

AND

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

AND

THE ROYAL BANK OF SCOTLAND PLC

ALLEN & OVERY

London

39625-00022 BK:1225870.3

THIS DEED OF RELEASE is dated 18 March, 2004 between:

(1)CEDARHURST TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the Chargee);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited), a company incorporated in England and Wales (registered number 1791957) whose office is at 30 St Mary Axe Avenue, London EC3A 8EP (the Chargor).

(3)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SCO90312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as agent and trustee for the Finance Parties (as defined in the Lessor Deposit Agreement) (the Agent).

BACKGROUND

Under the Lessor Mortgage and Assignment, the Chargor, as security for the Secured Obligations, mortgaged to the Chargee the Vessel by way of first priority mortgage and assigned to the Chargee all the Assigned Rights.

IT IS AGREED as follows:

1.INTERPRETATION

1.1Definitions

In this Deed:

Lessor Mortgage and Assignment means the lessor mortgage and assignment dated 12th February, 1997 between the Chargor and the Chargee, relating to one approximately 298,000 dwt double hulled very large crude carrier m.v. “Magdala” (the Vessel);.

1.2Construction

(a)Capitalised terms defined in the Lessor Mortgage and Assignment (whether expressly or by incorporation) have, unless expressly defined in this Deed, the same meaning in this Deed.

(b)The provisions of Clause 1.2(e) (Construction) of the Lessor Direct Agreement apply to this Deed as though they were set out in full in this Deed except that references to the Lessor Direct Agreement are to be construed as references to this Deed.

2.DISCHARGE, RELEASE AND REASSIGNMENT

(a)The Chargee without any warranty or representation (i) irrevocably and unconditionally releases and discharges all security created by the Chargor under the Lessor Mortgage and Assignment, (ii) re-assigns to the Chargor all the Assigned Rights and (ii) releases the Chargor from all obligations under the Lessor Mortgage and Assignment.

(b)The Agent consents to the release, discharge and re-assignment referred to in Clause 2(a).

3.FURTHER ASSURANCE

The Chargee shall from time to time execute and do all such further assurances, deeds, acts and things (including the giving of notices and the making of any filings and/or registrations consequent upon this Deed) as the Chargor may reasonably request in writing in connection with the release and discharge of the Lessor Mortgage and Assignment.

4.COUNTERPARTS

This Deed may be executed in any number of counterparts.  This has the same effect as if the signatures on the counterparts were on a single copy of the Deed.

5.GOVERNING LAW

This Deed is governed by English law.

6.EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

This Deed has been entered into as a deed on the date stated at the beginning of this Deed.

2

SIGNATORIES

Chargee

EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
for and on behalf of	)
CEDARHURST TANKERS LDC	)
acting by  Nicholas Sherriff	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ illegible
Chargor
EXECUTED AS A DEED	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
(formerly Natwest	)
Leasing (GB) Limited)	)
acting by Bob Ratcliffe	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ P.E. Shaw
Agent
EXECUTED AS A DEED	)	/s/ Robert J. Manners
for and on behalf of	)
THE ROYAL BANK OF SCOTLAND	)
PLC	)
acting by Robert J. Manners	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ Charmaine Rumbelow

3

EX-4.33.4

Exhibit 4.33.4

DEED OF RELEASE

Dated 11 March, 2004

BETWEEN

HEWLETT TANKERS LDC

AND

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

AND

THE ROYAL BANK OF SCOTLAND PLC

ALLEN & OVERY

London

39625-00022 BK:1237321.2

THIS DEED OF RELEASE is dated 11 March, 2004 between:

(1)HEWLETT TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the Chargee);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited), a company incorporated in England and Wales (registered number 1791957) whose office is at 30 St Mary Axe Avenue, London EC3A 8EP (the Chargor).

(3)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SCO90312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as agent and trustee for the Finance Parties (as defined in the Lessor Deposit Agreement) (the Agent).

BACKGROUND

Under the Lessor Mortgage and Assignment, the Chargor, as security for the Secured Obligations, mortgaged to the Chargee the Vessel by way of first priority mortgage and assigned to the Chargee all the Assigned Rights.

IT IS AGREED as follows:

1.INTERPRETATION

1.1Definitions

In this Deed:

Lessor Mortgage and Assignment means the lessor mortgage and assignment dated 12th February, 1997 between the Chargor and the Chargee, relating to one approximately 298,000 dwt double hulled very large crude carrier m.v. “Megara” (the Vessel);.

1.2Construction

(a)Capitalised terms defined in the Lessor Mortgage and Assignment (whether expressly or by incorporation) have, unless expressly defined in this Deed, the same meaning in this Deed.

(b)The provisions of Clause 1.2(e) (Construction) of the Lessor Direct Agreement apply to this Deed as though they were set out in full in this Deed except that references to the Lessor Direct Agreement are to be construed as references to this Deed.

2.DISCHARGE, RELEASE AND REASSIGNMENT

(a)The Chargee without any warranty or representation (i) irrevocably and unconditionally releases and discharges all security created by the Chargor under the Lessor Mortgage and Assignment, (ii) re-assigns to the Chargor all the Assigned Rights and (ii) releases the Chargor from all obligations under the Lessor Mortgage and Assignment.

(b)The Agent consents to the release, discharge and re-assignment referred to in Clause 2(a).

3.FURTHER ASSURANCE

The Chargee shall from time to time execute and do all such further assurances, deeds, acts and things (including the giving of notices and the making of any filings and/or registrations consequent upon this Deed) as the Chargor may reasonably request in writing in connection with the release and discharge of the Lessor Mortgage and Assignment.

4.COUNTERPARTS

This Deed may be executed in any number of counterparts.  This has the same effect as if the signatures on the counterparts were on a single copy of the Deed.

5.GOVERNING LAW

This Deed is governed by English law.

6.EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

This Deed has been entered into as a deed on the date stated at the beginning of this Deed.

2

SIGNATORIES

Chargee

EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
for and on behalf of	)
HEWLETT TANKERS LDC	)
acting by Nicholas Sherriff	)
	)
its duly authorised attorney	)
in the presence of:	)
Chargor
EXECUTED AS A DEED	)		/s/ Bob Ratcliffe
for and on behalf of)	)
CALICO LEASING (GB) LIMITED	)
(formerly Natwest	)
Leasing (GB) Limited)	)
acting by Bob Ratcliffe	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ PE Shaw
Agent
EXECUTED AS A DEED	)
for and on behalf of)	)
THE ROYAL BANK OF SCOTLAND	)	/s/ Robert J. Manners
PLC	)
acting by Robert J. Manners	)
	)
its duly authorised attorney	)
in the presence of:	)

3

EX-4.33.5

Exhibit 4.33.5

DEED OF RELEASE

Dated 29 March, 2004

BETWEEN

WOODMERE TANKERS LDC

AND

CALICO LEASING (GB) LIMITED

(formerly Natwest Leasing (GB) Limited)

AND

THE ROYAL BANK OF SCOTLAND PLC

ALLEN & OVERY

London

39625-00022 BK:1237330.2

THIS DEED OF RELEASE is dated 29 March, 2004 between:

(1)WOODMERE TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the Chargee);

(2)CALICO LEASING (GB) LIMITED (formerly Natwest Leasing (GB) Limited), a company incorporated in England and Wales (registered number 1791957) whose office is at 30 St Mary Axe Avenue, London EC3A 8EP (the Chargor).

(3)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SCO90312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as agent and trustee for the Finance Parties (as defined in the Lessor Deposit Agreement) (the Agent).

BACKGROUND

Under the Lessor Mortgage and Assignment, the Chargor, as security for the Secured Obligations, mortgaged to the Chargee the Vessel by way of first priority mortgage and assigned to the Chargee all the Assigned Rights.

IT IS AGREED as follows:

1.INTERPRETATION

1.1Definitions

In this Deed:

Lessor Mortgage and Assignment means the lessor mortgage and assignment dated 12th February, 1997 between the Chargor and the Chargee, relating to one approximately 298,000 dwt double hulled very large crude carrier m.v. “Myrina” (the Vessel).

1.2Construction

(a)Capitalised terms defined in the Lessor Mortgage and Assignment (whether expressly or by incorporation) have, unless expressly defined in this Deed, the same meaning in this Deed.

(b)The provisions of Clause 1.2(e) (Construction) of the Lessor Direct Agreement apply to this Deed as though they were set out in full in this Deed except that references to the Lessor Direct Agreement are to be construed as references to this Deed.

2.DISCHARGE, RELEASE AND REASSIGNMENT

(a)The Chargee without any warranty or representation (i) irrevocably and unconditionally releases and discharges all security created by the Chargor under the Lessor Mortgage and Assignment, (ii) re-assigns to the Chargor all the Assigned Rights and (ii) releases the Chargor from all obligations under the Lessor Mortgage and Assignment.

(b)The Agent consents to the release, discharge and re-assignment referred to in Clause 2(a).

3.FURTHER ASSURANCE

The Chargee shall from time to time execute and do all such further assurances, deeds, acts and things (including the giving of notices and the making of any filings and/or registrations consequent upon this Deed) as the Chargor may reasonably request in writing in connection with the release and discharge of the Lessor Mortgage and Assignment.

4.COUNTERPARTS

This Deed may be executed in any number of counterparts.  This has the same effect as if the signatures on the counterparts were on a single copy of the Deed.

5.GOVERNING LAW

This Deed is governed by English law.

6.EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

This Deed has been entered into as a deed on the date stated at the beginning of this Deed.

2

SIGNATORIES

Chargee

EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
for and on behalf of	)
WOODMERE TANKERS LDC	)
acting by Nicholas Sherriff	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ illegible
Chargor
EXECUTED AS A DEED	)	/s/ Bob Ratcliffe
for and on behalf of	)
CALICO LEASING (GB) LIMITED	)
(formerly Natwest	)
Leasing (GB) Limited)	)
acting by Bob Ratcliffe	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ PE Shaw
Agent
EXECUTED AS A DEED	)	/s/ Robert J. Manners
for and on behalf of	)
THE ROYAL BANK OF SCOTLAND	)
PLC	)
acting by Robert J. Manners	)
	)
its duly authorised attorney	)
in the presence of:	)
/s/ Charmaine Rumbelow

3

EX-4.34

Exhibit 4.34

Date 2 March 2004

KNIGHTSBRIDGE TANKERS LIMITED

as Borrower

KTL HAMPSTEAD, INC.

KTL CHELSEA, INC.

KTL MAYFAIR, INC.

KTL CAMDEN, INC.

KTL KENSINGTON, INC.

as New Owners

- and -

THE ROYAL BANK OF SCOTLAND plc

as Lender

LOAN AGREEMENT

relating to
a facility of up to US$140,000,000
to finance part of the acquisition costs of

five VLCCs, m.v.’s. “MEGARA”, “MACOMA”,

“MAGDALA”, “MUREX” and “MYRINA”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	INTERPRETATION
2	FACILITY
3	DRAWDOWN
4	INTEREST
5	INTEREST PERIODS
6	DEFAULT INTEREST
7	REPAYMENT AND PREPAYMENT
8	MISMATCH BETWEEN LOAN AND TRANSACTIONS
9	CONDITIONS PRECEDENT
10	GUARANTEE
11	REPRESENTATIONS AND WARRANTIES
12	GENERAL UNDERTAKINGS
13	CORPORATE AND FINANCIAL UNDERTAKINGS
14	INSURANCE
15	SHIP COVENANTS
16	SECURITY COVER
17	APPLICATION OF EARNINGS
18	EVENTS OF DEFAULT
19	PAYMENTS AND CALCULATIONS
20	SECURITY
21	APPLICATION
22	FEES AND EXPENSES
23	INDEMNITIES
24	NO SET-OFF OR TAX DEDUCTION
25	ILLEGALITY, ETC
26	INCREASED COSTS

27	SET-OFF
28	ASSIGNMENTS, TRANSFERS AND CHANGES IN LENDING OFFICE
29	VARIATIONS AND WAIVERS
30	NOTICES
31	SUPPLEMENTAL
32	GOVERNING LAW
33	ENFORCEMENT
SCHEDULE 1  DRAWDOWN NOTICE
SCHEDULE 2  CONDITION PRECEDENT DOCUMENTS PART A - DRAWDOWN NOTICE
SCHEDULE 2  CONDITIONS PRECEDENT DOCUMENTS PART B - DRAWDOWN
SCHEDULE 3  DETAILS OF SHIPS
EXECUTION PAGE

APPENDIX A	FORM OF MORTGAGE
APPENDIX B	FORM OF GENERAL ASSIGNMENT
APPENDIX C	FORM OF ACCOUNT SECURITY DEED
APPENDIX D	FORM OF MANAGER’S UNDERTAKING
APPENDIX E	FORM OF MASTER AGREEMENT SECURITY DEED

THIS AGREEMENT is made on  2 March 2004

BETWEEN

(1)KNIGHTSBRIDGE TANKERS LIMITED a company incorporated in Bermuda whose registered office is at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM08, Bermuda (the “Borrower”);

(2)KTL HAMPSTEAD, INC., KTL CHELSEA, INC., KTL MAYFAIR, INC., KTL CAMDEN, INC. and KTL KENSINGTON, INC., each a company incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (each a “New Owner” and together the “New Owners”);

(3)THE ROYAL BANK OF SCOTLAND plc acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (as “Lender”).

BACKGROUND

The Lender has agreed to make available to the Borrower a facility of up to $140,000,000 for the purpose of enabling the Borrower to advance funds to the New Owners (newly incorporated special purpose subsidiaries of the Borrower) to enable each New Owner to finance part of the cost of acquiring a Ship and to provide working capital to the Borrower.

IT IS AGREED as follows:

1INTERPRETATION

1.1Definitions.  Subject to Clause 1.5, in this Agreement:

“Account Security Deed” means the deed containing, inter alia, a charge in respect of the Operating Account and the Retention Account executed or to be executed by the Borrower and each New Owner in favour of the Lender in the form set out in Appendix C;

“Administration Notice” means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person before, or in connection with, the appointment of an administrator;

“Advance” means each of Advance A, Advance B, Advance C, Advance D and Advance E and, in the plural, means all such Advances;

“Advance A” means the principal amount of the Advance referred to in Clause 3.2(b)(i) made or to be made by the Lender pursuant to Clause 3 or (as the context requires) the principal amount thereof for the time being outstanding under this Agreement;

“Advance B” means the principal amount of the Advance referred to in Clause 3.2(b)(ii) made or to be made by the Lender pursuant to Clause 3 or (as the context requires) the principal amount thereof for the time being outstanding under this Agreement;

“Advance C” means the principal amount of the Advance referred to in Clause 3.2(b)(iii) made or to be made by the Lender pursuant to Clause 3 or (as the context requires) the principal amount thereof for the time being outstanding under this Agreement;

“Advance D” means the principal amount of the Advance referred to in Clause 3.2(b)(iv) made or to be made by the Lender pursuant to Clause 3 or (as the context requires) the principal amount thereof for the time being outstanding under this Agreement;

“Advance E” means the principal amount of the Advance referred to in Clause 3.2(b)(v) made or to be made by the Lender pursuant to Clause 3 or (as the context requires) the principal amount thereof for the time being outstanding under this Agreement; and

“Approved Managers”  means, in relation to each Ship, the commercial and technical managers, respectively, specified below the name of such Ship in Schedule 3 or any other company or companies which the Lender may, in its sole and absolute discretion, approve from time to time as the commercial and/or technical managers of any Ship (and such approval may be subject to the condition that any technical or commercial managers will execute a manager’s undertaking on terms and conditions acceptable to the Lender);

“Availability Period”  means the period commencing on the date of this Agreement and ending on:

(a)30 June 2004 (or such later date as the Lender in its discretion may agree with the Borrower); or

(b)if earlier, the Drawdown Date in relation to the final Advance or the date on which the Commitment is cancelled or terminated;

“Business Day”  means a day on which banks and financial markets are open for business in London and, in respect of a day on which a payment is required to be made under a Finance Document, also in New York City;

“Calculation Period”  means the period commencing on the date on which the last payment or delivery was made under Section 2(a)(i) of the Master Agreement with respect to a Transaction (or, in the case of the first such period, the date the relevant Transaction was entered into) and ending on the next date upon which such a payment or delivery is to be made;

“Commitment” means $140,000,000 to the extent not cancelled or reduced under this Agreement;

“Conditional Sale Agreement” means, in relation to each Ship, a conditional sale agreement dated 25 November 1996 entered into between the relevant Existing Owner and the Lessor and, in the singular, means any of them;

“Conditional Sale Agreement Transfer” means, in relation to each Ship, an agreement entered into or to be entered into between the relevant Existing Owner, the Lessor and the relevant New Owner in respect of the transfer of the Conditional Sale Agreement from the Lessor to the relevant New Owner and, in particular, transferring the right of the Lessor to take title of the relevant Ship from the relevant Existing Owner;

“Contractual Currency”  has the meaning given in Clause 23.5;

“Credit Support Document”  has the meaning given to that expression in Section 14 of the Master Agreement;

“Credit Support Provider”  has the meaning given to that expression in Section 14 of the Master Agreement;

“Daylight Funding Agreement”  means, in relation to each New Owner, an agreement entered into or to be entered into among, inter alios, the Lender and that New Owner in respect of a daylight overdraft facility to be made available by the Lender to that New Owner to enable it to finance the balance of the purchase consideration of the relevant Vessel in excess of the amount thereof being financed by the relevant Advance;

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“Designated Flag” means, in relation to each Ship, the flag specified below the name of each Ship in Schedule 4 as the “New Flag”;

“Dollars” and “$”  means the lawful currency for the time being of the United States of America;

“Drawdown Date”  means, in relation to each Advance, the date requested by the Borrower for that Advance to be made, or (as the context requires) the date on which that Advance is actually made;

“Drawdown Notice”  means a notice in the form set out in Schedule 1;

“Early Termination Date”  has the meaning given to that expression in Section 14 of the Master Agreement;

“Earnings” means, in relation to each Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the New Owner which is the owner of such Ship at any time during the Security Period and which arise out of the use or operation of such Ship, including (but not limited to):

(a)all freight, hire and passage moneys, compensation payable to the New Owner which is the owner of such Ship in the event of requisition of such Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of such Ship;

(b)all moneys which are at any time payable under Insurances in respect of loss of earnings of such Ship; and

(c)if and whenever such Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to such Ship;

“Environmental Claim” means:

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

(b)any claim by any other person which relates to an Environmental Incident or to an alleged Environmental Incident,

and “claim” means:

(c)a claim for damages, compensation, fines, penalties or any other payment of any kind, whether or not similar to the foregoing;

(d)an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and

(e)any form of enforcement or regulatory action, including the arrest or attachment of any asset;

“Environmental Incident” means in relation to each Ship:

(a)any release of Environmentally Sensitive Material from such Ship; or

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

(c)any other incident in which Environmentally Sensitive Material is released otherwise than from such Ship and in connection with which such Ship is actually or potentially liable to be arrested and/or where the relevant New Owner and/or any operator or manager of such Ship is at fault or allegedly at fault or otherwise liable to any legal or administrative action;

“Environmental Law” means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material;

“Environmentally Sensitive Material” means oil, oil products and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous;

“Event of Default” means any of the events or circumstances described in Clause 18;

“Existing Lenders” means the financial institutions referred to and defined as “Banks” in a facility agreement dated 6 February 1997 for US$184,758,844 entered into by the Borrower with such parties and with Goldman Sachs International as agent (as the role of Goldman Sachs International has since been transferred to The Royal Bank of Scotland plc);

“Existing Loan Agreement”  means the facility agreement referred to in the definition of “Existing Lenders” together with, where the context so requires, the related swap documents;

“Existing Owner” means, in relation to each Ship, the single purpose ship owning company specified below the name of such Ship in Schedule 4 being in each case a company incorporated under the laws of the Cayman Islands and, in the plural, means all of them;

“Existing Swap”  means the ISDA Master Agreement dated as of 6th February 1997 entered into between the Borrower and the Existing Swap Counterparty, together with the Schedule thereto and all confirmations to that Master Agreement;

“Existing Swap Counterparty”  means Goldman Sachs Capital Markets, L.P.;

“Fee Letter”  means a letter entered into or to be entered into between the Lender, the Borrower and the New Owners in respect of a fee payable to the Lender in connection with this Agreement;

“Final Instalment”  means the amount of the Loan equal to Sixty one million six hundred thousand Dollars ($61,600,000) (as such amount might be reduced by operation of Clause 7.1(b) or increased by operation of Clause 7.2 (b)) to be repaid on the twenty eighth (28th) and final Repayment Date;

“Finance Documents” means:

(a)this Agreement;

(b)the General Assignments;

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(c)the Manager’s Undertakings;

(d)the Mortgages;

(e)the Credit Support Documents;

(f)the Account Security Deed;

(g)the Master Agreement Security Deed;

(h)each Daylight Funding Agreement;

(i)the Fee Letter; and

(j)any other document (whether creating a Security Interest or not) which is executed at any time by the Borrower, a New Owner or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, the Master Agreement Liabilities or any amount payable to the Lender under this Agreement, the Master Agreement or any of the other documents referred to in this definition;

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

(a)for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;

(b)under any loan stock, bond, note or other security issued by the debtor;

(c)under any acceptance credit, guarantee or letter of credit facility made available to the debtor;

(d)under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;

(e)under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or

(f)under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) above if the references to the debtor referred to the other person;

“General Assignment” means, in relation to each Ship, a general assignment of the Earnings, Insurances and any Requisition Compensation in the form set out in Appendix B;

“Group”  means the Borrower and its subsidiaries from time to time;

“Insurances” means, in relation to each Ship:

(a)all policies and contracts of insurance, including entries of such Ship in any war risks and protection and indemnity risks association, which are effected in respect of such Ship, her Earnings or otherwise in relation to her; and

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(b)all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium;

“Interest Period” means a period determined in accordance with Clause 5;

“ISM Code” means the International Safety Management Code (including the guidelines on its implementation), adopted by the International Maritime Organisation Assembly as Resolutions A.741 (18) and A.788 (19), as the same may be amended or supplemented from time to time (and the terms “safety management system”, “Safety Management Certificate” and “Document of Compliance” have the same meanings as are given to them in the ISM Code);

“Lease Limited Recourse Provisions”  means, in relation to each Lease Transaction, those provisions under the applicable lease agreement, the applicable direct support agreement (between each Existing Owner, as lessee, the Lessor and SIPC) and the applicable Shell Sub-charter the effect of which, in summary, is to require SIPC to pay to the Lessor amounts payable by the relevant Existing Owner under the Lease Transaction and limiting the Lessor’s recourse to the Existing Owner to, among other things, the amount so paid by SIPC;

“Lease Transaction”  means, in relation to each Ship, the lease transaction entered into between the relevant Existing Owner and the Lessor by way of, among other documents, the relevant Conditional Sale Agreement and a lease agreement and, in the plural, means all of them.

“Lender”  means The Royal Bank of Scotland plc, a company incorporated in Scotland having its registered office at 36 St. Andrew Square, Edinburgh EH2 2YB, Scotland acting through the Shipping Business Centre at 5-10 Great Tower Street, London EC3P 3HX, England or through any other branch notified to the Borrower from time to time pursuant to Clause 28.3 and includes all persons directly or indirectly deriving title under it (whether by assignment, amalgamation, operation of law or otherwise);

“Lessor”  means Calico Leasing (GB) Limited, previously called Natwest Leasing (GB) Limited, a company incorporated in England and Wales with company number 1791957;

“LIBOR” means, for an Interest Period or other relevant period:

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

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

 “Liquid Assets”  means the aggregate of:

(a)cash in hand (subject to evidence satisfactory to the Lender);

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(b)moneys standing to the credit of each Operating Account and the Retention Account;

(c)other bank deposits with the Lender or any other bank with a minimum rating of A2 with Moody’s or A with Standard & Poors;

(d)bonds, certificates of deposit and other money market instruments, funds or securities issued or guaranteed by the government (or government agencies) of the United States of America (subject to such securities being immediately convertible to cash (subject to evidence satisfactory to the Lender); and

(e)commercial paper and/or money market funds with a maximum of twelve months maturity and subject to such securities being immediately convertible to cash and having a minimum rating of Prime-2 with Moody’s or A-2 with Standard & Poors (subject to evidence satisfactory to the Lender),

in each case legally and beneficially owned by the Borrower or a New Owner and (other than the Security Interests in favour of the Lender in respect of each Operating Account and the Retention Account) free of any Security Interest;

“Loan” means the principal amount for the time being outstanding under this Agreement;

“Loan Facility” means the loan facility in an amount of up to One hundred and forty million Dollars ($140,000,000) to be made available by the Lender under this Agreement in up to five (5) Advances and otherwise subject to and on the terms and conditions herein contained;

“Major Casualty” means, in relation to a Ship, any casualty to the Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $2,000,000 or the equivalent in any other currency;

“Manager’s Undertaking”  means an undertaking executed or to be executed by the initial Approved Manager which is responsible for the commercial management of the Ships in the form set out in Appendix D;

“Margin” means 1 per cent. per annum;

“Master Agreement”  means the Master Agreement (on the 1992 ISDA (Multicurrency - Crossborder) form as modified) entered into by the Lender and the Borrower dated the date of this Agreement, and includes all transactions from time to time entered into and confirmations from time to time exchanged under the Master Agreement and any amending, supplementing or replacement agreements made from time to time;

“Master Agreement Liabilities”  means, at any relevant time, all liabilities actual or contingent, present or future, of the Borrower to the Lender under the Master Agreement;

“Master Agreement Security Deed”  means the deed containing, inter alia, a charge in respect of the Master Agreement executed or to be executed by the Borrower in favour of the Lender in the form set out in Appendix E;

“Mortgage”  means, in relation to each Ship, the first preferred ship mortgage on such Ship executed or to be executed by each New Owner in favour of the Lender in the form set out in Appendix A;

“Negotiation Period” has the meaning given in Clause 4.7;

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“New Owner” means, in relation to each Ship, the single purpose ship owning company specified below the name of such Ship in Schedule 4 being in each case a company incorporated under the laws of the country specified in Schedule 4 with its registered office at the place specified in Schedule 4;

“Operating Account” means an account in the name of the Borrower with the Lender in London designated “KNTAOPAC USD1 - Knightsbridge Tankers Operating Account”, or any other account (with that or another office of the Lender) which is designated by the Lender as the Operating Account for the purposes of this Agreement;

“Party”  means a party to this Agreement and, where the context permits or requires, a party to a Finance Document and the Master Agreement;

“Payment Currency” has the meaning given in Clause 23.5;

“Permitted Security Interests” means in relation to each New Owner:

(a)Security Interests created by the Finance Documents;

(b)liens for unpaid master’s and crew’s wages in accordance with usual maritime practice;

(c)liens for salvage;

(d)liens arising by operation of law for not more than 2 months’ prepaid hire under any charter in relation to a Ship not prohibited by this Agreement; and

(e)liens for master’s disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the relevant New Owner in good faith by appropriate steps) and subject, in the case of liens for repair or maintenance, to Clause 15.13 (g);

(f)any possessory liens arising as a result of a Ship being put into the possession of any person for the purpose of work being done upon it in any amount not exceeding or likely to exceed $2,000,000 (or equivalent in any other currency), or such greater amount as the Lender may agree to pursuant to the last paragraph of Clause 15.13, provided such obligations are met when they fall due.

“Pertinent Document” means:

(a)any Finance Document;

(b)any policy or contract of insurance contemplated by, or referred to in, Clause 14 or any other provision of this Agreement or any other Finance Document;

(c)any other document contemplated by, or referred to in, any Finance Document; and

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

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

(a)England and Wales;

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(b)the country under the laws of which the company is incorporated or formed;

(c)a country in which the company’s central management and control is or has recently been exercised;

(d)a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;

(e)a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

(f)a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c);

“Pertinent Matter” means:

(a)any transaction or matter contemplated by, arising out of, or connection with, a Pertinent Document; or

(b)any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a),

and covers any such transaction, matter or statement, whether entered into, arising or made at any time before or after the date of this Agreement;

“Potential Event of Default” means an event or circumstance which, with the giving of any notice, the lapse of time, a determination of the Lender and/or the satisfaction of any other condition, would constitute an Event of Default;

“Quotation Date” means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under a Finance Document), the second Business Day before commencement of that Interest Period (or such other period);

“Receiving Bank”  means American Express Bank Limited, 3 World Financial Centre, 23rd Floor, New York, NY 10285-2300, USA or such other bank as may from time to time be notified by the Lender to the Borrower;

“Relevant Person” has the meaning given to that expression in Clause 18.7;

“Repayment Date” means a date on which a repayment is required to be made under Clause 7;

“Requisition Compensation” includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of “Total Loss”;

“Retention Account” means an account in the name of the Borrower with the Lender in London designated “KNTAREAC USD1 - Knightsbridge Tankers Retention Account”, or any other account (with that or another office of the Lender) which is designated by the Lender as the Retention Account for the purposes of this Agreement;

“Secured Liabilities” means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Agreement or at any later time or

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times, under, or in connection with, any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country;

“Security Interest” means:

(a)a mortgage, charge (whether fixed or floating),  pledge, any maritime or other lien, hypothecation, encumbrance, assignment, trust arrangement, title retention or other distress, execution, attachment, arrangement or process of any kind having the effect of security or any other security interest of any kind;

(b)the security rights of a plaintiff under an action in rem; and

(c)any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

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

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

(a)all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents have been paid;

(b)no amount is owing or has accrued (without yet having become due for payment) under any Finance Document;

(c)neither the Borrower nor any Security Party has any future or contingent liability under Clause 22, 23 or 24 or any other provision of this Agreement or any other Finance Document; and

(d)the Lender does not consider that there is a significant risk that any payment or transaction under a Finance Document would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or any asset covered (or previously covered) by a Security Interest created by a Finance Document;

“Shell Sub-charter”  means, in relation to each Ship, the sub-charter between the relevant Existing Owner and SIPC;

“Ship” means each of the VLCCs specified in Schedule 3 to be acquired by the relevant New Owner and registered in its name under the Designated Flag and, in the plural, means all such ships;

“SIPC”  means Shell International Petroleum Company Limited, a company incorporated in England and Wales having its registered office at Shell Centre, London SE1 7NA;

“Taxes”  includes all present and future income, corporation or value-added taxes and all stamp and other taxes and levies, imposts, deductions, duties, charges and withholdings

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whatsoever together with interest thereon and penalties with respect thereto, if any, and charges, fees or other amounts made on or in respect thereof (and references to “Taxation” shall be construed accordingly);

“Title Transfer Documents”  means, in relation to each Ship, a document or documents to be entered into between the relevant Existing Owner and the relevant New Owner transferring title to the Ship pursuant to the relevant Conditional Sale Agreement Transfer;

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

(a)actual, constructive, compromised, agreed or arranged total loss of such Ship;

(b)any expropriation, confiscation, requisition or acquisition of such Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 30 days redelivered to the relevant New Owner’s full control;

(c)any arrest, capture, seizure or detention of such Ship (including any hijacking or theft) unless it is within 30 days redelivered to the relevant New Owner’s full control;

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

(a)in the case of an actual loss of such Ship, the date on which it occurred or, if that is unknown, the date when such Ship was last heard of;

(b)in the case of a constructive, compromised, agreed or arranged total loss of such Ship, the earlier of:

(i)the date on which a notice of abandonment is given to the insurers; and

(ii)the date of any compromise, arrangement or agreement made by or on behalf of the relevant New Owner with such Ship’s insurers in which the insurers agree to treat such Ship as a total loss; and

(c)in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Lender that the event constituting the total loss occurred;

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

1.2Construction of certain terms.  In this Agreement:

“approved” means, for the purposes of Clause 14, approved in writing by the Lender;

“asset” includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment;

“company” includes any partnership, joint venture and unincorporated association;

“consent” includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation;

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“contingent liability” means a liability which is not certain to arise and/or the amount of which remains unascertained;

“document” includes a deed; also a letter, fax or telex;

“excess risks” means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims;

“expense” means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax;

“law” includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union,  the European Commission, the United Nations or its Security Council;

“legal or administrative action” means any legal proceeding or arbitration and any administrative or regulatory action or investigation;

“liability” includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise;

“months” shall be construed in accordance with Clause 1.3;

“obligatory insurances” means all insurances effected, or which the New Owner is obliged to effect, under Clause 14.2, any other provision of this Agreement or any other Finance Document;

“parent company” has the meaning given in Clause 1.4;

“person” includes any company, any state, political sub-division of a state and local or municipal authority; and any international organisation;

“policy”, in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;

“protection and indemnity risks” means the usual risks covered by a member of the International Group of Protection and Indemnity Associations, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies entered into pursuant to Clause 14.2(a) (risks to be covered by obligatory insurances) by reason of the incorporation in them of clause 8 of the Institute Time Clauses (Hulls) (1/10/83) or the Institute Time Clauses (Hulls) (1/11/1995) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision;

“regulation” includes any regulation, rule, official directive, request or guideline whether or not having the force of law (either having the force of law or compliance with which is reasonable in the ordinary course of business of the party concerned) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;

“subsidiary” has the meaning given in Clause 1.4; and

“war risks” includes the risk of mines and all risks excluded from the hull and machinery policies required to be maintained in accordance with Clause 14.2(a) by clause 23 of the Institute Time Clauses (Hulls) (1/10/83) or clause 24 of the Institute Time Clauses (Hulls) (1/11/1995) or any equivalent provision.

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1.3Meaning of “month”.  A period of one or more “months” ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (“the numerically corresponding day”), but:

(a)on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or

(b)on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;

and “month” and “monthly” shall be construed accordingly.

1.4Meaning of “subsidiary”.  A company (S) is a subsidiary of another company (P) if:

(a)a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

(b)P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or

(c)P has the direct or indirect power to appoint or remove a majority of the directors of S; or

(d)P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;

and any company of which S is a subsidiary is a parent company of S.

1.5General interpretation.  In this Agreement:

(a)references in Clause 1.1 to a Finance Document or any other document being in the form of a particular Schedule or Appendix include references to that form with any modifications to that form which the Lender approves or requires;

(b)references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;

(c)references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;

(d)words denoting the singular number shall include the plural and vice versa; and

(e)Clauses 1.1 to 1.4 and the foregoing provisions of this Clause 1.5 apply unless the contrary intention appears.

1.6Headings.  In interpreting a Finance Document or any provision of a Finance Document, all clause, sub-clause and other headings in that and any other Finance Document shall be entirely disregarded.

1.7Exclusion of restrictive principles of interpretation.  Any principle requiring any provision of this Agreement or any other Finance Document (including this Clause 1.7) to be construed narrowly or against the Lender is excluded.

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2FACILITY

2.1Amount of facility.  Subject to the other provisions of this Agreement and in reliance (inter alia) on the representations and warranties of the Borrower and the New Owners set out in Clause 11 and the representations and warranties of the Borrower and the other Security Parties set out in the other Finance Documents, the Lender shall make a loan facility not exceeding $140,000,000 available to the Borrower.

2.2The purpose of the Loan Facility shall be:

(a)as to Twenty eight million United States Dollars (US$28,000,000) to enable the Borrower to provide funds to the relevant New Owner to part-finance its purchase of m.v. “MEGARA” under the relevant Conditional Sale Agreement Transfer;

(b)as to Twenty eight million United States Dollars (US$28,000,000) to enable the Borrower to provide funds to the relevant New Owner to part-finance its purchase of m.v. “MACOMA” from the relevant Existing Owner under the relevant Conditional Sale Agreement Transfer;

(c)as to Twenty eight million United States Dollars (US$28,000,000) to enable the Borrower to provide funds to the relevant New Owner to part-finance its purchase of m.v. “MAGDALA” from under the relevant Conditional Sale Agreement Transfer;

(d)as to Twenty eight million United States Dollars (US$28,000,000) to enable the Borrower to provide funds to the relevant New Owner to part-finance its purchase of m.v. “MUREX” from under the relevant Conditional Sale Agreement Transfer; and

(e)as to Twenty eight million United States Dollars (US$28,000,000) to enable the Borrower to provide funds to the relevant New Owner to part-finance its purchase of m.v. “MYRINA” from under the relevant Conditional Sale Agreement Transfer.

3DRAWDOWN

3.1Request for advance of Loan.  Subject to the following conditions, the Borrower may request an Advance to be made by ensuring that the Lender receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 2 Business Days before the intended Drawdown Date.

3.2Availability.  The conditions referred to in Clause 3.1 are that:

(a)the Drawdown Date has to be a Business Day during the Availability Period; and

(b)the Lender agrees to make the Loan Facility available to the Borrower in no more than five (5) Advances as follows:

(i)an Advance in the amount and for the purpose specified in Clause 2.2(a);

(ii)an Advance in the amount and for the purpose specified in Clause 2.2(b);

(iii)an Advance in the amount and for the purpose specified in Clause 2.2(c);

(iv)an Advance in the amount and for the purpose specified in Clause 2.2(d); and

(v)an Advance in the amount and for the purpose specified in Clause 2.2(e).

3.3Drawdown Notice irrevocable.  A Drawdown Notice must be signed by a director of the Borrower, and once served, a Drawdown Notice cannot be revoked without the prior consent of the Lender.

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3.4Disbursement of Loan.  Subject to the provisions of this Agreement, the Lender shall on the Drawdown Date make the relevant Advance to the Borrower; and payment to the Borrower shall be made to the account or accounts which the Borrower specifies in the Drawdown Notice, which shall be (i) an account of the Borrower, (ii) an account of the relevant New Owner (for onward transmission to the Lessor) or (iii) an account of the Lessor to which the purchase price of the Vessel is to be paid in accordance with the applicable Conditional Sale Agreement Transfer.

3.5Disbursement of Loan to third party.  For the avoidance of doubt, the payment by the Lender under Clause 3.4 of the proceeds of an Advance to the account of a New Owner or of the Lessor shall constitute the making of that Advance to the Borrower and the Borrower shall at that time become indebted, as principal and direct obligor, to the Lender in an amount equal to that Advance.

3.6Cancellation of the Commitment.  Any unutilised part of the Commitment shall be cancelled at the close of business in London on the last day of the Availability Period.

4INTEREST

4.1Time for payment of normal interest.  Subject to the provisions of this Agreement, interest on the Loan in respect of each Interest Period shall be paid by the Borrower on the last day of that Interest Period.

4.2Normal rate of interest.  Subject to the provisions of this Agreement, the rate of interest on the Loan in respect of an Interest Period shall be the aggregate of (a) the Margin and (b) LIBOR for that Interest Period.

4.3Payment of accrued interest.  In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.

4.4Notification of market disruption.  The Lender shall promptly notify the Borrower if for any reason:

(a)it is unable to obtain Dollars in the London Interbank Market in order to fund the Loan (or any part of it) during any Interest Period, stating the circumstances which have caused such notice to be given; or

(b)adequate and fair means do not exist for ascertaining the rate of interest applicable to the Loan (or any part thereof) during any Interest Period.

4.5Suspension of drawdown.  If the Lender’s notice under Clause 4.4 is served before the Loan is made, the Lender’s obligation to make the Loan shall be suspended while the circumstances referred to in the Lender’s notice continue.

4.6Negotiation of alternative rate of interest.  If the Lender’s notice under Clause 4.4 is served after the Loan is made, the Borrower and the Lender shall use reasonable endeavours to agree, within the 30 days after the date on which the Lender serves its notice under Clause 4.4 (the “Negotiation Period”), an alternative interest rate or (as the case may be) an alternative basis for the Lender to fund or continue to fund the Loan during the Interest Period concerned.

4.7Application of agreed alternative rate of interest.  Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed.

4.8Alternative rate of interest in absence of agreement.  If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant

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circumstances are continuing at the end of the Negotiation Period, then the Lender shall set an interest period and interest rate representing the cost of funding of the Lender in Dollars (or in any available currency of the Loan) plus the Margin; and the procedure provided for by this Clause 4.8 shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Lender.

4.9Notice of prepayment.  If the Borrower does not agree with an interest rate set by the Lender under Clause 4.8, the Borrower may give the Lender not less than 5 Business Days’ notice of its intention to prepay the Loan at the end of the interest period set by the Lender.

4.10Prepayment.  A notice under Clause 4.9 shall be irrevocable; and on the last Business Day of the interest period set by the Lender, the Borrower shall prepay (without premium or penalty) the Loan, together with accrued interest thereon at the applicable rate plus the Margin.

4.11Application of prepayment.  Clause 7 shall apply in relation to the prepayment.

5INTEREST PERIODS

5.1Commencement of Interest Periods.  The first Interest Period in respect of each Advance shall commence on the Drawdown Date in respect of that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.

5.2Duration of normal Interest Periods.  Subject to Clauses 5.3, 5.4 and 5.5 each Interest Period shall be:

(a)1, 2, 3, 6, 9 or 12 months as notified by the Borrower to the Lender (or such other period as may be notified by the Borrower to the Lender, and agreed to by the Lender) not later than 11.00 a.m. (London time) 2 Business Days before the commencement of the Interest Period; or

(b)3 months, if the Borrower fails to notify the Lender by the time specified in Clause 5.2(a); or

(c)such other period as the Lender may agree with the Borrower.

5.3Duration of first Interest Periods.  The first Interest Period in respect of each Advance shall end on 30 June 2004.  After that, the Interest Periods in respect of each of the Advances shall begin and end on the same dates.

5.4Duration of Interest Periods for repayment instalments.  In respect of an amount due to be repaid under Clause 7 on a particular Repayment Date, an Interest Period shall end on that Repayment Date.

6DEFAULT INTEREST

6.1Payment of default interest on overdue amounts.  The Borrower shall pay interest in accordance with the following provisions of this Clause 6 on any amount payable by the Borrower under any Finance Document which the Lender does not receive on or before the relevant date, that is:

(a)the date on which the Finance Documents provide that such amount is due for payment; or

(b)if a Finance Document provides that such amount is payable on demand, the date on which the demand is served; or

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(c)if such amount has become immediately due and payable under Clause 18.4, the date on which it became immediately due and payable.

6.2Default rate of interest.  Interest shall accrue on an overdue amount from (and including) the relevant date until the date of actual payment (as well after as before judgment) at the rate per annum determined by the Lender to be 1.5 per cent. above:

(a)in the case of an overdue amount of principal, the higher of the rates set out at Clauses 6.3(a) and (b); or

(b)in the case of any other overdue amount, the rate set out at Clause 6.3(b).

6.3Calculation of default rate of interest.  The rates referred to in Clause 6.2 are:

(a)the rate applicable to the overdue principal amount immediately before the relevant date (but only for any unexpired part of any then current Interest Period);

(b)the Margin plus, in respect of successive periods of any duration (including at call) up to 3 months which the Lender may select from time to time:

(i)LIBOR; or

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

6.4Notification of interest periods and default rates.  The Lender shall promptly notify the Borrower of each interest rate determined by it under Clause 6.3 and of each period selected by it for the purposes of Clause 6(3)(b); but this shall not be taken to imply that the Borrower is liable to pay such interest only with effect from the date of the Lender’s notification.

6.5Payment of accrued default interest.  Subject to the other provisions of this Agreement, any interest due under this Clause shall be paid on the last day of the period by reference to which it was determined.

6.6Compounding of default interest.  Any such interest which is not paid at the end of the period by reference to which it was determined shall thereupon be compounded.

7REPAYMENT AND PREPAYMENT

7.1Amount of repayment instalments.

(a)The Borrower shall repay the Loan by twenty-eight (28) consecutive three-monthly instalments of Two million eight hundred thousand Dollars ($2,800,000) each and a further instalment (being the Final Instalment) of Sixty one million six hundred thousand Dollars ($61,600,000) on the same date as the twenty eighth (28th) and final quarterly instalment.

(b)If the aggregate amount of the Loan is less than One hundred and forty million Dollars ($140,000,000) the amount of each of such twenty-eight (28) three-monthly instalments and the Final Instalment shall be reduced pro rata.

(c)The repayment instalments made in accordance with this Clause 7.1 shall take effect as among the Advances on a pro rata basis.

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7.2Repayment Dates.

(a)The first repayment instalment of the Loan shall be repaid on 30 June 2004.  End of the subsequent instalments of the Loan shall be repaid on dates falling at consecutive three-monthly intervals thereafter.

(b)The Borrower may elect to defer the payment of one (1) or two (2) instalments on the condition and provided that:

(i)no Event of Default or Potential Event of Default has occurred or is continuing;

(ii)at least 14 day’s prior written notice has been given to the Lender specifying which instalment(s) are to be deferred;

(iii)the deferred instalment(s) shall be repaid on the same date as the Final Instalment and shall be deemed to form part of the Final Instalment for all purposes of the Finance Documents;

(iv)the Borrower shall not be entitled to request that repayment of the first or second repayment instalments be deferred; and

(v)subject to the foregoing, the Borrower may elect to defer two (2) instalments at the same time or on separate occasions.

7.3Final Repayment Date.  On the final Repayment Date, the Borrower shall additionally pay to the Lender all other sums then accrued or owing to the Lender under any Finance Document.

7.4Voluntary prepayment.  Subject to the following conditions, the Borrower may prepay the whole or any part of the Loan on any Business Day.

7.5Conditions for voluntary prepayment.  The conditions referred to in Clause 7.4 are that:

(a)a partial prepayment shall be in a minimum amount of $500,000 or if larger a whole multiple of $500,000;

(b)the Lender has received from the Borrower at least 5 days’ prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made;

(c)the Borrower has provided evidence satisfactory to the Lender that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any regulation relevant to this Agreement which affects the Borrower or any Security Party has been complied with; and

(d)the Borrower shall fully indemnify the Lender on its demand in respect of interest breakage costs made or incurred by the Lender, or which the Lender estimates that it will incur as a result of a prepayment.

7.6Effect of notice of prepayment.  A prepayment notice may not be withdrawn or amended without the consent of the Lender and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.

7.7Mandatory prepayment.  If a Ship is sold or becomes a Total Loss the Borrower shall prepay the whole of the Advance made for the purpose of assisting the relevant New Owner to finance the acquisition of that Ship:

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(a)in the case of a sale, on or before the date on which the sale is completed by delivery of a Ship to the buyer; or

(b)in the case of a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Lender of the proceeds of insurance relating to such Total Loss.

7.8Amounts payable on prepayment.  A prepayment shall be made together with accrued interest (and any other amount payable under Clause 23 or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an Interest Period or other relevant period together with any sums payable under Clause 23.1(b) but without premium or penalty.

7.9Application of partial prepayment.  Each partial prepayment shall be applied against the repayment instalments of the Loan (including the Final Instalment) on a pro rata basis.

7.10No reborrowing.  No amount repaid or prepaid may be reborrowed.

8MISMATCH BETWEEN LOAN AND TRANSACTIONS

8.1Full amount of Commitment not borrowed.  If for any reason less than the Commitment as at the date of this Agreement is advanced under this Agreement but nonetheless a Transaction in respect of the Commitment as at the date of this Agreement has been entered into under the Master Agreement then, subject to Clause 8.3, the Lender shall be entitled but not obliged:

(a)to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or any part of the rights, benefits and obligations created by the Master Agreement; and/or

(b)to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion decides,

and, if the Lender exercises any part of that entitlement, the Borrower’s continuing obligations under the Master Agreement shall, unless agreed otherwise by the Lender, be calculated so far as the Lender considers practicable by reference to the repayment schedule for the Loan taking into account the fact that less than the full amount of the Commitment as at the date of this Agreement has been drawndown under this Agreement.

8.2Hedging position following prepayment.  In the case of a prepayment of all or part of the Loan under this Agreement then, subject to Clause 8.3, the Lender shall be entitled but not obliged:

(a)to amend, supplement, cancel, net out, terminate, liquidate, transfer or assign all or such part of the rights, benefits and obligations created by the Master Agreement which equate or relate to the part of the Loan so prepaid; and/or

(b)to obtain or re-establish any hedge or related trading position in any manner and with any person the Lender in its absolute discretion decides,

and, in the case of a partial prepayment of the Loan and the Lender exercising any part of that entitlement, the Borrower’s continuing obligations under the Master Agreement shall, unless agreed otherwise by the Lender, be calculated so far as the Lender considers practicable by reference to the amended repayment schedule for the Loan taking account of the fact that the Loan then constitutes less than the amount drawndown under this Agreement, after taking into consideration any repayment instalment previously made under Clauses 7.1 and 7.2.

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8.3Obligation to provide additional security.  If:

(a)

(i)other than as a result of any repayment instalment previously made under Clause 7.1, the Loan constitutes less than the amount drawndown under this Agreement; or

(ii)less than the full amount of the Commitment as at the date of this Agreement is drawndown under this Agreement; and

(b)in either case following a written request from the Borrower, the Lender in its absolute discretion agrees that the Borrower may be permitted to maintain all or part of a Transaction in an amount not wholly matched with, or linked to, all or part of the Loan,

the Borrower shall, within five (5) Business Days of being notified by the Lender of such requirement, provide the Lender with, or procure the provision to the Lender of, such additional security as shall, in the opinion of the Lender, be adequate to secure the performance of any relevant Transaction.

8.4Form of additional security.  The additional security referred to in Clause 8.3  shall take such form, be constituted by such documentation and be entered into by such parties, as the Lender may, in its absolute discretion, approve or require, and each document comprising such additional security shall constitute a Credit Support Document.

8.5Indemnity.  The Borrower shall, on the first written demand of the Lender, indemnify the Lender in respect of all expenses (including the fees of legal advisers) incurred or sustained by the Lender as a consequence of, or in relation to, the effecting of any matters or transactions referred to in Clauses 8.1, 8.2, 8.3 and 8.4.

8.6Consequences of Transactions being terminated.  Without prejudice to or limitation of the obligations of the Borrower under Clause 8.5, if the Lender exercises any of its rights under Clauses 8.1 or 8.2 and such exercise results in all or part of a Transaction being terminated, such termination shall be treated under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in section 14 of the Master Agreement) effected by the Lender after an Event of Default by the Borrower, and, accordingly, the Lender shall be permitted to recover from the Borrower a payment for early termination calculated in accordance with the provisions of section 6(e)(i) of the Master Agreement.

9CONDITIONS PRECEDENT

9.1Documents, fees and no default.  The Lender’s obligation to make any Advance is subject to the following conditions precedent:

(a)that, on or before the date on which the first Drawdown Notice is served, the Lender receives the documents described in Part A of Schedule 2 in form and substance satisfactory to it and its lawyers;

(b)that, on or before the Drawdown Date in relation to each Advance, the Lender receives the documents described in Part B of Schedule 2 in form and substance satisfactory to it and its lawyers;

(c)that, on or before the first Drawdown Date, the Lender receives the arrangement fee referred to in Clause 22.1; and

(d)in relation to each Advance, that both on the date of the Drawdown Notice and on the Drawdown Date:

(i)no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the Loan;

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(ii)the representations and warranties set out in Clauses 11.1 to 11.21 and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing;

(iii)none of the circumstances contemplated by Clause 4.5 has occurred and is continuing;

(e)that on the Drawdown Date in relation to any Advance the representations and warranties set out in Clauses 11.22 to 11.26 would be true and not misleading;

(f)that, if the ratio set out in Clause 16.2 were applied immediately following the making of the Loan, the Borrower would not be obliged to provide additional security or prepay part of the Loan under Clause 16; and

(g)that the Lender has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Lender may request by notice to the Borrower before the Drawdown Date in relation to any Advance.

9.2Waivers of conditions precedent.  If the Lender, at its discretion, permits the Loan to be borrowed before certain of the conditions referred to in Clause 9.1 are satisfied, the Borrower shall ensure that those conditions are satisfied within 14 days after the Drawdown Date (or such longer period as the Lender may in its sole and absolute discretion, specify).

10GUARANTEE

10.1Guarantee and indemnity.  Each New Owner unconditionally and irrevocably:

(a)guarantees the due payment of all amounts payable by the Borrower and each other New Owner under or in connection with this Agreement, every other Finance Document and the Master Agreement;

(b)undertakes to pay to the Lender, on the Lender’s demand, any such amount which is not paid by the Borrower or any other New Owner when payable; and

(c)fully indemnifies the Lender on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by the Lender as a result of or in connection with any obligation or liability guaranteed by that New Owner being or becoming unenforceable, invalid, void or illegal; and the amount recoverable under this indemnity shall be equal to the amount which the Lender would otherwise have been entitled to recover;

(all such amount being collectively called “Guaranteed Obligations”.)

10.2No limit on number of demands.  The Lender may serve more than one demand under Clause 10.1.

10.3Principal and independent debtor.  Each New Owner shall be liable under this Clause 10 as a principal and independent debtor and accordingly it shall not have, as regards this Clause 10, any of the rights or defences of a surety.

10.4Waiver of rights and defences.  Without limiting the generality of Clause 10.3, each New Owner shall neither be discharged by, nor have any claim against the Lender in respect of, nor shall the security constituted by the Finance Documents to which that New Owner is a party be released or impaired by reason of:

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(a)any amendment or supplement being made to the Finance Documents or the Master Agreement;

(b)any arrangement or concession (including a rescheduling or acceptance of partial payments) relating to, or affecting, the Finance Documents or the Master Agreement;

(c)any release or loss (even though negligent) of any right or Security Interest created by the Finance Documents or the Master Agreement;

(d)any failure (even though negligent) promptly or properly to exercise or enforce any such right or Security Interest, including a failure to realise for its full market value an asset covered by such a Security Interest; or

(e)any other Finance Document, the Master Agreement or any Security Interest now being or later becoming void, unenforceable, illegal or invalid or otherwise defective for any reason, including a neglect to register it.

10.5Immediate recourse.  Each New Owner waives any right it may have of first requiring the Lender (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that New Owner under this Clause 10.

10.6Method of payments.  Any amount due under this Clause 10 shall be paid:

(a)in immediately available funds;

(b)to such account as the Lender may from time to time notify to the relevant New Owner;

(c)without any form of set-off, cross-claim or condition; and

(d)free and clear of any tax deduction except a tax deduction which that New Owner is required by law to make.

10.7Grossing-up for taxes.  If a New Owner is required by law to make a tax deduction, the amount due to the Lender shall be increased by the amount necessary to ensure that the Lender receives and retains a net amount which, after the tax deduction, is equal to the full amount that it would otherwise have received.

10.8Accrual of interest.  Any amount due under this Clause 10 shall carry interest after the date on which the Lender demands payment of it until it is actually paid, unless interest on that same amount also accrues due from the Borrower or the applicable other New Owner under this Agreement or the relevant other Finance Document.

10.9Calculation of interest.  Interest under this Clause 10 shall be calculated and accrue in the same way as interest under Clause 6.

10.10Guarantee extends to interest payable under Agreement.  For the avoidance of doubt, it is confirmed that this Clause 10 covers all interest payable under this Agreement, including that payable under Clause 6.

10.11Subordination of rights of New Owner.  All rights which a New Owner at any time has (whether in respect of this Clause 10 or any other transaction) against the Borrower or any other New Owner, any other Security Party or their respective assets shall be fully subordinated to the rights of the Lender under the Finance Documents and the Master Agreement;  and in particular, a New Owner shall not:

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(a)claim, or in a bankruptcy of the Borrower or any other Security Party prove for, any amount payable to that New Owner by the Borrower or any other Security Party, whether in respect of this Clause 10 or any other transaction;

(b)take or enforce any Security Interest for any such amount;

(c)claim to set-off any such amount against any amount payable by that New Owner to the Borrower or any other Security Party; or

(d)claim any subrogation or other right in respect of any Finance Document or the Master Agreement or any sum received or recovered by the Lender under a Finance Document or the Master Agreement.

10.12No requirement to commence proceedings.  The Lender will not need to commence any proceedings under, or enforce any Security Interest created by, Agreement, any other Finance Document or the Master Agreement before claiming or commencing proceedings under this Clause 10.

10.13Conclusive evidence of certain matters.  However, as against a New Owner:

(a)any judgment or order of a court in England or Bermuda in connection with this Agreement; and

(b)any statement or admission of the Borrower in connection with this Agreement,

shall be binding and conclusive as to all matters of fact and law to which it relates.

10.14Suspense account.  The Lender may, for the purpose of claiming or proving in a bankruptcy of the Borrower or any other Security Party, place any sum received or recovered under or by virtue of this Clause 10 or any Security Interest connected with it on a separate suspense or other nominal account without applying it in satisfaction of the Borrower’s obligations under this Agreement.

10.15Joint and several liability.  All liabilities and obligations of the New Owners under this Agreement shall, whether expressed to be so or not, be joint and several (but so that the liability in respect of the guarantee of each other New Owner shall be joint and several with the New Owners other than the New Owner whose liabilities are guaranteed).  The liabilities and obligations of a New Owner shall not be impaired by:

(a)this Agreement being or later becoming void, unenforceable or illegal as regards any other New Owner;

(b)the Lender entering into any rescheduling, refinancing or other arrangement of any kind with any other New Owner;

(c)the Lender releasing any other New Owner or any Security Interest created by a Finance Document or the Master Agreement; or

(d)any combination of the foregoing.

10.16New Owner’s Right of Contribution.  At any time a payment in respect of the Guaranteed Obligations is made under this Clause 10, the right of contribution of each New Owner against each other New Owner shall be determined as provided in the immediately following sentence, with the right of contribution of each New Owner to be revised and restated as of each date on which a payment (a “Relevant Payment”) is made on the Guaranteed Obligations under this Clause 10.  At any time that a Relevant Payment is made by a New Owner that results in the aggregate payments made by such

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New Owner in respect of the Guaranteed Obligations to and including the date of the Relevant Payment exceeding such New Owner’s Contribution Percentage (as defined below) of the aggregate payments made by all New Owners in respect of the Guaranteed Obligations to and including the date of the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such New Owner shall have a right of contribution against each other New Owner who has made no payment or has made payments in respect of the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other New Owner’s Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all New Owners in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such New Owner and the denominator of which is the Aggregate Excess Amount of all New Owners multiplied by (y) the Aggregate Deficit Amount of such other New Owner.  A New Owner’s right of contribution pursuant to the preceding sentences shall arise at the time of each computation, subject to adjustment to the time of each computation.  As used in this Clause 10:  (i) each New Owner’s “Contribution Percentage” shall mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such New Owner by (y) the aggregate Adjusted Net Worth of all New Owners; (ii) the “Adjusted Net Worth” of each New Owner shall mean the greater of (x) the Net Worth (as defined below) of such New Owner and (y) zero; and (iii) the “Net Worth” of each New Owner shall mean the amount by which the fair saleable value of such New Owner’s assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Clause 10) on such date.  Each of the New Owners recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution.  In this connection, each New Owner has the right to waive its contribution right against any New Owner to the extent that after giving effect to such waiver such New Owner would remain solvent, in the determination of the Lender.

10.17No Fraudulent Conveyance.  Each New Owner and the Lender (by its acceptance of the benefits of the provisions of this Clause 10) hereby confirms that it is its intention that the provisions of this Clause 10 not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar law of the United States of America or any state thereof, or of the Republic of Liberia.  To effectuate the foregoing intention, each New Owner and the Lender (by its acceptance of the benefits of the provisions of this Clause 10) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such New Owner shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such New Owner that are relevant under such laws and after giving effect to any rights to contribution of such New Owner from the other New Owners pursuant to Clause 10.16 (calculated as if such maximum amount had been discharged in full by such New Owner) result in the Guaranteed Obligations of such New Owner in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

11REPRESENTATIONS AND WARRANTIES

11.1General.  The Borrower and each New Owner represents and warrants to the Lender as set out in this Clause 11.

11.2Status

(a)The Borrower and each New Owner is duly incorporated and validly existing and in good standing under the laws of the jurisdiction of its organisation;

(b)The Borrower is listed on the NASDAQ stock exchange.

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11.3Share capital and ownership.  Each New Owner has an authorised share capital of $500 registered shares without par value, all of which shares have been fully paid, and the legal title and beneficial ownership of all of these shares is held (free of any Security Interest or other claim) by the Borrower.  The Borrower has no subsidiaries other than the Existing Owners and the New Owners.

11.4Corporate power and action.  The Borrower and each New Owner has the corporate capacity, and has taken all corporate or shareholder action and obtained all consents, licences, approvals and authorisations necessary for it:

(a)in the case of each New Owner, to execute the relevant Conditional Sale Agreement Transfer, to purchase and pay for the Ship under the relevant Conditional Sale Agreement Transfer and to register the relevant Ship in its name under the Designated flag;

(b)to execute the Master Agreement and the Finance Documents to which the Borrower or each New Owner is a party; and

(c)in the case of the Borrower, to borrow under this Agreement and to make all the payments contemplated by, and otherwise to comply with, the Master Agreement and those Finance Documents.

11.5Consents in force.  All the consents referred to in Clause 11.4 remain in force and nothing has occurred which makes any of them liable to revocation.

11.6Legal validity; effective Security Interests.  The Master Agreement and the Finance Documents to which the Borrower and each New Owner is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration):

(a)constitute the Borrower’s and each New Owner’s legal, valid and binding obligations enforceable against the Borrower and each New Owner in accordance with their respective terms; and

(b)create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate,

subject to any relevant insolvency laws affecting creditors’ rights generally.

11.7No third party Security Interests.  Without limiting the generality of Clause 11.6, at the time of the execution and delivery of each Finance Document to which it is a party;

(a)the Borrower and each New Owner will have the right to create all the Security Interests which that Finance Document purports to create; and

(b)no third party will have any Security Interest or any other interest, right or claim over, in or in relation to, any asset to which any such Security Interest, by its terms, relates.

11.8No conflicts.  The execution by the Borrower and each New Owner of the Master Agreement and each Finance Document to which it is a party, and the borrowing by the Borrower of the Loan, and its compliance with the Master Agreement and each such Finance Document will not involve or lead to a contravention of:

(a)any law or regulation; or

(b)the constitutional documents of the Borrower or any New Owner; or

(c)any contractual or other obligation or restriction which is binding on the Borrower or any New Owner or any of their respective assets.

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11.9No withholding taxes.  All payments which the Borrower or any New Owner is liable to make under the Finance Documents and the Master Agreement may be made without deduction or withholding for or on account of any tax payable under any law of any Pertinent Jurisdiction.

11.10No default.  No Event of Default or Potential Event of Default has occurred and is continuing or will result from the purchase of a Ship by the relevant New Owner, the entry by the Borrower and each New Owner into this Agreement, the Master Agreement and the other Finance Documents to which it is a party, the making of the Loan to the Borrower or the performance by the Borrower and any New Owner of any of their obligations under this Agreement, the Master Agreement and the other Finance Documents to which they are a party.

11.11Information.  All financial and other information furnished by or on behalf of the Borrower and any New Owner in connection with the negotiation of this Agreement and the other Finance Documents or delivered to the Lender pursuant to this Agreement or any of the other Finance Documents satisfied the requirements of Clause 12.7.

11.12Audited accounts.  The audited and unaudited accounts which have been provided in connection with any Finance Document satisfied the requirements of Clause 12.9 and there has been no material adverse change in the financial position or state of affairs of the Borrower or any New Owner from that disclosed in the latest of those accounts.

11.13No litigation.  No legal or administrative action involving the Borrower and any New Owner (including action relating to any alleged or actual breach of the ISM Code) has been commenced or taken or, to the knowledge of the Borrower or any New Owner, is likely to be commenced or taken and neither is there subsisting any judgment or award given against the Borrower or any New Owner before any court, board of arbitration or other body which would be likely to have a material adverse effect on the business or financial position or profitability of the Borrower or any New Owner.

11.14Registration.  Save for such registrations and filings as are referred to in this Agreement and the other Finance Documents, it is not necessary for the legality, validity, enforceability or admissibility in evidence of this Agreement, the Master Agreement and the other Finance Documents that any of them or any document relating thereto be registered, filed, recorded or enrolled with any court or authority in any relevant jurisdiction or that any stamp, registration or similar Taxes be paid on or in relation to this Agreement, the Master Agreement or any of the other Finance Documents.

11.15Validity and completeness of certain documents. Each Conditional Sale Agreement Transfer and the corresponding Title Transfer Documents constitute, or upon execution by the parties thereto, will constitute valid, binding and enforceable obligations of the parties thereto in accordance with their respective terms and:

(a)the copy of each Conditional Sale Agreement Transfer and the corresponding Title Transfer Documents delivered or to be delivered to the Lender is, or will be, a true and complete copy;

(b)if the Conditional Sale Agreement Transfers have been executed on or prior to the date of this Agreement, no amendments or additions to any Conditional Sale Agreement Transfer have been agreed;

(c)if the Conditional Sale Agreement Transfers have been executed on or prior to the date of this Agreement, none of the Existing Owners, the Lessor or the New Owners have waived any of their respective rights under the Conditional Sale Agreement Transfers; and

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(d)each Conditional Sale Agreement Transfer and the corresponding Title Transfer Documents have been, or will be, validly entered into pursuant to the agency powers conferred by the Lessor on each Existing Owner.

11.16No rebates etc.  There is no agreement or understanding to allow or pay any rebate, premium, commission, discount or other benefit or payment (howsoever described) to the Existing Owners, the New Owners, the Lessor, or any other third party in connection with any Conditional Sale Agreement Transfer or the purchase by a New Owner of a Ship, other than as disclosed to the Lender in writing on or before the date of this Agreement.

11.17Compliance with certain undertakings.  The Borrower is in compliance with Clauses 12.2, 12.12, 12.17 and 13.8.

11.18Taxes paid.  The Borrower and each New Owner has paid all taxes applicable to, or imposed on, or in relation to, the Borrower and each New Owner, their business or the Ships.

11.19ISM Code compliance.  All requirements of the ISM Code as they relate to the New Owners, the Approved Managers and the Ships have been complied with and, without limiting the foregoing, the New Owners have complied with the ISM Code and all other statutory and other requirements relative to their businesses and in particular have obtained and maintain a valid SMC and DOC and does not have an established place of business in any part of the United Kingdom or the United States of America.

11.20No other Financial Indebtedness.  The Borrower and the New Owners are not liable under or in respect of any Financial Indebtedness other than (i) under the Conditional Sale Agreement Transfers, this Agreement, the Master Agreement and the other Finance Documents to which they are a party, (ii) in the case of each New Owner, Financial Indebtedness owing to the Borrower in respect of the funding by the Borrower of each New Owner with the proceeds of the relevant Advance, such further amounts as are necessary to enable each New Owner to purchase a Ship and such further amounts as the Borrower may advance to a New Owner from time to time for the purpose of providing working capital, (iii) in the case of the Borrower, under the Existing Loan Agreement and (iv) such Financial Indebtedness as shall have been notified to, and approved by, the Lender on or before the date of this Agreement.  In particular, and without prejudice to the generality of the foregoing the Borrower and the Existing Owners are not liable in respect of any Financial Indebtedness (whether actual or contingent) related to or arising out of the Lease Transactions except for the Lease Limited Recourse Provisions.

11.21No money laundering.  The Borrower and each New Owner is acting for its own account and the borrowing of the Loan and the performance and discharge of its obligations and liabilities under this Agreement, the Master Agreement and the other Finance Documents to which it is a party and other arrangements effected or contemplated by this Agreement will not involve or lead to contravention of any law, official, requirement or other regulatory measure or procedure implemented to combat “money laundering” (as defined in Article 1 of the Directive (91/308/EEC) of the Council of the European Community).

11.22Delivery of the Ships.  Each Ship will have been re-delivered by Shell to the relevant Existing Owner pursuant to the relevant Shell Sub-charter and unconditionally delivered by the relevant Existing Owner to, and accepted by, the relevant New Owner pursuant to the relevant Conditional Sale Agreement Transfer and the corresponding Title Transfer Documents and the full purchase price payable under the Conditional Sale Agreement Transfer (including an amount in addition to the part thereof to be financed by way of the relevant Advance) will have been duly paid to the Lessor.

11.23Registered name and ownership.  Each Ship is registered in the name of the relevant New Owner under the Designated Flag and each Ship is in the absolute and

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unencumbered ownership of the relevant New Owner save as contemplated by this Agreement and the other Finance Documents.

11.24Class and seaworthiness.  Each Ship is classed specified below the name of such Ship in Schedule 3, free of all recommendations and qualifications of such Classification Society (save those notified to, and approved in writing by, the Lender) and the Ship is operationally seaworthy.

11.25Compliance with law.  Each Ship complies with all relevant laws, regulations and requirements (statutory or otherwise) as are applicable to:

(a)ships registered under the Designated Flag; and

(b)a ship engaged in the same or a similar service as Ships are or are to be engaged.

11.26Mortgage.  The relevant Mortgage is or will be duly registered against the relevant Ship as a valid first preferred ship mortgage in accordance with the laws of the Marshall Islands.

11.27Time when representations made.  The representations and warranties in this Clause are, subject to the final sentence of this Clause 11.27, made on the date of this Agreement and shall survive the execution of this Agreement and the making of each Advance.  The representations and warranties set out in Clauses 11.1 to 11.21 shall, in addition, be deemed to be repeated on the date on which the Drawdown Notice is given and at the commencement of each Interest Period, with respect to the facts and circumstances existing at each such time, as if made at each such time.  The representation and warranties set out in Clauses 11.22 to 11.26 shall be made only on the Drawdown Date in respect of the Advance relative to the relevant Ship.

12GENERAL UNDERTAKINGS

12.1Duration.  The Borrower and each New Owner shall comply with this Clause 12 at all times during the Security Period except as the Lender may otherwise permit (and the Borrower will procure compliance by each New Owner with each of the undertakings in this Clause 12 which relate to a New Owner).

12.2Negative pledge.  The Borrower and the New Owners shall not create, assume or permit to exist any Security Interest upon the Ships, the Insurances or the Earnings or any of their respective other present or future assets (including, but not limited to, the Borrower’s rights against the Lender under the Master Agreement, all or any part of the Borrower’s interest in any amount payable to the Borrower by the Lender under the Master Agreement or any of the shares in each New Owner and each Existing Owner) except (i) in the case of each New Owner, Permitted Security Interests, (ii) in the case of the Borrower, cash security in favour of the Existing Swap Counterparty in an amount not exceeding one fifth of the mark-to-market exposure of the Existing Swap Counterparty on each Drawdown Date and not exceeding $4,500,000 in aggregate for a period expiring not later than 31 August 2004 or (iii) as contemplated by the Finance Documents (including, for the avoidance of doubt, Security Interests securing obligations under the Existing Loan Agreement and the Existing Swap pending the satisfaction of those obligations as contemplated by this Agreement).

12.3No disposal of assets.  The Borrower and the New Owners shall not (voluntarily or involuntarily) sell, convey, transfer, lease, or otherwise dispose of all or a substantial part of its assets (whether by one transaction or a series of transactions and whether related or not) and, in particular but without prejudice to be the generality of the foregoing, the Borrower will not do any of the foregoing in relation to the shares in each New Owner and each Existing Owner.

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12.4Books debts.  The Borrower and the New Owners shall not assign or otherwise dispose of any of their respective book debts.

12.5Compliance with ISM Code.  The Borrower and the New Owners shall comply with the ISM Code and notify the Lender in writing in the event that either the DOC or SMC is withdrawn, cancelled or suspended.

12.6Information relating to customers of the Borrower.  The Borrower and the New Owners shall produce such documents and evidence as the Lender shall from time to time require, based on applicable law and regulations from time to time and the Lender’s own internal guidelines from time to time relating to the Lender’s knowledge of its customers.

12.7Information provided to be accurate.  All financial and other information which is provided in writing by or on behalf of the Borrower and the New Owners under, or in connection with, any Finance Document will be true and not misleading and will not omit any material fact or consideration.

12.8Provision of financial statements.  The Borrower shall send (or procure that there be sent) to the Lender:

(a)as soon as possible, but in no event later than 180 days after the end of each financial year of the Borrower, the audited accounts and financial statements of the Borrower and the audited, consolidated accounts and financial statements of the Group for such financial year, such accounts and financial statements to be prepared in accordance with generally accepted accounting principles in the United States of America consistently applied, certified as to their correctness by Deloitte & Touche (or other certified or chartered accountants acceptable to the Lender); and

(b)as soon as possible, but in no event later than 60 days after the end of each of the first three financial quarters of each financial year of the Borrower, the unaudited accounts and financial statements of the Borrower and the unaudited, consolidated accounts and financial statements of the Group for such financial quarter, such accounts and financial statements to be prepared in accordance with generally accepted accounting principles in the United States of America consistently applied, certified as to their correctness by the Chief Financial Officer of the Borrower.

12.9Form of financial statements.  All accounts and financial statements (audited and unaudited) delivered under Clause 12.8 (a) and (b) will:

(a)give a true and fair view of the state of affairs of the Borrower and the Group, respectively, at the date of those accounts and of their profit for the period to which those accounts relate; and

(b)fully disclose or provide for all significant liabilities of the Borrower and the Group, respectively.

12.10Provision of other information.  The Borrower and the New Owners shall send (or procure that there be sent) to the Lender:

(a)promptly upon the same being entered into (and without the need for any request from the Lender), a copy of any charterparty for the Ships and any addenda thereto;

(b)as soon as the same are instituted (or, to the knowledge of the Borrower or a New Owner, threatened), details of any litigation, arbitration or administrative proceedings against or involving the Borrower, a New Owner, the Approved Managers or a Ship (including any actual breach of the ISM Code) which is likely to have a material adverse effect on the Borrower or a New Owner or the operation of a Ship;

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(c)promptly upon being sent, copies of all communications to its shareholders (or any class of them) and/or creditors generally (or any class of them);

(d)from time to time, and on demand, such additional financial or other information (including but not limited to the ISM Code Documentation) relating to the Borrower or a New Owner and/or a Ship as may be requested by the Lender;

(e)promptly, upon request by the Lender, evidence satisfactory to the Lender that all Taxes payable by the Borrower or any New Owner have been paid and discharged in full when due; and

(f)any documents filed with the United States Securities and Exchange Commission.

12.11Consents.  The Borrower and each New Owner shall obtain and promptly renew from time to time, and will promptly furnish certified copies to the Lender of, all such authorisations, approvals, consents and licences as may be required under any applicable law or regulation to enable the Borrower and the New Owners to perform its obligations under this Agreement, the Master Agreement and the other Finance Documents to which they are a party or required for the validity or enforceability of this Agreement, the Master Agreement and the other Finance Documents to which they are a party or required to enable the New Owners to continue to own and operate the Ships, and the New Owners shall comply with their terms.

12.12Business. Each New Owner shall not conduct any business or activity other than the ownership, chartering and operation of its Ship.

12.13Conditional Sale Agreement Transfer.  The Borrower and the New Owners shall not agree to any amendment to, or waive or fail to enforce any provisions of, a Conditional Sale Agreement Transfer.  The Borrower further undertakes:

(a)whether or not all or any of the Conditional Sale Agreement Transfers have been executed at the date of this Agreement, to procure that each Existing Owner sells and transfers its Ship to the relevant New Owner promptly upon that Ship being re-delivered pursuant to the Shell Sub-charter, and each New Owner undertakes so to acquire the relevant Ship; and

(b)to procure that each Existing Owner enforces its rights against SIPC in respect of the re-delivery of each Ship pursuant to the Shell sub-charter.

12.14Approved Managers.  Each Ship shall be managed by the Approved Managers and the New Owners shall not employ a manager of the Ships other than the Approved Managers, nor change the terms and conditions of the management of the Ships other than upon such terms and conditions as the Lender shall approve.  If for any reason ICB Shipping (Bermuda) Ltd. ceases to be retained as general financial manager of the Borrower, the Borrower shall appoint a new general financial manager approved by the Lender, such approval not to be unreasonably withheld.

12.15Confirmation of no default.  The Borrower shall, within 2 Business Days after service by the Lender of a written request, provide the Lender with a notice which is signed by 2 directors of the Borrower and which:

(a)states that no Event of Default or Potential Event of Default has occurred; or

(b)states that no Event of Default or Potential Event of Default has occurred, except for a specified event or matter, of which all material details are given.

12.16Notification of default.  The Borrower shall notify the Lender as soon as the Borrower becomes aware of:

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(a)the occurrence of an Event of Default or a Potential Event of Default; or

(b)any matter which indicates that an Event of Default or a Potential Event of Default may have occurred,

and shall keep the Lender fully up-to-date with all developments.

12.17Principal place of business.  The Borrower and each New Owner shall maintain its place of business, and keep its corporate documents and records, at Hamilton, Bermuda; and the Borrower and each New Owner will not establish, or do anything as a result of which it would be deemed to have, a place of business in any country other than Bermuda.

12.18Undertaking in favour of agent.  The Borrower and the New Owners hereby confirm that the undertaking contained in Clause 12.13 is also given to, and may be independently relied upon by, The Royal Bank of Scotland plc in its capacity as agent under the Existing Loan Agreement.

13CORPORATE AND FINANCIAL UNDERTAKINGS

13.1Duration.  The Borrower and each New Owner shall comply with this Clause 13 at all times during the Security Period except as the Lender may otherwise permit (and the Borrower will procure compliance by each New Owner with each of the undertakings in this Clause 13 which relate to a New Owner).

13.2Maintenance of corporate status.

(a)The Borrower and each New Owner shall maintain its corporate status as a body corporate, duly organised and validly existing and in good standing under the laws of Bermuda (in the case of the Borrower) and Liberia (in the case of each New Owner) and neither the Borrower nor any New Owner shall amend, or permit to be amended, its constitutional documents;

(b)The Borrower shall remain a listed company on the NASDAQ stock exchange unless the prior written consent is obtained from the Lender to the contrary.

13.3Share capital.  The Borrower shall not reduce its issued share capital.

13.4No distributions.  The Borrower shall not declare or pay any dividend or make any other distribution of its assets or profits to any stockholder unless:

(a)Clause 13.6 will be complied with after the payment of any such dividend or other distribution;

(b)cashflow forecasts for the 12 months following the proposed payment (based on assumptions acceptable to and approved by the Lender) have been delivered to and approved by the Lender confirming that all operational costs, repayment instalments under Clause 7 and interest payments under Clause 4 can be met from the projected income of the Ships;

(c)there is no deferral in repayment pursuant to Clause 7.2 (b) for the period to which the dividend or other distribution relates; and

(d)no Event of Default of Potential Event of Default has occurred and is continuing.

13.5Subsidiaries etc.  The Borrower shall not consolidate or amalgamate with, or merge into, any other entity and shall not form or acquire any further subsidiaries (other than the Existing Owners and the New Owners).

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13.6Minimum Liquid Assets.  The Borrower shall at all times throughout the Security Period ensure that there are Liquid Assets of not less than Ten million Dollars ($10,000,000).

13.7Prohibition against Borrower granting Financial Indebtedness.  The Borrower shall not make available to any person any Financial Indebtedness other than Financial Indebtedness made available by the Borrower to each New Owner by way of the funding by the Borrower of each New Owner with the proceeds of the relevant Advance, such further amounts as are necessary to enable each New Owner to purchase a Ship and such further amounts as the Borrower may advance to a New Owner from time to time for the purpose of providing working capital.

13.8Prohibition against New Owners granting Financial Indebtedness.  Each New Owner shall not make available to any person any Financial Indebtedness.

13.9Prohibition against incurring Financial Indebtedness.  The Borrower and each New Owner shall not incur any Financial Indebtedness nor make any commitment to incur Financial Indebtedness except:

(a)Under this Agreement, the Master Agreement and the other Finance Documents;

(b)In the case of the Borrower, under the Existing Loan Agreement and the Existing Swap (such Financial Indebtedness to be reduced and ultimately satisfied with the proceeds of sale of each Ship to a New Owner); or

(c)In the case of each New Owner, as referred to in (ii) of Clause 11.20; or

(d)In the ordinary course of business and in an amount not exceeding in aggregate One million Dollars ($1,000,000) per Ship outstanding at any one time.

13.10Prohibition on requiring further tonnage.  The Borrower and each New Owner will not acquire, or commit to acquire any ships other than the Ships.

13.11Restrictions on payments.  The Borrower and each New Owner shall not make any payment to any person except in connection with the administration of the Borrower and the New Owners or the operation and/or repair of the Ships, the servicing and repayment of the Loan or as otherwise permitted by, or pursuant to, this Agreement, the other Finance Documents and the Master Agreement.

13.12Lease Limited Recourse Provisions.  The Borrower will not, and will procure that each Existing Owner will not, vary, amend, release or fail to enforce any of the provisions of the Lease Limited Recourse Provisions.  The Borrower will further procure that each Existing Owner:

(a)complies with its obligations under the Lease Limited Recourse Provisions;

(b)maintains its status as a body corporate, duly organised and validly existing and in good standing under the laws of the Cayman Islands;

(c)shall not incur any Financial Indebtedness (other than the Lease Limited Recourse Provisions); and

(d)will not grant any Security Interest to any person.

13.13Subordination of rights of Borrower and New Owners.  All rights which the New Owners and the Borrower at any time may have (whether in respect of this Agreement or any other transaction) against any New Owner (in the case of the Borrower) the Borrower (in the case of any New Owner), any Security Party or their respective assets shall be fully subordinated to the rights of the Lender under the Finance Documents; in particular:

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(a)the Borrower shall not:

(i)claim, or in a bankruptcy of any New Owner or any Security Party or prove for, any amount payable to the Borrower by any New Owner or any Security Party, whether in respect of this Agreement, any Finance Document or any other transaction;

(ii)take or enforce any Security Interest for any such amount;

(iii)claim to set-off any such amount against any amount payable to the Borrower by any New Owner or any Security Party; or

(iv)claim any subrogation or other right in respect of any Finance Document or any sum received or recovered by the Lender under a Finance Document; and

(b)a New Owner shall not:

(i)claim, or in bankruptcy of the Borrower, any other New Owner or any other Security Party or prove for, any amount payable to that New Owner by the Borrower, any other New Owner or any other Security Party, whether in respect of this Agreement, any Finance Document or any other transaction;

(ii)take or enforce any Security Interest for any such amount;

(iii)claim to set-off any such amount against any amount payable to that New Owner by the Borrower, any other New Owner or any other Security Party; or

(iv)claim any subrogation or other right in respect of any Finance Document or any sum received or recovered by the Lender under a Finance Document.

14INSURANCE

14.1General.  The Borrower shall procure that each New Owner will comply with this Clause 14 in respect of its Ship at all times during the Security Period, and each New Owner undertakes so to comply, except as the Lender may otherwise permit.

14.2Risks to be covered by obligatory insurances.  Each New Owner shall keep its Ship insured at its own expense against:

(a)fire and usual marine risks (including hull and machinery and excess risks);

(b)war risks;

(c)protection and indemnity risks (without any exclusion for any Environmental Incident); and

(d)any other risks against which the Lender considers, having regard to practices and other circumstances prevailing at the relevant time, it would be reasonable for that New Owner to insure and which are specified by the Lender by notice to that New Owner.

14.3Terms of obligatory insurances.  Each New Owner shall effect the insurances referred to in Clause 14.2:

(a)in Dollars;

(b)in the case of the insurance against fire and usual marine risks and war risks, in such amounts (but not less than the greater of):

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(i)the market value of its Ship on the basis of a sale free of charter for prompt delivery for cash on normal commercial terms and at arms’ length as between a willing seller and a willing buyer (as conclusively certified by an independent shipbroker appointed by the Lender); and

(ii)such amount as, when aggregated with the amount for which the other Ships are insured, is equal to the Required Percentage of the amount of the Loan,

and upon such terms as shall from time to time be approved in writing by the Lender.

“Required Percentage”  means 110% or (i) if only two Ships remain as security for the Loan, 115% or (ii) if only one Ship remains as security for the Loan, 120%.

(c)in the case of protection and indemnity, including oil pollution liability risks, for an aggregate amount equal to the highest amount in respect of which cover is ordinarily available from protection and indemnity associations that are members of the International Group of Protection and Indemnity Associations and in the international marine insurance market;

(d)in relation to protection and indemnity risks in respect of the Ship’s full tonnage;

(e)on terms approved by the Lender;

(f)through such brokers (the “approved brokers”) and with such insurance companies and/or underwriters as shall from time to time be approved in writing by the Lender provided that the insurances in respect of such war risks and protection and indemnity risks may be effected by entry of the Ship, on terms approved by the Lender in writing, in war risks and protection and indemnity risks associations as shall from time to time be approved in writing by the Lender; and

(g)if so required by the Lender (but without, as between the relevant New Owner and the Lender, liability on the part of the Lender for premiums or calls) with the Lender named as co-assured.

14.4Further protections for the Lender.  In addition to Clause 14.3, the obligatory insurances shall:

(a)whenever the Lender requires, name (or be amended to name) the Lender as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Lender, but without the Lender thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;

(b)name the Lender as loss payee with such directions for payment as the Lender may specify;

(c)provide that all payments by, or on behalf of, the insurers under the obligatory insurances to the Lender shall be made without set-off, counterclaim or deductions or condition whatsoever;

(d)provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Lender; and

(e)provide that the Lender may make proof of loss if the relevant New Owner fails to do so.

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14.5Renewal of obligatory insurances.  Each New Owner shall:

(a)at least 21 days before the expiry of any obligatory insurance or contract for such insurance:

(i)notify the Lender of the brokers (or other insurers) and any war risks and protection and indemnity risks association through or with which that New Owner proposes to renew those insurances and of the proposed terms of renewal; and

(ii)obtain the Lender’s approval to the matters referred to in paragraph (i);

(b)before the expiry of any obligatory insurance or contract for such insurance, renew that obligatory insurance in accordance with the Lender’s approval pursuant to paragraph (a); and

(c)procure that the approved brokers and/or the war risks and protection and indemnity associations with which such a renewal is effected shall, promptly after the renewal, notify the Lender in writing of the terms and conditions of the renewal.

14.6Copies of policies; letters of undertaking.  Each New Owner shall ensure that the approved brokers provide the Lender with pro forma copies of all policies relating to the obligatory insurances which they are to effect or renew and of a letter of undertaking in a form required by the Lender and including undertakings by the approved brokers that:

(a)they will have endorsed on each policy, immediately upon issue, a loss payable clause and a notice of assignment complying with the provisions of Clause 14.4;

(b)they will hold such policies, and the benefit of such insurances, to the order of the Lender in accordance with the said loss payable clause;

(c)they will advise the Lender immediately of any material change to the terms of the obligatory insurances;

(d)they will notify the Lender, not less than 14 days before the expiry of the obligatory insurances, in the event of their not having received notice of renewal instructions from or on behalf of the relevant New Owner or its agents and, in the event of their receiving instructions to renew, they will promptly notify the Lender of the terms of the instructions;

(e)they will not set off against any sum recoverable in respect of a claim relating to the Ship under the obligatory insurances any premiums or other amounts due to them or any relevant other person whether in respect of the relevant Ship or otherwise;

(f)they waive any lien on the policies or on any sums received under them which they might have in respect of such premiums or other amounts;

(g)they will not cancel such obligatory insurances by reason of non-payment of such premiums or other amounts; and

(h)they will arrange for a separate policy to be issued in respect of the Ship forthwith upon being so requested by the Lender.

14.7Copies of certificates of entry.  Each New Owner shall ensure that any war risks and protection and indemnity risks association in which its Ship is entered provides the Lender with:

(a)a certified copy of the certificate of entry for its Ship;

(b)a letter of undertaking in such form as may be required by the Lender; and

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(c)a certified copy of each certificate of financial responsibility for pollution by oil or other Environmentally Sensitive Material issued by the relevant certifying authority in relation to the Ship.

14.8Deposit of original policies.  Each New Owner shall ensure that all policies relating to obligatory insurances or contracts for such insurances are deposited with the approved brokers through which the insurances are effected or renewed.

14.9Payment of premiums.  Each New Owner shall punctually pay all premiums, calls, contributions or other sums payable in respect of the obligatory insurances or contracts for such insurances and produce all relevant receipts when so required by the Lender.

14.10Guarantees.  Each New Owner shall ensure that any guarantees required by a war risks or protection and indemnity risks association are promptly issued and remain in full force and effect.

14.11Compliance with terms of insurances.  No New Owner shall do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:

(a)each New Owner shall take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and (without limiting the obligation contained in Clause 14.7(c)) ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Lender has not given its prior approval;

(b)no New Owner shall make any changes relating to the classification or classification society or manager or operator of its Ship approved by the underwriters of the obligatory insurances;

(c)each New Owner shall make (and promptly supply copies to the Lender of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks association in which the Ship is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and

(d)no New Owner shall employ its Ship, nor allow it to be employed, otherwise than in conformity with the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.

14.12Alteration to terms of insurances.  No New Owner shall either make or agree to any alteration to any obligatory insurance nor waive any right relating to any obligatory insurance.

14.13Settlement of claims.  No New Owner shall settle, compromise or abandon any claim under any obligatory insurance for a Total Loss or for a Major Casualty, and shall do all things necessary and shall provide all documents, evidence and information to enable the Lender to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.

14.14Provision of copies of communications.  Each New Owner shall provide the Lender, at the time of each such communication, copies of all written communications between that New Owner and:

(a)the approved brokers; and

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(b)the approved war risks and protection and indemnity risks associations; and

(c)the approved insurance companies and/or underwriters, which relate directly or indirectly to:

(i)that New Owner’s obligations relating to the obligatory insurances including, without limitation, all requisite declarations and payments of additional premiums or calls; and

(ii)any credit arrangements made between that New Owner and any of the persons referred to in paragraphs (a) or (b) relating wholly or partly to the effecting or maintenance of the obligatory insurances or contracts relating to such insurances.

14.15Provision of information.  In addition, each New Owner shall promptly provide the Lender (or any persons which it may designate) with any information which the Lender (or any such designated person) requests for the purpose of:

(a)obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or

(b)effecting, maintaining or renewing any such insurances as are referred to in Clause 14.16 or dealing with or considering any matters relating to any such insurances,

and the Borrower and the New Owners (jointly and severally) shall, forthwith upon demand, indemnify the Lender in respect of all fees and other expenses incurred by or for the account of the Lender in connection with any such report as is referred to in paragraph (a).

14.16Mortgagee’s interest and Mortgagee’s interest additional perils insurances. The Lender shall be entitled from time to time to effect, maintain and renew a mortgagee’s interest insurance policy on each Ship and an insurance policy for the benefit of the Lender against the possible consequences of pollution involving any Ship, including without limitation, the risk of expropriation or sequestration of any Ship or the imposition of a lien or encumbrance of any kind having priority to the Security Interests created by the Mortgage, in an aggregate amount for all the Ships equal to 110% of the amount of the Loan, on such terms, through such insurers and generally in such manner as the Lender may from time to time consider appropriate.

14.17Indemnity.  The Borrower and the New Owners (jointly and severally) shall upon demand fully indemnify the Lender in respect of all premiums and other expenses which are incurred in connection with, or with a view to effecting, maintaining or renewing, any insurance referred to in Clause 14.16 or dealing with, or considering, any matter arising out of any such insurance.

14.18Oil Pollution Act.  Each New Owner shall procure and maintain a Certificate of Financial Responsibility as required by the United States Oil Pollution Act 1990.

14.19Endorsement of mortgagee’s interest.  Without prejudice to Clauses 14.3 and 14.4, each New Owner shall procure the interest of the Lender shall be duly endorsed upon all slips, cover notes, policies, certificates of entry or other instruments of insurance issued or to be issued in connection with the obligatory or other insurances by means of a loss payable and notice of cancellation clause reflecting the terms of proviso (b) to Clause 3.1 of the General Assignment and a notice of assignment signed by the relevant New Owner, each in such form as shall from time to time be approved in writing by the Lender.

14.20Application of insurances proceeds.  Each New Owner shall apply all such sums receivable in respect of the obligatory or other insurances as are paid to the Lender in accordance with proviso (b)(iii) to Clause 3.1 of the relevant General Assignment for the

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purpose of making good the loss and fully repairing all damage in respect of which the insurance moneys shall have been received.

14.21Changing requirements.  The Lender shall be entitled to review the requirements of this Clause 14 from time to time in order to take account of changes in circumstances after the date of this Agreement (such changes in circumstances to include, without limitation, changes in the Ships’ trading patterns, changes in applicable law and changes in the price and availability of insurance coverage).  The Lender may notify the Borrower and the New Owners in writing from time to time of any modification to the requirements of this Clause 14 which the Lender shall reasonably specify and any such notification shall be binding on the Borrower and the New Owners and shall take effect as an amendment to this Clause 14.

15SHIP COVENANTS

15.1General.  The Borrower shall procure that each New Owner shall comply with this Clause 15 in respect of its Ship at all times during the Security Period, and each New Owner undertakes so to comply, except as the Lender may otherwise permit.

15.2Ship’s name and registration.  Each New Owner shall:

(a)keep its Ship registered in its name under the Designated Flag and current port of registry;

(b)not do or allow to be done anything as a result of which such registration might be cancelled or imperilled; and

(c)not change the name or port of registry of its Ship.

15.3Classification.  Each New Owner shall keep its Ship in a good and safe condition and state of repair:

(a)consistent with first-class ship ownership and management practice;

(b)so as to maintain its Ship’s present class (as specified below the name of such Ship in Schedule 4) free of overdue recommendations and conditions affecting its Ship’s class (other than those notified to, and approved in writing by, the Lender); and

(c)so as to comply with all laws and regulations applicable to vessels registered on the Designated Flag or to vessels trading to any jurisdiction to which its Ship may trade from time to time, including but not limited to the ISM Code.

15.4Repairs and replacement.  Subject to Clause 15.6, each New Owner shall procure all repairs to, or replacement of, any damaged, worn or lost parts or equipment be effected in such manner (both as regards workmanship and quality of materials) so as not reduce the value of its Ship.

15.5Modification.  No New Owner shall make any modification to its Ship or equipment installed her which would or might materially alter the structure, type or performance characteristics of its Ship or materially reduce her value.

15.6Removal of parts.  No New Owner shall remove any material part of its Ship or any item of equipment installed on its Ship unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as, or better condition than, the part or item removed, does not materially reduce the value of its Ship, is free from any Security Interest or any right in favour of any person other than the Lender and becomes on installation on its Ship the property of the relevant New Owner and subject to the security constituted by the relevant Mortgage Provided that a New Owner may install equipment owned by a third party if the equipment can be removed without any risk of damage to its Ship.

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15.7Surveys.  Each New Owner shall submit its Ship regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Lender, provide the Lender with copies of all survey reports.

15.8Inspection.  Each New Owner shall permit the Lender (by surveyors or other persons appointed by the Lender for that purpose) to board its Ship at all reasonable times to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.

15.9Prevention of and release from arrest.  Each New Owner shall promptly discharge:

(a)all liabilities which give or may give rise to maritime or possessory liens on, or claims enforceable against, its Ship, her Earnings or Insurances;

(b)all Taxes, dues and other amounts charged in respect of its Ship, her Earnings or Insurances; and

(c)all other outgoings whatsoever in respect of its Ship, her Earnings or Insurances,

and, forthwith upon receiving notice of the arrest of its Ship, or of her detention in exercise purported exercise of any lien or claim, the relevant New Owner shall procure its release by providing bail or otherwise as the circumstances may require.

15.10Compliance with laws etc.  Each New Owner shall:

(a)comply, or procure compliance with the ISM Code, all Environmental Laws and all other laws or regulations relating to its Ship, its ownership, operation and management or to the business of that New Owner;

(b)not employ its Ship nor allow its employment in any manner contrary to any law or regulation in any relevant jurisdiction including but not limited to the ISM Code or in carrying illicit or prohibited goods or in any manner whatsoever which may render her liable to condemnation in Prize Court or to destruction, seizure or confiscation; and

(c)in the event of hostilities in any part of the world (whether war is declared or not), not cause or permit its Ship to enter or trade to any zone which is declared a war zone by any government or by the Ship’s war risks insurers unless that New Owner has (at the New Owner’s expense) effected any special, additional or modified insurance cover as may be necessary to ensure that the Ship remains insured in accordance with the provisions of this Agreement.

15.11Provision of information.  Each New Owner shall promptly provide the Lender with any information which it requests regarding:

(a)its Ship, its employment, position and engagements;

(b)the Earnings of its Ship;

(c)payments made and amounts due to the master and crew of the Ship owned by it;

(d)any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of its Ship;

(e)any other payments made in respect of its Ship;

(f)any towages and salvages;

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(g)the relevant New Owner’s, the Approved Managers’ or the relevant Ship’s compliance with the ISM Code,

and, upon the Lender’s request, the relevant New Owner shall provide copies of any current charter relating to its Ship, of any current charter guarantee and of its Ship’s Safety Management Certificate and the Document of Compliance.

15.12Notification of certain events.  Each New Owner shall immediately notify the Lender by fax, confirmed forthwith by letter, of:

(a)any casualty to its Ship which is or is likely to be or to become a Major Casualty;

(b)any occurrence as a result of which its Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;

(c)any material requirement or recommendation made by any insurer, classification society or any competent authority in respect of its Ship which is not immediately complied with;

(d)any arrest or detention of its Ship, any exercise or purported exercise of any lien on its Ship or its Earnings or any requisition of its Ship for hire;

(e)any intended dry docking of its Ship;

(f)any Environmental Claim made against that New Owner or in connection with its Ship, or any Environmental Incident;

(g)any claim for breach of the ISM Code being made against that New Owner, the Approved Managers or otherwise in connection with its Ship; or

(h)any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code not being complied with,

and that New Owner shall keep the Lender advised in writing on a regular basis and in such detail as the Lender shall require of that New Owner’s, the Approved Managers’ or any other person’s response to any of those events or matters.

15.13Restrictions on chartering, appointment of managers etc.  No New Owner shall:

(a)let its Ship on demise charter for any period (other than by the applicable Shell Sub-charter);

(b)enter into any time or consecutive voyage charter in respect of its Ship for a term which exceeds, or which by virtue of any optional extensions may exceed, 13 months;

(c)enter into any charter in relation to its Ship under which more than 2 months’ hire (or the equivalent) is payable in advance;

(d)charter its Ship otherwise than on bona fide arm’s length terms at the time when the Ship owned by it is fixed;

(e)appoint a manager of its Ship other than the Approved Managers or agree to any alteration to the terms of the Approved Managers’ appointment;

(f)de-activate or lay up its Ship; or

(g)put its Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $2,000,000 (or the equivalent in any other currency) unless that person has first given to the Lender and in terms satisfactory to the

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Lender a written undertaking not to exercise any lien on the Ship or her Earnings for the cost of such work or for any other reason;

(h)the Lender shall not unreasonably withhold its consent to the Ship being put into the possession of any person for the purpose of work being done upon it in an amount exceeding that set out in sub-clause (g) above and without the written undertaking referred to therein, having regard to the such factors as the Lender, acting reasonably, considers relevant at the applicable time.

15.14Notice of Mortgage.  Each New Owner shall keep the relevant Mortgage registered against its Ship as a valid first preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master’s cabin of its Ship a framed printed notice stating that that Ship is mortgaged by that New Owner to the Lender.

15.15Sharing of Earnings.  No New Owner shall enter into any agreement or arrangement for the sharing of any Earnings of its Ship.

15.16Books of account.  Each New Owner shall keep proper books of account in respect of its Ship and the Earnings of its Ship and, as and when the Lender so requires, the Borrower shall make such books available for inspection on behalf of the Lender.

15.17Wages etc.  Each New Owner shall furnish satisfactory evidence that the wages and allotments and the insurance and pension contributions of the master and crew of its Ship are being regularly paid and that all deductions from their wages in respect of tax and/or social security liability are being properly accounted for and that that Ship’s master has no claim for disbursements other than those incurred by him in the ordinary course of trading on the voyage then in progress.

16SECURITY COVER

16.1Duration.  The Borrower shall comply with the following provisions of this Clause 16 at all times during the Security Period except as the Lender may otherwise permit.

16.2Minimum required Security Cover.  If, and so often as, the aggregate, charter-free market value of the Ships (as determined in accordance with Clauses 16.5 and 16.6) plus the market value of any additional security for the time being actually provided to the Lender pursuant to Clause 16.3 falls below 125 per cent. of the aggregate of:

(a)the Loan; and

(b)such amount (the “Termination Amount”) as determined by the Lender in its absolute discretion as the amount due from the Borrower on terminating any Transaction under the Master Agreement in the same manner as if it were a Terminated Transaction (as defined in Section 14 of the Master Agreement) effected by the Lender after an Event of Default,

the Borrower shall, within 10 days of being notified by the Lender of such requirement (which notification shall be conclusive and binding on the Borrower), comply with Clause 16.3 or 16.4.

16.3Provision of additional security.  Subject to Clause 16.4, on receipt of the notification referred to in Clause 16.2, the Borrower shall, within 10 days of receipt of the notification, provide the Lender with, or procure the provision to the Lender of, such additional security as shall, in the opinion of the Lender, be adequate to make up such deficiency, which additional security shall take such form, be constituted by such documentation and be entered into by such parties as the Lender in its absolute discretion may approve or require.

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16.4Prepayment of Loan.  If the Borrower does not make proposals satisfactory to the Lender in relation to the additional security referred to in Clause 16.3 within 5 days of the date of the receipt by the Borrower of the Lender’s notification referred to in Clause 16.2, the Borrower shall be deemed to have elected to prepay (subject to, and in accordance with, Clauses 7.5, 7.8, 7.9 and 7.10), such part of the Loan as will ensure that the market value (as determined in accordance with Clauses 16.5 and 16.6) of the Ships plus the market value of any additional security for the time being actually provided to the Lender pursuant to Clause 16.3 is, after such prepayment, at least 125 per cent. of the aggregate of (a) the Loan and (b) the Termination Amount.

16.5Market value of the Ships.  For the purposes of this Clauses 16.3 and 16.4, the market value of each Ship shall be determined (at the expense of the Borrower and the New Owners, jointly and severally) at any time as the Lender may request by obtaining the arithmetic mean of three valuations, one of which shall be from an independent sale and purchase shipbroker based in London and nominated by the Lender and the other two of which shall be by independent sale and purchase shipbrokers or other experts to be agreed upon by the Borrower and the Lender.  If the Borrower fails to nominate two shipbrokers or other experts within five days of a notification in writing from the Lender to that effect, or if the Borrower and the Lender cannot within five days agree on the identity of the two shipbrokers or other experts nominated by the Borrower, the market value of each Ship shall be determined solely by the valuation provided by the shipbroker or other expert nominated by the Lender.

16.6Procedure for valuation.  For the purposes of ascertaining the market value referred to in Clause 16.5, such valuation shall be made with or without physical inspection of the Ships (as the Lender may require), on the basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment.  The Borrower and the New Owners shall accept the market value determined in accordance with Clause 16.5 as conclusive evidence of the market value of each Ship.

16.7Provision of information.  The Borrower and the New Owners shall supply to the Lender and to any such shipbroker or other expert such information concerning the Ships and their condition as such shipbroker or other expert may require for the purpose of making a valuation.

16.8Market value of additional security.  For the purpose of this Clause 16, the market value of any additional security provided or to be provided to the Lender shall be determined by the Lender in its absolute discretion without any necessity for the Lender to assign any reason therefor.  If any additional security provided includes any vessels the market value of such vessels will be determined in accordance with Clause 16.5.

16.9Additional documentation.  In connection with any additional security provided in accordance with this Clause 16, the Lender shall be entitled to receive certified copies of such documents of the kind referred to in paragraphs 1, 2, 3, 4 and 13 of Part A of Schedule 2 and such favourable legal opinions as the Lender shall, in its absolute discretion, require.

16.10Payment of valuation expenses.  Without prejudice to the generality of Clauses 23.2, 23.3 and 23.4, the Borrower and the New Owners (jointly and severally) shall, on demand, pay the Lender the amount of the fees and expenses of any shipbroker or expert instructed by the Lender under this Clause and all legal and other expenses incurred by the Lender in connection with any matter arising out of this Clause.

17APPLICATION OF EARNINGS

17.1Duration.  The Borrower shall comply with this Clause 17 at all times during the Security Period except as the Lender may otherwise permit.

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17.2Location of Accounts.  The Borrower shall comply with any written requirement of the Lender from time to time as to the location or re-location of the Operating Account and the Retention Account (or either of them) and shall, from time to time, enter into such documentation as the Lender may require in order to create or maintain in favour of the Lender a Security Interest in the Operating Account and the Retention Account, all at the cost and expense of the Borrower.

17.3Earnings to Operating Account.  Subject only to the provisions of each General Assignment, all the Earnings of each Ship shall be paid to the Operating Account.

17.4Transfers to Retention Account.  During each month of the Security Period (but by no later than, in the case of the first such month, the date falling fifteen (15) days after the first Drawdown Date and, in the case of each subsequent month, the same date of that month), these shall be transferred from the Operating Account to the Retention Account out of the aggregate amount of Earnings received in the Operating Account during the preceding month:

(a)one third (1/3rd) of the amount of the repayment instalment specified in Clause 7.1 falling due for payment on the next following Repayment Date (but prior to the first Repayment Date, the monthly amount shall be such lesser amount as shall reflect the number of months from the first Drawdown Date to the first Repayment Date); and

(b)the relevant fraction of the amount of interest on the Loan falling due on the next due date for payment of interest under this Agreement or, if smaller, the relevant fraction of the aggregate of net payments under the Master Agreement and any balance of interest due under this Agreement; and

(c)the relevant fraction of any net payment due under the Master Agreement in excess of the relevant fraction under paragraph (b) above in relation to that part of the Loan the subject of a Transaction.

17.5Definition of “relevant fraction”.  The expression “relevant fraction” means:

(a)in relation to an amount of interest on the Loan falling due for payment, a fraction (which shall be notified by the Lender to the Borrower at the beginning of each Interest Period) where the numerator is always one and where the denominator shall always be three; and

(b)in relation to a net payment due under the Master Agreement, a fraction (as notified by the Lender to the Borrower) where the numerator is always one and where the denominator is that number of months in the Calculation Period in respect of any relevant Transaction under the Master Agreement.

17.6Insufficient Earnings.  If the aggregate amount of Earnings received in the Operating Account is insufficient in any month for the required transfers to be made in full from the Operating Account to the Retention Account in accordance with Clause 17.4, the Borrower and the New Owners (jointly and severally) shall make up the amount of the insufficiency on demand from the Lender but, without prejudice to its right to make such demand, the Lender may elect to make up the whole or any part of such insufficiency by increasing the amount of any transfer to be made in accordance with Clause 17.4 from the aggregate amount of Earnings received in the next or subsequent months.

17.7Application of credit balance on Retention Account.  Until the occurrence of an Event of Default or Potential Event of Default, the Lender shall:

(a)on each Repayment Date, apply in accordance with Clause 19.1 the relevant part of the balance then standing to the credit of the Retention Account as shall be required to make payment of the repayment instalment specified in Clause 7.1 then due under this Agreement and such application shall constitute satisfaction to a similar extent and

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amount of the Borrower’s obligations to pay such repayment instalment then due under this Agreement;

(b)where no Transaction has been entered into under the Master Agreement or a Transaction has been entered into under the Master Agreement in respect of part only of the Loan, on each due date for payment of interest under this Agreement, apply in accordance with Clause 19.1 the relevant part of the balance then standing to the credit of the Retention Account as shall be required to make payment of the interest then due under this Agreement (and not the subject of a Transaction) and such application shall constitute satisfaction to a similar extent and amount of the Borrower’s obligations to pay such interest then due under this Agreement; and

(c)where a Transaction has been entered into under the Master Agreement, on each date on which a net payment becomes due for payment by the Borrower under the Master Agreement, apply in accordance with the Master Agreement the relevant part of the balance then standing to the credit of the Retention Account as shall be required to make payment of the net amount then due from the Borrower under the Master Agreement.

17.8No derogation from the provisions of this Agreement or the Master Agreement.  Clause 17.7 shall not, save as expressly provided, in any way affect the obligation of the Borrower to make payments of principal and interest on the due dates under this Agreement and payment of any Master Agreement Liabilities under the Master Agreement in accordance with their respective terms.

17.9Balance on Operating Account.  Any amounts standing to the credit of the Operating Account shall, provided that the foregoing provisions of this Clause 17 are complied with and provided that no Event of Default or Potential Event of Default has occurred, be available to the Borrower for any purpose permitted by this Agreement.

17.10Interest on Retention Account.  Any amounts for the time being standing to the credit of the Retention Account shall bear interest at the rate from time to time offered by the Lender to its customers for Dollar deposits of similar amounts and for periods similar to those for which such amounts are likely in the opinion of the Lender to remain standing to the credit of the Retention Account.  Such interest shall, provided that the foregoing provisions of this Clause 17 are complied with and provided that no Event of Default or Potential Event of Default has occurred, be released to the Borrower on each Repayment Date.

18EVENTS OF DEFAULT

18.1Events of Default.  An Event of Default occurs if:

(a)the Borrower, any New Owner or any other Security Party fails to pay when due or, if payable on demand, within 5 days of the Lender’s demand any sum payable under a Finance Document or under any document relating to a Finance Document; or

(b)

(i)any breach occurs of Clauses 7.7, 8.3, 9.2, 12.2, 12.3, 12.17, 13.7, 13.8, 13.9, 13.10, 14.1, 14.2, 14.3, 14.4, 14.11, 15.2, 15.15 or 17.3; or

(ii)the Borrower fails to provide additional security or make a prepayment of part of the Loan in the circumstances referred to in Clauses 16.2, 16.3 and 16.4 within the time limit prescribed; or

(c)any breach by the Borrower, any New Owner or any other Security Party occurs of any provision of a Finance Document (other than a breach covered by Clause 18.1(a) or (b) if, in the opinion of the Lender, such default is capable of remedy and such default continues

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unremedied five (5) Business Days after written notice from the Lender requesting action to remedy the same; or

(d)subject to any applicable grace period specified in any Finance Document, any breach by the Borrower, any New Owner or any other Security Party occurs of any provision of a Finance Document, other than a breach covered by Clause 18.1(a), (b) or (c);

(e)any representation, warranty or statement made by, or by an officer of, the Borrower, any New Owner or any other Security Party in a Finance Document or in the Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading when it is made or deemed to be repeated; or

(f)any of the following occurs in relation to any Financial Indebtedness of a Relevant Person:

(i)any Financial Indebtedness of a Relevant Person is not paid when due or, if so payable, on demand; or

(ii)any Financial Indebtedness of a Relevant Person becomes due and payable or capable of being declared due and payable before its stated maturity date as a consequence of any event of default; or

(iii)a lease, hire purchase agreement or charter creating any Financial Indebtedness of a Relevant Person is terminated by the lessor or owner or becomes capable of being terminated as a consequence of any termination event (other than a termination of the Lease Transactions solely by reason of the expiry and non-renewal of the chartering of each Ship by the relevant Existing Owner to Shell International Petroleum Company Limited); or

(iv)any overdraft, loan, note issuance, acceptance credit, letter of credit, guarantee, foreign exchange or other facility, or any swap or other derivative contract or transaction, relating to any Financial Indebtedness of a Relevant Person ceases to be available or becomes capable of being terminated as a result of any event of default, or cash cover is required, or becomes capable of being required, in respect of such a facility or contract as a result of any event of default; or

(v)any Security Interest securing any Financial Indebtedness of a Relevant Person becomes enforceable; or

(g)any of the following occurs:

(i)a Relevant Person becomes, in the opinion of the Lender, unable to pay its debts as they fall due; or

(ii)any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration, distress or any form of freezing order in respect of a sum of, or sums aggregating, $1,000,000 or more or the equivalent in another currency and the same is not released within 14 days; or

(iii)any administrative receiver or other receiver is appointed over any asset of a Relevant Person; or

(iv)any step is taken in relation to the appointment of an administrative receiver of a Relevant Person; or

(v)an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person;

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(vi)a resolution is passed, an application to a court is made or any other step is taken by a creditor of a Relevant Person (other than the holder of Security Interests which together relate to all or substantially all of the assets of that Relevant Person) for the appointment of an administrator in respect of that Relevant Person, unless:

(A) the proposed administration is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead;

(B)the application is dismissed or withdrawn within 30 days of being made; and

(C)that Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

(vii)an administration notice is given or filed, a resolution is passed, an application to a court is made or any other step is taken by:

(A)the members of a Relevant Person,

(B)the directors of a Relevant Person, or

(C)a creditor that is a holder of Security Interests which together relate to all or substantially all of the assets of a Relevant Person,

for or with a view to the appointment of an administrator in respect of that Relevant Person; or

(viii)a resolution is passed, an application to a court is made or any other step is taken by a government minister or public or regulatory authority of a Pertinent Jurisdiction for or with a view to the appointment of an administrator in respect of a Relevant Person; or

(ix)a petition is presented to a court, a resolution is passed, or any other step is taken for or with a view to the appointment of a provisional liquidator in respect of a Relevant Person unless:

(A)the proposed appointment is being contested in good faith, on substantial grounds and not with a view to some other insolvency law procedure being implemented instead;

(B)the petition is dismissed or withdrawn within 30 days of being presented; and

(C)that Relevant Person will continue to carry on business in the ordinary way and without being the subject of any actual, interim or pending insolvency law procedure; or

(x)a petition is presented to a court, a resolution is passed or any other step is taken for or with a view to the winding up of a Relevant Person, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower or a Security Party which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Lender and effected not later than 3 months after the commencement of the winding up; or

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(xi)a Relevant Person, its directors or, in any proceedings, a lawyer acting for a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that that Relevant Person is insolvent or likely to become insolvent; or

(xii)any meeting of the members or directors, or of any committee of the board or senior management, of a Relevant Person is held or summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (v) to (xi) above or a step preparatory to such action, or (with or without such a meeting) the members, directors or such a committee resolve or agree that such an action or step should be taken or should be taken if certain conditions materialise or fail to materialise; or

(xiii)in any country other than England, any event occurs or any proceedings are opened or commenced or any step is taken which, in the opinion of the Lender, is similar to any of the foregoing; or

(h)a Relevant Person or its directors petition or apply to a court for, or it or its directors take any steps to obtain or submit or present a document setting out the proposed terms of, or any other proposal for, any form of moratorium, suspension or deferral of payments, reorganisation of its debt (or certain of its debt), arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or protection in bankruptcy or any such moratorium, suspension or deferral of payments, reorganisation, arrangement or protection in bankruptcy is effected by court order, by the filing of documents with a court, by means of a contract or in any other way at all; or

(i)the Borrower, any New Owner or any other Security Party ceases or suspends carrying on its business or a part of its business which, in the opinion of the Lender, is material in the context of this Agreement; or

(j)an encumbrancer takes possession of the whole or, in the opinion of the Lender, any material part of the assets of the Borrower any New Owner or any other Security Party or a Security Interest (other than in favour of the Lender) is levied or enforced upon or sued out against the whole or, in the opinion of the Lender, a material part of the assets of the Borrower, any New Owner or any other Security Party; or

(k)it becomes unlawful in any Pertinent Jurisdiction or impossible:

(i)for the Borrower, any New Owner or any other Security Party to discharge any liability under a Finance Document or a Conditional Sale Agreement Transfer or to comply with any other obligation which the Lender considers material under a Finance Document; or

(ii)for the Lender to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or

(l)any consent necessary to enable any New Owner to own, operate or charter its Ship or to enable the Borrower, any New Owner or any other Security Party to comply with any provision which the Lender considers material of a Finance Document or a Conditional Sale Agreement Transfer is not granted, expires without being renewed, is revoked or becomes liable to revocation or any condition of such a consent is not fulfilled; or

(m)if any person or group of persons acting in concert gains control of the Borrower, and for this purpose:

(i)“control”  means the power to direct the management and policies of an entity, whether through the ownership of more than 49% of voting capital, by contract or otherwise; and

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(ii)“acting in concert”  means acting together pursuant to an agreement or understanding (whether formal or informal); or

(n)any provision which the Lender considers material of a Finance Document or a Conditional Sale Agreement Transfer proves to have been or becomes invalid or unenforceable or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or

(o)the security constituted by a Finance Document is in any way imperilled or in jeopardy; or

(p)the Lender gives notice of an Early Termination Date under Section 6(a) of the Master Agreement; or

(q)a person entitled to do so gives notice of an Early Termination Date under Section 6(b)(iv) of the Master Agreement; or

(r)an Event of Default (as defined in Section 14 of the Master Agreement) occurs; or

(s)the Master Agreement is terminated, cancelled, suspended, rescinded or revoked or otherwise ceases to remain in full force and effect for any reason; or

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

(i)a change in the financial position, state of affairs or prospects of the Borrower or any New Owner or a Credit Support Provider; or

(ii)any accident or other event involving any Ship or another vessel owned, chartered or operated by a Relevant Person;

in the light of which the Lender considers that there is a significant risk that the Borrower or a New Owner or a Credit Support Provider is, or will later become, unable to discharge its or their liabilities under the Finance Documents or the Master Agreement as they fall due;

18.2Actions following an Event of Default.  On, or at any time after, the occurrence of an Event of Default, the Lender may:

(a)serve on the Borrower a notice stating that all obligations of the Lender to the Borrower under this Agreement are terminated; and/or

(b)serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement and the Master Agreement are immediately due and payable or are due and payable on demand; and/or

(c)take any other action which, as a result of the Event of Default or any notice served under Clause 18.2(a) or (b) the Lender is entitled to take under any Finance Document, the Master Agreement or any applicable law.

18.3Termination of obligations.  On the service of a notice under Clause 18.2(a), all the obligations of the Lender to the Borrower under this Agreement shall terminate.

18.4Acceleration of Loan.  On the service of a notice under Clause 18.2(b), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.

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18.5Multiple notices; action without notice.  The Lender may serve notices under Clauses 18.2(a) and (b) simultaneously or on different dates and it may take any action referred to in Clause 18.2 if no such notice is served or simultaneously with, or at any time after, the service of both or either of such notices.

18.6Exclusion of Lender liability.  Neither the Lender nor any receiver, administrator or manager appointed by the Lender, shall have any liability to the Borrower or a Security Party:

(a)for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document, the Master Agreement or by any failure or delay to exercise such a right or to enforce such a Security Interest; or

(b)as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by, or realised from, any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset,

except that this does not exempt the Lender, an administrator, a receiver or manager from liability for losses shown to have been caused directly and mainly by the dishonesty or the wilful misconduct of the Lender’s own officers and employees or (as the case may be) such, administrator’s, receiver’s or manager’s own partners or employees.

18.7Relevant Persons.  In this Clause 18, a “Relevant Person” means a Credit Support Provider, the Approved Managers, the Borrower, any New Owner or any other Security Party, and any company which is a subsidiary of the Borrower or a Security Party or of which the Borrower or a Security Party is a subsidiary.

18.8Interpretation.  In Clause 18.1(f) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in Clause 18.1(g) “petition” includes an application.

19PAYMENTS AND CALCULATIONS

19.1Currency and method of payments.  All payments to be made by the Borrower or a Security Party to the Lender under a Finance Document shall be made to the Lender:

(a)by not later than 11.00 a.m. (London time) on the due date;

(b)in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Lender shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement); and

(c)to the account of the Lender at the Receiving Bank (Account No 000261123) or to such other account with such other bank as the Lender may, from time to time, notify to the Borrower.

19.2Payment on non-Business Day.  If any payment by the Borrower or a Security Party under a Finance Document would otherwise fall due on a day which is not a Business Day:

(a)the due date shall be extended to the next succeeding Business Day; or

(b)if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;

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and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.

19.3Basis for calculation of periodic payments.  All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.

19.4Lender accounts.  The Lender shall maintain an account showing the amounts advanced by the Lender and all other sums owing to the Lender from the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.

19.5Accounts prima facie evidence.  If the account maintained under Clause 19.4 shows an amount to be owing by the Borrower or a Security Party to the Lender, that account shall be prima facie evidence that that amount is owing to the Lender.

20SECURITY

Execution of security.  The Borrower shall execute, deliver and perform the provisions of, and procure the execution, delivery and performance by the other parties thereto (other than the Lender) of, the Finance Documents and the provisions thereof at the times and in the manner provided in the Finance Documents so that all such documents shall, both at the date of such execution and delivery and at all times during the Security Period, be valid and binding obligations of the Borrower and such other parties enforceable in accordance with their respective terms.

21APPLICATION

21.1Application.  All moneys received by the Lender under the Finance Documents shall (unless the Lender otherwise requires) be applied by the Lender in the following manner:

FIRST:  in or towards satisfaction of any amounts as are then accrued due and payable under this Agreement, the Master Agreement and the other Finance Documents (or any of them) or are then due and payable by virtue of payment demanded under this Agreement, the Master Agreement or the other Finance Documents in such order of application as the Lender shall think fit;

SECONDLY:  at the option of the Lender:

(a)in retention of an amount equal to any amounts which are not then due and payable under this Agreement, the Master Agreement or any other Finance Document but which (in the sole and absolute opinion of the Lender) will or may become due and payable in the future and, upon their becoming due and payable, in or towards satisfaction thereof in accordance with the foregoing provisions of this Clause 21.1; and/or

(b)in or towards prepayment of the Loan in accordance with Clause 7; and

THIRDLY:  the surplus (if any) shall be paid to the Borrower or to whomsoever else may be entitled thereto.

21.2Notice of variation of order of application.  The Lender may, by notice to the Borrower and the Security Parties, provide for a different order of application from that set out in Clause 21.1 either as regards a specified sum or sums or as regards sums in a specified category or categories.

21.3Effect of variation notice.  The Lender may give notices under Clause 21.2 from time to time; and such a notice may be stated to apply not only to sums which may be received or

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recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.

21.4Appropriation rights overridden.  This Clause 21 and any notice which the Lender gives under Clause 21.2 shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.

22FEES AND EXPENSES

22.1Arrangement and commitment fees.  The Borrower and the New Owners (jointly and severally) shall pay to the Lender an arrangement fee as set out in the Fee Letter.

22.2Costs of negotiation, preparation etc.  The Borrower and the New Owners (jointly and severally) shall reimburse to the Lender on demand all costs, fees and expenses (including, but not limited to, legal fees and expenses) and Taxes thereon incurred by the Lender in connection with:

(a)the negotiation, preparation and execution of this Agreement, the Master Agreement and the Security Documents and the reports referred to in paragraph 7 of Part A of Schedule 2 and paragraph 9 of Part B of Schedule 2; and/or

(b)the preserving or enforcing of, or attempting to preserve or enforce, any of its rights under this Agreement, the Master Agreement and the other Finance Documents.

22.3Costs of variations, enforcement etc.  The Borrower and the New Owners (jointly and severally) shall reimburse to the Lender on demand all costs, fees and expenses (including, but not limited to, legal fees and expenses) and Taxes thereon incurred by the Lender in connection with:

(a)any variation of, or supplement to, this Agreement, the Master Agreement and the other Finance Documents (or any of them); and/or

(b)any consent or waiver required from the Lender in relation to this Agreement, the Master Agreement and any other Finance Document, and in each case, regardless of whether the same is actually implemented, completed or granted.

22.4Stamp and other duties.  The Borrower and the New Owners (jointly and severally) shall pay promptly all stamp, documentary and other like duties and Taxes to which this Agreement, the Master Agreement and the other Finance Documents may be subject or give rise and shall indemnify the Lender on demand against any and all liabilities with respect to, or resulting from, any delay or omission on the part of the Borrower to pay any such duties or Taxes.

22.5Authority to debit Operating Account.  The Lender shall, without prejudice to any other of the provisions of this Agreement, be entitled (but not obliged) at any time and from time to time (without prior notice) to debit the Operating Account in order to satisfy amounts payable by the Borrower to the Lender pursuant to this Clause 22 provided that prior to the occurrence of an Event of Default or a Potential Event of Default the Lender shall only exercise its right under this Clause 22.5 if the Borrower has, within 30 days of a communication from the Lender, either not responded or has indicated, on a bona fide and reasonable basis, that it contests the amount in question.

23INDEMNITIES

23.1Indemnities regarding borrowing and repayment of Loan.  The Borrower and the New Owners (jointly and severally) shall fully indemnify the Lender on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or

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incurred by the Lender, or which the Lender reasonably and with due diligence estimates that it will incur, as a result of or in connection with:

(a)an Advance not being borrowed on the date specified in the Drawdown Notice for any reason other than a default by the Lender;

(b)the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of an Interest Period or other relevant period;

(c)any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 6);

(d)the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 18,

and in respect of any Tax (other than Tax on its overall net income) for which the Lender is liable in connection with any amount paid or payable to the Lender (whether for its own account or otherwise) under any Finance Document.

23.2Breakage costs.  Without limiting its generality, Clause 23.1 covers any claim, expense, liability or loss, including a loss of a prospective profit or an amount equal to the Margin in the circumstances envisaged in Clause 23.1(b), incurred or suffered by the Lender:

(a)in liquidating or employing deposits from third parties acquired or arranged to fund or maintain all or any part of the Loan and/or any overdue amount (or an aggregate amount which includes the Loan or any overdue amount); and

(b)in terminating, or otherwise in connection with, the Master Agreement and any interest and/or currency swap or any other transaction entered into (whether with another legal entity or with another office or department of the Lender) to hedge any exposure arising under this Agreement or a number of transactions of which this Agreement is one.

23.3Miscellaneous indemnities.  The Borrower and the New Owners (jointly and severally) shall fully indemnify the Lender on its demand in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by the Lender, in any country, as a result of or in connection with:

(a)any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Lender or by any administrator or receiver appointed by the Lender under a Finance Document;

(b)any other Pertinent Matter,

other than claims, expenses, liabilities and losses which are shown to have been directly and mainly caused by the dishonesty or wilful misconduct of the officers or employees of the Lender or such administrator’s or receiver’s own partner or employees.

23.4ISM Code and indemnity.  Without prejudice to the generality of Clause 23.3, the indemnities referred to in Clause 23.3 cover any claims, expenses, liabilities and losses which arise, or are asserted, under or in connection with any law relating to safety at sea or the ISM Code.

23.5Currency indemnity.  If any sum due from the Borrower or any Security Party to the Lender under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the “Contractual Currency”) into another currency (the “Payment Currency”) for the purpose of:

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(a)making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or

(b)obtaining an order or judgment from any court or other tribunal; or

(c)enforcing any such order or judgment,

the Borrower and the New Owners (jointly and severally) shall indemnify the Lender against the loss arising when the amount of the payment actually received by the Lender is converted at the available rate of exchange into the Contractual Currency.

23.6Meaning of “available rate of exchange”.  In Clause 23.5, the “available rate of exchange” means the rate at which the Lender is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

23.7Separate liability.  Clause 23.5 creates a separate liability of the Borrower and the New Owners (jointly and severally) which is distinct from its other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.

23.8Environmental indemnity.  The Borrower and the New Owners (jointly and severally) shall indemnify the Lender on demand against all costs, expenses, liabilities and losses sustained or incurred as a result of or in connection with, Environmental Claims being made against the Lender or otherwise howsoever arising out of any Environmental Incident

23.9Receiving Bank.  The Borrower and the New Owners (jointly and severally) shall indemnify the Lender on demand against all costs and expenses paid or incurred by the Lender arising out of the role of the Receiving Bank in relation to the Loan.

23.10Certification of amounts.  A notice which is signed by 2 officers of the Lender, which states that a specified amount, or aggregate amount, is due to the Lender under this Clause 23 and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.

24NO SET-OFF OR TAX DEDUCTION

24.1No deductions.  All amounts due from the Borrower or a New Owner under a Finance Document shall be paid:

(a)without any form of set-off, cross-claim or condition (including but not limited to, any set-off, cross claim or condition arising under, or in relation to, or in connection with, the Master Agreement); and

(b)free and clear of any Tax Deduction except a Tax Deduction which the Borrower or a New Owner is required by law to make.

24.2Grossing-up for Taxes.  If the Borrower or a New Owner is required by law to make a Tax Deduction from any payment:

(a)the Borrower or the relevant New Owner shall notify the Lender as soon as it becomes aware of the requirement;

(b)the Borrower or the relevant New Owner shall pay an amount equal to the Tax Deduction to the appropriate taxation authority promptly, and in any event before any fine or penalty arises; and

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(c)the amount due in respect of the payment shall be increased by the amount necessary to ensure that the Lender receives and retains (free from any liability relating to the Tax Deduction) an amount which, after the Tax Deduction, is equal to the full amount which it would otherwise have received.

24.3Evidence of payment of Taxes.  Within one month after making any Tax Deduction, the Borrower or the relevant New Owner shall deliver to the Lender documentary evidence satisfactory to the Lender that the Tax had been paid to the appropriate taxation authority.

24.4Exclusion of Tax on overall net income.  In this Clause 24,  “Tax Deduction” means any deduction or withholding for, or on account of, any present or future Tax except tax on the Lender’s overall net income.

24.5Tax credits.  If the Lender receives for its own account a repayment or credit in respect of Tax on account of which the Borrower or a New Owner has made an increased payment under Clause 24.2 it shall pay to the Borrower or the relevant New Owner a sum equal to the proportion of the repayment or credit which the Lender allocates to the amount due from the Borrower or the relevant New Owner in respect of which the Borrower or the relevant New Owner made the increased payment but:

(a)the Lender shall not be obliged to allocate to this transaction any part of a Tax repayment or credit which is referable to a class or number of transactions;

(b)nothing in this Clause 24.5 shall oblige the Lender to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority of, another or to make any such claim within any particular time;

(c)nothing in this Clause 24.5 shall oblige the Lender to make a payment which would leave it in a worse position than it would have been in if the Borrower or the relevant New Owner had not been required to make a Tax deduction from a payment; and

(d)any allocation or determination made by the Lender under or in connection with this Clause 24.5 shall be conclusive and binding on the Borrower and the New Owners.

25ILLEGALITY, ETC

25.1Illegality.  This Clause 25 applies if the Lender notifies the Borrower that it has become, or will with effect from a specified date, become:

(a)unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or

(b)contrary to, or inconsistent with, any regulation,

for the Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.

25.2Notification and effect of illegality.  On the Lender notifying the Borrower under Clause 25.1, the Commitment shall terminate; and thereupon or, if later, on the date specified in the Lender’s notice under Clause 25.1 as the date on which the notified event would become effective the Borrower shall prepay the Loan in full in accordance with Clause 7.

25.3Mitigation.  If circumstances arise which would result in a notification under Clause 25.1 then, without in any way limiting the rights of the Lender under Clause 25.2, the Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not

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affected by the circumstances but the Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:

(a)have an adverse effect on its business, operations or financial condition; or

(b)involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or

(c)involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.

26INCREASED COSTS

26.1Increased costs.  This Clause 26 applies if the Lender notifies the Borrower that it considers that as a result of:

(a)the introduction or alteration after the date of this Agreement of a law, or an alteration after the date of this Agreement in the manner in which a law is interpreted or applied  (including the imposition of Taxes on payments under this Agreement, but disregarding any effect which relates to the application to payments under this Agreement of a tax on the Lender’s overall net income); or

(b)complying with any regulation (including any which relates to capital adequacy or liquidity controls, which affects the manner in which the Lender allocates capital resources to its obligations under this Agreement or which is imposed by any applicable authority such as the Bank of England or the Financial Services Authority) which is introduced, or altered, or the interpretation or application of which is altered, after the date of this Agreement,

the Lender (or a parent company of it) has incurred or will incur an increased cost.

26.2Meaning of “increased costs”.  In this Clause 26, “increased costs” means:

(a)an additional or increased cost incurred as a result of, or in connection with, the Lender having entered into, or being a party to, this Agreement or having taken an assignment of rights under this Agreement, of funding or maintaining the Loan or performing its obligations under this Agreement, or of having outstanding all or any part of the Loan or other unpaid sums; or

(b)a reduction in the amount of any payment to the Lender under this Agreement or in the effective return which such a payment represents to the Lender or on its capital;

(c)an additional or increased cost of funding all or maintaining all or any of the advances comprised in a class of advances formed by or including the Loan or (as the case may require) the proportion of that cost attributable to the Loan; or

(d)a liability to make a payment, or a return foregone, which is calculated by reference to any amounts received or receivable by the Lender under this Agreement;

but not:

(i)an item attributable to a change in the rate of Tax on the overall net income of the Lender (or a parent company of it); or

(ii)an item covered by the indemnity for Tax in Clause 23.1; or

(iii)an item covered by the grossing-up provisions in Clause 24.2.

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For the purposes of this Clause 26.2, the Lender may in good faith allocate or spread costs and/or losses among its assets and liabilities (or any class of its assets and liabilities) on such basis as it considers appropriate.

26.3Payment of increased costs.  The Borrower and the New Owners (jointly and severally) shall pay to the Lender, on its demand, the amounts which the Lender from time to time notifies the Borrower that it has specified to be necessary to compensate it for the increased cost.

26.4Notice of prepayment.  If the Borrower is not willing to continue to compensate the Lender for the increased cost under Clause 26.3, the Borrower may give the Lender not less than 5 days’ notice of its intention to prepay the Loan at the end of an Interest Period.

26.5Prepayment.  A notice under Clause 26.4 shall be irrevocable; and on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Loan, together with the aggregate of accrued interest thereon at the applicable rate, any Mandatory Cost and the Margin.

26.6Application of prepayment.  Clause 7 shall apply in relation to the prepayment.

27SET-OFF

27.1Application of credit balances.  The Lender may without prior notice:

(a)apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower or any New Owner at any office of the Lender in any country in or towards satisfaction of any sum then due from the Borrower or any New Owner to the Lender under this Agreement, the Master Agreement or any other Finance Document; and

(b)for that purpose:

(i)break, or alter the maturity of, all or any part of a deposit of the Borrower or any New Owner;

(ii)convert or translate all or any part of a deposit or other credit balance into Dollars; and

(iii)enter into any other transaction or make any entry with regard to the credit balance which the Lender considers appropriate.

27.2Set-off between this Agreement and the Master Agreement.  If the Borrower is the defaulting party under the Master Agreement, the Lender, as the non-defaulting party, may (without prejudice to or limitation of its right of set-off under section 6(e) of the Master Agreement and its rights under Clause 27.1) at the same time as, or at any time after, the Borrower’s default, set-off any amount due from the Borrower to the Lender under this Agreement against any amount due from the Lender to the Borrower under the Master Agreement and apply the first amount in discharging the second amount.  The effect of any set-off under this Clause 27.2 shall be effective to extinguish or, as the case may require, reduce the liabilities of the Lender under the Master Agreement.

27.3Existing rights unaffected.  The Lender shall not be obliged to exercise any of its rights under Clauses 27.1 or 27.2; and those rights shall be without prejudice and in addition to any right of set-off, combination of accounts, charge, lien or other right or remedy to which the Lender is entitled (whether under the general law or any document).

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27.4No Security Interest.  This Clause 27 gives the Lender a contractual right of set-off only, and does not create any equitable charge or other Security Interest over any credit balance of the Borrower or any New Owner.

28ASSIGNMENTS, TRANSFERS AND CHANGES IN LENDING OFFICE

28.1Successors etc.  This Agreement shall be binding upon and inure to the benefit of the Lender, the Borrower and each New Owner and their respective successors and permitted assigns.

28.2Transfer by Borrower and New Owners.  The Borrower and the New Owners may not, without the consent of the Lender, transfer any of their respective rights, liabilities or obligations under any Finance Document.

28.3Assignment etc by Lender.  The Lender may, with the consent of the Borrower, such consent not to be unreasonably withheld, assign or transfer all or any of the rights and/or obligations and interests which it has under, or by virtue of, the Finance Documents or change its lending office.  The requirement for the consent of the Borrower shall not apply in respect of an assignment or transfer to a company which is in the same group of companies as the Lender.  The Lender shall notify the Borrower and the New Owners promptly following any such assignment, transfer or change in lending office.

28.4Rights of assignee.  In respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document, or any misrepresentation made in or in connection with a Finance Document, a direct or indirect assignee of any of the Lender’s rights or interests under, or by virtue of, the Finance Documents shall be entitled to recover damages by reference to the loss incurred by that assignee as a result of the breach or misrepresentation irrespective of whether the Lender would have incurred a loss of that kind or amount.

28.5Sub-participation; subrogation assignment.  The Lender may sub-participate all or any part of its rights and/or obligations under, or in connection with, the Finance Documents without the consent of, or any prior notice to, the Borrower or the New Owners; and the Lender may assign, in any manner and on terms agreed by it, all or any part of those rights to an insurer or surety which has become subrogated to them. The Lender shall notify the Borrower and the New Owners promptly following any such sub-participation or assignment.

28.6Disclosure of information.  The Lender may disclose to a potential assignee, transferee or sub-participant or any other person who may otherwise enter into contractual relations with the Lender in relation to this Agreement or any other Finance Document any information which the Lender has received in relation to the Borrower and the New Owners and their related entities or their respective affairs, unless the information is clearly of a confidential nature.

29VARIATIONS AND WAIVERS

29.1Variations, waivers etc. by Lender.  A document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or the Lender’s rights or remedies under such a provision or the general law, only if the document is signed, or specifically agreed to by fax or telex, by the Borrower and the Lender and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.

29.2Exclusion of other or implied variations.  Except for a document which satisfies the requirements of Clause 29.1, no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Lender (or any person acting on its behalf) shall result in the Lender (or any person acting on its behalf) being taken to have

57

varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:

(a)a provision of this Agreement or any other Finance Document; or

(b)an Event of Default; or

(c)a breach by the Borrower or a Security Party of an obligation under any Finance Document or the general law; or

(d)any right or remedy conferred by any Finance Document or by the general law,

and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.

30NOTICES

30.1General.  Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax; and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.

30.2Addresses for communications.  A notice shall be sent:

(a)	to the Borrower and each New Owner:	c/o Frontline Management AS
		PO Box 1327 Vika
		N. 0112 Oslo
		Norway
		Fax No: +47 23 11 40 44
		Attention: Finance Department
(b)	to the Lender:	Shipping Business Centre
		5-10 Great Tower Street
		London EC3P 3HX
		Fax No: +44 20 7283 7538
		Attention: Manager, Ship Finance
	or to such other address as the relevant party may notify the other.

30.3Effective date of notices.  Subject to Clauses 30.4 and 30.5:

(a)a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;

(b)a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.

30.4Service outside business hours.  However, if under Clause 30.3 a notice would be deemed to be served:

(a)on a day which is not a business day in the place of receipt; or

58

(b)on such a business day, but after 5 p.m. local time;

the notice shall (subject to Clause 30.5) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.

30.5Illegible notices.  Clauses 30.3 and 30.4 do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.

30.6Valid notices.  A notice under, or in connection with, a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:

(a)the failure to serve it in accordance with the requirements of this Agreement or, as the case may be, another Finance Document has not caused any party to suffer any significant loss or prejudice; or

(b)in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.

30.7English language.  Any notice under, or in connection with, a Finance Document shall be in English or if the Lender so requires, accompanied by a certified English translation prepared by a translator approved by the Lender.

30.8Meaning of “notice”.  In this Clause 30, “notice” includes any demand, consent, authorisation, approval, instruction, waiver or other communication.

31SUPPLEMENTAL

31.1Time.  Time shall be of the essence in this Agreement as regards compliance by the Borrower of its obligations under this Agreement.

31.2Delay.  No delay or omission on the part of the Lender in exercising any right, power or remedy under this Agreement shall impair such right, power or remedy or be construed as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any further exercise thereof or the exercise of any other right, power or remedy.

31.3Rights cumulative, non-exclusive.  The rights, powers and remedies herein provided are cumulative and not exclusive of any rights, powers and remedies provided by law and may be exercised from time to time and as often as the Lender deems expedient.

31.4Waiver.  Any waiver by the Lender of any provision of this Agreement or any consent or approval given by the Lender under this Agreement shall only be effective if given in writing and then only for the purpose and upon the terms for which it is given.

31.5Partial invalidity.  If at any time any one or more of the provisions of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law or regulation, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be in any way affected or impaired thereby.

31.6Duration of obligations.  The obligations of the Borrower under this Agreement shall remain in full force and effect until the Lender shall have received all amounts due or to become due to it under this Agreement and under the other Finance Documents in accordance with this Agreement and of the other Finance Documents.  Without prejudice

59

to the foregoing, the obligations of the Borrower and the New Owners under Clauses 6, 23, 24 and 27 shall survive the repayment of the Loan.

31.7Counterparts.  A Finance Document may be executed in any number of counterparts.

31.8Third party rights.  A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.

31.9Certificates.  A certificate or determination of the Lender as to any matter provided for in this Agreement or any other Finance Document shall, in the absence of manifest error, be conclusive and binding on the Borrower.

32GOVERNING LAW

This Agreement is governed by English law.

33ENFORCEMENT

33.1Jurisdiction

(a)Subject to Clause 33.1(c), the courts of England have exclusive jurisdiction to settle any dispute arising out of, or in connection with, this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).

(b)The Lender, the Borrower and the New Owners agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly none of them will argue to the contrary.

(c)The Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions.

33.2Service of process.  Without prejudice to any other mode of service allowed under any relevant law, the Borrower and each New Owner:

(a)irrevocably appoints Maritime Recovery Limited currently of 20 Salcott Road, PO Box 239, London SW11 6DJ as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(b)agrees that failure by a process agent to notify it of the process will not invalidate the proceedings concerned.

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

60

SCHEDULE 1

DRAWDOWN NOTICE

To:	The Royal Bank of Scotland plc,
	Shipping Business Centre
	5-10 Great Tower Street
	London EC3P 3HX

 [•]

DRAWDOWN NOTICE

1We refer to the loan agreement (the “Loan Agreement”) dated [•] and made between ourselves, as Borrower, the New Owners (as defined therein) and yourselves, as Lender, in connection with a facility of up to US$140,000,000.  Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.

2We request to borrow as follows:

(a)Amount: US$[•];

(b)Drawdown Date:  [•];

(c)Payment instructions : account in [our] name [of [•] and numbered [•]with [•]of [•]*.

3We represent and warrant that:

(a)the representations and warranties in Clauses 11.1 to 11.21 of the Loan Agreement would remain true and not misleading if repeated on the date of this Drawdown Notice with reference to the facts and circumstances now existing;

(b)no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Loan.

4This Drawdown Notice cannot be revoked without the prior consent of the Lender.

[Name of Signatory]

[Authorised signatory/Attorney-in-fact]

for and on behalf of

KNIGHTSBRIDGE TANKERS LIMITED

* specify details if proceeds of Advance are to be split between more than one account.

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SCHEDULE 2

CONDITION PRECEDENT DOCUMENTS

PART A - DRAWDOWN NOTICE

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

1Copies of the Articles of Incorporation and By-Laws (or equivalent documents) (and all amendments thereto) of each of the Borrower, the New Owners and the Existing Owners and any other documents required to be filed or registered or issued under the laws of Bermuda to establish the incorporation and/or good standing of the Borrower, under the laws of the Republic of Liberia to establish the incorporation and/or goodstanding of each of the New Owners or under the laws of the Cayman Islands to establish the incorporation and/or goodstanding of each of the Existing Owners.

2Copies of resolutions passed at meetings of the board of directors of each of the Borrower, the New Owners (and, in the case of each New Owner, appropriate shareholder authorisation) and the Existing Owners evidencing its approval of such of this Agreement, the other Finance Documents, the Master Agreement, the Conditional Sale Agreement Transfers and the Title Transfer Documents to which each is a party and authorising appropriate officers or attorneys to execute them and to sign all notices required to be given under this Agreement, the other Finance Documents on its behalf (or, in the case of the Conditional Sale Agreement Transfers, ratifying the execution thereof) or other evidence of such approvals and authorisations as shall be acceptable to the Lender.

3The original of any power of attorney issued in favour of any person executing this Agreement, any other Finance Documents, the Master Agreement and the Conditional Sale Agreement Transfers on behalf of the Borrower, the New Owners or the Existing Owners.

4Copies of all governmental and other consents, licences, approvals and authorisations as may be necessary to authorise the performance by the Borrower, the New Owners and the Existing Owners, of their respective obligations under those of this Agreement, the other Finance Documents, the Master Agreement, the Conditional Sale Agreement Transfers and the Title Transfer Documents to which each is a party and the execution, validity and enforceability of this Agreement, the other Finance Documents, the Master Agreement, the Conditional Sale Agreement Transfers and the Title Transfer Documents.

5Evidence that the Operating Account and the Retention Account have each been duly opened by the Borrower and that all board resolutions, mandates, signature cards and other documents or evidence required in connection with the opening, maintenance and operation of the Operating Account and the Retention Account have been duly delivered to the Lender.

6A valuation of the Ships, dated not later than ten (10) days before the first Drawdown Date, and complying with Clause 16.5, showing a charter free aggregate value for the Ships of not less than $235,000,000.

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7A survey report on terms fully satisfactory to the Lender from an independent marine surveyor selected by the Lender in respect of the physical condition of all or any of the Ships (in the Lender’s discretion).  Such survey report will address, amongst other things, the bed plate cracking problem suffered in the past by three of the Ships.  The surveyor and the Lender will be given full access to the class records of the Ships.

8A copy of a management or other agreement between the Borrower and ICB Shipping (Bermuda) Ltd. in respect of the general management of the Borrower.

9The Master Agreement and all the Finance Documents (other than the Mortgage and the General Assignment) duly executed and delivered by the parties thereto together with all other items and documents required to be delivered pursuant to the terms thereof, including (but without limitation).

10Evidence and confirmation satisfactory to the Lender as to the satisfaction or securing of the outstanding swap liabilities of the Borrower and the Existing Owners to Goldman Sachs International.

11Documentary evidence that the agent for service of process named in Clause 33 and, where provided for, in any other Finance Document and in the Master Agreement to which the Borrower or any Security Party is a party has accepted its appointment for the purpose of the relevant Financial Document and/or the Master Agreement.

12If the Lender so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Lender.

13Such documents and evidence as the Lender shall require, based on applicable law and regulations and the Lender’s own internal guidelines, relating to the Lender’s knowledge of its customers.

63

SCHEDULE 2

CONDITIONS PRECEDENT DOCUMENTS

PART B - DRAWDOWN

The following are the documents referred to in Clause 9.1(b) (in respect of the Ship which is to be financed by the proceeds of the relevant Advance).

1A duly executed original of the Mortgage and the General Assignment and of each document to be delivered under or pursuant to each of them.

2A copy of the Conditional Sale Agreement Transfer and the Title Transfer Documents, in form and substance satisfactory to the Lender.

3A valuation of the Ship, dated not earlier than ten (10) days before the relevant Drawdown Date, from three independent London sale and purchase shipbrokers one of which shall be selected by the Lender and the other two to be jointly selected and agreed upon by the Borrower and the Lender, showing a charter-free value for the Ship of not less than $47,000,000.

4Documentary evidence (in a form acceptable to the Lender) that:

(a)the Ship has been unconditionally delivered by the Existing Owner to, and accepted by, the New Owner under the Conditional Sale Agreement Transfer and the Title Transfer Documents, and the full purchase price payable under the Conditional Sale Agreement Transfer (in addition to the part to be financed by the Loan) has been financed in a manner satisfactory to the Lender and duly paid to the Lessor and that any mortgage or other security granted over any of the Ships directly or indirectly in favour of the Existing Lenders has been, or will forthwith be, discharged;

(b)arrangements are in place for the proceeds of the Advance to be transferred from the Borrower or the relevant New Owner to the Lessor and from the Lessor to the Existing Lenders in satisfaction of the relevant portion of the liabilities under the Existing Loan Agreement;

(c)the Ship is definitively and permanently registered in the name of the relevant New Owner under Marshall Island flag;

(d)the Ship is in the absolute and unencumbered ownership of the relevant New Owner save as contemplated by the Finance Documents;

(e)the Ship maintains the class as specified below the name of such Ship in Schedule 4, free of all overdue recommendations and conditions of such Classification Society (save for those notified to, and approved in writing by, the Lender) ;

(f)the Mortgage has been duly recorded against the Ship as a valid first preferred Marshall Islands ship mortgage in accordance with the laws of the Marshall Islands;

(g)the Ship is insured in accordance with this Agreement and all requirements therein in respect of insurances have been complied with.

64

5Documents establishing that the Ship will, as from the relevant Drawdown Date, be managed by the Approved Managers on terms acceptable to the Lender, together with:

(a)Manager’s Undertakings executed by the Approved Managers in favour of the Lender in the terms required by the Lender agreeing certain matters in relation to the management of the Ship and subordinating the rights of each Approved Manager against the Ship and the relevant New Owner to the rights of the Lender under the Finance Documents; and

(b)copies of the Approved Managers’ Document of Compliance and of the Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Lender requires).

6Evidence that the Ship has been deleted from Isle of Man flag free from all registered Security Interests or, in the alternative, evidence that the Ship will be so deleted within such period as the Lender shall require and that, in any event, there are no Security Interests registered against the Ship on Isle of Man flag.

7A letter from the relevant New Owner to the protection and indemnity risks association in which the Ship is or is to be entered instructing it to provide the Lender with a copy of the certificate of entry of the Ship and any other information relating to the entry of the Ship in such association.

8A written confirmation from the Borrower as to which individuals are authorised to give verbal and/or written instructions to the Lender on behalf of the Borrower in respect of the selection of any Interest Period pursuant to Clause 5.2 of this Agreement.

9Favourable legal opinion from lawyers appointed by the Lender on such matters concerning the laws of Bermuda, Liberia, the Marshall Islands and the Cayman Islands and such other relevant jurisdictions as the Lender may require in relation to, or in connection with, this Agreement, the other Finance Documents, the Master Agreement, the Conditional Sale Agreement Transfers and the Title Transfer Documents.

10Evidence that the Lender has received the arrangement fee referred to in Clause 22.1(a);

11A favourable opinion from an independent insurance consultant acceptable to the Lender on such matters relating to the insurances for the Ship as the Lender may require.

Each of the documents specified in paragraphs 1, 2, 3 and 4 of Part A and every other copy document delivered under Part B of this Schedule shall be certified as a true and up to date copy by a director or the secretary (or equivalent officer) of the Borrower.

65

SCHEDULE 3

DETAILS OF SHIPS

1	Existing Name of Ship:	“MEGARA”
	New Name of Ship:	“HAMPSTEAD”
	Existing Flag:	Isle of Man
	Existing Official Number:	729404
	Existing Owner:	Hewlett Tankers LDC
	Class Society and notation:	+ 100A1 oil tanker (Double Hull) ESP*I.W.S. SPM NAV1 ShipRight (SDA, FDA, CM) + LMC UMS IGS at Lloyd’s Register
	New Owner:	KTL Hampstead, Inc.
	Place of incorporation of New Owner:	Liberia
	Registered office of New Owner:	80 Broad Street, Monrovia, Liberia
	New Flag:	Marshall Islands
	Commercial Manager:	ICB Shipping (Bermuda) Ltd (with ability to sub-contract to Frontline Management (Bermuda) Ltd or Frontline Management AS)
	Technical Manager:	Thome Ship Management Pte Ltd
2	Existing Name of Ship:	“MACOMA”
	New Name of Ship:	“CHELSEA”
	Existing Flag:	Isle of Man

66

Existing Official Number:	729402
Existing Owner:	Lawrence Tankers LDC
Class Society and notation:	+ 100A1 oil tanker (Double Hull) ESP*I.W.S. SPM NAV1 ShipRight (SDA, FDA, CM) + LMC UMS IGS at Lloyd’s Register
New Owner:	KTL Chelsea, Inc.
Place of incorporation of New Owner:	Liberia
Registered office of New Owner:	80 Broad Street, Monrovia, Liberia
New Flag:	Marshall Islands
Commercial Manager:	ICB Shipping (Bermuda) Ltd (with ability to sub-contract to Frontline Management (Bermuda) Ltd or Frontline Management AS)
Technical Manager:	V. Ships UK Ltd

67

3	Existing Name of Ship:	“MAGDALA”
	New Name of Ship:	“MAYFAIR”
	Existing Flag:	Isle of Man
	Existing Official Number:	729403
	Existing Owner:	Cedarhurst Tankers LDC
	Class Society and notation:	+ 100A1 oil tanker (Double Hull) ESP*I.W.S. SPM NAV1 ShipRight (SDA, FDA, CM) + LMC UMS IGS at Lloyd’s Register
	New Owner:	KTL Mayfair, Inc.
	Place of incorporation of New Owner:	Liberia
	Registered office of New Owner:	80 Broad Street, Monrovia, Liberia
	New Flag:	Marshall Islands
	Commercial Manager:	ICB Shipping (Bermuda) Ltd (with ability to sub-contract to Frontline Management (Bermuda) Ltd or Frontline Management AS)
	Technical Manager:	Wallem Shipmanagement Limited
4	Existing Name of Ship:	“MUREX”
	New Name of Ship:	“CAMDEN”
	Existing Flag:	Isle of Man
	Existing Official Number:	729405

68

	Existing Owner:	Inwood Tankers LDC
	Class Society and notation:	+ 100A1 oil tanker (Double Hull) ESP*I.W.S. SPM NAV1 ShipRight (SDA, FDA, CM) + LMC UMS IGS at Lloyd’s Register
	New Owner:	KTL Camden, Inc.
	Place of incorporation of New Owner:	Liberia
	Registered office of New Owner:	80 Broad Street, Monrovia, Liberia
	New Flag:	Marshall Islands
	Commercial Manager:	ICB Shipping (Bermuda) Ltd (with ability to sub-contract to Frontline Management (Bermuda) Ltd or Frontline Management AS)
	Technical Manager:	Wallem Shipmanagement Limited
5	Existing Name of Ship:	“MYRINA”
	New Name of Ship:	“KENSINGTON”
	Existing Flag:	Isle of Man
	Existing Official Number:	729406
	Existing Owner:	Woodmere Tankers LDC
	Class Society and notation:	+ 100A1 oil tanker (Double Hull) ESP*I.W.S. SPM NAV1 ShipRight (SDA, FDA, CM) + LMC UMS IGS at Lloyd’s Register
	New Owner:	KTL Kensington, Inc.
	Place of incorporation of New Owner:	Liberia
	Registered office of New Owner:	80 Broad Street, Monrovia, Liberia

69

New Flag:	Marshall Islands
Commercial Manager:	ICB Shipping (Bermuda) Ltd (with ability to sub-contract to Frontline Management (Bermuda) Ltd or Frontline Management AS)
Technical Manager:	V. Ships UK Ltd

70

EXECUTION PAGE

BORROWER
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
	)
for and on behalf of	)
KNIGHTSBRIDGE	)
TANKERS LIMITED	)
in the presence of: Kavita Shah	)	/s/ Kavita Shah
NEW OWNERS
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
	)
for and on behalf of	)
KTL HAMPSTEAD, INC.	)
in the presence of: Kavita Shah	)	/s/ Kavita Shah
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
	)
for and on behalf of	)
KTL CHELSEA, INC.	)
in the presence of: Kavita Shah	)	/s/ Kavita Shah
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
	)
for and on behalf of	)
KTL MAYFAIR, INC.	)
in the presence of: Kavita Shah	)	/s/ Kavita Shah
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
	)
for and on behalf of	)
KTL CAMDEN, INC.	)
in the presence of: Kavita Shah	)	/s/ Kavita Shah
SIGNED by Nicholas Sherriff	)	/s/ Nicholas Sherriff
	)
for and on behalf of	)
KTL KENSINGTON, INC.	)
in the presence of: Kavita Shah	)	/s/ Kavita Shah

71

LENDER
SIGNED by Robert J. Manners	)	/s/ Robert J. Manners
	)
for and on behalf of	)
THE ROYAL BANK	)
OF SCOTLAND plc	)
in the presence of: Martin Bennett	)	/s/ Martin Bennett

72

EX-4.35

Exhibit 4.35

(Multicurrency-Cross Border)

ISDA®

International Swaps & Derivatives Association, Inc.

MASTER AGREEMENT

dated as of 2 March 2004

The Royal Bank of Scotland plc(“Party A”) and Knightsbridge Tankers Limited (“Party B”)

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

Accordingly, the parties agree as follows:-

1.Interpretation

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

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

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

2.Obligations

(a)General Conditions.

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

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

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

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

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

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

(i) in the same currency; and

(ii) in respect of the same Transaction,

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

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

(d)Deduction or Withholding for Tax.

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

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

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

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

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

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

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

2

(ii) Liability. If:-

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

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

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

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

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

3.Representations

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

(a)Basic Representations.

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

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

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

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

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

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

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

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

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

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

4.Agreements

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

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

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

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

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

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

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

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

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

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

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

5.Events of Default and Termination Events

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

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

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

(iii) Credit Support Default.

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

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

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

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

(v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf);

(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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6.Early Termination

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

(b)Right to Terminate Following Termination Event.

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

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

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

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

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

(iv) Right to Terminate. If:-

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

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

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

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

(c)Effect of Designation.

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

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

(d)Calculations.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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7.Transfer

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

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

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

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

8.Contractual Currency

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

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

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

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

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9.Miscellaneous

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

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

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

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

(e)Counterparts and Confirmations.

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

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

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

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

10.Offices; Multibranch Parties

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

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

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

11.Expenses

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

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

12.Notices

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

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

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

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

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

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

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

13.Governing Law and Jurisdiction

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

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

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

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

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

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

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

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

14.Definitions

As used in this Agreement:-

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

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

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

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

“Applicable Rate” means:-

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties.

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

The Royal Bank of Scotland plc			Knightsbridge Tankers Limited
(Name of Party A)			(Name of Party B)
By:	/s/ Robert J. Manners		By:	/s/ Nicholas Sherriff
Name: Robert J. Manners			Name: Nicholas Sherriff
Title:			Title:Attorney-in-fact
Date: 2 March 2004			Date:2 March 2004
Witnessed by:		/s/ Martin Bennett	Witnessed by:		/s/ Kavita Shah
Name: Martin Bennett			Name: Kavita Shah
Address:			Address:

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EX-4.36.1

Exhibit 4.36.1

Date 15 March 2004

KTL CAMDEN, INC.

as Owner

-and-

THE ROYAL BANK OF SCOTLAND plc

as Lender

GENERAL ASSIGNMENT

relating to m.v. “CAMDEN”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	COVENANT TO PAY
3	ASSIGNMENTS AND FLOATING CHARGE
4	EARNINGS, INSURANCES AND REQUISITION COMPENSATION
5	REPRESENTATIONS AND WARRANTIES
6	COVENANTS
7	PROTECTION OF SECURITY
8	ENFORCEABILITY AND LENDER’S POWERS
9	APPLICATION OF MONEYS
10	FURTHER ASSURANCES
11	POWER OF ATTORNEY
12	INCORPORATION OF LOAN AGREEMENT PROVISIONS
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
EXECUTION PAGE

THIS DEED is made on 15 March 2004

BETWEEN

(1)KTL CAMDEN, INC., a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the “Owner”); and

(2)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Lender” which expression includes its successors and assigns)

BACKGROUND

(A)By a loan agreement dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Kensington, Inc. and the Owner and (iii) the Lender it was agreed that the Lender would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances.

(B)By certain agreements (each a “Daylight Funding Agreement”) dated         2004 and made between, among others, each New Owner and the Lender it was agreed that the Lender would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to the Mortgage (the “Mortgage”) marked “B”.

(C)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes, delivers and registers a Mortgage and enters into this Deed.

(D)The Owner has executed a Mortgage in favour of the Lender.

(E)This Deed supplements the Loan Agreement and the Mortgage executed by the Owner and is one of the General Assignments referred to in the Loan Agreement.

IT IS AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2Definitions.  In this Deed, unless the contrary intention appears:

“Charter”  means any charter relating to the Ship, or other contract for its employment, whether or not already in existence;

“Charter Guarantee” means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter;

“Loan Agreement”  means the loan agreement dated 2 March 2004 referred to in Recital (A);

“Receiver”  means any receiver and/or manager (or joint receivers and/or managers) appointed under Clause 8.3;

“Secured Assets”  means those assets of the Owner:

(a)mortgaged or charged by Clause 3.1; or

(b)covered by the floating charge in Clause 3.2; or

(c)mortgaged or charged by any other Finance Document to which the Owner is a party;

“Secured Liabilities”  means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Deed or at any later time or times, to the Lender under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation, the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship”  means the vessel  “CAMDEN” documented in the name of the Owner under the laws and flag of the Marshall Islands under Official Number 2027 and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Deed.

1.4Inconsistency between Loan Agreement provisions and this Deed.  This Deed shall be read together with the other Finance Documents, but in case of any conflict between the Loan Agreement and this Deed, the provisions of the Loan Agreement shall prevail.

1.5Continuing effect after discharge of Mortgage.  Notwithstanding that this Deed supplements the Loan Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Mortgage.

1.6Inconsistency between provisions of specific mortgages and this Deed.  Any specific mortgage which the Owner may effect in respect of any Charter or Charter Guarantee to secure the Secured Liabilities shall be in addition to this Deed; but in the event of any conflict between the provisions of such a mortgage and the provisions of this Deed, the

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provisions of the mortgage shall prevail; and for this purpose “mortgage” includes assignment and charge.

2COVENANT TO PAY

2.1Covenant to pay Secured Liabilities.  The Owner covenants with the Lender:

(a)duly and punctually to pay the Secured Liabilities; and

(b)to observe and perform all its other obligations under the Finance Documents.

3ASSIGNMENTS AND FLOATING CHARGE

3.1Assignments.  The Owner, with full title guarantee, assigns to the Lender absolutely all rights and interests which now or at any later time it has to, in or in connection with:

(a)the Earnings;

(b)the Insurances;

(c)any Charter;

(d)any Charter Guarantee; and

(e)any Requisition Compensation.

Each Security Interest created by each paragraph in this Clause 3.1 is a separate and independent Security Interest and if any one of them is to be construed and categorised as a floating charge that shall not result in the others being so construed or categorised.

3.2General floating charge.  As security for payment of the Secured Liabilities, the Owner charges in favour of the Lender, by way of first floating charge and (where applicable) with full title guarantee, all its undertaking and all its assets whatsoever and wheresoever, both present and future, except those assets mortgaged or charged by Clause 3.1 or by any other Finance Document to which the Owner is a party.

3.3Continuing security.  This Deed shall remain in force until the end of the Security Period as a continuing security and, in particular:

(a)the Security Interests created by Clauses 3.1 and 3.2 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 3.1 and 3.2, and the rights of the Lender under this Deed, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Lender;

(c)no failure or delay by or on behalf of the Lender to enforce or exercise a Security Interest created by Clause 3.1 or Clause 3.2 or a right of the Lender under this Deed, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right or with such a Security Interest being a fixed security shall preclude or estop the Lender (either permanently or temporarily) from enforcing or exercising it or result in a Security Interest expressed to be a fixed security taking effect as a floating security; and

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(d)this Deed shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

(iii)which the Lender now or subsequently has in respect of any of the Secured Liabilities.

3.4No obligations imposed on Lender.  The Owner shall remain liable to perform all obligations connected with the Secured Assets and the Lender shall not, in any circumstances, have or incur any obligation of any kind in connection with the Secured Assets.

3.5Notice of assignment.  The Owner shall, upon the written request of the Lender, give written notice (in such form as the Lender shall require) of the assignments contained in Clause 3.1 to any person from whom any part of the Secured Assets is or may be due.

3.6Negative pledge; disposal of assets.  The Owner shall not sell, create any Security Interest not exclusively securing the Secured Liabilities over or otherwise dispose of any items of the Secured Assets or any right relating to any item of the Secured Assets.  However, this Clause 3.6 does not apply to the assets covered by the floating charge in Clause 3.2.

3.7Release of security.  At the end of the Security Period, the Lender will, at the request and cost of the Owner, re-assign (without any warranty, representation, covenant or other recourse) to the Owner such rights as the Lender then has to, or in connection with, the assets assigned in Clause 3.1 and release the floating charge created in Clause 3.2.

3.8Insolvency Act 1986.  Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the floating charge created by Clause 3.2 and to any other charge created by this Deed which is to be construed and categorised as a floating charge.

4EARNINGS, INSURANCES AND REQUISITION COMPENSATION

4.1Receipt of Earnings.  The Earnings shall be paid to the Operating Account of the Owner for application in accordance with clause 17 of the Loan Agreement until an Event of Default occurs, whereupon:

(a)the Owner shall forthwith, and the Lender may at any time thereafter, instruct all persons from whom the Earnings are due to pay them to the Lender or as it may direct; and

(b)any sum in respect of Earnings then held by the Owner’s brokers, bankers or other agents or representatives shall be deemed to have been received by and to be held by them on trust for the Lender.

4.2Receipt of Insurances before an Event of Default.  Before an Event of Default occurs, sums recoverable in respect of the Insurances shall be payable as follows:

(a)any sum recoverable in respect of a Total Loss under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender; and

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(b)any sum recoverable in respect of a Major Casualty under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender but so that:

(i)the sum received by the Lender shall be paid over to the Owner upon the Owner providing evidence satisfactory to the Lender that all loss and damage resulting from the casualty has been properly made good and repaired and that all repair accounts and other liabilities connected with the casualty have been paid by the Owner; and

(ii)the insurers with whom the fire and usual marine risks and war risks insurances are effected may in the case of any Major Casualty, and with the prior written consent of the Lender make payment on account of the repairs which are being carried out; and

(c)any other sum recoverable under the Insurances against fire and usual marine risks and war risks shall be paid to the Owner which shall apply it in making good the loss and fully repairing all damage in respect of which that insurance money was received; and

(d)any sum recoverable under the Insurances against protection and indemnity risks shall be paid direct to the person to whom was incurred the liability to which such sum relates (or to the Owner in reimbursement to it of moneys expended to discharge that liability).

4.3Receipt of Insurances after an Event of Default.  On or after the occurrence of an Event of Default any sums recoverable under the Insurances shall be payable to the Lender.

4.4Receipt of Requisition Compensation.  Any Requisition Compensation shall at all times be payable to the Lender.

5REPRESENTATIONS AND WARRANTIES

5.1General.  The Owner represents and warrants to the Lender as follows.

5.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading if repeated on the date of this Deed with reference to the circumstances now existing.

5.3No Charter.  Except as disclosed by the Owner to the Lender in writing, the Ship is not subject to any Charter.

5.4Compliance with Environmental Laws.  All Environmental Laws relating to its ownership, operation and management and the business of the Owner (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with.

5.5No Environmental Claim.  No Environmental Claim has been made or threatened against the Owner or otherwise in connection with the Ship.

5.6No Environmental Incident.  No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

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6COVENANTS

6.1General.  The Owner shall comply with the following provisions of this Clause 6 at all times during the Security Period except as the Lender may otherwise permit.

6.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement.

7PROTECTION OF SECURITY

7.1Lender’s right to protect or maintain security.  The Lender may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Deed or for any similar or related purpose.

7.2Lender’s right to insure, repair etc.  Without limiting the generality of Clause 7.1, if the Owner does not comply with Clause 6, the Lender may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Lender may think expedient or necessary for the purpose of preventing its arrest and securing its release.

8ENFORCEABILITY AND LENDER’S POWERS

8.1Right to enforce security.  If an Event of Default occurs and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement (and without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Deed has become enforceable):

(a)the security constituted by this Deed shall immediately become enforceable for all purposes (including those of paragraph 14 of Schedule B1 of the Insolvency Act 1986); and

(b)the Lender shall be entitled at any time or times to serve a notice on the Owner crystallising each charge created by this Deed which is a floating charge; and

(c)the Lender shall be entitled at any time or times to exercise the powers set out in this Clause 8 and in any other Finance Document; and

(d)the Lender shall be entitled at any time or times:

(i)to exercise the powers possessed by it as assignee of any item of the Secured Assets conferred by the law of any country or territory in which any item of the Secured Assets is physically present or deemed to be sited the courts of which have or claim any jurisdiction in respect of the Owner or any item of the Secured Assets; and

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(ii)without limiting the scope of the Lender’s powers under sub-paragraph (i), to exercise the powers possessed by it as a creditor or as a person with a Security Interest in any item of the Secured Assets conferred by English law.

8.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Lender shall be entitled then or at any later times or times:

(a)to require that all policies and other documents relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to or to the order of the Lender;

(b)to collect, recover and give a good discharge for any moneys or claims forming part of, or arising in relation to, any item of the Secured Assets and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(c)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, any item of the Secured Assets which the Lender may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(d)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to any item of the Secured Assets which the Lender may think fit.

8.3Power to appoint receiver.  The Lender shall have the power, at any time after the Security Interests created by this Deed have become enforceable, to appoint a receiver or joint receivers of all the Secured Assets or of such item of the Secured Assets as may be specified or described in the appointment; and, unless the appointment otherwise provides, it shall be deemed to cover the whole or substantially the whole of the Secured Assets.

8.4Administrative receiver.  If the appointment of the receiver or the joint receivers under Clause 8.3 covers the whole or substantially the whole of the Secured Assets, he or they shall be an administrative receiver or administrative receivers, unless the provisions of the Insolvency Act 1986 relating to an administrative receiver are not applicable to a receiver of property of a company such as the Owner.

In that case, section 42 of the Insolvency Act 1986 and Schedule 1 to that Act (general powers of an administrative receiver) shall nevertheless be deemed to be incorporated into this Deed with any necessary modifications.

8.5Receivers’ powers in relation to Ship.  Without prejudice to Clause 8.4, it is specifically declared that, if the appointment of a Receiver comprises the Ship, he shall have power to commence, defend and settle any proceedings or take any other steps with a view or relating to the arrest of the Ship or in connection with any other matter relating to the Ship, to operate the Ship (and to issue bills of lading and other documents in the name of the Owner), to enter into charterparties, insurances and other contracts in respect of the Ship, to sell the Ship and to do all things which appear to the Receiver to be conducive to or connected with any of the foregoing.

8.6Administrator.  To the intent that the Lender shall be the holder of a qualifying floating charge in respect of the Owner’s property for the purposes of the Insolvency Act 1986 and the Enterprise Act 2002, it is hereby declared that, in addition to the power to appoint

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a receiver or an administrative receiver contained in Clause 8.3, the Lender shall have power, after all relevant floating charges have become enforceable, to appoint an administrator of the Owner or, at the option of the Lender, to apply to the court for an administration order in respect of the Owner.

8.7Supplementary provisions regarding Receivers.  The following shall have effect as regards any Receiver appointed under this Clause 8:

(a)the appointment shall be by deed or, at the Lender’s option, by a document signed by any of its officers; and an appointment in respect of some only of the Secured Assets may later be extended to all or some of the other Secured Assets;

(b)to the fullest extent permitted by law, a Receiver shall be the Owner’s agent, and the Owner shall be responsible, to the exclusion of any liability on the part of the Lender, for his remuneration and for his contracts, acts and defaults;

(c)the remuneration of a Receiver and the other terms of his appointment shall be fixed, and may be revised, by the Lender;

(d)the Lender may exercise any of the powers conferred by the Finance Documents while a Receiver is in office and is acting;

(e)the Owner irrevocably and by way of security appoints every Receiver its attorney on its behalf and in its name or otherwise to execute or sign any document and do any act or thing which that Receiver considers necessary or desirable with a view to or in connection with any exercise or proposed exercise of any of his powers;

(f)a Receiver may delegate any of his powers to any person or persons and may do so on terms authorising successive sub-delegations;

(g)in the case of joint Receivers, any of their powers may be exercised by any one or more of them, unless their appointment specifically states the contrary;

(h)in the event that a Receiver is not an administrative receiver, the Lender may remove him, with or without appointing another Receiver; and such a removal may be effected by a document signed by any of the Lender’s officers;

(i)the Lender may appoint a Receiver to replace a Receiver who has resigned or for any other reason ceased to hold office;

(j)a Receiver shall be entitled to retain out of any money received by him such amounts in respect of his expenses or the following indemnity (or to cover estimated future expenses or amounts due under the following indemnity) as he may from time to time agree with the Lender; and

(k)the Owner shall, on a Receiver’s demand, fully indemnify that Receiver and every person employed by or acting for him in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Receiver or person, or which that Receiver reasonably and with due diligence estimates that he or such a person may incur, as a result of or in connection with any action taken or omitted to be taken in relation to the Secured Assets or any other matter or event relating to the Secured Assets, including any accident or incident involving or caused by the Ship; and neither a Receiver nor such

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a person shall have any liability to the Owner in any circumstances save proven dishonesty on the part of that Receiver or person himself.

8.8Law of Property Act 1925 not applicable.  The Owner hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Deed.

8.9No liability of Lender or Receiver.  Neither the Lender nor any Receiver shall be obliged to check the nature or sufficiency of any payment received by it or him under this Deed or to preserve, exercise or enforce any right forming part of, or relating to, any item of the Secured Assets.

9APPLICATION OF MONEYS

9.1Application.  All sums received by the Lender or by a Receiver:

(a)in respect of the Earnings following a direction made by the Lender under Clause 4.1;

(b)under the Insurances (except any sum received by the Lender in respect of a Major Casualty which has been paid over to the Owner under Clause 4.2(b));

(c)in respect of Requisition Compensation;

(d)in respect of any transaction or arrangement under Clause 8.1, 8.2, 8.3, 8.5 or 8.7,

shall be held by the Lender or the Receiver upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Lender or any Receiver in or connection with the exercise of their respective powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

10FURTHER ASSURANCES

10.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b)effect any registration or notarisation, give any notice or take any other step;

which the Lender may, by notice to the Owner, specify for any of the purposes described in Clause 10.2 or for any similar or related purpose.

10.2Purposes of further assurances.  The purposes referred to in Clause 10.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to this Deed or any other Finance Document;

(b)to create a specific mortgage or assignment of any particular item of the Secured Assets or otherwise to vest in the Lender the title to any particular item of the Secured Assets;

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(c)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Lender intended should be created, by or pursuant to the Mortgage, this Deed or any other Finance Document;

(d)to enable or assist the Lender or a Receiver to sell or otherwise deal with any item of the Secured Assets, to transfer title to, or grant any interest or right relating to, any item of the Secured Assets or to exercise any power which is referred to in Clause 8.1 above or which is conferred by any Finance Document;

(e)to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Secured Assets in any country or under the law of any country.

10.3Terms of further assurances.  The Lender may specify the terms of any document to be executed by the Owner under Clause 10.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its or a Receiver’s interests.

10.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 10.1 by the date specified in the notice.

10.5Additional corporate action.  At the same time as the Owner delivers to the Lender any document executed under Clause 10.1(a), the Owner shall also deliver to the Lender a certificate signed by 2 of the Owner’s directors which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Lender; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of association or other constitutional documents.

11POWER OF ATTORNEY

11.1Appointment.  For the purpose of securing the Lender’s interest in the Secured Assets and the due and punctual performance of its obligations to the Lender under this Deed and every other Finance Document, the Owner irrevocably and by way of security appoints the Lender its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

11.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 11.1, it is confirmed that it authorises the Lender to execute on behalf of the Owner a document ratifying by the Owner any transaction or action which the Lender and/or a Receiver has purported to enter into or to take and which the Lender considers was or might have been outside his powers or otherwise invalid.

11.3Delegation.  The Lender may sub-delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Lender by Clauses 11.1 and/or 11.2, and may do so on terms authorising successive sub-delegations.

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12INCORPORATION OF LOAN AGREEMENT PROVISIONS

12.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices;

clause 31, supplemental.

12.2Incorporation of general provisions.  Clause 12.1 is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Deed shall be taken to exclude or restrict any power, right or remedy which the Lender may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner, the Ship or any other item of the Secured Assets.

13.2Exercise of other rights.  The Lender may exercise any right under this Deed before it has exercised any right referred to in Clause 13.1(a) or (b) above.

13.3Settlement or discharge conditional.  Any settlement or discharge under this Deed between the Lender and the Owner shall be conditional upon no security or payment to the Lender by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

13.4Third party rights.  A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

14LAW AND JURISDICTION

14.1English law.  This Deed shall be governed by, and construed in accordance with, English law.

14.2Exclusive English jurisdiction.  Subject to Clause 14.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed.

14.3Choice of forum for the exclusive benefit of the Lender.  Clause 14.2 is for the exclusive benefit of the Lender, which reserves the rights:

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(a)to commence proceedings in relation to any matter which arises out of or in connection with this Deed in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Deed.

14.4Process agent.  The Owner irrevocably appoints Maritime Recovery Limited at its registered office for the time being, presently at 20 Salcott Road, PO Box 239, London SW11 6DJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Deed.

14.5Lender’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.6Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS DEED has been duly executed as a deed on the date stated at the beginning of this Deed.

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EXECUTION PAGE

OWNER

EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by KTL CAMDEN, INC.			)
acting by Nicholas Sherriff			)
expressly authorised in accordance with the			)
laws ofLiberia			)
by virtue of a power of attorney granted			)
by KTL CAMDEN, INC.			)
on 2 March 2004			)
such execution being witnessed by:			)
Signature of witness	/s/  illegible
LENDER
EXECUTED and DELIVEREDas a DEED			)	/s/ Robert J. Manners
by the duly authorised attorney of			)
THE ROYAL BANK OF SCOTLAND plc			)
for it and on its behalf			)
in the presence of:
Signature of witness		/s/ Martin Bennett

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EX-4.36.2

Exhibit 4.36.2

Date 5 March 2004

KTL CHELSEA, INC.

as Owner

-and-

THE ROYAL BANK OF SCOTLAND plc

as Lender

GENERAL ASSIGNMENT

relating to m.v. “CHELSEA”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	COVENANT TO PAY
3	ASSIGNMENTS AND FLOATING CHARGE
4	EARNINGS, INSURANCES AND REQUISITION COMPENSATION
5	REPRESENTATIONS AND WARRANTIES
6	COVENANTS
7	PROTECTION OF SECURITY
8	ENFORCEABILITY AND LENDER’S POWERS
9	APPLICATION OF MONEYS
10	FURTHER ASSURANCES
11	POWER OF ATTORNEY
12	INCORPORATION OF LOAN AGREEMENT PROVISIONS
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
EXECUTION PAGE

THIS DEED is made on 5 March 2004

BETWEEN

(1)KTL CHELSEA, INC., a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the “Owner”); and

(2)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Lender” which expression includes its successors and assigns)

BACKGROUND

(A)By a loan agreement dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Mayfair, Inc., KTL Camden, Inc., KTL Kensington, Inc. and the Owner and (iii) the Lender it was agreed that the Lender would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances.

(B)By certain agreements (each a “Daylight Funding Agreement”) dated                                                                      2004 and made between, among others, each New Owner and the Lender it was agreed that the Lender would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to the Mortgage (the “Mortgage”) marked “B”.

(C)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes, delivers and registers a Mortgage and enters into this Deed.

(D)The Owner has executed a Mortgage in favour of the Lender.

(E)This Deed supplements the Loan Agreement and the Mortgage executed by the Owner and is one of the General Assignments referred to in the Loan Agreement.

IT IS AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2Definitions.  In this Deed, unless the contrary intention appears:

“Charter”  means any charter relating to the Ship, or other contract for its employment, whether or not already in existence;

“Charter Guarantee” means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter;

“Loan Agreement”  means the loan agreement dated 2 March 2004 referred to in Recital (A);

“Receiver”  means any receiver and/or manager (or joint receivers and/or managers) appointed under Clause 8.3;

“Secured Assets”  means those assets of the Owner:

(a)mortgaged or charged by Clause 3.1; or

(b)covered by the floating charge in Clause 3.2; or

(c)mortgaged or charged by any other Finance Document to which the Owner is a party;

“Secured Liabilities”  means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Deed or at any later time or times, to the Lender under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation, the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship”  means the vessel  “CHELSEA” documented in the name of the Owner under the laws and flag of the Marshall Islands under Official Number 2036 and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Deed.

1.4Inconsistency between Loan Agreement provisions and this Deed.  This Deed shall be read together with the other Finance Documents, but in case of any conflict between the Loan Agreement and this Deed, the provisions of the Loan Agreement shall prevail.

1.5Continuing effect after discharge of Mortgage.  Notwithstanding that this Deed supplements the Loan Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Mortgage.

1.6Inconsistency between provisions of specific mortgages and this Deed.  Any specific mortgage which the Owner may effect in respect of any Charter or Charter Guarantee to secure the Secured Liabilities shall be in addition to this Deed; but in the event of any conflict between the provisions of such a mortgage and the provisions of this Deed, the

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provisions of the mortgage shall prevail; and for this purpose “mortgage” includes assignment and charge.

2COVENANT TO PAY

2.1Covenant to pay Secured Liabilities.  The Owner covenants with the Lender:

(a)duly and punctually to pay the Secured Liabilities; and

(b)to observe and perform all its other obligations under the Finance Documents.

3ASSIGNMENTS AND FLOATING CHARGE

3.1Assignments.  The Owner, with full title guarantee, assigns to the Lender absolutely all rights and interests which now or at any later time it has to, in or in connection with:

(a)the Earnings;

(b)the Insurances;

(c)any Charter;

(d)any Charter Guarantee; and

(e)any Requisition Compensation.

Each Security Interest created by each paragraph in this Clause 3.1 is a separate and independent Security Interest and if any one of them is to be construed and categorised as a floating charge that shall not result in the others being so construed or categorised.

3.2General floating charge.  As security for payment of the Secured Liabilities, the Owner charges in favour of the Lender, by way of first floating charge and (where applicable) with full title guarantee, all its undertaking and all its assets whatsoever and wheresoever, both present and future, except those assets mortgaged or charged by Clause 3.1 or by any other Finance Document to which the Owner is a party.

3.3Continuing security.  This Deed shall remain in force until the end of the Security Period as a continuing security and, in particular:

(a)the Security Interests created by Clauses 3.1 and 3.2 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 3.1 and 3.2, and the rights of the Lender under this Deed, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Lender;

(c)no failure or delay by or on behalf of the Lender to enforce or exercise a Security Interest created by Clause 3.1 or Clause 3.2 or a right of the Lender under this Deed, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right or with such a Security Interest being a fixed security shall preclude or estop the Lender (either permanently or temporarily) from enforcing or exercising it or result in a Security Interest expressed to be a fixed security taking effect as a floating security; and

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(d)this Deed shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

(iii)which the Lender now or subsequently has in respect of any of the Secured Liabilities.

3.4No obligations imposed on Lender.  The Owner shall remain liable to perform all obligations connected with the Secured Assets and the Lender shall not, in any circumstances, have or incur any obligation of any kind in connection with the Secured Assets.

3.5Notice of assignment.  The Owner shall, upon the written request of the Lender, give written notice (in such form as the Lender shall require) of the assignments contained in Clause 3.1 to any person from whom any part of the Secured Assets is or may be due.

3.6Negative pledge; disposal of assets.  The Owner shall not sell, create any Security Interest not exclusively securing the Secured Liabilities over or otherwise dispose of any items of the Secured Assets or any right relating to any item of the Secured Assets.  However, this Clause 3.6 does not apply to the assets covered by the floating charge in Clause 3.2.

3.7Release of security.  At the end of the Security Period, the Lender will, at the request and cost of the Owner, re-assign (without any warranty, representation, covenant or other recourse) to the Owner such rights as the Lender then has to, or in connection with, the assets assigned in Clause 3.1 and release the floating charge created in Clause 3.2.

3.8Insolvency Act 1986.  Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the floating charge created by Clause 3.2 and to any other charge created by this Deed which is to be construed and categorised as a floating charge.

4EARNINGS, INSURANCES AND REQUISITION COMPENSATION

4.1Receipt of Earnings.  The Earnings shall be paid to the Operating Account of the Owner for application in accordance with clause 17 of the Loan Agreement until an Event of Default occurs, whereupon:

(a)the Owner shall forthwith, and the Lender may at any time thereafter, instruct all persons from whom the Earnings are due to pay them to the Lender or as it may direct; and

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(b)any sum in respect of Earnings then held by the Owner’s brokers, bankers or other agents or representatives shall be deemed to have been received by and to be held by them on trust for the Lender.

4.2Receipt of Insurances before an Event of Default.  Before an Event of Default occurs, sums recoverable in respect of the Insurances shall be payable as follows:

(a)any sum recoverable in respect of a Total Loss under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender; and

(b)any sum recoverable in respect of a Major Casualty under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender but so that:

(i)the sum received by the Lender shall be paid over to the Owner upon the Owner providing evidence satisfactory to the Lender that all loss and damage resulting from the casualty has been properly made good and repaired and that all repair accounts and other liabilities connected with the casualty have been paid by the Owner; and

(ii)the insurers with whom the fire and usual marine risks and war risks insurances are effected may in the case of any Major Casualty, and with the prior written consent of the Lender make payment on account of the repairs which are being carried out; and

(c)any other sum recoverable under the Insurances against fire and usual marine risks and war risks shall be paid to the Owner which shall apply it in making good the loss and fully repairing all damage in respect of which that insurance money was received; and

(d)any sum recoverable under the Insurances against protection and indemnity risks shall be paid direct to the person to whom was incurred the liability to which such sum relates (or to the Owner in reimbursement to it of moneys expended to discharge that liability).

4.3Receipt of Insurances after an Event of Default.  On or after the occurrence of an Event of Default any sums recoverable under the Insurances shall be payable to the Lender.

4.4Receipt of Requisition Compensation.  Any Requisition Compensation shall at all times be payable to the Lender.

5REPRESENTATIONS AND WARRANTIES

5.1General.  The Owner represents and warrants to the Lender as follows.

5.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading if repeated on the date of this Deed with reference to the circumstances now existing.

5.3No Charter.  Except as disclosed by the Owner to the Lender in writing, the Ship is not subject to any Charter.

5.4Compliance with Environmental Laws.  All Environmental Laws relating to its ownership, operation and management and the business of the Owner (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with.

5.5No Environmental Claim.  No Environmental Claim has been made or threatened against the Owner or otherwise in connection with the Ship.

5.6No Environmental Incident.  No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

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6COVENANTS

6.1General.  The Owner shall comply with the following provisions of this Clause 6 at all times during the Security Period except as the Lender may otherwise permit.

6.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement.

7PROTECTION OF SECURITY

7.1Lender’s right to protect or maintain security.  The Lender may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Deed or for any similar or related purpose.

7.2Lender’s right to insure, repair etc.  Without limiting the generality of Clause 7.1, if the Owner does not comply with Clause 6, the Lender may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Lender may think expedient or necessary for the purpose of preventing its arrest and securing its release.

8ENFORCEABILITY AND LENDER’S POWERS

8.1Right to enforce security.  If an Event of Default occurs and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement (and without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Deed has become enforceable):

(a)the security constituted by this Deed shall immediately become enforceable for all purposes (including those of paragraph 14 of Schedule B1 of the Insolvency Act 1986); and

(b)the Lender shall be entitled at any time or times to serve a notice on the Owner crystallising each charge created by this Deed which is a floating charge; and

(c)the Lender shall be entitled at any time or times to exercise the powers set out in this Clause 8 and in any other Finance Document; and

(d)the Lender shall be entitled at any time or times:

(i)to exercise the powers possessed by it as assignee of any item of the Secured Assets conferred by the law of any country or territory in which any item of the Secured Assets is physically present or deemed to be sited the courts of which have or claim any jurisdiction in respect of the Owner or any item of the Secured Assets; and

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(ii)without limiting the scope of the Lender’s powers under sub-paragraph (i), to exercise the powers possessed by it as a creditor or as a person with a Security Interest in any item of the Secured Assets conferred by English law.

8.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Lender shall be entitled then or at any later times or times:

(a)to require that all policies and other documents relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to or to the order of the Lender;

(b)to collect, recover and give a good discharge for any moneys or claims forming part of, or arising in relation to, any item of the Secured Assets and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(c)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, any item of the Secured Assets which the Lender may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(d)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to any item of the Secured Assets which the Lender may think fit.

8.3Power to appoint receiver.  The Lender shall have the power, at any time after the Security Interests created by this Deed have become enforceable, to appoint a receiver or joint receivers of all the Secured Assets or of such item of the Secured Assets as may be specified or described in the appointment; and, unless the appointment otherwise provides, it shall be deemed to cover the whole or substantially the whole of the Secured Assets.

8.4Administrative receiver.  If the appointment of the receiver or the joint receivers under Clause 8.3 covers the whole or substantially the whole of the Secured Assets, he or they shall be an administrative receiver or administrative receivers, unless the provisions of the Insolvency Act 1986 relating to an administrative receiver are not applicable to a receiver of property of a company such as the Owner.

In that case, section 42 of the Insolvency Act 1986 and Schedule 1 to that Act (general powers of an administrative receiver) shall nevertheless be deemed to be incorporated into this Deed with any necessary modifications.

8.5Receivers’ powers in relation to Ship.  Without prejudice to Clause 8.4, it is specifically declared that, if the appointment of a Receiver comprises the Ship, he shall have power to commence, defend and settle any proceedings or take any other steps with a view or relating to the arrest of the Ship or in connection with any other matter relating to the Ship, to operate the Ship (and to issue bills of lading and other documents in the name of the Owner), to enter into charterparties, insurances and other contracts in respect of the Ship, to sell the Ship and to do all things which appear to the Receiver to be conducive to or connected with any of the foregoing.

8.6Administrator.  To the intent that the Lender shall be the holder of a qualifying floating charge in respect of the Owner’s property for the purposes of the Insolvency Act 1986 and the Enterprise Act 2002, it is hereby declared that, in addition to the power to appoint

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a receiver or an administrative receiver contained in Clause 8.3, the Lender shall have power, after all relevant floating charges have become enforceable, to appoint an administrator of the Owner or, at the option of the Lender, to apply to the court for an administration order in respect of the Owner.

8.7Supplementary provisions regarding Receivers.  The following shall have effect as regards any Receiver appointed under this Clause 8:

(a)the appointment shall be by deed or, at the Lender’s option, by a document signed by any of its officers; and an appointment in respect of some only of the Secured Assets may later be extended to all or some of the other Secured Assets;

(b)to the fullest extent permitted by law, a Receiver shall be the Owner’s agent, and the Owner shall be responsible, to the exclusion of any liability on the part of the Lender, for his remuneration and for his contracts, acts and defaults;

(c)the remuneration of a Receiver and the other terms of his appointment shall be fixed, and may be revised, by the Lender;

(d)the Lender may exercise any of the powers conferred by the Finance Documents while a Receiver is in office and is acting;

(e)the Owner irrevocably and by way of security appoints every Receiver its attorney on its behalf and in its name or otherwise to execute or sign any document and do any act or thing which that Receiver considers necessary or desirable with a view to or in connection with any exercise or proposed exercise of any of his powers;

(f)a Receiver may delegate any of his powers to any person or persons and may do so on terms authorising successive sub-delegations;

(g)in the case of joint Receivers, any of their powers may be exercised by any one or more of them, unless their appointment specifically states the contrary;

(h)in the event that a Receiver is not an administrative receiver, the Lender may remove him, with or without appointing another Receiver; and such a removal may be effected by a document signed by any of the Lender’s officers;

(i)the Lender may appoint a Receiver to replace a Receiver who has resigned or for any other reason ceased to hold office;

(j)a Receiver shall be entitled to retain out of any money received by him such amounts in respect of his expenses or the following indemnity (or to cover estimated future expenses or amounts due under the following indemnity) as he may from time to time agree with the Lender; and

(k)the Owner shall, on a Receiver’s demand, fully indemnify that Receiver and every person employed by or acting for him in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Receiver or person, or which that Receiver reasonably and with due diligence estimates that he or such a person may incur, as a result of or in connection with any action taken or omitted to be taken in relation to the Secured Assets or any other matter or event relating to the Secured Assets, including any accident or incident involving or caused by the Ship; and neither a Receiver nor such

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a person shall have any liability to the Owner in any circumstances save proven dishonesty on the part of that Receiver or person himself.

8.8Law of Property Act 1925 not applicable.  The Owner hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Deed.

8.9No liability of Lender or Receiver.  Neither the Lender nor any Receiver shall be obliged to check the nature or sufficiency of any payment received by it or him under this Deed or to preserve, exercise or enforce any right forming part of, or relating to, any item of the Secured Assets.

9APPLICATION OF MONEYS

9.1Application.  All sums received by the Lender or by a Receiver:

(a)in respect of the Earnings following a direction made by the Lender under Clause 4.1;

(b)under the Insurances (except any sum received by the Lender in respect of a Major Casualty which has been paid over to the Owner under Clause 4.2(b));

(c)in respect of Requisition Compensation;

(d)in respect of any transaction or arrangement under Clause 8.1, 8.2, 8.3, 8.5 or 8.7,

shall be held by the Lender or the Receiver upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Lender or any Receiver in or connection with the exercise of their respective powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

10FURTHER ASSURANCES

10.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b)effect any registration or notarisation, give any notice or take any other step;

which the Lender may, by notice to the Owner, specify for any of the purposes described in Clause 10.2 or for any similar or related purpose.

10.2Purposes of further assurances.  The purposes referred to in Clause 10.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to this Deed or any other Finance Document;

(b)to create a specific mortgage or assignment of any particular item of the Secured Assets or otherwise to vest in the Lender the title to any particular item of the Secured Assets;

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(c)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Lender intended should be created, by or pursuant to the Mortgage, this Deed or any other Finance Document;

(d)to enable or assist the Lender or a Receiver to sell or otherwise deal with any item of the Secured Assets, to transfer title to, or grant any interest or right relating to, any item of the Secured Assets or to exercise any power which is referred to in Clause 8.1 above or which is conferred by any Finance Document;

(e)to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Secured Assets in any country or under the law of any country.

10.3Terms of further assurances.  The Lender may specify the terms of any document to be executed by the Owner under Clause 10.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its or a Receiver’s interests.

10.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 10.1 by the date specified in the notice.

10.5Additional corporate action.  At the same time as the Owner delivers to the Lender any document executed under Clause 10.1(a), the Owner shall also deliver to the Lender a certificate signed by 2 of the Owner’s directors which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Lender; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of association or other constitutional documents.

11POWER OF ATTORNEY

11.1Appointment.  For the purpose of securing the Lender’s interest in the Secured Assets and the due and punctual performance of its obligations to the Lender under this Deed and every other Finance Document, the Owner irrevocably and by way of security appoints the Lender its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

11.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 11.1, it is confirmed that it authorises the Lender to execute on behalf of the Owner a document ratifying by the Owner any transaction or action which the Lender and/or a Receiver has purported to enter into or to take and which the Lender considers was or might have been outside his powers or otherwise invalid.

11.3Delegation.  The Lender may sub-delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Lender by Clauses 11.1 and/or 11.2, and may do so on terms authorising successive sub-delegations.

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12INCORPORATION OF LOAN AGREEMENT PROVISIONS

12.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices;

clause 31, supplemental.

12.2Incorporation of general provisions.  Clause 12.1 is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Deed shall be taken to exclude or restrict any power, right or remedy which the Lender may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner, the Ship or any other item of the Secured Assets.

13.2Exercise of other rights.  The Lender may exercise any right under this Deed before it has exercised any right referred to in Clause 13.1(a) or (b) above.

13.3Settlement or discharge conditional.  Any settlement or discharge under this Deed between the Lender and the Owner shall be conditional upon no security or payment to the Lender by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

13.4Third party rights.  A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

14LAW AND JURISDICTION

14.1English law.  This Deed shall be governed by, and construed in accordance with, English law.

14.2Exclusive English jurisdiction.  Subject to Clause 14.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed.

14.3Choice of forum for the exclusive benefit of the Lender.  Clause 14.2 is for the exclusive benefit of the Lender, which reserves the rights:

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(a)to commence proceedings in relation to any matter which arises out of or in connection with this Deed in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Deed.

14.4Process agent.  The Owner irrevocably appoints Maritime Recovery Limited at its registered office for the time being, presently at 20 Salcott Road, PO Box 239, London SW11 6DJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Deed.

14.5Lender’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.6Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS DEED has been duly executed as a deed on the date stated at the beginning of this Deed.

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EXECUTION PAGE

OWNER

EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by KTL CHELSEA, INC.		)
acting by Attorney-in-fact		)
expressly authorised in accordance with the		)
laws ofLiberia		)
by virtue of a power of attorney granted		)
by KTL CHELSEA, INC.		)
on 2 March 2004		)
such execution being witnessed by:		)
Signature of witness	/s/ Kavita Shah
LENDER
EXECUTED and DELIVEREDas a DEED		)	/s/ Robert J. Manners
by the duly authorised attorney of		)
THE ROYAL BANK OF SCOTLAND plc		)
for it and on its behalf		)
in the presence of:
Signature of witness	/s/ Daniel Perrott

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EX-4.36.3

Exhibit 4.36.3

Date 11 March 2004

KTL HAMPSTEAD, INC.

as Owner

-and-

THE ROYAL BANK OF SCOTLAND plc

as Lender

GENERAL ASSIGNMENT

relating to m.v. “HAMPSTEAD”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	COVENANT TO PAY
3	ASSIGNMENTS AND FLOATING CHARGE
4	EARNINGS, INSURANCES AND REQUISITION COMPENSATION
5	REPRESENTATIONS AND WARRANTIES
6	COVENANTS
7	PROTECTION OF SECURITY
8	ENFORCEABILITY AND LENDER’S POWERS
9	APPLICATION OF MONEYS
10	FURTHER ASSURANCES
11	POWER OF ATTORNEY
12	INCORPORATION OF LOAN AGREEMENT PROVISIONS
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
EXECUTION PAGE

THIS DEED is made on 11 March 2004

BETWEEN

(1)KTL HAMPSTEAD, INC., a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the “Owner”); and

(2)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Lender” which expression includes its successors and assigns)

BACKGROUND

(A)By a loan agreement dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Camden, Inc., KTL Kensington, Inc. and the Owner and (iii) the Lender it was agreed that the Lender would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances.

(B)By certain agreements (each a “Daylight Funding Agreement”) dated        March 2004 and made between, among others, each New Owner and the Lender it was agreed that the Lender would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to the Mortgage (the “Mortgage”) marked “B”.

(C)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes, delivers and registers a Mortgage and enters into this Deed.

(D)The Owner has executed a Mortgage in favour of the Lender.

(E)This Deed supplements the Loan Agreement and the Mortgage executed by the Owner and is one of the General Assignments referred to in the Loan Agreement.

IT IS AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2Definitions.  In this Deed, unless the contrary intention appears:

“Charter”  means any charter relating to the Ship, or other contract for its employment, whether or not already in existence;

“Charter Guarantee” means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter;

“Loan Agreement”  means the loan agreement dated 2 March 2004 referred to in Recital (A);

“Receiver”  means any receiver and/or manager (or joint receivers and/or managers) appointed under Clause 8.3;

“Secured Assets”  means those assets of the Owner:

(a)mortgaged or charged by Clause 3.1; or

(b)covered by the floating charge in Clause 3.2; or

(c)mortgaged or charged by any other Finance Document to which the Owner is a party;

“Secured Liabilities”  means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Deed or at any later time or times, to the Lender under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation, the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship”  means the vessel  “HAMPSTEAD” documented in the name of the Owner under the laws and flag of the Marshall Islands under Official Number 2022 and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Deed.

1.4Inconsistency between Loan Agreement provisions and this Deed.  This Deed shall be read together with the other Finance Documents, but in case of any conflict between the Loan Agreement and this Deed, the provisions of the Loan Agreement shall prevail.

1.5Continuing effect after discharge of Mortgage.  Notwithstanding that this Deed supplements the Loan Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Mortgage.

1.6Inconsistency between provisions of specific mortgages and this Deed.  Any specific mortgage which the Owner may effect in respect of any Charter or Charter Guarantee to secure the Secured Liabilities shall be in addition to this Deed; but in the event of any conflict between the provisions of such a mortgage and the provisions of this Deed, the

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provisions of the mortgage shall prevail; and for this purpose “mortgage” includes assignment and charge.

2COVENANT TO PAY

2.1Covenant to pay Secured Liabilities.  The Owner covenants with the Lender:

(a)duly and punctually to pay the Secured Liabilities; and

(b)to observe and perform all its other obligations under the Finance Documents.

3ASSIGNMENTS AND FLOATING CHARGE

3.1Assignments.  The Owner, with full title guarantee, assigns to the Lender absolutely all rights and interests which now or at any later time it has to, in or in connection with:

(a)the Earnings;

(b)the Insurances;

(c)any Charter;

(d)any Charter Guarantee; and

(e)any Requisition Compensation.

Each Security Interest created by each paragraph in this Clause 3.1 is a separate and independent Security Interest and if any one of them is to be construed and categorised as a floating charge that shall not result in the others being so construed or categorised.

3.2General floating charge.  As security for payment of the Secured Liabilities, the Owner charges in favour of the Lender, by way of first floating charge and (where applicable) with full title guarantee, all its undertaking and all its assets whatsoever and wheresoever, both present and future, except those assets mortgaged or charged by Clause 3.1 or by any other Finance Document to which the Owner is a party.

3.3Continuing security.  This Deed shall remain in force until the end of the Security Period as a continuing security and, in particular:

(a)the Security Interests created by Clauses 3.1 and 3.2 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 3.1 and 3.2, and the rights of the Lender under this Deed, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Lender;

(c)no failure or delay by or on behalf of the Lender to enforce or exercise a Security Interest created by Clause 3.1 or Clause 3.2 or a right of the Lender under this Deed, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right or with such a Security Interest being a fixed security shall preclude or estop the Lender (either permanently or temporarily) from enforcing or exercising it or result in a Security Interest expressed to be a fixed security taking effect as a floating security; and

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(d)this Deed shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

(iii)which the Lender now or subsequently has in respect of any of the Secured Liabilities.

3.4No obligations imposed on Lender.  The Owner shall remain liable to perform all obligations connected with the Secured Assets and the Lender shall not, in any circumstances, have or incur any obligation of any kind in connection with the Secured Assets.

3.5Notice of assignment.  The Owner shall, upon the written request of the Lender, give written notice (in such form as the Lender shall require) of the assignments contained in Clause 3.1 to any person from whom any part of the Secured Assets is or may be due.

3.6Negative pledge; disposal of assets.  The Owner shall not sell, create any Security Interest not exclusively securing the Secured Liabilities over or otherwise dispose of any items of the Secured Assets or any right relating to any item of the Secured Assets.  However, this Clause 3.6 does not apply to the assets covered by the floating charge in Clause 3.2.

3.7Release of security.  At the end of the Security Period, the Lender will, at the request and cost of the Owner, re-assign (without any warranty, representation, covenant or other recourse) to the Owner such rights as the Lender then has to, or in connection with, the assets assigned in Clause 3.1 and release the floating charge created in Clause 3.2.

3.8Insolvency Act 1986.  Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the floating charge created by Clause 3.2 and to any other charge created by this Deed which is to be construed and categorised as a floating charge.

4EARNINGS, INSURANCES AND REQUISITION COMPENSATION

4.1Receipt of Earnings.  The Earnings shall be paid to the Operating Account of the Owner for application in accordance with clause 17 of the Loan Agreement until an Event of Default occurs, whereupon:

(a)the Owner shall forthwith, and the Lender may at any time thereafter, instruct all persons from whom the Earnings are due to pay them to the Lender or as it may direct; and

(b)any sum in respect of Earnings then held by the Owner’s brokers, bankers or other agents or representatives shall be deemed to have been received by and to be held by them on trust for the Lender.

4.2Receipt of Insurances before an Event of Default.  Before an Event of Default occurs, sums recoverable in respect of the Insurances shall be payable as follows:

(a)any sum recoverable in respect of a Total Loss under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender; and

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(b)any sum recoverable in respect of a Major Casualty under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender but so that:

(i)the sum received by the Lender shall be paid over to the Owner upon the Owner providing evidence satisfactory to the Lender that all loss and damage resulting from the casualty has been properly made good and repaired and that all repair accounts and other liabilities connected with the casualty have been paid by the Owner; and

(ii)the insurers with whom the fire and usual marine risks and war risks insurances are effected may in the case of any Major Casualty, and with the prior written consent of the Lender make payment on account of the repairs which are being carried out; and

(c)any other sum recoverable under the Insurances against fire and usual marine risks and war risks shall be paid to the Owner which shall apply it in making good the loss and fully repairing all damage in respect of which that insurance money was received; and

(d)any sum recoverable under the Insurances against protection and indemnity risks shall be paid direct to the person to whom was incurred the liability to which such sum relates (or to the Owner in reimbursement to it of moneys expended to discharge that liability).

4.3Receipt of Insurances after an Event of Default.  On or after the occurrence of an Event of Default any sums recoverable under the Insurances shall be payable to the Lender.

4.4Receipt of Requisition Compensation.  Any Requisition Compensation shall at all times be payable to the Lender.

5REPRESENTATIONS AND WARRANTIES

5.1General.  The Owner represents and warrants to the Lender as follows.

5.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading if repeated on the date of this Deed with reference to the circumstances now existing.

5.3No Charter.  Except as disclosed by the Owner to the Lender in writing, the Ship is not subject to any Charter.

5.4Compliance with Environmental Laws.  All Environmental Laws relating to its ownership, operation and management and the business of the Owner (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with.

5.5No Environmental Claim.  No Environmental Claim has been made or threatened against the Owner or otherwise in connection with the Ship.

5.6No Environmental Incident.  No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

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6COVENANTS

6.1General.  The Owner shall comply with the following provisions of this Clause 6 at all times during the Security Period except as the Lender may otherwise permit.

6.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement.

7PROTECTION OF SECURITY

7.1Lender’s right to protect or maintain security.  The Lender may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Deed or for any similar or related purpose.

7.2Lender’s right to insure, repair etc.  Without limiting the generality of Clause 7.1, if the Owner does not comply with Clause 6, the Lender may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Lender may think expedient or necessary for the purpose of preventing its arrest and securing its release.

8ENFORCEABILITY AND LENDER’S POWERS

8.1Right to enforce security.  If an Event of Default occurs and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement (and without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Deed has become enforceable):

(a)the security constituted by this Deed shall immediately become enforceable for all purposes (including those of paragraph 14 of Schedule B1 of the Insolvency Act 1986); and

(b)the Lender shall be entitled at any time or times to serve a notice on the Owner crystallising each charge created by this Deed which is a floating charge; and

(c)the Lender shall be entitled at any time or times to exercise the powers set out in this Clause 8 and in any other Finance Document; and

(d)the Lender shall be entitled at any time or times:

(i)to exercise the powers possessed by it as assignee of any item of the Secured Assets conferred by the law of any country or territory in which any item of the Secured Assets is physically present or deemed to be sited the courts of which have or claim any jurisdiction in respect of the Owner or any item of the Secured Assets; and

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(ii)without limiting the scope of the Lender’s powers under sub-paragraph (i), to exercise the powers possessed by it as a creditor or as a person with a Security Interest in any item of the Secured Assets conferred by English law.

8.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Lender shall be entitled then or at any later times or times:

(a)to require that all policies and other documents relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to or to the order of the Lender;

(b)to collect, recover and give a good discharge for any moneys or claims forming part of, or arising in relation to, any item of the Secured Assets and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(c)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, any item of the Secured Assets which the Lender may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(d)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to any item of the Secured Assets which the Lender may think fit.

8.3Power to appoint receiver.  The Lender shall have the power, at any time after the Security Interests created by this Deed have become enforceable, to appoint a receiver or joint receivers of all the Secured Assets or of such item of the Secured Assets as may be specified or described in the appointment; and, unless the appointment otherwise provides, it shall be deemed to cover the whole or substantially the whole of the Secured Assets.

8.4Administrative receiver.  If the appointment of the receiver or the joint receivers under Clause 8.3 covers the whole or substantially the whole of the Secured Assets, he or they shall be an administrative receiver or administrative receivers, unless the provisions of the Insolvency Act 1986 relating to an administrative receiver are not applicable to a receiver of property of a company such as the Owner.

In that case, section 42 of the Insolvency Act 1986 and Schedule 1 to that Act (general powers of an administrative receiver) shall nevertheless be deemed to be incorporated into this Deed with any necessary modifications.

8.5Receivers’ powers in relation to Ship.  Without prejudice to Clause 8.4, it is specifically declared that, if the appointment of a Receiver comprises the Ship, he shall have power to commence, defend and settle any proceedings or take any other steps with a view or relating to the arrest of the Ship or in connection with any other matter relating to the Ship, to operate the Ship (and to issue bills of lading and other documents in the name of the Owner), to enter into charterparties, insurances and other contracts in respect of the Ship, to sell the Ship and to do all things which appear to the Receiver to be conducive to or connected with any of the foregoing.

8.6Administrator.  To the intent that the Lender shall be the holder of a qualifying floating charge in respect of the Owner’s property for the purposes of the Insolvency Act 1986 and the Enterprise Act 2002, it is hereby declared that, in addition to the power to appoint

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a receiver or an administrative receiver contained in Clause 8.3, the Lender shall have power, after all relevant floating charges have become enforceable, to appoint an administrator of the Owner or, at the option of the Lender, to apply to the court for an administration order in respect of the Owner.

8.7Supplementary provisions regarding Receivers.  The following shall have effect as regards any Receiver appointed under this Clause 8:

(a)the appointment shall be by deed or, at the Lender’s option, by a document signed by any of its officers; and an appointment in respect of some only of the Secured Assets may later be extended to all or some of the other Secured Assets;

(b)to the fullest extent permitted by law, a Receiver shall be the Owner’s agent, and the Owner shall be responsible, to the exclusion of any liability on the part of the Lender, for his remuneration and for his contracts, acts and defaults;

(c)the remuneration of a Receiver and the other terms of his appointment shall be fixed, and may be revised, by the Lender;

(d)the Lender may exercise any of the powers conferred by the Finance Documents while a Receiver is in office and is acting;

(e)the Owner irrevocably and by way of security appoints every Receiver its attorney on its behalf and in its name or otherwise to execute or sign any document and do any act or thing which that Receiver considers necessary or desirable with a view to or in connection with any exercise or proposed exercise of any of his powers;

(f)a Receiver may delegate any of his powers to any person or persons and may do so on terms authorising successive sub-delegations;

(g)in the case of joint Receivers, any of their powers may be exercised by any one or more of them, unless their appointment specifically states the contrary;

(h)in the event that a Receiver is not an administrative receiver, the Lender may remove him, with or without appointing another Receiver; and such a removal may be effected by a document signed by any of the Lender’s officers;

(i)the Lender may appoint a Receiver to replace a Receiver who has resigned or for any other reason ceased to hold office;

(j)a Receiver shall be entitled to retain out of any money received by him such amounts in respect of his expenses or the following indemnity (or to cover estimated future expenses or amounts due under the following indemnity) as he may from time to time agree with the Lender; and

(k)the Owner shall, on a Receiver’s demand, fully indemnify that Receiver and every person employed by or acting for him in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Receiver or person, or which that Receiver reasonably and with due diligence estimates that he or such a person may incur, as a result of or in connection with any action taken or omitted to be taken in relation to the Secured Assets or any other matter or event relating to the Secured Assets, including any accident or incident involving or caused by the Ship; and neither a Receiver nor such

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a person shall have any liability to the Owner in any circumstances save proven dishonesty on the part of that Receiver or person himself.

8.8Law of Property Act 1925 not applicable.  The Owner hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Deed.

8.9No liability of Lender or Receiver.  Neither the Lender nor any Receiver shall be obliged to check the nature or sufficiency of any payment received by it or him under this Deed or to preserve, exercise or enforce any right forming part of, or relating to, any item of the Secured Assets.

9APPLICATION OF MONEYS

9.1Application.  All sums received by the Lender or by a Receiver:

(a)in respect of the Earnings following a direction made by the Lender under Clause 4.1;

(b)under the Insurances (except any sum received by the Lender in respect of a Major Casualty which has been paid over to the Owner under Clause 4.2(b));

(c)in respect of Requisition Compensation;

(d)in respect of any transaction or arrangement under Clause 8.1, 8.2, 8.3, 8.5 or 8.7,

shall be held by the Lender or the Receiver upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Lender or any Receiver in or connection with the exercise of their respective powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

10FURTHER ASSURANCES

10.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b)effect any registration or notarisation, give any notice or take any other step;

which the Lender may, by notice to the Owner, specify for any of the purposes described in Clause 10.2 or for any similar or related purpose.

10.2Purposes of further assurances.  The purposes referred to in Clause 10.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to this Deed or any other Finance Document;

(b)to create a specific mortgage or assignment of any particular item of the Secured Assets or otherwise to vest in the Lender the title to any particular item of the Secured Assets;

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(c)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Lender intended should be created, by or pursuant to the Mortgage, this Deed or any other Finance Document;

(d)to enable or assist the Lender or a Receiver to sell or otherwise deal with any item of the Secured Assets, to transfer title to, or grant any interest or right relating to, any item of the Secured Assets or to exercise any power which is referred to in Clause 8.1 above or which is conferred by any Finance Document;

(e)to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Secured Assets in any country or under the law of any country.

10.3Terms of further assurances.  The Lender may specify the terms of any document to be executed by the Owner under Clause 10.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its or a Receiver’s interests.

10.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 10.1 by the date specified in the notice.

10.5Additional corporate action.  At the same time as the Owner delivers to the Lender any document executed under Clause 10.1(a), the Owner shall also deliver to the Lender a certificate signed by 2 of the Owner’s directors which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Lender; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of association or other constitutional documents.

11POWER OF ATTORNEY

11.1Appointment.  For the purpose of securing the Lender’s interest in the Secured Assets and the due and punctual performance of its obligations to the Lender under this Deed and every other Finance Document, the Owner irrevocably and by way of security appoints the Lender its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

11.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 11.1, it is confirmed that it authorises the Lender to execute on behalf of the Owner a document ratifying by the Owner any transaction or action which the Lender and/or a Receiver has purported to enter into or to take and which the Lender considers was or might have been outside his powers or otherwise invalid.

11.3Delegation.  The Lender may sub-delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Lender by Clauses 11.1 and/or 11.2, and may do so on terms authorising successive sub-delegations.

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12INCORPORATION OF LOAN AGREEMENT PROVISIONS

12.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices;

clause 31, supplemental.

12.2Incorporation of general provisions.  Clause 12.1 is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Deed shall be taken to exclude or restrict any power, right or remedy which the Lender may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner, the Ship or any other item of the Secured Assets.

13.2Exercise of other rights.  The Lender may exercise any right under this Deed before it has exercised any right referred to in Clause 13.1(a) or (b) above.

13.3Settlement or discharge conditional.  Any settlement or discharge under this Deed between the Lender and the Owner shall be conditional upon no security or payment to the Lender by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

13.4Third party rights.  A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

14LAW AND JURISDICTION

14.1English law.  This Deed shall be governed by, and construed in accordance with, English law.

14.2Exclusive English jurisdiction.  Subject to Clause 14.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed.

14.3Choice of forum for the exclusive benefit of the Lender.  Clause 14.2 is for the exclusive benefit of the Lender, which reserves the rights:

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(a)to commence proceedings in relation to any matter which arises out of or in connection with this Deed in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Deed.

14.4Process agent.  The Owner irrevocably appoints Maritime Recovery Limited at its registered office for the time being, presently at 20 Salcott Road, PO Box 239, London SW11 6DJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Deed.

14.5Lender’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.6Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS DEED has been duly executed as a deed on the date stated at the beginning of this Deed.

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EXECUTION PAGE

OWNER

EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
by KTL HAMPSTEAD, INC.	)
acting by Nicholas Sherriff	)
expressly authorised in accordance with the	)
laws ofLiberia	)
by virtue of a power of attorney granted	)
by KTL HAMPSTEAD, INC.	)
on 2 March 2004	)
such execution being witnessed by:	)
Signature of witness
/s/ illegible
LENDER
EXECUTED and DELIVEREDas a DEED	)	/s/ Robert J. Manners
by the duly authorised attorney of	)
THE ROYAL BANK OF SCOTLAND plc	)
for it and on its behalf	)
in the presence of:
Signature of witness
/s/ Charmaine Rumbelow

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EX-4.36.4

Exhibit 4.36.4

Date 29 March 2004

KTL KENSINGTON, INC.

as Owner

-and-

THE ROYAL BANK OF SCOTLAND plc

as Lender

GENERAL ASSIGNMENT

relating to m.v. “KENSINGTON”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	COVENANT TO PAY
3	ASSIGNMENTS AND FLOATING CHARGE
4	EARNINGS, INSURANCES AND REQUISITION COMPENSATION
5	REPRESENTATIONS AND WARRANTIES
6	COVENANTS
7	PROTECTION OF SECURITY
8	ENFORCEABILITY AND LENDER’S POWERS
9	APPLICATION OF MONEYS
10	FURTHER ASSURANCES
11	POWER OF ATTORNEY
12	INCORPORATION OF LOAN AGREEMENT PROVISIONS
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
EXECUTION PAGE

THIS DEED is made on 29 March 2004

BETWEEN

(1)KTL KENSINGTON, INC., a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the “Owner”); and

(2)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Lender” which expression includes its successors and assigns)

BACKGROUND

(A)By a loan agreement dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Camden, Inc. and the Owner and (iii) the Lender it was agreed that the Lender would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances.

(B)By certain agreements (each a “Daylight Funding Agreement”) dated                                                           2004 and made between, among others, each New Owner and the Lender it was agreed that the Lender would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to the Mortgage (the “Mortgage”) marked “B”.

(C)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes, delivers and registers a Mortgage and enters into this Deed.

(D)The Owner has executed a Mortgage in favour of the Lender.

(E)This Deed supplements the Loan Agreement and the Mortgage executed by the Owner and is one of the General Assignments referred to in the Loan Agreement.

IT IS AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2Definitions.  In this Deed, unless the contrary intention appears:

“Charter”  means any charter relating to the Ship, or other contract for its employment, whether or not already in existence;

“Charter Guarantee” means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter;

“Loan Agreement”  means the loan agreement dated 2 March 2004 referred to in Recital (A);

“Receiver”  means any receiver and/or manager (or joint receivers and/or managers) appointed under Clause 8.3;

“Secured Assets”  means those assets of the Owner:

(a)mortgaged or charged by Clause 3.1; or

(b)covered by the floating charge in Clause 3.2; or

(c)mortgaged or charged by any other Finance Document to which the Owner is a party;

“Secured Liabilities”  means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Deed or at any later time or times, to the Lender under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation, the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship”  means the vessel “KENSINGTON” documented in the name of the Owner under the laws and flag of the Marshall Islands under Official Number 2035 and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Deed.

1.4Inconsistency between Loan Agreement provisions and this Deed.  This Deed shall be read together with the other Finance Documents, but in case of any conflict between the Loan Agreement and this Deed, the provisions of the Loan Agreement shall prevail.

1.5Continuing effect after discharge of Mortgage.  Notwithstanding that this Deed supplements the Loan Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Mortgage.

1.6Inconsistency between provisions of specific mortgages and this Deed.  Any specific mortgage which the Owner may effect in respect of any Charter or Charter Guarantee to secure the Secured Liabilities shall be in addition to this Deed; but in the event of any conflict between the provisions of such a mortgage and the provisions of this Deed, the

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provisions of the mortgage shall prevail; and for this purpose “mortgage” includes assignment and charge.

2COVENANT TO PAY

2.1Covenant to pay Secured Liabilities.  The Owner covenants with the Lender:

(a)duly and punctually to pay the Secured Liabilities; and

(b)to observe and perform all its other obligations under the Finance Documents.

3ASSIGNMENTS AND FLOATING CHARGE

3.1Assignments.  The Owner, with full title guarantee, assigns to the Lender absolutely all rights and interests which now or at any later time it has to, in or in connection with:

(a)the Earnings;

(b)the Insurances;

(c)any Charter;

(d)any Charter Guarantee; and

(e)any Requisition Compensation.

Each Security Interest created by each paragraph in this Clause 3.1 is a separate and independent Security Interest and if any one of them is to be construed and categorised as a floating charge that shall not result in the others being so construed or categorised.

3.2General floating charge.  As security for payment of the Secured Liabilities, the Owner charges in favour of the Lender, by way of first floating charge and (where applicable) with full title guarantee, all its undertaking and all its assets whatsoever and wheresoever, both present and future, except those assets mortgaged or charged by Clause 3.1 or by any other Finance Document to which the Owner is a party.

3.3Continuing security.  This Deed shall remain in force until the end of the Security Period as a continuing security and, in particular:

(a)the Security Interests created by Clauses 3.1 and 3.2 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 3.1 and 3.2, and the rights of the Lender under this Deed, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Lender;

(c)no failure or delay by or on behalf of the Lender to enforce or exercise a Security Interest created by Clause 3.1 or Clause 3.2 or a right of the Lender under this Deed, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right or with such a Security Interest being a fixed security shall preclude or estop the Lender (either permanently or temporarily) from enforcing or exercising it or result in a Security Interest expressed to be a fixed security taking effect as a floating security; and

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(d)this Deed shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

(iii)which the Lender now or subsequently has in respect of any of the Secured Liabilities.

3.4No obligations imposed on Lender.  The Owner shall remain liable to perform all obligations connected with the Secured Assets and the Lender shall not, in any circumstances, have or incur any obligation of any kind in connection with the Secured Assets.

3.5Notice of assignment.  The Owner shall, upon the written request of the Lender, give written notice (in such form as the Lender shall require) of the assignments contained in Clause 3.1 to any person from whom any part of the Secured Assets is or may be due.

3.6Negative pledge; disposal of assets.  The Owner shall not sell, create any Security Interest not exclusively securing the Secured Liabilities over or otherwise dispose of any items of the Secured Assets or any right relating to any item of the Secured Assets.  However, this Clause 3.6 does not apply to the assets covered by the floating charge in Clause 3.2.

3.7Release of security.  At the end of the Security Period, the Lender will, at the request and cost of the Owner, re-assign (without any warranty, representation, covenant or other recourse) to the Owner such rights as the Lender then has to, or in connection with, the assets assigned in Clause 3.1 and release the floating charge created in Clause 3.2.

3.8Insolvency Act 1986.  Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the floating charge created by Clause 3.2 and to any other charge created by this Deed which is to be construed and categorised as a floating charge.

4EARNINGS, INSURANCES AND REQUISITION COMPENSATION

4.1Receipt of Earnings.  The Earnings shall be paid to the Operating Account of the Owner for application in accordance with clause 17 of the Loan Agreement until an Event of Default occurs, whereupon:

(a)the Owner shall forthwith, and the Lender may at any time thereafter, instruct all persons from whom the Earnings are due to pay them to the Lender or as it may direct; and

(b)any sum in respect of Earnings then held by the Owner’s brokers, bankers or other agents or representatives shall be deemed to have been received by and to be held by them on trust for the Lender.

4.2Receipt of Insurances before an Event of Default.  Before an Event of Default occurs, sums recoverable in respect of the Insurances shall be payable as follows:

(a)any sum recoverable in respect of a Total Loss under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender; and

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(b)any sum recoverable in respect of a Major Casualty under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender but so that:

(i)the sum received by the Lender shall be paid over to the Owner upon the Owner providing evidence satisfactory to the Lender that all loss and damage resulting from the casualty has been properly made good and repaired and that all repair accounts and other liabilities connected with the casualty have been paid by the Owner; and

(ii)the insurers with whom the fire and usual marine risks and war risks insurances are effected may in the case of any Major Casualty, and with the prior written consent of the Lender make payment on account of the repairs which are being carried out; and

(c)any other sum recoverable under the Insurances against fire and usual marine risks and war risks shall be paid to the Owner which shall apply it in making good the loss and fully repairing all damage in respect of which that insurance money was received; and

(d)any sum recoverable under the Insurances against protection and indemnity risks shall be paid direct to the person to whom was incurred the liability to which such sum relates (or to the Owner in reimbursement to it of moneys expended to discharge that liability).

4.3Receipt of Insurances after an Event of Default.  On or after the occurrence of an Event of Default any sums recoverable under the Insurances shall be payable to the Lender.

4.4Receipt of Requisition Compensation.  Any Requisition Compensation shall at all times be payable to the Lender.

5REPRESENTATIONS AND WARRANTIES

5.1General.  The Owner represents and warrants to the Lender as follows.

5.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading if repeated on the date of this Deed with reference to the circumstances now existing.

5.3No Charter.  Except as disclosed by the Owner to the Lender in writing, the Ship is not subject to any Charter.

5.4Compliance with Environmental Laws.  All Environmental Laws relating to its ownership, operation and management and the business of the Owner (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with.

5.5No Environmental Claim.  No Environmental Claim has been made or threatened against the Owner or otherwise in connection with the Ship.

5.6No Environmental Incident.  No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

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6COVENANTS

6.1General.  The Owner shall comply with the following provisions of this Clause 6 at all times during the Security Period except as the Lender may otherwise permit.

6.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement.

7PROTECTION OF SECURITY

7.1Lender’s right to protect or maintain security.  The Lender may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Deed or for any similar or related purpose.

7.2Lender’s right to insure, repair etc.  Without limiting the generality of Clause 7.1, if the Owner does not comply with Clause 6, the Lender may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Lender may think expedient or necessary for the purpose of preventing its arrest and securing its release.

8ENFORCEABILITY AND LENDER’S POWERS

8.1Right to enforce security.  If an Event of Default occurs and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement (and without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Deed has become enforceable):

(a)the security constituted by this Deed shall immediately become enforceable for all purposes (including those of paragraph 14 of Schedule B1 of the Insolvency Act 1986); and

(b)the Lender shall be entitled at any time or times to serve a notice on the Owner crystallising each charge created by this Deed which is a floating charge; and

(c)the Lender shall be entitled at any time or times to exercise the powers set out in this Clause 8 and in any other Finance Document; and

(d)the Lender shall be entitled at any time or times:

(i)to exercise the powers possessed by it as assignee of any item of the Secured Assets conferred by the law of any country or territory in which any item of the Secured Assets is physically present or deemed to be sited the courts of which have or claim any jurisdiction in respect of the Owner or any item of the Secured Assets; and

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(ii)without limiting the scope of the Lender’s powers under sub-paragraph (i), to exercise the powers possessed by it as a creditor or as a person with a Security Interest in any item of the Secured Assets conferred by English law.

8.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Lender shall be entitled then or at any later times or times:

(a)to require that all policies and other documents relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to or to the order of the Lender;

(b)to collect, recover and give a good discharge for any moneys or claims forming part of, or arising in relation to, any item of the Secured Assets and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(c)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, any item of the Secured Assets which the Lender may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(d)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to any item of the Secured Assets which the Lender may think fit.

8.3Power to appoint receiver.  The Lender shall have the power, at any time after the Security Interests created by this Deed have become enforceable, to appoint a receiver or joint receivers of all the Secured Assets or of such item of the Secured Assets as may be specified or described in the appointment; and, unless the appointment otherwise provides, it shall be deemed to cover the whole or substantially the whole of the Secured Assets.

8.4Administrative receiver.  If the appointment of the receiver or the joint receivers under Clause 8.3 covers the whole or substantially the whole of the Secured Assets, he or they shall be an administrative receiver or administrative receivers, unless the provisions of the Insolvency Act 1986 relating to an administrative receiver are not applicable to a receiver of property of a company such as the Owner.

In that case, section 42 of the Insolvency Act 1986 and Schedule 1 to that Act (general powers of an administrative receiver) shall nevertheless be deemed to be incorporated into this Deed with any necessary modifications.

8.5Receivers’ powers in relation to Ship.  Without prejudice to Clause 8.4, it is specifically declared that, if the appointment of a Receiver comprises the Ship, he shall have power to commence, defend and settle any proceedings or take any other steps with a view or relating to the arrest of the Ship or in connection with any other matter relating to the Ship, to operate the Ship (and to issue bills of lading and other documents in the name of the Owner), to enter into charterparties, insurances and other contracts in respect of the Ship, to sell the Ship and to do all things which appear to the Receiver to be conducive to or connected with any of the foregoing.

8.6Administrator.  To the intent that the Lender shall be the holder of a qualifying floating charge in respect of the Owner’s property for the purposes of the Insolvency Act 1986 and the Enterprise Act 2002, it is hereby declared that, in addition to the power to appoint

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a receiver or an administrative receiver contained in Clause 8.3, the Lender shall have power, after all relevant floating charges have become enforceable, to appoint an administrator of the Owner or, at the option of the Lender, to apply to the court for an administration order in respect of the Owner.

8.7Supplementary provisions regarding Receivers.  The following shall have effect as regards any Receiver appointed under this Clause 8:

(a)the appointment shall be by deed or, at the Lender’s option, by a document signed by any of its officers; and an appointment in respect of some only of the Secured Assets may later be extended to all or some of the other Secured Assets;

(b)to the fullest extent permitted by law, a Receiver shall be the Owner’s agent, and the Owner shall be responsible, to the exclusion of any liability on the part of the Lender, for his remuneration and for his contracts, acts and defaults;

(c)the remuneration of a Receiver and the other terms of his appointment shall be fixed, and may be revised, by the Lender;

(d)the Lender may exercise any of the powers conferred by the Finance Documents while a Receiver is in office and is acting;

(e)the Owner irrevocably and by way of security appoints every Receiver its attorney on its behalf and in its name or otherwise to execute or sign any document and do any act or thing which that Receiver considers necessary or desirable with a view to or in connection with any exercise or proposed exercise of any of his powers;

(f)a Receiver may delegate any of his powers to any person or persons and may do so on terms authorising successive sub-delegations;

(g)in the case of joint Receivers, any of their powers may be exercised by any one or more of them, unless their appointment specifically states the contrary;

(h)in the event that a Receiver is not an administrative receiver, the Lender may remove him, with or without appointing another Receiver; and such a removal may be effected by a document signed by any of the Lender’s officers;

(i)the Lender may appoint a Receiver to replace a Receiver who has resigned or for any other reason ceased to hold office;

(j)a Receiver shall be entitled to retain out of any money received by him such amounts in respect of his expenses or the following indemnity (or to cover estimated future expenses or amounts due under the following indemnity) as he may from time to time agree with the Lender; and

(k)the Owner shall, on a Receiver’s demand, fully indemnify that Receiver and every person employed by or acting for him in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Receiver or person, or which that Receiver reasonably and with due diligence estimates that he or such a person may incur, as a result of or in connection with any action taken or omitted to be taken in relation to the Secured Assets or any other matter or event relating to the Secured Assets, including any accident or incident involving or caused by the Ship; and neither a Receiver nor such

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a person shall have any liability to the Owner in any circumstances save proven dishonesty on the part of that Receiver or person himself.

8.8Law of Property Act 1925 not applicable.  The Owner hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Deed.

8.9No liability of Lender or Receiver.  Neither the Lender nor any Receiver shall be obliged to check the nature or sufficiency of any payment received by it or him under this Deed or to preserve, exercise or enforce any right forming part of, or relating to, any item of the Secured Assets.

9APPLICATION OF MONEYS

9.1Application.  All sums received by the Lender or by a Receiver:

(a)in respect of the Earnings following a direction made by the Lender under Clause 4.1;

(b)under the Insurances (except any sum received by the Lender in respect of a Major Casualty which has been paid over to the Owner under Clause 4.2(b));

(c)in respect of Requisition Compensation;

(d)in respect of any transaction or arrangement under Clause 8.1, 8.2, 8.3, 8.5 or 8.7,

shall be held by the Lender or the Receiver upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Lender or any Receiver in or connection with the exercise of their respective powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

10FURTHER ASSURANCES

10.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b)effect any registration or notarisation, give any notice or take any other step;

which the Lender may, by notice to the Owner, specify for any of the purposes described in Clause 10.2 or for any similar or related purpose.

10.2Purposes of further assurances.  The purposes referred to in Clause 10.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to this Deed or any other Finance Document;

(b)to create a specific mortgage or assignment of any particular item of the Secured Assets or otherwise to vest in the Lender the title to any particular item of the Secured Assets;

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(c)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Lender intended should be created, by or pursuant to the Mortgage, this Deed or any other Finance Document;

(d)to enable or assist the Lender or a Receiver to sell or otherwise deal with any item of the Secured Assets, to transfer title to, or grant any interest or right relating to, any item of the Secured Assets or to exercise any power which is referred to in Clause 8.1 above or which is conferred by any Finance Document;

(e)to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Secured Assets in any country or under the law of any country.

10.3Terms of further assurances.  The Lender may specify the terms of any document to be executed by the Owner under Clause 10.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its or a Receiver’s interests.

10.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 10.1 by the date specified in the notice.

10.5Additional corporate action.  At the same time as the Owner delivers to the Lender any document executed under Clause 10.1(a), the Owner shall also deliver to the Lender a certificate signed by 2 of the Owner’s directors which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Lender; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of association or other constitutional documents.

11POWER OF ATTORNEY

11.1Appointment.  For the purpose of securing the Lender’s interest in the Secured Assets and the due and punctual performance of its obligations to the Lender under this Deed and every other Finance Document, the Owner irrevocably and by way of security appoints the Lender its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

11.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 11.1, it is confirmed that it authorises the Lender to execute on behalf of the Owner a document ratifying by the Owner any transaction or action which the Lender and/or a Receiver has purported to enter into or to take and which the Lender considers was or might have been outside his powers or otherwise invalid.

11.3Delegation.  The Lender may sub-delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Lender by Clauses 11.1 and/or 11.2, and may do so on terms authorising successive sub-delegations.

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12INCORPORATION OF LOAN AGREEMENT PROVISIONS

12.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices;

clause 31, supplemental.

12.2Incorporation of general provisions.  Clause 12.1 is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Deed shall be taken to exclude or restrict any power, right or remedy which the Lender may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner, the Ship or any other item of the Secured Assets.

13.2Exercise of other rights.  The Lender may exercise any right under this Deed before it has exercised any right referred to in Clause 13.1(a) or (b) above.

13.3Settlement or discharge conditional.  Any settlement or discharge under this Deed between the Lender and the Owner shall be conditional upon no security or payment to the Lender by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

13.4Third party rights.  A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

14LAW AND JURISDICTION

14.1English law.  This Deed shall be governed by, and construed in accordance with, English law.

14.2Exclusive English jurisdiction.  Subject to Clause 14.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed.

14.3Choice of forum for the exclusive benefit of the Lender.  Clause 14.2 is for the exclusive benefit of the Lender, which reserves the rights:

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(a)to commence proceedings in relation to any matter which arises out of or in connection with this Deed in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Deed.

14.4Process agent.  The Owner irrevocably appoints Maritime Recovery Limited at its registered office for the time being, presently at 20 Salcott Road, PO Box 293, London SW11 6DJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Deed.

14.5Lender’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.6Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS DEED has been duly executed as a deed on the date stated at the beginning of this Deed.

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EXECUTION PAGE

OWNER
EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
by KTL KENSINGTON, INC.	)
acting by Nicholas Sherriff	)
expressly authorised in accordance with the	)
laws ofLiberia	)
by virtue of a power of attorney granted	)
by KTL KENSINGTON, INC.	)
on 2 March 2004	)
such execution being witnessed by:	)
Signature of witness
/s/ illegible
LENDER
EXECUTED and DELIVEREDas a DEED	)	/s/ Robert J. Manners
by the duly authorised attorney of	)
THE ROYAL BANK OF SCOTLAND plc	)
for it and on its behalf	)
in the presence of:
Signature of witness
/s/ Charmaine Rumbelow

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EX-4.36.5

Exhibit 4.36.5

Date 18 March 2004

KTL MAYFAIR, INC.

as Owner

-and-

THE ROYAL BANK OF SCOTLAND plc

as Lender

GENERAL ASSIGNMENT

relating to m.v. “MAYFAIR”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	COVENANT TO PAY
3	ASSIGNMENTS AND FLOATING CHARGE
4	EARNINGS, INSURANCES AND REQUISITION COMPENSATION
5	REPRESENTATIONS AND WARRANTIES
6	COVENANTS
7	PROTECTION OF SECURITY
8	ENFORCEABILITY AND LENDER’S POWERS
9	APPLICATION OF MONEYS
10	FURTHER ASSURANCES
11	POWER OF ATTORNEY
12	INCORPORATION OF LOAN AGREEMENT PROVISIONS
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
EXECUTION PAGE

THIS DEED is made on 18 March 2004

BETWEEN

(1)KTL MAYFAIR, INC., a company incorporated in Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the “Owner”); and

(2)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Lender” which expression includes its successors and assigns)

BACKGROUND

(A)By a loan agreement dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Camden, Inc., KTL Kensington, Inc. and the Owner and (iii) the Lender it was agreed that the Lender would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances.

(B)By certain agreements (each a “Daylight Funding Agreement”) dated                                         2004 and made between, among others, each New Owner and the Lender it was agreed that the Lender would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to the Mortgage (the “Mortgage”) marked “B”.

(C)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes, delivers and registers a Mortgage and enters into this Deed.

(D)The Owner has executed a Mortgage in favour of the Lender.

(E)This Deed supplements the Loan Agreement and the Mortgage executed by the Owner and is one of the General Assignments referred to in the Loan Agreement.

IT IS AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2Definitions.  In this Deed, unless the contrary intention appears:

“Charter”  means any charter relating to the Ship, or other contract for its employment, whether or not already in existence;

“Charter Guarantee” means any guarantee, bond, letter of credit or other instrument (whether or not already issued) supporting a Charter;

“Loan Agreement”  means the loan agreement dated 2 March 2004 referred to in Recital (A);

“Receiver”  means any receiver and/or manager (or joint receivers and/or managers) appointed under Clause 8.3;

“Secured Assets”  means those assets of the Owner:

(a)mortgaged or charged by Clause 3.1; or

(b)covered by the floating charge in Clause 3.2; or

(c)mortgaged or charged by any other Finance Document to which the Owner is a party;

“Secured Liabilities”  means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Deed or at any later time or times, to the Lender under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation, the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship”  means the vessel  “MAYFAIR” documented in the name of the Owner under the laws and flag of the Marshall Islands under Official Number 2028 and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or hereafter acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Deed.

1.4Inconsistency between Loan Agreement provisions and this Deed.  This Deed shall be read together with the other Finance Documents, but in case of any conflict between the Loan Agreement and this Deed, the provisions of the Loan Agreement shall prevail.

1.5Continuing effect after discharge of Mortgage.  Notwithstanding that this Deed supplements the Loan Agreement and the Mortgage, it shall continue in full force and effect after any discharge of the Mortgage.

1.6Inconsistency between provisions of specific mortgages and this Deed.  Any specific mortgage which the Owner may effect in respect of any Charter or Charter Guarantee to secure the Secured Liabilities shall be in addition to this Deed; but in the event of any conflict between the provisions of such a mortgage and the provisions of this Deed, the

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provisions of the mortgage shall prevail; and for this purpose “mortgage” includes assignment and charge.

2COVENANT TO PAY

2.1Covenant to pay Secured Liabilities.  The Owner covenants with the Lender:

(a)duly and punctually to pay the Secured Liabilities; and

(b)to observe and perform all its other obligations under the Finance Documents.

3ASSIGNMENTS AND FLOATING CHARGE

3.1Assignments.  The Owner, with full title guarantee, assigns to the Lender absolutely all rights and interests which now or at any later time it has to, in or in connection with:

(a)the Earnings;

(b)the Insurances;

(c)any Charter;

(d)any Charter Guarantee; and

(e)any Requisition Compensation.

Each Security Interest created by each paragraph in this Clause 3.1 is a separate and independent Security Interest and if any one of them is to be construed and categorised as a floating charge that shall not result in the others being so construed or categorised.

3.2General floating charge.  As security for payment of the Secured Liabilities, the Owner charges in favour of the Lender, by way of first floating charge and (where applicable) with full title guarantee, all its undertaking and all its assets whatsoever and wheresoever, both present and future, except those assets mortgaged or charged by Clause 3.1 or by any other Finance Document to which the Owner is a party.

3.3Continuing security.  This Deed shall remain in force until the end of the Security Period as a continuing security and, in particular:

(a)the Security Interests created by Clauses 3.1 and 3.2 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 3.1 and 3.2, and the rights of the Lender under this Deed, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Lender;

(c)no failure or delay by or on behalf of the Lender to enforce or exercise a Security Interest created by Clause 3.1 or Clause 3.2 or a right of the Lender under this Deed, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right or with such a Security Interest being a fixed security shall preclude or estop the Lender (either permanently or temporarily) from enforcing or exercising it or result in a Security Interest expressed to be a fixed security taking effect as a floating security; and

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(d)this Deed shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

(iii)which the Lender now or subsequently has in respect of any of the Secured Liabilities.

3.4No obligations imposed on Lender.  The Owner shall remain liable to perform all obligations connected with the Secured Assets and the Lender shall not, in any circumstances, have or incur any obligation of any kind in connection with the Secured Assets.

3.5Notice of assignment.  The Owner shall, upon the written request of the Lender, give written notice (in such form as the Lender shall require) of the assignments contained in Clause 3.1 to any person from whom any part of the Secured Assets is or may be due.

3.6Negative pledge; disposal of assets.  The Owner shall not sell, create any Security Interest not exclusively securing the Secured Liabilities over or otherwise dispose of any items of the Secured Assets or any right relating to any item of the Secured Assets.  However, this Clause 3.6 does not apply to the assets covered by the floating charge in Clause 3.2.

3.7Release of security.  At the end of the Security Period, the Lender will, at the request and cost of the Owner, re-assign (without any warranty, representation, covenant or other recourse) to the Owner such rights as the Lender then has to, or in connection with, the assets assigned in Clause 3.1 and release the floating charge created in Clause 3.2.

3.8Insolvency Act 1986.  Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the floating charge created by Clause 3.2 and to any other charge created by this Deed which is to be construed and categorised as a floating charge.

4EARNINGS, INSURANCES AND REQUISITION COMPENSATION

4.1Receipt of Earnings.  The Earnings shall be paid to the Operating Account of the Owner for application in accordance with clause 17 of the Loan Agreement until an Event of Default occurs, whereupon:

(a)the Owner shall forthwith, and the Lender may at any time thereafter, instruct all persons from whom the Earnings are due to pay them to the Lender or as it may direct; and

(b)any sum in respect of Earnings then held by the Owner’s brokers, bankers or other agents or representatives shall be deemed to have been received by and to be held by them on trust for the Lender.

4.2Receipt of Insurances before an Event of Default.  Before an Event of Default occurs, sums recoverable in respect of the Insurances shall be payable as follows:

(a)any sum recoverable in respect of a Total Loss under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender; and

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(b)any sum recoverable in respect of a Major Casualty under the Insurances against fire and usual marine risks and war risks shall be paid to the Lender but so that:

(i)the sum received by the Lender shall be paid over to the Owner upon the Owner providing evidence satisfactory to the Lender that all loss and damage resulting from the casualty has been properly made good and repaired and that all repair accounts and other liabilities connected with the casualty have been paid by the Owner; and

(ii)the insurers with whom the fire and usual marine risks and war risks insurances are effected may in the case of any Major Casualty, and with the prior written consent of the Lender make payment on account of the repairs which are being carried out; and

(c)any other sum recoverable under the Insurances against fire and usual marine risks and war risks shall be paid to the Owner which shall apply it in making good the loss and fully repairing all damage in respect of which that insurance money was received; and

(d)any sum recoverable under the Insurances against protection and indemnity risks shall be paid direct to the person to whom was incurred the liability to which such sum relates (or to the Owner in reimbursement to it of moneys expended to discharge that liability).

4.3Receipt of Insurances after an Event of Default.  On or after the occurrence of an Event of Default any sums recoverable under the Insurances shall be payable to the Lender.

4.4Receipt of Requisition Compensation.  Any Requisition Compensation shall at all times be payable to the Lender.

5REPRESENTATIONS AND WARRANTIES

5.1General.  The Owner represents and warrants to the Lender as follows.

5.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading if repeated on the date of this Deed with reference to the circumstances now existing.

5.3No Charter.  Except as disclosed by the Owner to the Lender in writing, the Ship is not subject to any Charter.

5.4Compliance with Environmental Laws.  All Environmental Laws relating to its ownership, operation and management and the business of the Owner (as now conducted and as reasonably anticipated to be conducted in the future) have been complied with.

5.5No Environmental Claim.  No Environmental Claim has been made or threatened against the Owner or otherwise in connection with the Ship.

5.6No Environmental Incident.  No Environmental Incident has occurred and no person has claimed that an Environmental Incident has occurred.

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6COVENANTS

6.1General.  The Owner shall comply with the following provisions of this Clause 6 at all times during the Security Period except as the Lender may otherwise permit.

6.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement.

7PROTECTION OF SECURITY

7.1Lender’s right to protect or maintain security.  The Lender may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Deed or for any similar or related purpose.

7.2Lender’s right to insure, repair etc.  Without limiting the generality of Clause 7.1, if the Owner does not comply with Clause 6, the Lender may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Lender may think expedient or necessary for the purpose of preventing its arrest and securing its release.

8ENFORCEABILITY AND LENDER’S POWERS

8.1Right to enforce security.  If an Event of Default occurs and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement (and without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Deed has become enforceable):

(a)the security constituted by this Deed shall immediately become enforceable for all purposes (including those of paragraph 14 of Schedule B1 of the Insolvency Act 1986); and

(b)the Lender shall be entitled at any time or times to serve a notice on the Owner crystallising each charge created by this Deed which is a floating charge; and

(c)the Lender shall be entitled at any time or times to exercise the powers set out in this Clause 8 and in any other Finance Document; and

(d)the Lender shall be entitled at any time or times:

(i)to exercise the powers possessed by it as assignee of any item of the Secured Assets conferred by the law of any country or territory in which any item of the Secured Assets is physically present or deemed to be sited the courts of which have or claim any jurisdiction in respect of the Owner or any item of the Secured Assets; and

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(ii)without limiting the scope of the Lender’s powers under sub-paragraph (i), to exercise the powers possessed by it as a creditor or as a person with a Security Interest in any item of the Secured Assets conferred by English law.

8.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Lender shall be entitled then or at any later times or times:

(a)to require that all policies and other documents relating to the Insurances (including details of and correspondence concerning outstanding claims) be forthwith delivered to or to the order of the Lender;

(b)to collect, recover and give a good discharge for any moneys or claims forming part of, or arising in relation to, any item of the Secured Assets and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(c)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, any item of the Secured Assets which the Lender may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(d)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to any item of the Secured Assets which the Lender may think fit.

8.3Power to appoint receiver.  The Lender shall have the power, at any time after the Security Interests created by this Deed have become enforceable, to appoint a receiver or joint receivers of all the Secured Assets or of such item of the Secured Assets as may be specified or described in the appointment; and, unless the appointment otherwise provides, it shall be deemed to cover the whole or substantially the whole of the Secured Assets.

8.4Administrative receiver.  If the appointment of the receiver or the joint receivers under Clause 8.3 covers the whole or substantially the whole of the Secured Assets, he or they shall be an administrative receiver or administrative receivers, unless the provisions of the Insolvency Act 1986 relating to an administrative receiver are not applicable to a receiver of property of a company such as the Owner.

In that case, section 42 of the Insolvency Act 1986 and Schedule 1 to that Act (general powers of an administrative receiver) shall nevertheless be deemed to be incorporated into this Deed with any necessary modifications.

8.5Receivers’ powers in relation to Ship.  Without prejudice to Clause 8.4, it is specifically declared that, if the appointment of a Receiver comprises the Ship, he shall have power to commence, defend and settle any proceedings or take any other steps with a view or relating to the arrest of the Ship or in connection with any other matter relating to the Ship, to operate the Ship (and to issue bills of lading and other documents in the name of the Owner), to enter into charterparties, insurances and other contracts in respect of the Ship, to sell the Ship and to do all things which appear to the Receiver to be conducive to or connected with any of the foregoing.

8.6Administrator.  To the intent that the Lender shall be the holder of a qualifying floating charge in respect of the Owner’s property for the purposes of the Insolvency Act 1986 and the Enterprise Act 2002, it is hereby declared that, in addition to the power to appoint

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a receiver or an administrative receiver contained in Clause 8.3, the Lender shall have power, after all relevant floating charges have become enforceable, to appoint an administrator of the Owner or, at the option of the Lender, to apply to the court for an administration order in respect of the Owner.

8.7Supplementary provisions regarding Receivers.  The following shall have effect as regards any Receiver appointed under this Clause 8:

(a)the appointment shall be by deed or, at the Lender’s option, by a document signed by any of its officers; and an appointment in respect of some only of the Secured Assets may later be extended to all or some of the other Secured Assets;

(b)to the fullest extent permitted by law, a Receiver shall be the Owner’s agent, and the Owner shall be responsible, to the exclusion of any liability on the part of the Lender, for his remuneration and for his contracts, acts and defaults;

(c)the remuneration of a Receiver and the other terms of his appointment shall be fixed, and may be revised, by the Lender;

(d)the Lender may exercise any of the powers conferred by the Finance Documents while a Receiver is in office and is acting;

(e)the Owner irrevocably and by way of security appoints every Receiver its attorney on its behalf and in its name or otherwise to execute or sign any document and do any act or thing which that Receiver considers necessary or desirable with a view to or in connection with any exercise or proposed exercise of any of his powers;

(f)a Receiver may delegate any of his powers to any person or persons and may do so on terms authorising successive sub-delegations;

(g)in the case of joint Receivers, any of their powers may be exercised by any one or more of them, unless their appointment specifically states the contrary;

(h)in the event that a Receiver is not an administrative receiver, the Lender may remove him, with or without appointing another Receiver; and such a removal may be effected by a document signed by any of the Lender’s officers;

(i)the Lender may appoint a Receiver to replace a Receiver who has resigned or for any other reason ceased to hold office;

(j)a Receiver shall be entitled to retain out of any money received by him such amounts in respect of his expenses or the following indemnity (or to cover estimated future expenses or amounts due under the following indemnity) as he may from time to time agree with the Lender; and

(k)the Owner shall, on a Receiver’s demand, fully indemnify that Receiver and every person employed by or acting for him in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Receiver or person, or which that Receiver reasonably and with due diligence estimates that he or such a person may incur, as a result of or in connection with any action taken or omitted to be taken in relation to the Secured Assets or any other matter or event relating to the Secured Assets, including any accident or incident involving or caused by the Ship; and neither a Receiver nor such

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a person shall have any liability to the Owner in any circumstances save proven dishonesty on the part of that Receiver or person himself.

8.8Law of Property Act 1925 not applicable.  The Owner hereby waives the entitlement conferred by section 93 of the Law of Property Act 1925 and agrees that section 103 of that Act shall not apply to the security created by this Deed.

8.9No liability of Lender or Receiver.  Neither the Lender nor any Receiver shall be obliged to check the nature or sufficiency of any payment received by it or him under this Deed or to preserve, exercise or enforce any right forming part of, or relating to, any item of the Secured Assets.

9APPLICATION OF MONEYS

9.1Application.  All sums received by the Lender or by a Receiver:

(a)in respect of the Earnings following a direction made by the Lender under Clause 4.1;

(b)under the Insurances (except any sum received by the Lender in respect of a Major Casualty which has been paid over to the Owner under Clause 4.2(b));

(c)in respect of Requisition Compensation;

(d)in respect of any transaction or arrangement under Clause 8.1, 8.2, 8.3, 8.5 or 8.7,

shall be held by the Lender or the Receiver upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Lender or any Receiver in or connection with the exercise of their respective powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

10FURTHER ASSURANCES

10.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Lender (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Lender may, in any particular case, specify;

(b)effect any registration or notarisation, give any notice or take any other step;

which the Lender may, by notice to the Owner, specify for any of the purposes described in Clause 10.2 or for any similar or related purpose.

10.2Purposes of further assurances.  The purposes referred to in Clause 10.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Lender intended should be created by or pursuant to this Deed or any other Finance Document;

(b)to create a specific mortgage or assignment of any particular item of the Secured Assets or otherwise to vest in the Lender the title to any particular item of the Secured Assets;

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(c)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Lender intended should be created, by or pursuant to the Mortgage, this Deed or any other Finance Document;

(d)to enable or assist the Lender or a Receiver to sell or otherwise deal with any item of the Secured Assets, to transfer title to, or grant any interest or right relating to, any item of the Secured Assets or to exercise any power which is referred to in Clause 8.1 above or which is conferred by any Finance Document;

(e)to enable or assist the Lender to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Secured Assets in any country or under the law of any country.

10.3Terms of further assurances.  The Lender may specify the terms of any document to be executed by the Owner under Clause 10.1, and those terms may include any covenants, powers and provisions which the Lender considers appropriate to protect its or a Receiver’s interests.

10.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 10.1 by the date specified in the notice.

10.5Additional corporate action.  At the same time as the Owner delivers to the Lender any document executed under Clause 10.1(a), the Owner shall also deliver to the Lender a certificate signed by 2 of the Owner’s directors which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Lender; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of association or other constitutional documents.

11POWER OF ATTORNEY

11.1Appointment.  For the purpose of securing the Lender’s interest in the Secured Assets and the due and punctual performance of its obligations to the Lender under this Deed and every other Finance Document, the Owner irrevocably and by way of security appoints the Lender its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

11.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 11.1, it is confirmed that it authorises the Lender to execute on behalf of the Owner a document ratifying by the Owner any transaction or action which the Lender and/or a Receiver has purported to enter into or to take and which the Lender considers was or might have been outside his powers or otherwise invalid.

11.3Delegation.  The Lender may sub-delegate to any person or persons (including a Receiver and persons designated by him) all or any of the powers (including the discretions) conferred on the Lender by Clauses 11.1 and/or 11.2, and may do so on terms authorising successive sub-delegations.

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12INCORPORATION OF LOAN AGREEMENT PROVISIONS

12.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices;

clause 31, supplemental.

12.2Incorporation of general provisions.  Clause 12.1 is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Deed shall be taken to exclude or restrict any power, right or remedy which the Lender may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner, the Ship or any other item of the Secured Assets.

13.2Exercise of other rights.  The Lender may exercise any right under this Deed before it has exercised any right referred to in Clause 13.1(a) or (b) above.

13.3Settlement or discharge conditional.  Any settlement or discharge under this Deed between the Lender and the Owner shall be conditional upon no security or payment to the Lender by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

13.4Third party rights.  A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

14LAW AND JURISDICTION

14.1English law.  This Deed shall be governed by, and construed in accordance with, English law.

14.2Exclusive English jurisdiction.  Subject to Clause 14.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed.

14.3Choice of forum for the exclusive benefit of the Lender.  Clause 14.2 is for the exclusive benefit of the Lender, which reserves the rights:

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(a)to commence proceedings in relation to any matter which arises out of or in connection with this Deed in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Deed.

14.4Process agent.  The Owner irrevocably appoints Maritime Recovery Limited at its registered office for the time being, presently at 20 Salcott Road, PO Box 293, London SW11 6DJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Deed.

14.5Lender’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.6Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS DEED has been duly executed as a deed on the date stated at the beginning of this Deed.

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EXECUTION PAGE

OWNER
EXECUTED AS A DEED	)	/s/ Nicholas Sherriff
by KTL MAYFAIR, INC.	)
acting by Nicholas Sherriff	)
expressly authorised in accordance with the	)
laws ofLiberia	)
by virtue of a power of attorney granted	)
by KTL MAYFAIR, INC.	)
on 2 March 2004	)
such execution being witnessed by:	)
Signature of witness
/s/ illegible
LENDER
EXECUTED and DELIVEREDas a DEED	)	/s/ Robert J. Manners
by the duly authorised attorney of	)
THE ROYAL BANK OF SCOTLAND plc	)
for it and on its behalf	)
in the presence of:
Signature of witness
/s/ Charmaine Rumbelow

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EX-4.37

Exhibit 4.37

Date 2 March 2004

KNIGHTSBRIDGE TANKERS LIMITED

as Borrower

- and -

KTL HAMPSTEAD, INC.

KTL CHELSEA, INC.

KTL MAYFAIR, INC.

KTL CAMDEN, INC.

KTL KENSINGTON, INC.

as New Owners

- and -

THE ROYAL BANK OF SCOTLAND plc

as Bank

ACCOUNT SECURITY DEED

relating to a Loan Agreement dated 2 March 2004

WATSON Farley & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS
2	FIRST FIXED CHARGE
3	RESTRICTIONS ON REPAYMENT AND TRANSFER OF CREDIT BALANCES
4	LENDER’S RIGHTS OF SET OFF
5	CURRENCY CONVERSION
6	FURTHER DOCUMENTATION ETC
7	SUPPLEMENTAL
8	INCORPORATION OF LOAN AGREEMENT PROVISIONS
9	LAW AND JURISDICTION
EXECUTION PAGE

THISDEED is made on 2 March 2004

BETWEEN

(1)KNIGHTSBRIDGE TANKERS LIMITED, a company incorporated in Bermuda whose registered office is at Par-la-Ville, 14 Par-la-Ville Road, Hamilton HM08, Bermuda (the “Borrower”); and

(2)KTL HAMPSTEAD, INC., KTL CHELSEA, INC., KTL MAYFAIR, INC., KTL CAMDEN, INC. and KTL KENSINGTON, INC., each a company incorporated in the Republic of Liberia whose registered office is at Broad Street, Monrovia, Liberia (each a “New Owner” and together the “New Owners”);

(3)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Lender”).

BACKGROUND

(A)By a loan agreement (the “Loan Agreement”) dated 2 March 2004 and made between (i) the Borrower, (ii) the New Owners and (iii) the Lender it was agreed that the Lender would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances.

(B)Under the Loan Agreement the Borrower has opened, and is to maintain, with the Lender:

(i)an account designated “Knightsbridge Tankers Retention Account” with account number KNTAREAC USD1 (the “Retention Account”); and

(ii)an account designed “Knightsbridge Tankers Operating Account” with account number KNTAOPAC USD1 (the “Operating Account”).

(C)It is one of the conditions precedent to the availability of the facility under the Loan Agreement that the Borrower and the New Owners executes this Deed.

(D)The Lender enters into this Deed in the following capacities:

(i)as the bank with which the Accounts will be maintained; and

(ii)as the Lender under the Loan Agreement.

IT IS AGREED as follows:

1DEFINITIONS

1.1Defined Expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed unless the context otherwise requires.

1.2Definitions.  In this Deed unless a contrary intention appears:

“Accounts” means the Operating Account and the Retention Account;

“Account Bank” means the Lender in its capacity as the bank with which the Accounts are maintained;

“Credit Balance” means, in relation to the Operating Account or the Retention Account:

(a)the amount for the time being standing to the credit of that Account; and

(b)any amount received by or for the account of the Account Bank which, under any of the Finance Documents, the Account Bank is required to credit to that Account but which the Account Bank has not yet credited to the Account; and

(c)any interest accrued or accruing on an amount covered by paragraph (a) or (b) above, whether or not the interest has been credited to that Account; and

“Secured Liabilities” has the meaning given in Clause 1.1 of the Loan Agreement.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Deed.

1.4Construction of certain terms.  In this Deed:

(a)references to the Accounts include any other account, whether in Dollars or any other currency, which may be opened in the place of the accounts referred to in Recital B above, irrespective of the number or designation of such replacement account, and any sub-account of that account or such replacement account, and references to the Accounts shall be construed accordingly;

(b)references to “outstanding Secured Liabilities” or “outstanding amounts” include amounts which are payable at a later date, but exclude amounts the liability to pay which remains contingent;

(c)an amount shall be deemed to be outstanding and to be due and payable to the Lender if it is then entitled to demand payment of that amount, notwithstanding that no demand has yet been served; and

(d)references to, or to a provision of, a Finance Document (including the Loan Agreement) are references to it as amended or supplemented, whether before the date of this Deed or otherwise, and references to the Secured Liabilities shall be construed accordingly.

2FIRST FIXED CHARGE

2.1Charges.  The Borrower and the New Owners:

(a)to the full extent of their interest and with full title guarantee, charge the Credit Balance on the Operating Account to the Lender as security for the due payment of the Secured Liabilities;

(b)to the full extent of their interest and with full title guarantee, charge the Credit Balance on the Retention Account to the Lender as security for the due payment of the Secured Liabilities;

(c)declare that each such charge shall be a first fixed charge; and

(d)declare that each such charge shall be entirely distinct and independent from the other.

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2.2Right to apply Credit Balances. Upon or at any time after the occurrence of an Event of Default (but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or is continuing or that the security constituted by this Deed has become enforceable) or, if and to the extent that the Loan Agreement so permits, before an Event of Default, the Lender shall be entitled to appropriate all or any part of the Credit Balances on both Accounts or either of them in or towards the discharge of the then outstanding Secured Liabilities and the Lender may take any action described in this Clause 2.2 notwithstanding that any maturity or roll-over date attached to any part or parts of the Credit Balance may not yet have arrived.

2.3Right to determine order of application of Credit Balances.  If, on any occasion on which the Lender exercises any of its rights under this Clause 2, the aggregate amount of the Credit Balances is less than the aggregate amount of the then outstanding Secured Liabilities (after making, where appropriate, any conversion under Clause 5), the Lender may exercise those rights in respect of such of the Secured Liabilities, and in such proportions, as the Lender on that occasion decides.

2.4Notification of application of Credit Balances.  The Lender shall notify the Borrower and the New Owners as soon as reasonably practicable after carrying out a transaction under this Clause 2.

2.5Certification of application of Credit Balances.  A certificate signed by a director or other senior officer of the Lender and which states that on the date and (if the certificate also states this) at a specified time the Lender exercised its rights under this Clause 2 to appropriate a specified amount of Credit Balance on a specified Account in the discharge of a specified amount of the then outstanding Secured Liabilities shall be conclusive evidence that the liabilities of the Account Bank in respect of the specified amount of the Credit Balance on the specified Account and the specified amount of Secured Liabilities were extinguished and discharged on the date and, if so stated, at the specified time.

3RESTRICTIONS ON REPAYMENT AND TRANSFER OF CREDIT BALANCES

3.1Restriction on payment of Credit Balances. The Borrower covenants not to withdraw or transfer any of the Credit Balances except to the extent that the Loan Agreement so permits but subject nevertheless to Clause 3.2.

3.2Assignment of Credit Balances not permitted.  During the Security Period, the Borrower or any New Owner shall not attempt to assign any right (future or contingent) relating to the Credit Balance on either Account without the Lender’s prior written consent.

3.3Meaning of “assignment”.  In this Clause 3 references to assignment include the creation, or permitting to arise, of any form of beneficial or security interest and every other kind of disposition.

4LENDER’S RIGHTS OF SET OFF

4.1Meaning of “Amount Eligible for Set-Off”.  In this Clause “Amount Eligible for Set-Off” means any amount which is at the relevant time outstanding (as defined in Clause 1.4) from the Borrower and any New Owner under any Finance Document to the Lender.

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4.2Right to exercise set-off.  The Lender may exercise the rights set out in the following provisions of this Clause 4:

(a)upon or at any time after the occurrence of an Event of Default (but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or is continuing or that the security constituted by this Deed has become enforceable) or, if and to the extent that the Loan Agreement so permits, before an Event of Default; and

(b)notwithstanding that any maturity or roll-over date attached to any part or parts of the Credit Balances may not yet have arrived.

4.3Exercise of set-off.  The Lender may, by notice to the Borrower and the New Owners, set off all or any part of the Credit Balances on both Accounts or either of them against all or any part of the Amounts Eligible for Set-Off.

4.4Effect of exercise of set-off.  A set-off under Clause 4.3 shall:

(a)extinguish and discharge (and not merely provide a defence to an action for):

(i)the liabilities of the Account Bank in respect of the Credit Balances; and

(ii)the Secured Liabilities,

which are the subject of the set-off; and

(b)be deemed to be completed upon the service of a notice by the Lender to the Borrower and the New Owners which states that the set-off has been effected and which gives brief particulars of the Credit Balances and the Secured Liabilities involved.

4.5Right to determine order of application of Credit Balances.  If, on any occasion on which the Lender exercises its rights under this Clause 4, the aggregate amount of the Credit Balances is less than the aggregate of the Amounts Eligible for Set-Off (after making, where appropriate, any conversion under Clause 5), the Lender may exercise those rights in respect of such of the Amounts Eligible for Set-Off, and in such proportions, as the Lender on that occasion decides.

4.6Certification of application of Credit Balances.  A certificate signed by a director or other senior officer of the Lender and which states that a notice of set-off of which a copy is attached to the certificate was served (or under Clause 7 is deemed to have been served) by the Lender on the Borrower and the New Owners on a specified date, and (if the certificate also states this) at or before a specified time, shall be conclusive evidence that the liabilities of the Account Bank in respect of the Credit Balances, and the Secured Liabilities, which were referred to in the notice were extinguished and discharged on the specified date and (if the certificate so states) at or before the specified time.

4.7Independent rights.  The Lender’s rights under this Clause 4 are in addition to, and entirely separate from, and exercisable independently of, its rights under Clause 2.

5CURRENCY CONVERSION

5.1Right to convert Credit Balances.  For the purposes of this Deed:

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(a)the Account Bank may convert into a different currency or currencies all or any part or parts of the Credit Balance on both or either of the Accounts;

(b)the Account Bank may credit to different sub-accounts comprised in each or either Account parts of the Credit Balance on that Account which are denominated in different currencies; and

(c)the Lender may convert into a different currency or currencies all or any part or parts of the Secured Liabilities (including Amounts Eligible for Set-Off).

5.2Rate of conversion.  Such a conversion shall be at the rate which the Account Bank or (as the case may be) the Lender determines to be the rate at or about the time of conversion at which it is or has been offering to purchase the currency in which the amount was previously denominated with the currency into which it is to be the converted.

5.3Meaning of “conversion”.  In this Deed “conversion” includes a translation without an actual currency transaction; but references in this Deed to a transaction under this clause include such a translation.

5.4Construction of certain terms.  References in this Deed to the Credit Balances, the Secured Liabilities and the Amounts Eligible for Set-Off include references to the amount produced by any conversion of them under this Clause 5.

5.5Notification of conversion.  The Account Bank or, as the case may be, the Lender shall notify the Borrower and the New Owners as soon as reasonably practicable after carrying out a transaction under this Clause.

6FURTHER DOCUMENTATION ETC

6.1Obligation to execute further documents etc.  The Borrower and the New Owners shall execute forthwith any document which the Lender may specify for the purpose of:

(a)supplementing the rights which this Deed confers on the Lender in relation to the Credit Balances;

(b)registering or otherwise perfecting this Deed; or

(c)ensuring or confirming the validity of anything done or to be done under this Deed.

6.2Terms of further assurances.  Any document to be executed pursuant to Clause 6.1 shall be in the terms specified by the Lender and, in the case of a mortgage of the Credit Balances, those terms may include a provision entitling the Lender, on or after an Event of Default, to deal with the Credit Balances in any way it considers appropriate for the purpose of discharging the Secured Liabilities.

6.3Further obligations of Borrower and the New Owners.  The Borrower and the New Owners shall also forthwith do any act and execute any document (including a document which amends or replaces this Deed) which the Lender specifies for the purpose of enabling or assisting the Account Bank or the Lender to comply, in relation to the Credit Balances, the Accounts and/or the Secured Liabilities, with any requirement (legally binding or not) applicable to the Account Bank or the Lender and, in particular, any requirements of a banking supervisory authority with regard to netting or cash collateral.

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6.4Power of attorney in relation to further assurances.  For the purpose of securing performance of the Borrower and the New Owner’s obligations under Clauses 6.1 to 6.3, the Borrower and the New Owners irrevocably appoint the Lender as their attorney, on their behalf and in their name or otherwise, to sign or execute any document which, in the opinion of the Lender the Borrower and the New Owners are obliged, or could be required, to sign or execute under any of those Clauses.

6.5Power of attorney in relation to Accounts.  In addition, for the purpose of securing the Lender’s interest in the Credit Balances, the Borrower and the New Owners irrevocably appoint the Lender as their attorney, on their behalf and in their name or otherwise to require or authorise the Account Bank:

(a)to open any sub-account within each or either Account;

(b)to open any other accounts in the name of the Borrower and the New Owners with the Account Bank; or

(c)to make any entries on, or transfers to or from, the Accounts and/or any account opened under paragraph (b) above;

which the Lender considers necessary or convenient for or in connection with any exercise or intended exercise of any rights which the Lender or the Account Bank has under this Deed or any other purpose connected with this Deed.

6.6Acts of attorney.  Without limiting its generality, Clause 6.5 entitles the Lender to require or authorise the Account Bank to break the deposit of the Credit Balances in whole or in part, and to transfer any part or parts of the Credit Balances to sub-accounts within both or either of the Accounts denominated in a different currency or currencies and/orhaving a different roll-over date or dates from the rest of the Credit Balances.

6.7Delegation.  The Lender may appoint any person or persons its substitute under the foregoing powers of attorney and may also delegate the exercise of those powers of attorney to any person or persons.

6.8Meaning of “mortgage”.  In this Clause 6 “mortgage” includes a charge and any other kind of security.

7SUPPLEMENTAL

7.1Continuing security.  This Deed, including each of the charges created by Clause 2, shall remain in force until the end of the Security Period as a continuing security and, in particular:

(a)the Security Interests created by Clause 2 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clause 2, and the rights of the Lender under this Deed, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Lender;

(c)no failure or delay by or on behalf of the Lender to enforce or exercise a Security Interest created by Clause 2 or a right of the Lender under this Deed, and no act, course of conduct, acquiescence or failure to act (or to prevent the Borrower and any New Owner

6

from taking certain action) which is inconsistent with such a Security Interest or such a right or with such a Security Interest being a fixed security shall preclude or stop the Lender (either permanently or temporarily) from enforcing or exercising it or result in a Security Interest expressed to be a fixed security taking effect as a floating security; and

(d)this Deed shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Borrower or any New Owner or that of a third party; or

(ii)any other right of recourse as against the Borrower or any third party,

which the Lender now or subsequently has in respect of any of the Secured Liabilities.

7.2No restriction on other rights.  Nothing in this Deed excludes or restricts any form of banker’s lien or right of set off or any other right or remedy which the Lender or the Account Bank would have had, apart from this Deed, under the general law, the Account Bank’s terms and conditions relating to accounts or otherwise.

7.3Third party rights.  A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.

8INCORPORATION OF LOAN AGREEMENT PROVISIONS

8.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices;

clause 31, supplemental.

8.2Incorporation of general provisions.  Clause 8.1 is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally.

9LAW AND JURISDICTION

9.1English law.  This Deed shall be governed by, and construed in accordance with, English law.

9.2Exclusive English jurisdiction.  Subject to Clause 9.3, the courts of England shall have exclusive jurisdiction to settle any disputes which may arise out of or in connection with this Deed.

9.3Choice of forum for the exclusive benefit of the Lender.  Clause 9.2 is for the exclusive benefit of the Lender, which reserves the rights:

7

(a)to commence proceedings in relation to any matter which arises out of or in connection with this Deed in the courts of any country other than England and which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.

The Borrower and each New Owner shall not commence any proceedings in any country other than England in relation to a matter which arises out of or in connection with this Deed.

9.4Process agent.  The Borrower and each New Owner irrevocably appoints Maritime Recovery Limited at its registered office for the time being, presently at 20 Salcott Road, P O Box 239, London SW11 6DJ, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Deed.

9.5Lender’s rights unaffected.  Nothing in this Clause 9 shall exclude or limit any right which the Lender may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

9.6Meaning of “proceedings”.  In this Clause 9, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

THIS DEED has been duly executed as a deed on the date stated at the beginning of this Deed.

8

EXECUTION PAGE

BORROWER
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by KNIGHTSBRIDGE TANKERS LIMITED			)
acting by Nicholas Sherriff			)
expressly authorised in accordance with			)
the laws of Bermuda by virtue of a power of			)
attorney granted by KNIGHTSBRIDGE			)
TANKERS LIMITED on 2 March 2004			)
such execution being			)
witnessed by:			)
Signature of witness		/s/ Kavita Shah
NEW OWNERS
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by KTL HAMPSTEAD, INC.			)
acting by Nicholas Sherriff			)
expressly authorised in accordance with			)
the laws of Liberia by virtue of a power of			)
attorney granted by KTL HAMPSTEAD, INC.			)
on 2 March 2004			)
such execution being witnessed by :			)
Signature of witness		/s/ Kavita Shah
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by KTL CHELSEA, INC.			)
acting by Nicholas Sherriff			)
expressly authorised in accordance with			)
the laws of Liberia by virtue of a power of			)
attorney granted by KTL CHELSEA, INC.			)
on 2 March 2004			)
such execution being witnessed by :			)
Signature of witness	/s/ Kavita Shah

9

EXECUTED AS A DEED		)
by KTL MAYFAIR, INC.		)
acting by Nicholas Sherriff		)	/s/ Nicholas Sherriff
expressly authorised in accordance with		)
the laws of Liberia by virtue of a power of		)
attorney granted by KTL MAYFAIR, INC.		)
on 2 March 2004		)
such execution being witnessed by:		)
Signature of witness	/s/ Kavita Shah
EXECUTED AS A DEED		)
by KTL CAMDEN, INC.		)
acting by Nicholas Sherriff		)	/s/ Nicholas Sherriff
expressly authorised in accordance with		)
the laws of Liberia by virtue of a power of		)
attorney granted by KTL CAMDEN, INC.		)
on) 2 March 2004		)
such execution being witnessed by:		)
Signature of witness	/s/ Kavita Shah
EXECUTED AS A DEED		)
by KTL KENSINGTON, INC.		)
acting by Nicholas Sherriff		)	/s/ Nicholas Sherriff
expressly authorised in accordance with		)
the laws of Liberia by virtue of a power of		)
attorney granted by KTL KENSINGTON, INC.		)
on) 2 March 2004		)
such execution being witnessed by:		)
Signature of witness	/s/ Kavita Shah
LENDER
EXECUTED and DELIVERED as a Deed		)	/s/ Robert J. Manners
by the duly authorised attorney of		)
THE ROYAL BANK OF SCOTLAND plc		)
in the presence of:		)
	/s/ Martin Bennett

10

EX-4.39

Exhibit 4.39

Dated 2 March 2004

KNIGHTSBRIDGE TANKERS LIMITED

-and-

THE ROYAL BANK OF SCOTLAND plc

MASTER AGREEMENT SECURITY DEED

relating to a Loan Agreement dated 2 March 2004

WATSON, FARLEY & WILLIAMS

London

INDEX

CLAUSE

1	DEFINITIONS
2	RESTRICTIONS
3	FIRST FIXED CHARGE
4	FURTHER DOCUMENTATION ETC
5	REPRESENTATIONS
6	NOTICES
7	SUPPLEMENTAL
8	LAW AND JURISDICTION

THIS SECURITY DEED is made on the 2nd day of March 2004

BETWEEN

(1)KNIGHTSBRIDGE TANKERS LIMITED, a company incorporated in Bermuda having its registered office at Par-la-Ville, 14 Par-la-Ville Road, Hamilton HM08, Bermuda (the “Borrower”), and

(2)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre at 5-10 Great Tower Street, London EC3P 3HX (the “Lender” which expression shall include all persons directly or indirectly deriving title under it (whether by assignment, amalgamation, operation of law or otherwise)).

WHEREAS

(A)By a loan agreement dated 2 March 2004 and made between (i) the Borrower as borrower, KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Camden, Inc. and KTL Kensington, Inc. as owners and (ii) the Lender as lender, the Lender agreed to make available to the Borrower upon the terms and conditions therein described a loan of up to One hundred and forty million United States Dollars (US$140,000,000);

(B)By a master agreement (on the 1992 ISDA Master Agreement (Multicurrency - Crossborder) form as modified) dated 2 March 2004 made between the Borrower and the Lender the Borrower has entered into or may enter into certain Transactions (as such term is defined in the said Master Agreement) pursuant to separate Confirmations (as such term is defined in the said Master Agreement) providing for, amongst other things, the payment of certain amounts by the Borrower to the Lender.

(C)It is a condition precedent to the Lender advancing the loan under the said loan agreement that the Borrower as security for, inter alia, its obligations under the loan agreement shall execute this Deed.

NOW THIS DEED WITNESSETH AND IT IS HEREBY AGREED as follows:

1DEFINITIONS

1.1In this Deed, unless the context otherwise requires, the following expressions shall have the following meanings:

“Finance Documents”  means any such document as is defined in the Loan Agreement as a Security Document (including this Deed and, where the context so admits, the Loan Agreement itself) or as may from time to time be executed by any person as security for or as a guarantee of the Secured Indebtedness or any part thereof as the same may hereafter be supplemented and/or amended, and references to the “Finance Documents” shall mean all or any of them as the context so requires;

“Loan”  means the sum of One hundred and forty million Dollars ($140,000,000) first referred to in Recital (A) hereto advanced or to be advanced by the Lender to the Borrower pursuant to the Loan Agreement or (as the context may require) the principal amount of such sum outstanding at any relevant time;

“Loan Agreement”  means the agreement dated 2 March 2004 and made between the Borrower, KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Camden, Inc. and KTL Kensington, Inc. and the Lender first referred to in Recital (A) hereto as the same may from time to time hereafter be supplemented and/or amended;

“Master Agreement”  means the agreement dated 2 March 2004 and made between the Borrower and the Lender first referred to in Recital (B) hereto as the same may from time to time hereafter be supplemented and/or amended;

“Master Agreement Liabilities”  means, at any relevant time, all liabilities actual or contingent, present or future of the Borrower to the Lender under the Master Agreement;

“Secured Indebtedness”  means the aggregate of (a) the Loan and interest thereon (and interest on any unpaid interest thereon and on any other sums of money on which interest is stated in the Loan Agreement to be payable) and (b) all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Deed to be payable by the Borrower to or recoverable from the Borrower by the Lender (or in respect of which the Borrower agrees in this Deed to indemnify the Lender) whether actually or contingently, presently or in the future together with interest thereon as provided in the Loan Agreement and this Deed and (c) the Master Agreement Liabilities and (d) all other sums of money from time to time owing to the Lender under the Finance Documents or any of them whether actually or contingently, presently or in the future;

“Security Interest”  means:

(a)a mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, encumbrance, assignment, trust arrangement, title retention or other distress, execution, attachment, arrangement or process of any kind having the effect of security or any other security interest of any kind;

(b)the security rights of a plaintiff under an action in rem; and

(c)any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution;

“Security Period”  means the period commencing on the date of this Deed and terminating upon discharge of the security created by the Finance Documents by irrevocable and unconditional payment in full of the Secured Indebtedness; and

“Secured Property”  means all rights, title, interest and benefits whatsoever of the Borrower under or in connection with the Master Agreement including, without limitation, all moneys payable by the Lender to the Borrower thereunder and all claims for damages in respect of any breach by the Lender of the Master Agreement.

1.2For the purposes of this Deed an amount shall be deemed to be outstanding and to be due and payable to the Lender if it is then entitled to demand payment of that amount, notwithstanding that it has not yet served a demand.

1.3Clause 1 of the Loan Agreement (Purpose, Definitions and Interpretation) applies with any necessary modifications for the purposes of this Deed.

2RESTRICTIONS

2.1During the Security Period:

(a)no right (present, future or contingent) relating to the Secured Property shall be capable of being assigned to, or exercised by, a person other than the Borrower; and

2

(b)the Borrower shall not attempt to assign any right (present, future or contingent) relating to the Secured Property;

without the Lender’s prior written consent.

2.2In this Clause references to assignment include the creation, or permitting to arise, of any form of beneficial interest or Security Interest and every other kind of disposition.

2.3An act or transaction which is contrary to, or inconsistent with, this Clause shall be void as regards the Lender.

3FIRST FIXED CHARGE

3.1The Borrower:

(a)with full title guarantee charges all the Secured Property with the payment of all the Secured Indebtedness; and

(b)declares that this shall be a first fixed charge.

3.2Upon the occurrence of an Event of Default the charge shall become enforceable, and the Lender shall be entitled then or at any later time or times to appropriate all or any part of the Secured Property in or towards discharge of the then outstanding Secured Indebtedness, and may do so notwithstanding that any maturity date attached to any part or parts of the Secured Property may not yet have arrived.

3.3A certificate signed by a director or other senior officer of the Lender and which states that on a specified date and (if the certificate also states this) at a specified time the Lender exercised its rights under this clause to appropriate a specified amount of Secured Property in the discharge of a specified amount of the outstanding Secured Indebtedness shall be conclusive evidence that:

(a)the Lender’s liabilities in respect of the specified amount of Secured Property; and

(b)the specified amount of Secured Indebtedness;

were extinguished and discharged on the specified date and, if so stated, at the specified time.

4FURTHER DOCUMENTATION ETC

4.1The Borrower shall execute forthwith any document which the Lender may specify for the purpose of:

(a)supplementing the rights which this Deed confers on the Lender in relation to the Secured Property; or

(b)creating a mortgage of the Secured Property to replace or supplement the charge created in Clause 3 above; or

(c)registering or otherwise perfecting this Deed or any mortgage created under paragraph (b) above; or

(d)ensuring or confirming the validity of anything done or to be done under this Deed.

4.2The document shall be in the terms specified by the Lender and, in the case of a mortgage of the Secured Property, those terms may include a provision entitling the Lender, on or

3

after an Event of Default, to appropriate, or otherwise deal with, the Secured Property for the purpose of discharging the Secured Indebtedness.

4.3The Borrower shall also forthwith do any act and execute any document (including a document which amends or replaces this Deed) which the Lender specifies for the purpose of enabling or assisting the Lender to comply, in relation to the Secured Property and/or Secured Indebtedness, with any requirement (legally binding or not) applicable to the Lender and, in particular, any requirements of a banking supervisory authority with regard to netting or cash collateral.

4.4For the purpose of securing performance of the Borrower’s obligations under Clauses 4.1 to 4.3, the Borrower irrevocably appoints the Lender as its attorney, on its behalf and in its name or otherwise to sign or execute any document which, in the opinion of the Lender, the Borrower is obliged, or could be required, to sign or execute under any of those Clauses, which the Lender considers necessary or convenient for or in connection with any exercise or intended exercise of any rights which the Lender has under this Deed or any other purpose connected with this Deed.

4.5The Lender may appoint any person or persons its substitute under that power of attorney and may also delegate that power of attorney to any person or persons.

4.6In this clause “mortgage” includes a charge and any other kind of security.

5REPRESENTATIONS

5.1The Borrower represents and warrants to the Lender as follows:

(a)the Borrower is the sole owner of the Secured Property and has the right to create all Security Interests which this Deed purports to create;

(b)the Borrower has not sold or transferred or (save by this Deed) created any Security Interest over any of its rights, title or interest to or in the Secured Property and no third party has or will have any Security Interest or other interest, right or claim of any kind over, or in relation to, any of the Secured Property;

(c)the Borrower has the corporate power, and has taken all necessary corporate action to authorise it, to execute this Deed, the Loan Agreement and the Master Agreement; and

(d)nothing in this Deed will or might result in the Borrower contravening any law or regulation which is now in force or which has been published but not yet brought into force or any contractual or other obligation which the Borrower now has to a third party.

6NOTICES

6.1Clause 30 (Notices) of the Loan Agreement applies to this Deed as if references to the Loan Agreement were references to this Deed and any other necessary modifications were made.

7SUPPLEMENTAL

7.1This Deed, including the charge created by Clause 3, shall remain in force as a continuing security until the Security Period has ended.

7.2The rights of the Lender under this Deed will not be discharged or prejudiced by:

(a)any kind of amendment or supplement to the other Finance Documents;

4

(b)any arrangement or concession, including a rescheduling, which the Lender may make in relation to any of the Loan Agreement, the Master Agreement and Finance Documents, or any action by the Lender and/or the Borrower and/or any other party thereto which is contrary to the terms of the Loan Agreement and Finance Documents;

(c)any release or discharge, whether granted by the Lender or effected by the operation of any law, of all or any of the obligations of the Borrower and/or any other party thereto under any of the Loan Agreement, the Master Agreement and Finance Documents;

(d)any change in the membership and/or control of the Borrower and/or any other party thereto and/or any merger, demerger or reorganisation involving the Borrower and/or any other party thereto;

(e)any event or matter which is similar to, or connected with, any of the foregoing;

and the rights of the Lender under this Deed do not depend on the Loan Agreement, the Master Agreement or any of the Finance Documents being or remaining valid.

7.3Nothing in this Deed excludes or restricts any right of set-off, right to net off payments, or any other right or remedy which the Lender would have had, apart from this Deed, under the general law, the Loan Agreement, the Master Agreement and the Finance Documents.

7.4A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any terms of this Deed.

8LAW AND JURISDICTION

8.1Clause 32 of the Loan Agreement (Governing Law) applies to this Deed as if references to the Loan Agreement were references to this Deed and any other necessary modifications were made.

IN WITNESS whereof the Borrower has caused this Deed to be duly executed the day and year first above written.

EXECUTED and DELIVERED as a DEED		)
by Nicholas Sherriff		)	/s/ Nicholas Sherriff
the duly authorised attorney of		)
KNIGHTSBRIDGE TANKERS LIMITED		)
for it and on its behalf		)
in the presence of:		)
	/s/ Kavita Shah
ACCEPTED		)
by Robert J. Manners		)	/s/ Robert J. Manners
the duly authorised attorney of		)
THE ROYAL BANK OF SCOTLAND plc		)
for it and on its behalf		)
in the presence of:		)
	/s/ Martin Bennett

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EX-4.40.1

Exhibit 4.40.1

Date 15 March 2004

KTL CAMDEN, INC.

as Owner

- and -

THE ROYAL BANK OF SCOTLAND plc

as Mortgagee

FIRST PREFERRED MARSHALL ISLANDS MORTGAGE

m.v. “CAMDEN”

WATSON FARLEY & WILLIAMS
London

INDEX

Clause

1	DEFINITIONS AND INTERPRETATION
2	MORTGAGE
3	PAYMENT COVENANTS
4	REPRESENTATIONS AND WARRANTIES
5	COVENANTS
6	PROTECTION OF SECURITY
7	ENFORCEABILITY AND MORTGAGEE’S POWERS
8	APPLICATION OF MONEYS
9	FURTHER ASSURANCES
10	POWER OF ATTORNEY
11	INCORPORATION OF LOAN AGREEMENT PROVISIONS
12	TOTAL AMOUNT, ETC.
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
ACKNOWLEDGEMENT OF MORTGAGE

THIS FIRST PREFERRED MORTGAGE is made on 15 March 2004

BY

(1)KTL CAMDEN, INC., a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia and duly registered as a foreign maritime entity under the laws of the Republic of the Marshall Islands (the “Owner”)

IN FAVOUR OF

(1)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Mortgagee”, which expression includes its successors and assigns).

BACKGROUND

(A)The Owner is the sole owner of the whole of the m.v. “CAMDEN” documented under the laws and flag of the Marshall Islands with Official Number 2027 of 156,802 gross registered tons and 107,829 net registered tons.

(B)By a loan agreement  (the “Loan Agreement”) dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Kensington, Inc. and the Owner (together, the “New Owners” and individually, a “New Owner”) and (iii) the Mortgagee it was agreed that (a) the Mortgagee would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances and (b) the New Owners jointly and severally would guarantee to the Mortgagee the obligations of the Borrower under the Loan Agreement and the other Finance Documents and the Master Agreement.  A copy of the form of the Loan Agreement without attachments is annexed to this Mortgage marked “A”.

(C)By certain agreements (each a “Daylight Funding Agreement”) made between, among others, each New Owner and the Mortgagee it was agreed that the Mortgagee would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to this Mortgage marked “B”.

(D)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes and delivers this Mortgage in favour of the Mortgagee as security for the Secured Liabilities and the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents.

(E)Pursuant to the Loan Agreement, the Mortgagee has on the date of this Mortgage advanced to the Borrower, and the Borrower is indebted to the Mortgagee in, the principal amount of US$118,498,190 consisting of the aggregate of Advance A, Advance B and Advance D in the amount of US$84,000,000 and an advance under the Daylight Funding Agreement in the amount of US$34,498,190.  As at the date of this Mortgage, the Borrower and the Lender estimate that the maximum aggregate amount of the Master Agreement Liabilities shall not exceed US$ 30,000,000

(F)The Owner has authorised the execution and delivery of this Mortgage under and pursuant to Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

3

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Mortgage unless the context otherwise requires.

1.2Definitions.  In this Mortgage, unless the contrary intention appears:

“Loan Agreement” means the loan agreement dated 2 March 2004 referred to in Recital (B);

“Secured Liabilities” means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Mortgage or at any later time or times, to the Mortgagee under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship” means the vessel described in Recital (A) and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or later acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Mortgage.

1.4Inconsistency between Loan Agreement provisions and this Mortgage.  This Mortgage shall be read together with the Loan Agreement, but in case of any conflict between the Loan Agreement and this Mortgage, the provisions of the Loan Agreement shall prevail to the extent permitted by Marshall Islands law.

2MORTGAGE

2.1Mortgage.  In consideration of the premises and other good and valuable consideration, the Owner grants, conveys, mortgages, pledges, confirms, assigns, transfers and sets over the whole of the Ship to the Mortgagee as security for:

(a)the due and punctual payment of the Secured Liabilities; and

(b)the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents to which the Owner is or is to be a party.

2.2Extent of property mortgaged.  This Mortgage shall not cover property other than the Ship as the term “Vessel” is used in Sub-division 2 77of Section 308 of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

2.3Void provisions.  Any provision of this Mortgage construed as waiving the preferred status of this Mortgage shall, to such extent, be void and of no effect.

2.4Continuing security.  This Mortgage shall remain in force until the end of the Security Period as a continuing security and, in particular:

4

(a)the Security Interests created by Clause 2.1 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 2.1, and the rights of the Mortgagee under this Mortgage, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Mortgagee;

(c)no failure or delay by or on behalf of the Mortgagee to enforce or exercise a Security Interest created by Clause 2.1 or a right of the Mortgagee under this Mortgage, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right shall preclude or estop the Mortgagee (either permanently or temporarily) from enforcing or exercising it; and

(d)this Mortgage shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

which the Mortgagee now or subsequently has in respect of any of the Secured Liabilities.

2.5No obligations imposed on Mortgagee.  The Owner shall remain liable to perform all obligations connected with the Ship and the Mortgagee shall not, in any circumstances, have or incur any obligation of any kind in connection with the Ship.

2.6Negative pledge; disposal of assets.  The Owner shall not:

(a)sell the Ship;

(b)create any Security Interest not exclusively securing the Secured Liabilities over the Ship (other than Permitted Security Interests); or

(c)otherwise dispose of the Ship or any right relating to the Ship.

2.7Release of security.  At the end of the Security Period or at such earlier time as the Ship is sold and the Owner has complied with the provisions of the Loan Agreement, the Mortgagee shall, at the request and cost of the Owner, discharge this Mortgage.

3PAYMENT COVENANTS

3.1General.  The Owner shall comply with the following provisions of this Clause 3 at all times during the Security Period.

3.2Covenant to pay amounts due under Loan Agreement.  The Owner shall pay to the Lender all amounts from time to time due and payable to the Lender pursuant to clause 10 of the Loan Agreement.

3.3Covenant to pay expenses etc.  The Owner shall pay all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee) at the times and in the manner specified in this Mortgage.

3.4Covenant to pay default interest.  The Owner shall pay interest on any expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys referred to in Clause 3.3 from the date on which the relevant expense, claim, liability, loss, cost, duty, fee, charge or other money is paid or incurred by the Mortgagee (as well after as before judgment):

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(a)at the rate described in clause 6.2 of the Loan Agreement;

(b)compounded in accordance with clause 6.6 of the Loan Agreement; and

(c)on demand.

3.5Covenant to pay other sums.  The Owner shall pay each and every other sum of money which may be or become owing to the Mortgagee under the Loan Agreement, this Mortgage and the other Finance Documents to which the Owner is or is to be a party at the times and in the manner specified in this Mortgage or in the other Finance Documents.

4REPRESENTATIONS AND WARRANTIES

4.1General.  The Owner represents and warrants to the Mortgagee as follows.

4.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading as if repeated on the date of this Mortgage with reference to the circumstances now existing.

5COVENANTS

5.1General.  The Owner shall comply with the following provisions of this Clause 5 at all times during the Security Period except as the Mortgagee may otherwise permit in writing.

5.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement, all of which are expressly incorporated in this Mortgage with any necessary modifications.

5.3Perfection of Mortgage.  The Owner shall:

(a)comply with and satisfy all the requirements and formalities established by the Republic of The Marshall Islands Maritime Act 1990 as amended and any other pertinent legislation of the Republic of The Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first preferred mortgage and maritime lien upon the Ship; and

(b)promptly provide the Mortgagee from time to time with evidence in such form as the Mortgagee requires that the Owner is complying with Clause 5.3(a).

5.4Notice of Mortgage.  The Owner shall:

(a)carry on board the Ship with its papers a certified copy of this Mortgage and cause that certified copy of this Mortgage to be exhibited to any person having business with the Ship which might give rise to a lien or the Ship other than a lien for crew’s wages and salvage and to any representative of the Mortgagee on demand; and

(b)place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than 6 inches wide and 9 inches high reading as follows:

“NOTICE OF MORTGAGE

This Vessel is covered by a First Preferred Mortgage to THE ROYAL BANK OF SCOTLAND plc under authority of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended. Under the terms of the said Mortgage neither the Owner nor any Charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage.”

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6PROTECTION OF SECURITY

6.1Mortgagee’s right to protect or maintain security.  The Mortgagee may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Mortgage or for any similar or related purpose.

6.2Mortgagee’s right to insure, repair etc.  Without limiting the generality of Clause 6.1, if the Owner does not comply with Clause 5, the Mortgagee may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Mortgagee may think expedient or necessary for the purpose of securing its release.

7ENFORCEABILITY AND MORTGAGEE’S POWERS

7.1Right to enforce security.  On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Mortgage has become enforceable, and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement:

(a)the security constituted by this Mortgage shall immediately become enforceable;

(b)the Mortgagee shall be entitled at any time or times to exercise the powers set out in Clause 7.2 and in any other Finance Document;

(c)the Mortgagee shall be entitled at any time or times to exercise the powers possessed by it as mortgagee of the Ship conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship; and

(d)the Mortgagee shall be entitled to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by applicable law including the provisions of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

7.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Mortgagee shall be entitled then or at any later time or times:

(a)to take possession of the Ship whether actually or constructively and/or otherwise to take control of the Ship wherever the Ship may be and cause the Owner or any other person in possession of the Ship forthwith upon demand to surrender the Ship to the Mortgagee without legal process and without the Mortgagee being liable for any losses thereby caused or to account to the Owner in connection therewith;

(b)to sell the Ship or any share in the Ship with or without prior notice to the Owner, and with or without the benefit of any charterparty or other contract for its employment, by public auction or private contract at any time, at any place and upon any terms (including, without limitation, on terms that all or any part or parts of the purchase price be satisfied by shares, loan stock or other securities and/or be left outstanding as a debt, whether secured or unsecured and whether carrying interest or not) which the Mortgagee thinks fit, with power for the Mortgagee to purchase the Ship at any such public auction and to set off the purchase price against all or any part of the Secured Liabilities;

(c)to manage, insure, maintain and repair the Ship and to charter, employ, lay up or in any other manner whatsoever deal with the Ship in any manner, upon any terms and for any period which

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the Mortgagee may think fit, in all respects as if the Mortgagee were the owner of the Ship and without the Mortgagee being responsible for any loss thereby incurred;

(d)to collect, recover and give good discharge for any moneys or claims arising in relation to the Ship and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(e)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, the Ship which the Mortgagee may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(f)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to the Ship which the Mortgagee may think fit.

7.3No liability of Mortgagee.  The Mortgagee shall not be obliged to check the nature or sufficiency of any payment received by it under this Mortgage or to preserve, exercise or enforce any right relating to the Ship.

8APPLICATION OF MONEYS

8.1General.  All sums received by the Mortgagee:

(a)in respect of sale of the Ship or any share in the Ship;

(b)in respect of net profits arising out of the employment of the Ship pursuant to Clause 7.2(c); or

(c)in respect of any other transaction or arrangement under Clauses 7.1 or 7.2,

shall be held by the Mortgagee upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Mortgagee in or in connection with the exercise of its powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

9FURTHER ASSURANCES

9.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Mortgagee (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Mortgagee may, in any particular case, specify; and

(b)effect any registration or notarisation, give any notice or take any other step,

which the Mortgagee may, by notice to the Owner, specify for any of the purposes described in Clause 9.2 or for any similar or related purpose.

9.2Purposes of further assurances.  The purposes referred to in Clause 9.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Mortgagee intended should be created by or pursuant to this Mortgage or any other Finance Document;

(b)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Mortgagee intended should be created, by or pursuant to this Mortgage or any other Finance Document;

(c)to enable or assist the Mortgagee to sell or otherwise deal with the Ship, to transfer title to, or grant any interest or right relating to, the Ship or to exercise any power which is referred to in Clauses 7.1 or 7.2 or which is conferred by any Finance Document; or

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(d)to enable or assist the Mortgagee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Ship in any country or under the law of any country.

9.3Terms of further assurances.  The Mortgagee may specify the terms of any document to be executed by the Owner under Clause 9.1, and those terms may include any covenants, undertakings, powers and provisions which the Mortgagee considers appropriate to protect its interests.

9.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 9.1 by the date specified in the notice.

9.5Additional corporate action.  At the same time as the Owner delivers to the Mortgagee any document executed under Clause 9.1(a), the Owner shall also deliver to the Mortgagee a certificate signed by 2 of the Owner’s officers which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Mortgagee; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of incorporation or other constitutional documents.

10POWER OF ATTORNEY

10.1Appointment.  For the purpose of securing the Mortgagee’s interest in the Ship and the due and punctual performance the Owner’s obligations to the Mortgagee under this Mortgage and every other Finance Document to which the Owner is or is to be a party, the Owner irrevocably and by way of security appoints the Mortgagee its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

10.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 10.1, the Owner confirms that Clause 10.1 authorises the Mortgagee to execute on its behalf a document ratifying any transaction or action which the Mortgagee has purported to enter into or to take and which the Mortgagee considers was or might have been outside its powers or otherwise invalid.

10.3Delegation.  The Mortgagee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Mortgagee by Clauses 10.1 and/or 10.2, and may do so on terms authorising successive sub-delegations.

11INCORPORATION OF LOAN AGREEMENT PROVISIONS

11.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Mortgage as if they were expressly incorporated in this Mortgage with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices; and

clause 31, supplemental.

11.2Incorporation of general provisions.  Clause 11.1 is without prejudice to the application to this

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Mortgage of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally or this Mortgage specifically.

12TOTAL AMOUNT, ETC.

12.1Total amount.  For the purpose of recording this Mortgage as required by Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended, the total amount of the direct and contingent obligations secured by this Mortgage is Two hundred and ten million Dollars $210,000,000 together with interest, fees, commissions and performance of mortgage covenants.  The date of maturity of this Mortgage is on demand and there is no separate discharge amount.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Mortgage shall be taken to exclude or restrict any power, right or remedy which the Mortgagee may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship.

13.2Exercise of other rights.  The Mortgagee may exercise any right under this Mortgage before it has exercised any right referred to in Clause 13.1(a) or (b).

13.3Settlement or discharge conditional.  Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

14LAW AND JURISDICTION

14.1Marshall Islands law.  This Mortgage shall be governed by, and construed in accordance with, Marshall Islands law.

14.2Choice of forum.  The Mortgagee reserves the rights:

(a)to commence proceedings in relation to any matter which arises out of or in connection with this Mortgage in the courts of any country which have or claim jurisdiction to that matter; and

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in the Marshall Islands or without commencing proceedings in the Marshall Islands.

14.3Action against Ship.  The rights referred to in Clause 14.2 include the right of the Mortgagee to arrest and take action against the Ship at whatever place the Ship shall be found lying and for the purpose of any action which the Mortgagee may bring before the courts of that jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee may bring against the Ship, any writ, notice, judgment or other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master) and such service shall be deemed good service on the Owner for all purposes.

14.4Mortgagee’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Mortgagee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

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14.5Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

IN WITNESS whereof the Owner has caused this Mortgage to be executed by its duly authorised Attorney-in-Fact the day and year first before written.

KTL CAMDEN, INC.
By	/s/ Alison Ho

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ACKNOWLEDGEMENT OF MORTGAGE

STATE OF NEW YORK	)
	)  S.S.
COUNTY OF NEW YORK	)

On this 15th day of March 2004 before me personally appeared Alison Ho to me known who being by me duly sworn did depose and say that she resides at 585 West End Avenue, New York, New York  10024 that she is an attorney-in-fact for KTL CAMDEN, INC. the corporation described in and which executed the foregoing instrument; and that she signed her name thereto by order of the Board of Directors of said Corporation.

/s/ Sonia D. Odom

Notary Public

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EX-4.40.2

Exhibit 4.40.2

Date 5 March 2004

KTL CHELSEA, INC.

as Owner

- and -

THE ROYAL BANK OF SCOTLAND plc

as Mortgagee

FIRST PREFERRED MARSHALL ISLANDS MORTGAGE

m.v. “CHELSEA”

WATSON, FARLEY & WILLIAMS
London

INDEX

Clause

1	DEFINITIONS AND INTERPRETATION
2	MORTGAGE
3	PAYMENT COVENANTS
4	REPRESENTATIONS AND WARRANTIES
5	COVENANTS
6	PROTECTION OF SECURITY
7	ENFORCEABILITY AND MORTGAGEE’S POWERS
8	APPLICATION OF MONEYS
9	FURTHER ASSURANCES
10	POWER OF ATTORNEY
11	INCORPORATION OF LOAN AGREEMENT PROVISIONS
12	TOTAL AMOUNT, ETC.
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
ACKNOWLEDGEMENT OF MORTGAGE

THIS FIRST PREFERRED MORTGAGE is made on 5 March 2004

BY

(1)KTL CHELSEA, INC., a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia and duly registered as a foreign maritime entity under the laws of the Republic of the Marshall Islands (the “Owner”)

IN FAVOUR OF

(1)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Mortgagee”, which expression includes its successors and assigns).

BACKGROUND

(A)The Owner is the sole owner of the whole of the m.v. “CHELSEA” documented under the laws and flag of the Marshall Islands with Official Number 2036 of 156,802 gross registered tons and 107,829 net registered tons.

(B)By a loan agreement  (the “Loan Agreement”) dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Mayfair, Inc., KTL Camden, Inc., KTL Kensington, Inc. and the Owner (together, the “New Owners” and individually, a “New Owner”) and (iii) the Mortgagee it was agreed that (a) the Mortgagee would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances and (b) the New Owners jointly and severally would guarantee to the Mortgagee the obligations of the Borrower under the Loan Agreement and the other Finance Documents and the Master Agreement.  A copy of the form of the Loan Agreement without attachments is annexed to this Mortgage marked “A”.

(C)By certain agreements (each a “Daylight Funding Agreement”) dated 2 March 2004 and made between, among others, each New Owner and the Mortgagee it was agreed that the Mortgagee would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to this Mortgage marked “B”.

(D)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes and delivers this Mortgage in favour of the Mortgagee as security for the Secured Liabilities and the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents.

(E)Pursuant to the Loan Agreement, the Mortgagee has on the date of this Mortgage advanced to the Borrower, and the Borrower is indebted to the Mortgagee in, the principal amount of US$62,498,180 consisting of the aggregate of Advance B in the amount of US$28,000,000 and an advance under the Daylight Funding Agreement in the amount of US$34,498,180.  As at the date of this Mortgage, the Borrower and the Lender estimate that the maximum aggregate amount of the Master Agreement Liabilities shall not exceed US$ 30,000,000

(F)The Owner has authorised the execution and delivery of this Mortgage under and pursuant to Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Mortgage unless the context otherwise requires.

1.2Definitions.  In this Mortgage, unless the contrary intention appears:

“Loan Agreement” means the loan agreement dated 2 March 2004 referred to in Recital (B);

“Secured Liabilities” means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Mortgage or at any later time or times, to the Mortgagee under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship” means the vessel described in Recital (A) and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or later acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Mortgage.

1.4Inconsistency between Loan Agreement provisions and this Mortgage.  This Mortgage shall be read together with the Loan Agreement, but in case of any conflict between the Loan Agreement and this Mortgage, the provisions of the Loan Agreement shall prevail to the extent permitted by Marshall Islands law.

2MORTGAGE

2.1Mortgage.  In consideration of the premises and other good and valuable consideration, the Owner grants, conveys, mortgages, pledges, confirms, assigns, transfers and sets over the whole of the Ship to the Mortgagee as security for:

(a)the due and punctual payment of the Secured Liabilities; and

(b)the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents to which the Owner is or is to be a party.

2.2Extent of property mortgaged.  This Mortgage shall not cover property other than the Ship as the term “Vessel” is used in Sub-division 2 of Section 71 of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

2.3Void provisions.  Any provision of this Mortgage construed as waiving the preferred status of this Mortgage shall, to such extent, be void and of no effect.

2.4Continuing security.  This Mortgage shall remain in force until the end of the Security Period as a continuing security and, in particular:

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(a)the Security Interests created by Clause 2.1 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 2.1, and the rights of the Mortgagee under this Mortgage, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Mortgagee;

(c)no failure or delay by or on behalf of the Mortgagee to enforce or exercise a Security Interest created by Clause 2.1 or a right of the Mortgagee under this Mortgage, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right shall preclude or estop the Mortgagee (either permanently or temporarily) from enforcing or exercising it; and

(d)this Mortgage shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

which the Mortgagee now or subsequently has in respect of any of the Secured Liabilities.

2.5No obligations imposed on Mortgagee.  The Owner shall remain liable to perform all obligations connected with the Ship and the Mortgagee shall not, in any circumstances, have or incur any obligation of any kind in connection with the Ship.

2.6Negative pledge; disposal of assets.  The Owner shall not:

(a)sell the Ship;

(b)create any Security Interest not exclusively securing the Secured Liabilities over the Ship (other than Permitted Security Interests); or

(c)otherwise dispose of the Ship or any right relating to the Ship.

2.7Release of security.  At the end of the Security Period or at such earlier time as the Ship is sold and the Owner has complied with the provisions of the Loan Agreement, the Mortgagee shall, at the request and cost of the Owner, discharge this Mortgage.

3PAYMENT COVENANTS

3.1General.  The Owner shall comply with the following provisions of this Clause 3 at all times during the Security Period.

3.2Covenant to pay amounts due under Loan Agreement.  The Owner shall pay to the Lender all amounts from time to time due and payable to the Lender pursuant to clause 10 of the Loan Agreement.

3.3Covenant to pay expenses etc.  The Owner shall pay all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee) at the times and in the manner specified in this Mortgage.

3.4Covenant to pay default interest.  The Owner shall pay interest on any expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys referred to in Clause 3.3 from the date on which the relevant expense, claim, liability, loss, cost, duty,

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fee, charge or other money is paid or incurred by the Mortgagee (as well after as before judgment):

(a)at the rate described in clause 6.2 of the Loan Agreement;

(b)compounded in accordance with clause 6.6 of the Loan Agreement; and

(c)on demand.

3.5Covenant to pay other sums.  The Owner shall pay each and every other sum of money which may be or become owing to the Mortgagee under the Loan Agreement, this Mortgage and the other Finance Documents to which the Owner is or is to be a party at the times and in the manner specified in this Mortgage or in the other Finance Documents.

4REPRESENTATIONS AND WARRANTIES

4.1General.  The Owner represents and warrants to the Mortgagee as follows.

4.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading as if repeated on the date of this Mortgage with reference to the circumstances now existing.

5COVENANTS

5.1General.  The Owner shall comply with the following provisions of this Clause 5 at all times during the Security Period except as the Mortgagee may otherwise permit in writing.

5.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement, all of which are expressly incorporated in this Mortgage with any necessary modifications.

5.3Perfection of Mortgage.  The Owner shall:

(a)comply with and satisfy all the requirements and formalities established by the Republic of The Marshall Islands Maritime Act 1990 as amended and any other pertinent legislation of the Republic of The Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first preferred mortgage and maritime lien upon the Ship; and

(b)promptly provide the Mortgagee from time to time with evidence in such form as the Mortgagee requires that the Owner is complying with Clause 5.3(a).

5.4Notice of Mortgage.  The Owner shall:

(a)carry on board the Ship with its papers a certified copy of this Mortgage and cause that certified copy of this Mortgage to be exhibited to any person having business with the Ship which might give rise to a lien or the Ship other than a lien for crew’s wages and salvage and to any representative of the Mortgagee on demand; and

(b)place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than 6 inches wide and 9 inches high reading as follows:

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“NOTICE OF MORTGAGE

This Vessel is covered by a First Preferred Mortgage to THE ROYAL BANK OF SCOTLAND plc under authority of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended. Under the terms of the said Mortgage neither the Owner nor any Charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage.”

6PROTECTION OF SECURITY

6.1Mortgagee’s right to protect or maintain security.  The Mortgagee may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Mortgage or for any similar or related purpose.

6.2Mortgagee’s right to insure, repair etc.  Without limiting the generality of Clause 6.1, if the Owner does not comply with Clause 5, the Mortgagee may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Mortgagee may think expedient or necessary for the purpose of securing its release.

7ENFORCEABILITY AND MORTGAGEE’S POWERS

7.1Right to enforce security.  On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Mortgage has become enforceable, and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement:

(a)the security constituted by this Mortgage shall immediately become enforceable;

(b)the Mortgagee shall be entitled at any time or times to exercise the powers set out in Clause 7.2 and in any other Finance Document;

(c)the Mortgagee shall be entitled at any time or times to exercise the powers possessed by it as mortgagee of the Ship conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship; and

(d)the Mortgagee shall be entitled to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by applicable law including the provisions of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

7.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Mortgagee shall be entitled then or at any later time or times:

(a)to take possession of the Ship whether actually or constructively and/or otherwise to take control of the Ship wherever the Ship may be and cause the Owner or any other person in possession of the Ship forthwith upon demand to surrender the Ship to the Mortgagee without legal process and without the Mortgagee being liable for any losses thereby caused or to account to the Owner in connection therewith;

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(b)to sell the Ship or any share in the Ship with or without prior notice to the Owner, and with or without the benefit of any charterparty or other contract for its employment, by public auction or private contract at any time, at any place and upon any terms (including, without limitation, on terms that all or any part or parts of the purchase price be satisfied by shares, loan stock or other securities and/or be left outstanding as a debt, whether secured or unsecured and whether carrying interest or not) which the Mortgagee thinks fit, with power for the Mortgagee to purchase the Ship at any such public auction and to set off the purchase price against all or any part of the Secured Liabilities;

(c)to manage, insure, maintain and repair the Ship and to charter, employ, lay up or in any other manner whatsoever deal with the Ship in any manner, upon any terms and for any period which the Mortgagee may think fit, in all respects as if the Mortgagee were the owner of the Ship and without the Mortgagee being responsible for any loss thereby incurred;

(d)to collect, recover and give good discharge for any moneys or claims arising in relation to the Ship and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(e)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, the Ship which the Mortgagee may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(f)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to the Ship which the Mortgagee may think fit.

7.3No liability of Mortgagee.  The Mortgagee shall not be obliged to check the nature or sufficiency of any payment received by it under this Mortgage or to preserve, exercise or enforce any right relating to the Ship.

8APPLICATION OF MONEYS

8.1General.  All sums received by the Mortgagee:

(a)in respect of sale of the Ship or any share in the Ship;

(b)in respect of net profits arising out of the employment of the Ship pursuant to Clause 7.2(c); or

(c)in respect of any other transaction or arrangement under Clauses 7.1 or 7.2,

shall be held by the Mortgagee upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Mortgagee in or in connection with the exercise of its powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

9FURTHER ASSURANCES

9.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Mortgagee (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Mortgagee may, in any particular case, specify; and

(b)effect any registration or notarisation, give any notice or take any other step,

which the Mortgagee may, by notice to the Owner, specify for any of the purposes described in Clause 9.2 or for any similar or related purpose.

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9.2Purposes of further assurances.  The purposes referred to in Clause 9.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Mortgagee intended should be created by or pursuant to this Mortgage or any other Finance Document;

(b)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Mortgagee intended should be created, by or pursuant to this Mortgage or any other Finance Document;

(c)to enable or assist the Mortgagee to sell or otherwise deal with the Ship, to transfer title to, or grant any interest or right relating to, the Ship or to exercise any power which is referred to in Clauses 7.1 or 7.2 or which is conferred by any Finance Document; or

(d)to enable or assist the Mortgagee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Ship in any country or under the law of any country.

9.3Terms of further assurances.  The Mortgagee may specify the terms of any document to be executed by the Owner under Clause 9.1, and those terms may include any covenants, undertakings, powers and provisions which the Mortgagee considers appropriate to protect its interests.

9.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 9.1 by the date specified in the notice.

9.5Additional corporate action.  At the same time as the Owner delivers to the Mortgagee any document executed under Clause 9.1(a), the Owner shall also deliver to the Mortgagee a certificate signed by 2 of the Owner’s officers which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Mortgagee; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of incorporation or other constitutional documents.

10POWER OF ATTORNEY

10.1Appointment.  For the purpose of securing the Mortgagee’s interest in the Ship and the due and punctual performance the Owner’s obligations to the Mortgagee under this Mortgage and every other Finance Document to which the Owner is or is to be a party, the Owner irrevocably and by way of security appoints the Mortgagee its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

10.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 10.1, the Owner confirms that Clause 10.1 authorises the Mortgagee to execute on its behalf a document ratifying any transaction or action which the Mortgagee has purported to enter into or to take and which the Mortgagee considers was or might have been outside its powers or otherwise invalid.

10.3Delegation.  The Mortgagee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Mortgagee by Clauses 10.1 and/or 10.2, and may do so on terms authorising successive sub-delegations.

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11INCORPORATION OF LOAN AGREEMENT PROVISIONS

11.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Mortgage as if they were expressly incorporated in this Mortgage with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices; and

clause 31, supplemental.

11.2Incorporation of general provisions.  Clause 11.1 is without prejudice to the application to this Mortgage of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally or this Mortgage specifically.

12TOTAL AMOUNT, ETC.

12.1Total amount.  For the purpose of recording this Mortgage as required by Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended, the total amount of the direct and contingent obligations secured by this Mortgage is Two hundred and ten million Dollars $210,000,000 together with interest, fees, commissions and performance of mortgage covenants.  The date of maturity of this Mortgage is on demand and there is no separate discharge amount.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Mortgage shall be taken to exclude or restrict any power, right or remedy which the Mortgagee may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship.

13.2Exercise of other rights.  The Mortgagee may exercise any right under this Mortgage before it has exercised any right referred to in Clause 13.1(a) or (b).

13.3Settlement or discharge conditional.  Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

14LAW AND JURISDICTION

14.1Marshall Islands law.  This Mortgage shall be governed by, and construed in accordance with, Marshall Islands law.

14.2Choice of forum.  The Mortgagee reserves the rights:

(a)to commence proceedings in relation to any matter which arises out of or in connection with this Mortgage in the courts of any country which have or claim jurisdiction to that matter; and

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(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in the Marshall Islands or without commencing proceedings in the Marshall Islands.

14.3Action against Ship.  The rights referred to in Clause 14.2 include the right of the Mortgagee to arrest and take action against the Ship at whatever place the Ship shall be found lying and for the purpose of any action which the Mortgagee may bring before the courts of that jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee may bring against the Ship, any writ, notice, judgment or other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master) and such service shall be deemed good service on the Owner for all purposes.

14.4Mortgagee’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Mortgagee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.5Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

IN WITNESS whereof the Owner has caused this Mortgage to be executed by its duly authorised Attorney-in-Fact the day and year first before written.

KTL CHELSEA, INC.

By /s/ Arthur Lichtenstein

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ACKNOWLEDGEMENT OF MORTGAGE

STATE OF NEW YORK	)
	)  S.S.
COUNTY OF NEW YORK	)

On this 5th day of March 2004 before me personally appeared Arthur Lichtenstein to me known who being by me duly sworn did depose and say that he resides at 21986 75th Avenue, Bayside, New York 11364 that he is an attorney-in-fact for KTL CHELSEA, INC. the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said Corporation.

/s/ Sonia D. Odom

Notary Public

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EX-4.40.3

Exhibit 4.40.3

Date 11 March 2004

KTL HAMPSTEAD, INC.

as Owner

- and -

THE ROYAL BANK OF SCOTLAND plc

as Mortgagee

FIRST PREFERRED MARSHALL ISLANDS MORTGAGE

m.v. “HAMPSTEAD”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	MORTGAGE
3	PAYMENT COVENANTS
4	REPRESENTATIONS AND WARRANTIES
5	COVENANTS
6	PROTECTION OF SECURITY
7	ENFORCEABILITY AND MORTGAGEE’S POWERS
8	APPLICATION OF MONEYS
9	FURTHER ASSURANCES
10	POWER OF ATTORNEY
11	INCORPORATION OF LOAN AGREEMENT PROVISIONS
12	TOTAL AMOUNT, ETC.
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
ACKNOWLEDGEMENT OF MORTGAGE

THIS FIRST PREFERRED MORTGAGE is made on 11 March 2004

BY

(1)KTL HAMPSTEAD, INC., a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia and duly registered as a foreign maritime entity under the laws of the Republic of the Marshall Islands (the “Owner”)

IN FAVOUR OF

(1)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Mortgagee”, which expression includes its successors and assigns).

BACKGROUND

(A)The Owner is the sole owner of the whole of the m.v. “HAMPSTEAD” documented under the laws and flag of the Marshall Islands with Official Number 2022 of 156,802 gross registered tons and 107,829 net registered tons.

(B)By a loan agreement  (the “Loan Agreement”) dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Camden, Inc., KTL Kensington, Inc. and the Owner (together, the “New Owners” and individually, a “New Owner”) and (iii) the Mortgagee it was agreed that (a) the Mortgagee would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances and (b) the New Owners jointly and severally would guarantee to the Mortgagee the obligations of the Borrower under the Loan Agreement and the other Finance Documents and the Master Agreement.  A copy of the form of the Loan Agreement without attachments is annexed to this Mortgage marked “A”.

(C)By certain agreements (each a “Daylight Funding Agreement”) and made between, among others, each New Owner and the Mortgagee it was agreed that the Mortgagee would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to this Mortgage marked “B”.

(D)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes and delivers this Mortgage in favour of the Mortgagee as security for the Secured Liabilities and the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents.

(E)Pursuant to the Loan Agreement, the Mortgagee has on the date of this Mortgage advanced to the Borrower, and the Borrower is indebted to the Mortgagee in, the principal amount of US$94,998,200 consisting of the aggregate of Advance A and Advance B in the amount of US$56,000,000 and an advance under the Daylight Funding Agreement in the amount of US$38,998,200.  As at the date of this Mortgage, the Borrower and the Lender estimate that the maximum aggregate amount of the Master Agreement Liabilities shall not exceed US$ 30,000,000

(F)The Owner has authorised the execution and delivery of this Mortgage under and pursuant to Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Mortgage unless the context otherwise requires.

1.2Definitions.  In this Mortgage, unless the contrary intention appears:

“Loan Agreement” means the loan agreement dated 2 March 2004 referred to in Recital (B);

“Secured Liabilities” means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Mortgage or at any later time or times, to the Mortgagee under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship” means the vessel described in Recital (A) and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or later acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Mortgage.

1.4Inconsistency between Loan Agreement provisions and this Mortgage.  This Mortgage shall be read together with the Loan Agreement, but in case of any conflict between the Loan Agreement and this Mortgage, the provisions of the Loan Agreement shall prevail to the extent permitted by Marshall Islands law.

2MORTGAGE

2.1Mortgage.  In consideration of the premises and other good and valuable consideration, the Owner grants, conveys, mortgages, pledges, confirms, assigns, transfers and sets over the whole of the Ship to the Mortgagee as security for:

(a)the due and punctual payment of the Secured Liabilities; and

(b)the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents to which the Owner is or is to be a party.

2.2Extent of property mortgaged.  This Mortgage shall not cover property other than the Ship as the term “Vessel” is used in Sub-division 2 of Section 308 of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

2.3Void provisions.  Any provision of this Mortgage construed as waiving the preferred status of this Mortgage shall, to such extent, be void and of no effect.

2.4Continuing security.  This Mortgage shall remain in force until the end of the Security Period as a continuing security and, in particular:

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(a)the Security Interests created by Clause 2.1 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 2.1, and the rights of the Mortgagee under this Mortgage, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Mortgagee;

(c)no failure or delay by or on behalf of the Mortgagee to enforce or exercise a Security Interest created by Clause 2.1 or a right of the Mortgagee under this Mortgage, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right shall preclude or estop the Mortgagee (either permanently or temporarily) from enforcing or exercising it; and

(d)this Mortgage shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

which the Mortgagee now or subsequently has in respect of any of the Secured Liabilities.

2.5No obligations imposed on Mortgagee.  The Owner shall remain liable to perform all obligations connected with the Ship and the Mortgagee shall not, in any circumstances, have or incur any obligation of any kind in connection with the Ship.

2.6Negative pledge; disposal of assets.  The Owner shall not:

(a)sell the Ship;

(b)create any Security Interest not exclusively securing the Secured Liabilities over the Ship (other than Permitted Security Interests); or

(c)otherwise dispose of the Ship or any right relating to the Ship.

2.7Release of security.  At the end of the Security Period or at such earlier time as the Ship is sold and the Owner has complied with the provisions of the Loan Agreement, the Mortgagee shall, at the request and cost of the Owner, discharge this Mortgage.

3PAYMENT COVENANTS

3.1General.  The Owner shall comply with the following provisions of this Clause 3 at all times during the Security Period.

3.2Covenant to pay amounts due under Loan Agreement.  The Owner shall pay to the Lender all amounts from time to time due and payable to the Lender pursuant to clause 10 of the Loan Agreement.

3.3Covenant to pay expenses etc.  The Owner shall pay all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee) at the times and in the manner specified in this Mortgage.

3.4Covenant to pay default interest.  The Owner shall pay interest on any expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys referred to in Clause 3.3 from the date on which the relevant expense, claim, liability, loss, cost, duty,

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fee, charge or other money is paid or incurred by the Mortgagee (as well after as before judgment):

(a)at the rate described in clause 6.2 of the Loan Agreement;

(b)compounded in accordance with clause 6.6 of the Loan Agreement; and

(c)on demand.

3.5Covenant to pay other sums.  The Owner shall pay each and every other sum of money which may be or become owing to the Mortgagee under the Loan Agreement, this Mortgage and the other Finance Documents to which the Owner is or is to be a party at the times and in the manner specified in this Mortgage or in the other Finance Documents.

4REPRESENTATIONS AND WARRANTIES

4.1General.  The Owner represents and warrants to the Mortgagee as follows.

4.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading as if repeated on the date of this Mortgage with reference to the circumstances now existing.

5COVENANTS

5.1General.  The Owner shall comply with the following provisions of this Clause 5 at all times during the Security Period except as the Mortgagee may otherwise permit in writing.

5.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement, all of which are expressly incorporated in this Mortgage with any necessary modifications.

5.3Perfection of Mortgage.  The Owner shall:

(a)comply with and satisfy all the requirements and formalities established by the Republic of The Marshall Islands Maritime Act 1990 as amended and any other pertinent legislation of the Republic of The Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first preferred mortgage and maritime lien upon the Ship; and

(b)promptly provide the Mortgagee from time to time with evidence in such form as the Mortgagee requires that the Owner is complying with Clause 5.3(a).

5.4Notice of Mortgage.  The Owner shall:

(a)carry on board the Ship with its papers a certified copy of this Mortgage and cause that certified copy of this Mortgage to be exhibited to any person having business with the Ship which might give rise to a lien or the Ship other than a lien for crew’s wages and salvage and to any representative of the Mortgagee on demand; and

(b)place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than 6 inches wide and 9 inches high reading as follows:

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“NOTICE OF MORTGAGE

This Vessel is covered by a First Preferred Mortgage to THE ROYAL BANK OF SCOTLAND plc under authority of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended. Under the terms of the said Mortgage neither the Owner nor any Charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage.”

6PROTECTION OF SECURITY

6.1Mortgagee’s right to protect or maintain security.  The Mortgagee may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Mortgage or for any similar or related purpose.

6.2Mortgagee’s right to insure, repair etc.  Without limiting the generality of Clause 6.1, if the Owner does not comply with Clause 5, the Mortgagee may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Mortgagee may think expedient or necessary for the purpose of securing its release.

7ENFORCEABILITY AND MORTGAGEE’S POWERS

7.1Right to enforce security.  On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Mortgage has become enforceable, and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement:

(a)the security constituted by this Mortgage shall immediately become enforceable;

(b)the Mortgagee shall be entitled at any time or times to exercise the powers set out in Clause 7.2 and in any other Finance Document;

(c)the Mortgagee shall be entitled at any time or times to exercise the powers possessed by it as mortgagee of the Ship conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship; and

(d)the Mortgagee shall be entitled to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by applicable law including the provisions of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

7.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Mortgagee shall be entitled then or at any later time or times:

(a)to take possession of the Ship whether actually or constructively and/or otherwise to take control of the Ship wherever the Ship may be and cause the Owner or any other person in possession of the Ship forthwith upon demand to surrender the Ship to the Mortgagee without legal process and without the Mortgagee being liable for any losses thereby caused or to account to the Owner in connection therewith;

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(b)to sell the Ship or any share in the Ship with or without prior notice to the Owner, and with or without the benefit of any charterparty or other contract for its employment, by public auction or private contract at any time, at any place and upon any terms (including, without limitation, on terms that all or any part or parts of the purchase price be satisfied by shares, loan stock or other securities and/or be left outstanding as a debt, whether secured or unsecured and whether carrying interest or not) which the Mortgagee thinks fit, with power for the Mortgagee to purchase the Ship at any such public auction and to set off the purchase price against all or any part of the Secured Liabilities;

(c)to manage, insure, maintain and repair the Ship and to charter, employ, lay up or in any other manner whatsoever deal with the Ship in any manner, upon any terms and for any period which the Mortgagee may think fit, in all respects as if the Mortgagee were the owner of the Ship and without the Mortgagee being responsible for any loss thereby incurred;

(d)to collect, recover and give good discharge for any moneys or claims arising in relation to the Ship and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(e)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, the Ship which the Mortgagee may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(f)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to the Ship which the Mortgagee may think fit.

7.3No liability of Mortgagee.  The Mortgagee shall not be obliged to check the nature or sufficiency of any payment received by it under this Mortgage or to preserve, exercise or enforce any right relating to the Ship.

8APPLICATION OF MONEYS

8.1General.  All sums received by the Mortgagee:

(a)in respect of sale of the Ship or any share in the Ship;

(b)in respect of net profits arising out of the employment of the Ship pursuant to Clause 7.2(c); or

(c)in respect of any other transaction or arrangement under Clauses 7.1 or 7.2,

shall be held by the Mortgagee upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Mortgagee in or in connection with the exercise of its powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

9FURTHER ASSURANCES

9.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Mortgagee (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Mortgagee may, in any particular case, specify; and

(b)effect any registration or notarisation, give any notice or take any other step,

which the Mortgagee may, by notice to the Owner, specify for any of the purposes described in Clause 9.2 or for any similar or related purpose.

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9.2Purposes of further assurances.  The purposes referred to in Clause 9.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Mortgagee intended should be created by or pursuant to this Mortgage or any other Finance Document;

(b)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Mortgagee intended should be created, by or pursuant to this Mortgage or any other Finance Document;

(c)to enable or assist the Mortgagee to sell or otherwise deal with the Ship, to transfer title to, or grant any interest or right relating to, the Ship or to exercise any power which is referred to in Clauses 7.1 or 7.2 or which is conferred by any Finance Document; or

(d)to enable or assist the Mortgagee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Ship in any country or under the law of any country.

9.3Terms of further assurances.  The Mortgagee may specify the terms of any document to be executed by the Owner under Clause 9.1, and those terms may include any covenants, undertakings, powers and provisions which the Mortgagee considers appropriate to protect its interests.

9.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 9.1 by the date specified in the notice.

9.5Additional corporate action.  At the same time as the Owner delivers to the Mortgagee any document executed under Clause 9.1(a), the Owner shall also deliver to the Mortgagee a certificate signed by 2 of the Owner’s officers which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Mortgagee; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of incorporation or other constitutional documents.

10POWER OF ATTORNEY

10.1Appointment.  For the purpose of securing the Mortgagee’s interest in the Ship and the due and punctual performance the Owner’s obligations to the Mortgagee under this Mortgage and every other Finance Document to which the Owner is or is to be a party, the Owner irrevocably and by way of security appoints the Mortgagee its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

10.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 10.1, the Owner confirms that Clause 10.1 authorises the Mortgagee to execute on its behalf a document ratifying any transaction or action which the Mortgagee has purported to enter into or to take and which the Mortgagee considers was or might have been outside its powers or otherwise invalid.

10.3Delegation.  The Mortgagee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Mortgagee by Clauses 10.1 and/or 10.2, and may do so on terms authorising successive sub-delegations.

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11INCORPORATION OF LOAN AGREEMENT PROVISIONS

11.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Mortgage as if they were expressly incorporated in this Mortgage with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices; and

clause 31, supplemental.

11.2Incorporation of general provisions.  Clause 11.1 is without prejudice to the application to this Mortgage of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally or this Mortgage specifically.

12TOTAL AMOUNT, ETC.

12.1Total amount.  For the purpose of recording this Mortgage as required by Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended, the total amount of the direct and contingent obligations secured by this Mortgage is Two hundred and ten million Dollars $210,000,000 together with interest, fees, commissions and performance of mortgage covenants.  The date of maturity of this Mortgage is on demand and there is no separate discharge amount.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Mortgage shall be taken to exclude or restrict any power, right or remedy which the Mortgagee may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship.

13.2Exercise of other rights.  The Mortgagee may exercise any right under this Mortgage before it has exercised any right referred to in Clause 13.1(a) or (b).

13.3Settlement or discharge conditional.  Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

14LAW AND JURISDICTION

14.1Marshall Islands law.  This Mortgage shall be governed by, and construed in accordance with, Marshall Islands law.

14.2Choice of forum.  The Mortgagee reserves the rights:

(a)to commence proceedings in relation to any matter which arises out of or in connection with this Mortgage in the courts of any country which have or claim jurisdiction to that matter; and

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(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in the Marshall Islands or without commencing proceedings in the Marshall Islands.

14.3Action against Ship.  The rights referred to in Clause 14.2 include the right of the Mortgagee to arrest and take action against the Ship at whatever place the Ship shall be found lying and for the purpose of any action which the Mortgagee may bring before the courts of that jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee may bring against the Ship, any writ, notice, judgment or other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master) and such service shall be deemed good service on the Owner for all purposes.

14.4Mortgagee’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Mortgagee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.5Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

IN WITNESS whereof the Owner has caused this Mortgage to be executed by its duly authorised Attorney-in-Fact the day and year first before written.

KTL HAMPSTEAD, INC.
By	/s/ Alison Ho

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ACKNOWLEDGEMENT OF MORTGAGE

STATE OF NEW YORK	)
	)	S.S.
COUNTY OF NEW YORK	)

On this 11th day of March 2004 before me personally appeared Alison Ho to me known who being by me duly sworn did depose and say that she resides at 585 West End Avenue, New York, New York 10024; that she is an attorney-in-fact for KTL HAMPSTEAD, INC., the corporation described in and which executed the foregoing instrument; and that she signed her name thereto by order of the Board of Directors of said Corporation.

/s/ Sonia D. Odom

Notary Public

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EX-4.40.4

Exhibit 4.40.4

Date 29 March 2004

KTL KENSINGTON, INC.

as Owner

- and -

THE ROYAL BANK OF SCOTLAND plc

as Mortgagee

FIRST PREFERRED MARSHALL ISLANDS MORTGAGE

m.v. “KENSINGTON”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	MORTGAGE
3	PAYMENT COVENANTS
4	REPRESENTATIONS AND WARRANTIES
5	COVENANTS
6	PROTECTION OF SECURITY
7	ENFORCEABILITY AND MORTGAGEE’S POWERS
8	APPLICATION OF MONEYS
9	FURTHER ASSURANCES
10	POWER OF ATTORNEY
11	INCORPORATION OF LOAN AGREEMENT PROVISIONS
12	TOTAL AMOUNT, ETC.
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
ACKNOWLEDGEMENT OF MORTGAGE

THIS FIRST PREFERRED MORTGAGE is made on 29 March 2004

BY

(1)KTL KENSINGTON, INC., a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia and duly registered as a foreign maritime entity under the laws of the Republic of the Marshall Islands (the “Owner”)

IN FAVOUR OF

(1)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Mortgagee”, which expression includes its successors and assigns).

BACKGROUND

(A)The Owner is the sole owner of the whole of the m.v. “KENSINGTON” documented under the laws and flag of the Marshall Islands with Official Number 2035 of 156,802 gross registered tons and 107,829 net registered tons.

(B)By a loan agreement  (the “Loan Agreement”) dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Mayfair, Inc., KTL Camden, Inc. and the Owner (together, the “New Owners” and individually, a “New Owner”) and (iii) the Mortgagee it was agreed that (a) the Mortgagee would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances and (b) the New Owners jointly and severally would guarantee to the Mortgagee the obligations of the Borrower under the Loan Agreement and the other Finance Documents and the Master Agreement.  A copy of the form of the Loan Agreement without attachments is annexed to this Mortgage marked “A”.

(C)By certain agreements (each a “Daylight Funding Agreement”) and made between, among others, each New Owner and the Mortgagee it was agreed that the Mortgagee would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to this Mortgage marked “B”.

(D)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes and delivers this Mortgage in favour of the Mortgagee as security for the Secured Liabilities and the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents.

(E)Pursuant to the Loan Agreement, the Mortgagee has on the date of this Mortgage advanced to the Borrower, and the Borrower is indebted to the Mortgagee in, the principal amount of US$174,498,192 consisting of the aggregate of Advance A, Advance B, Advance C, Advance D and Advance E in the amount of US$140,000,000 and an advance under the Daylight Funding Agreement in the amount of US$34,498,192.  As at the date of this Mortgage, the Borrower and the Lender estimate that the maximum aggregate amount of the Master Agreement Liabilities shall not exceed US$ 30,000,000

(F)The Owner has authorised the execution and delivery of this Mortgage under and pursuant to Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Mortgage unless the context otherwise requires.

1.2Definitions.  In this Mortgage, unless the contrary intention appears:

“Loan Agreement” means the loan agreement dated 2 March 2004 referred to in Recital (B);

“Secured Liabilities” means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Mortgage or at any later time or times, to the Mortgagee under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship” means the vessel described in Recital (A) and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or later acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Mortgage.

1.4Inconsistency between Loan Agreement provisions and this Mortgage.  This Mortgage shall be read together with the Loan Agreement, but in case of any conflict between the Loan Agreement and this Mortgage, the provisions of the Loan Agreement shall prevail to the extent permitted by Marshall Islands law.

2MORTGAGE

2.1Mortgage.  In consideration of the premises and other good and valuable consideration, the Owner grants, conveys, mortgages, pledges, confirms, assigns, transfers and sets over the whole of the Ship to the Mortgagee as security for:

(a)the due and punctual payment of the Secured Liabilities; and

(b)the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents to which the Owner is or is to be a party.

2.2Extent of property mortgaged.  This Mortgage shall not cover property other than the Ship as the term “Vessel” is used in Sub-division 2 of Section 308 of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

2.3Void provisions.  Any provision of this Mortgage construed as waiving the preferred status of this Mortgage shall, to such extent, be void and of no effect.

2.4Continuing security.  This Mortgage shall remain in force until the end of the Security Period as a continuing security and, in particular:

2

(a)the Security Interests created by Clause 2.1 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 2.1, and the rights of the Mortgagee under this Mortgage, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Mortgagee;

(c)no failure or delay by or on behalf of the Mortgagee to enforce or exercise a Security Interest created by Clause 2.1 or a right of the Mortgagee under this Mortgage, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right shall preclude or estop the Mortgagee (either permanently or temporarily) from enforcing or exercising it; and

(d)this Mortgage shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

which the Mortgagee now or subsequently has in respect of any of the Secured Liabilities.

2.5No obligations imposed on Mortgagee.  The Owner shall remain liable to perform all obligations connected with the Ship and the Mortgagee shall not, in any circumstances, have or incur any obligation of any kind in connection with the Ship.

2.6Negative pledge; disposal of assets.  The Owner shall not:

(a)sell the Ship;

(b)create any Security Interest not exclusively securing the Secured Liabilities over the Ship (other than Permitted Security Interests); or

(c)otherwise dispose of the Ship or any right relating to the Ship.

2.7Release of security.  At the end of the Security Period or at such earlier time as the Ship is sold and the Owner has complied with the provisions of the Loan Agreement, the Mortgagee shall, at the request and cost of the Owner, discharge this Mortgage.

3PAYMENT COVENANTS

3.1General.  The Owner shall comply with the following provisions of this Clause 3 at all times during the Security Period.

3.2Covenant to pay amounts due under Loan Agreement.  The Owner shall pay to the Lender all amounts from time to time due and payable to the Lender pursuant to clause 10 of the Loan Agreement.

3.3Covenant to pay expenses etc.  The Owner shall pay all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee) at the times and in the manner specified in this Mortgage.

3.4Covenant to pay default interest.  The Owner shall pay interest on any expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys referred to in Clause 3.3 from the date on which the relevant expense, claim, liability, loss, cost, duty,

3

fee, charge or other money is paid or incurred by the Mortgagee (as well after as before judgment):

(a)at the rate described in clause 6.2 of the Loan Agreement;

(b)compounded in accordance with clause 6.6 of the Loan Agreement; and

(c)on demand.

3.5Covenant to pay other sums.  The Owner shall pay each and every other sum of money which may be or become owing to the Mortgagee under the Loan Agreement, this Mortgage and the other Finance Documents to which the Owner is or is to be a party at the times and in the manner specified in this Mortgage or in the other Finance Documents.

4REPRESENTATIONS AND WARRANTIES

4.1General.  The Owner represents and warrants to the Mortgagee as follows.

4.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading as if repeated on the date of this Mortgage with reference to the circumstances now existing.

5COVENANTS

5.1General.  The Owner shall comply with the following provisions of this Clause 5 at all times during the Security Period except as the Mortgagee may otherwise permit in writing.

5.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement, all of which are expressly incorporated in this Mortgage with any necessary modifications.

5.3Perfection of Mortgage.  The Owner shall:

(a)comply with and satisfy all the requirements and formalities established by the Republic of The Marshall Islands Maritime Act 1990 as amended and any other pertinent legislation of the Republic of The Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first preferred mortgage and maritime lien upon the Ship; and

(b)promptly provide the Mortgagee from time to time with evidence in such form as the Mortgagee requires that the Owner is complying with Clause 5.3(a).

5.4Notice of Mortgage.  The Owner shall:

(a)carry on board the Ship with its papers a certified copy of this Mortgage and cause that certified copy of this Mortgage to be exhibited to any person having business with the Ship which might give rise to a lien or the Ship other than a lien for crew’s wages and salvage and to any representative of the Mortgagee on demand; and

(b)place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than 6 inches wide and 9 inches high reading as follows:

4

“NOTICE OF MORTGAGE

This Vessel is covered by a First Preferred Mortgage to THE ROYAL BANK OF SCOTLAND plc under authority of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended. Under the terms of the said Mortgage neither the Owner nor any Charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage.”

6PROTECTION OF SECURITY

6.1Mortgagee’s right to protect or maintain security.  The Mortgagee may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Mortgage or for any similar or related purpose.

6.2Mortgagee’s right to insure, repair etc.  Without limiting the generality of Clause 6.1, if the Owner does not comply with Clause 5, the Mortgagee may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Mortgagee may think expedient or necessary for the purpose of securing its release.

7ENFORCEABILITY AND MORTGAGEE’S POWERS

7.1Right to enforce security.  On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Mortgage has become enforceable, and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement:

(a)the security constituted by this Mortgage shall immediately become enforceable;

(b)the Mortgagee shall be entitled at any time or times to exercise the powers set out in Clause 7.2 and in any other Finance Document;

(c)the Mortgagee shall be entitled at any time or times to exercise the powers possessed by it as mortgagee of the Ship conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship; and

(d)the Mortgagee shall be entitled to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by applicable law including the provisions of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

7.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Mortgagee shall be entitled then or at any later time or times:

(a)to take possession of the Ship whether actually or constructively and/or otherwise to take control of the Ship wherever the Ship may be and cause the Owner or any other person in possession of the Ship forthwith upon demand to surrender the Ship to the Mortgagee without legal process and without the Mortgagee being liable for any losses thereby caused or to account to the Owner in connection therewith;

5

(b)to sell the Ship or any share in the Ship with or without prior notice to the Owner, and with or without the benefit of any charterparty or other contract for its employment, by public auction or private contract at any time, at any place and upon any terms (including, without limitation, on terms that all or any part or parts of the purchase price be satisfied by shares, loan stock or other securities and/or be left outstanding as a debt, whether secured or unsecured and whether carrying interest or not) which the Mortgagee thinks fit, with power for the Mortgagee to purchase the Ship at any such public auction and to set off the purchase price against all or any part of the Secured Liabilities;

(c)to manage, insure, maintain and repair the Ship and to charter, employ, lay up or in any other manner whatsoever deal with the Ship in any manner, upon any terms and for any period which the Mortgagee may think fit, in all respects as if the Mortgagee were the owner of the Ship and without the Mortgagee being responsible for any loss thereby incurred;

(d)to collect, recover and give good discharge for any moneys or claims arising in relation to the Ship and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(e)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, the Ship which the Mortgagee may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(f)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to the Ship which the Mortgagee may think fit.

7.3No liability of Mortgagee.  The Mortgagee shall not be obliged to check the nature or sufficiency of any payment received by it under this Mortgage or to preserve, exercise or enforce any right relating to the Ship.

8APPLICATION OF MONEYS

8.1General.  All sums received by the Mortgagee:

(a)in respect of sale of the Ship or any share in the Ship;

(b)in respect of net profits arising out of the employment of the Ship pursuant to Clause 7.2(c); or

(c)in respect of any other transaction or arrangement under Clauses 7.1 or 7.2,

shall be held by the Mortgagee upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Mortgagee in or in connection with the exercise of its powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

9FURTHER ASSURANCES

9.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Mortgagee (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Mortgagee may, in any particular case, specify; and

(b)effect any registration or notarisation, give any notice or take any other step,

which the Mortgagee may, by notice to the Owner, specify for any of the purposes described in Clause 9.2 or for any similar or related purpose.

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9.2Purposes of further assurances.  The purposes referred to in Clause 9.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Mortgagee intended should be created by or pursuant to this Mortgage or any other Finance Document;

(b)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Mortgagee intended should be created, by or pursuant to this Mortgage or any other Finance Document;

(c)to enable or assist the Mortgagee to sell or otherwise deal with the Ship, to transfer title to, or grant any interest or right relating to, the Ship or to exercise any power which is referred to in Clauses 7.1 or 7.2 or which is conferred by any Finance Document; or

(d)to enable or assist the Mortgagee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Ship in any country or under the law of any country.

9.3Terms of further assurances.  The Mortgagee may specify the terms of any document to be executed by the Owner under Clause 9.1, and those terms may include any covenants, undertakings, powers and provisions which the Mortgagee considers appropriate to protect its interests.

9.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 9.1 by the date specified in the notice.

9.5Additional corporate action.  At the same time as the Owner delivers to the Mortgagee any document executed under Clause 9.1(a), the Owner shall also deliver to the Mortgagee a certificate signed by 2 of the Owner’s officers which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Mortgagee; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of incorporation or other constitutional documents.

10POWER OF ATTORNEY

10.1Appointment.  For the purpose of securing the Mortgagee’s interest in the Ship and the due and punctual performance the Owner’s obligations to the Mortgagee under this Mortgage and every other Finance Document to which the Owner is or is to be a party, the Owner irrevocably and by way of security appoints the Mortgagee its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

10.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 10.1, the Owner confirms that Clause 10.1 authorises the Mortgagee to execute on its behalf a document ratifying any transaction or action which the Mortgagee has purported to enter into or to take and which the Mortgagee considers was or might have been outside its powers or otherwise invalid.

10.3Delegation.  The Mortgagee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Mortgagee by Clauses 10.1 and/or 10.2, and may do so on terms authorising successive sub-delegations.

7

11INCORPORATION OF LOAN AGREEMENT PROVISIONS

11.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Mortgage as if they were expressly incorporated in this Mortgage with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices; and

clause 31, supplemental.

11.2Incorporation of general provisions.  Clause 11.1 is without prejudice to the application to this Mortgage of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally or this Mortgage specifically.

12TOTAL AMOUNT, ETC.

12.1Total amount.  For the purpose of recording this Mortgage as required by Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended, the total amount of the direct and contingent obligations secured by this Mortgage is Two hundred and ten million Dollars $210,000,000 together with interest, fees, commissions and performance of mortgage covenants.  The date of maturity of this Mortgage is on demand and there is no separate discharge amount.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Mortgage shall be taken to exclude or restrict any power, right or remedy which the Mortgagee may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship.

13.2Exercise of other rights.  The Mortgagee may exercise any right under this Mortgage before it has exercised any right referred to in Clause 13.1(a) or (b).

13.3Settlement or discharge conditional.  Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

14LAW AND JURISDICTION

14.1Marshall Islands law.  This Mortgage shall be governed by, and construed in accordance with, Marshall Islands law.

14.2Choice of forum.  The Mortgagee reserves the rights:

(a)to commence proceedings in relation to any matter which arises out of or in connection with this Mortgage in the courts of any country which have or claim jurisdiction to that matter; and

8

(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in the Marshall Islands or without commencing proceedings in the Marshall Islands.

14.3Action against Ship.  The rights referred to in Clause 14.2 include the right of the Mortgagee to arrest and take action against the Ship at whatever place the Ship shall be found lying and for the purpose of any action which the Mortgagee may bring before the courts of that jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee may bring against the Ship, any writ, notice, judgment or other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master) and such service shall be deemed good service on the Owner for all purposes.

14.4Mortgagee’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Mortgagee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.5Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

IN WITNESS whereof the Owner has caused this Mortgage to be executed by its duly authorised Attorney-in-Fact the day and year first before written.

KTL KENSINGTON, INC.
By	/s/ Michael Thorne

9

ACKNOWLEDGEMENT OF MORTGAGE

STATE OF NEW YORK	)
	)	S.S.
COUNTY OF NEW YORK	)

On this 29th day of March 2004 before me personally appeared Michael Thorne to me known who being by me duly sworn did depose and say that he resides at One University Place, New York, New York 10003 that he is an attorney-in-fact for KTL KENSINGTON, INC. the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said Corporation.

/s/ Sonia D. Odom

Notary Public

10

EX-4.40.5

Exhibit 4.40.5

Date 18 March 2004

KTL MAYFAIR, INC.

as Owner

- and -

THE ROYAL BANK OF SCOTLAND plc

as Mortgagee

FIRST PREFERRED MARSHALL ISLANDS MORTGAGE

m.v. “MAYFAIR”

WATSON, FARLEY & WILLIAMS

London

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	MORTGAGE
3	PAYMENT COVENANTS
4	REPRESENTATIONS AND WARRANTIES
5	COVENANTS
6	PROTECTION OF SECURITY
7	ENFORCEABILITY AND MORTGAGEE’S POWERS
8	APPLICATION OF MONEYS
9	FURTHER ASSURANCES
10	POWER OF ATTORNEY
11	INCORPORATION OF LOAN AGREEMENT PROVISIONS
12	TOTAL AMOUNT, ETC.
13	SUPPLEMENTAL
14	LAW AND JURISDICTION
ACKNOWLEDGEMENT OF MORTGAGE

THIS FIRST PREFERRED MORTGAGE is made on 18 March 2004

BY

(1)KTL MAYFAIR, INC., a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia and duly registered as a foreign maritime entity under the laws of the Republic of the Marshall Islands (the “Owner”)

IN FAVOUR OF

(1)THE ROYAL BANK OF SCOTLAND plc, acting through its office at Shipping Business Centre, 5-10 Great Tower Street, London EC3P 3HX (the “Mortgagee”, which expression includes its successors and assigns).

BACKGROUND

(A)The Owner is the sole owner of the whole of the m.v. “MAYFAIR” documented under the laws and flag of the Marshall Islands with Official Number 2028 of 156,802 gross registered tons and 107,829 net registered tons.

(B)By a loan agreement  (the “Loan Agreement”) dated 2 March 2004 and made between (i) Knightsbridge Tankers Limited (the “Borrower”), (ii) KTL Hampstead, Inc., KTL Chelsea, Inc., KTL Camden, Inc., KTL Kensington, Inc. and the Owner (together, the “New Owners” and individually, a “New Owner”) and (iii) the Mortgagee it was agreed that (a) the Mortgagee would make available to the Borrower a facility of up to US$140,000,000 by way of up to five (5) separate advances and (b) the New Owners jointly and severally would guarantee to the Mortgagee the obligations of the Borrower under the Loan Agreement and the other Finance Documents and the Master Agreement.  A copy of the form of the Loan Agreement without attachments is annexed to this Mortgage marked “A”.

(C)By certain agreements (each a “Daylight Funding Agreement”) and made between, among others, each New Owner and the Mortgagee it was agreed that the Mortgagee would advance to each New Owner by way of a single advance and by way of overdraft a facility of approximately US$40,000000 per New Owner for the purpose of financing the balance of that New Owner’s obligation to pay the purchase price of the Ship to be acquired by it in excess of the amount available for that purpose under the Loan Agreement.  By the guarantee contained in clause 10 of the Loan Agreement each New Owner guarantees the liabilities of each other New Owner under, inter alia, its Daylight Funding Agreement.  A copy of the form of each Daylight Funding Agreement is annexed to this Mortgage marked “B”.

(D)It is one of the conditions precedent to (i) the availability of the facility under the Loan Agreement and (ii) the facility under the Owner’s Daylight Funding Agreement that the Owner executes and delivers this Mortgage in favour of the Mortgagee as security for the Secured Liabilities and the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents.

(E)Pursuant to the Loan Agreement, the Mortgagee has on the date of this Mortgage advanced to the Borrower, and the Borrower is indebted to the Mortgagee in, the principal amount of US$146,498,175 consisting of the aggregate of Advance A, Advance B, Advance C and Advance D in the amount of US$112,000,000 and an advance under the Daylight Funding Agreement in the amount of US$34,498,175.  As at the date of this Mortgage, the Borrower and the Lender estimate that the maximum aggregate amount of the Master Agreement Liabilities shall not exceed US$ 30,000,000

(F)The Owner has authorised the execution and delivery of this Mortgage under and pursuant to Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED as follows:

1DEFINITIONS AND INTERPRETATION

1.1Defined expressions.  Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Mortgage unless the context otherwise requires.

1.2Definitions.  In this Mortgage, unless the contrary intention appears:

“Loan Agreement” means the loan agreement dated 2 March 2004 referred to in Recital (B);

“Secured Liabilities” means all liabilities which the Borrower, the New Owners, the other Security Parties or any of them have, at the date of this Mortgage or at any later time or times, to the Mortgagee under or in connection with any Finance Document or the Master Agreement or any judgment relating to any Finance Document or the Master Agreement (including, without limitation the liabilities of the New Owners as joint and several guarantors of the liabilities of the Borrower and each other New Owner, as contained in clause 10 of the Loan Agreement); and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country; and

“Ship” means the vessel described in Recital (A) and includes any share or interest in that vessel and its engines, machinery, boats, tackle, outfit, spare gear, fuel, consumable or other stores, belongings and appurtenances whether on board or ashore and whether now owned or later acquired.

1.3Application of construction and interpretation provisions of Loan Agreement.  Clauses 1.2 and 1.5 of the Loan Agreement apply, with any necessary modifications, to this Mortgage.

1.4Inconsistency between Loan Agreement provisions and this Mortgage.  This Mortgage shall be read together with the Loan Agreement, but in case of any conflict between the Loan Agreement and this Mortgage, the provisions of the Loan Agreement shall prevail to the extent permitted by Marshall Islands law.

2MORTGAGE

2.1Mortgage.  In consideration of the premises and other good and valuable consideration, the Owner grants, conveys, mortgages, pledges, confirms, assigns, transfers and sets over the whole of the Ship to the Mortgagee as security for:

(a)the due and punctual payment of the Secured Liabilities; and

(b)the performance and observance of and compliance with the covenants, terms and conditions contained in the Finance Documents to which the Owner is or is to be a party.

2.2Extent of property mortgaged.  This Mortgage shall not cover property other than the Ship as the term “Vessel” is used in Sub-division 2 of Section 308 of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

2.3Void provisions.  Any provision of this Mortgage construed as waiving the preferred status of this Mortgage shall, to such extent, be void and of no effect.

2.4Continuing security.  This Mortgage shall remain in force until the end of the Security Period as a continuing security and, in particular:

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(a)the Security Interests created by Clause 2.1 shall not be satisfied by any intermediate payment or satisfaction of the Secured Liabilities;

(b)the Security Interests created by Clauses 2.1, and the rights of the Mortgagee under this Mortgage, are only capable of being extinguished, limited or otherwise adversely affected by an express and specific term in a document signed by or on behalf of the Mortgagee;

(c)no failure or delay by or on behalf of the Mortgagee to enforce or exercise a Security Interest created by Clause 2.1 or a right of the Mortgagee under this Mortgage, and no act, course of conduct, acquiescence or failure to act (or to prevent the Owner from taking certain action) which is inconsistent with such a Security Interest or such a right shall preclude or estop the Mortgagee (either permanently or temporarily) from enforcing or exercising it; and

(d)this Mortgage shall be additional to, and shall not in any way impair or be impaired by:

(i)any other Security Interest whether in relation to property of the Owner or that of a third party; or

(ii)any other right of recourse as against the Owner or any third party,

which the Mortgagee now or subsequently has in respect of any of the Secured Liabilities.

2.5No obligations imposed on Mortgagee.  The Owner shall remain liable to perform all obligations connected with the Ship and the Mortgagee shall not, in any circumstances, have or incur any obligation of any kind in connection with the Ship.

2.6Negative pledge; disposal of assets.  The Owner shall not:

(a)sell the Ship;

(b)create any Security Interest not exclusively securing the Secured Liabilities over the Ship (other than Permitted Security Interests); or

(c)otherwise dispose of the Ship or any right relating to the Ship.

2.7Release of security.  At the end of the Security Period or at such earlier time as the Ship is sold and the Owner has complied with the provisions of the Loan Agreement, the Mortgagee shall, at the request and cost of the Owner, discharge this Mortgage.

3PAYMENT COVENANTS

3.1General.  The Owner shall comply with the following provisions of this Clause 3 at all times during the Security Period.

3.2Covenant to pay amounts due under Loan Agreement.  The Owner shall pay to the Lender all amounts from time to time due and payable to the Lender pursuant to clause 10 of the Loan Agreement.

3.3Covenant to pay expenses etc.  The Owner shall pay all such expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys as are stated in this Mortgage to be payable by the Owner to or recoverable from the Owner by the Mortgagee (or in respect of which the Owner agrees in this Mortgage to indemnify the Mortgagee) at the times and in the manner specified in this Mortgage.

3.4Covenant to pay default interest.  The Owner shall pay interest on any expenses, claims, liabilities, losses, costs, duties, fees, charges or other moneys referred to in Clause 3.3 from the date on which the relevant expense, claim, liability, loss, cost, duty,

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fee, charge or other money is paid or incurred by the Mortgagee (as well after as before judgment):

(a)at the rate described in clause 6.2 of the Loan Agreement;

(b)compounded in accordance with clause 6.6 of the Loan Agreement; and

(c)on demand.

3.5Covenant to pay other sums.  The Owner shall pay each and every other sum of money which may be or become owing to the Mortgagee under the Loan Agreement, this Mortgage and the other Finance Documents to which the Owner is or is to be a party at the times and in the manner specified in this Mortgage or in the other Finance Documents.

4REPRESENTATIONS AND WARRANTIES

4.1General.  The Owner represents and warrants to the Mortgagee as follows.

4.2Repetition of Loan Agreement representations and warranties.  The representations and warranties in clause 11 of the Loan Agreement remain true and not misleading as if repeated on the date of this Mortgage with reference to the circumstances now existing.

5COVENANTS

5.1General.  The Owner shall comply with the following provisions of this Clause 5 at all times during the Security Period except as the Mortgagee may otherwise permit in writing.

5.2Insurance and Ship covenants.  The Owner shall comply with the provisions of clauses 14 (insurance) and 15 (ship covenants) of the Loan Agreement, all of which are expressly incorporated in this Mortgage with any necessary modifications.

5.3Perfection of Mortgage.  The Owner shall:

(a)comply with and satisfy all the requirements and formalities established by the Republic of The Marshall Islands Maritime Act 1990 as amended and any other pertinent legislation of the Republic of The Marshall Islands to perfect this Mortgage as a legal, valid and enforceable first preferred mortgage and maritime lien upon the Ship; and

(b)promptly provide the Mortgagee from time to time with evidence in such form as the Mortgagee requires that the Owner is complying with Clause 5.3(a).

5.4Notice of Mortgage.  The Owner shall:

(a)carry on board the Ship with its papers a certified copy of this Mortgage and cause that certified copy of this Mortgage to be exhibited to any person having business with the Ship which might give rise to a lien or the Ship other than a lien for crew’s wages and salvage and to any representative of the Mortgagee on demand; and

(b)place and maintain in a conspicuous place in the navigation room and the Master’s cabin of the Ship a framed printed notice in plain type in English of such size that the paragraph of reading matter shall cover a space not less than 6 inches wide and 9 inches high reading as follows:

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“NOTICE OF MORTGAGE

This Vessel is covered by a First Preferred Mortgage to THE ROYAL BANK OF SCOTLAND plc under authority of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended. Under the terms of the said Mortgage neither the Owner nor any Charterer nor the Master of this Vessel nor any other person has any right, power or authority to create, incur or permit to be imposed upon this Vessel any lien whatsoever other than for crew’s wages and salvage.”

6PROTECTION OF SECURITY

6.1Mortgagee’s right to protect or maintain security.  The Mortgagee may take any action which it may think fit for the purpose of protecting or maintaining the security created by this Mortgage or for any similar or related purpose.

6.2Mortgagee’s right to insure, repair etc.  Without limiting the generality of Clause 6.1, if the Owner does not comply with Clause 5, the Mortgagee may:

(a)effect, replace and renew any Insurances;

(b)arrange for the carrying out of such surveys and/or repairs of the Ship as it deems expedient or necessary; and

(c)discharge any liabilities charged on the Ship, or otherwise relating to or affecting it, and/or take any measures which the Mortgagee may think expedient or necessary for the purpose of securing its release.

7ENFORCEABILITY AND MORTGAGEE’S POWERS

7.1Right to enforce security.  On the occurrence of an Event of Default but without the necessity for any court order in any jurisdiction to the effect that an Event of Default has occurred or that the security constituted by this Mortgage has become enforceable, and irrespective of whether a notice has been served under clause 18.2 of the Loan Agreement:

(a)the security constituted by this Mortgage shall immediately become enforceable;

(b)the Mortgagee shall be entitled at any time or times to exercise the powers set out in Clause 7.2 and in any other Finance Document;

(c)the Mortgagee shall be entitled at any time or times to exercise the powers possessed by it as mortgagee of the Ship conferred by the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship; and

(d)the Mortgagee shall be entitled to exercise all the rights and remedies in foreclosure and otherwise given to mortgagees by applicable law including the provisions of Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended.

7.2Right to take possession, sell etc.  On the occurrence of an Event of Default, the Mortgagee shall be entitled then or at any later time or times:

(a)to take possession of the Ship whether actually or constructively and/or otherwise to take control of the Ship wherever the Ship may be and cause the Owner or any other person in possession of the Ship forthwith upon demand to surrender the Ship to the Mortgagee without legal process and without the Mortgagee being liable for any losses thereby caused or to account to the Owner in connection therewith;

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(b)to sell the Ship or any share in the Ship with or without prior notice to the Owner, and with or without the benefit of any charterparty or other contract for its employment, by public auction or private contract at any time, at any place and upon any terms (including, without limitation, on terms that all or any part or parts of the purchase price be satisfied by shares, loan stock or other securities and/or be left outstanding as a debt, whether secured or unsecured and whether carrying interest or not) which the Mortgagee thinks fit, with power for the Mortgagee to purchase the Ship at any such public auction and to set off the purchase price against all or any part of the Secured Liabilities;

(c)to manage, insure, maintain and repair the Ship and to charter, employ, lay up or in any other manner whatsoever deal with the Ship in any manner, upon any terms and for any period which the Mortgagee may think fit, in all respects as if the Mortgagee were the owner of the Ship and without the Mortgagee being responsible for any loss thereby incurred;

(d)to collect, recover and give good discharge for any moneys or claims arising in relation to the Ship and to permit any brokers through whom collection or recovery is effected to charge the usual brokerage therefor;

(e)to take over or commence or defend (if necessary using the name of the Owner) any claims or proceedings relating to, or affecting, the Ship which the Mortgagee may think fit and to abandon, release or settle in any way any such claims or proceedings; and

(f)generally, to enter into any transaction or arrangement of any kind and to do anything in relation to the Ship which the Mortgagee may think fit.

7.3No liability of Mortgagee.  The Mortgagee shall not be obliged to check the nature or sufficiency of any payment received by it under this Mortgage or to preserve, exercise or enforce any right relating to the Ship.

8APPLICATION OF MONEYS

8.1General.  All sums received by the Mortgagee:

(a)in respect of sale of the Ship or any share in the Ship;

(b)in respect of net profits arising out of the employment of the Ship pursuant to Clause 7.2(c); or

(c)in respect of any other transaction or arrangement under Clauses 7.1 or 7.2,

shall be held by the Mortgagee upon trust in the first place to pay or discharge any expenses or liabilities (including any interest) which have been paid or incurred by the Mortgagee in or in connection with the exercise of its powers and to apply the balance in accordance with clause 21 of the Loan Agreement.

9FURTHER ASSURANCES

9.1Owner’s obligation to execute further documents etc.  The Owner shall:

(a)execute and deliver to the Mortgagee (or as it may direct) any assignment, mortgage, power of attorney, proxy or other document, governed by the law of England or such other country as the Mortgagee may, in any particular case, specify; and

(b)effect any registration or notarisation, give any notice or take any other step,

which the Mortgagee may, by notice to the Owner, specify for any of the purposes described in Clause 9.2 or for any similar or related purpose.

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9.2Purposes of further assurances.  The purposes referred to in Clause 9.1 are:

(a)validly and effectively to create any Security Interest or right of any kind which the Mortgagee intended should be created by or pursuant to this Mortgage or any other Finance Document;

(b)to protect the priority, or increase the effectiveness, in any jurisdiction of any Security Interest which is created, or which the Mortgagee intended should be created, by or pursuant to this Mortgage or any other Finance Document;

(c)to enable or assist the Mortgagee to sell or otherwise deal with the Ship, to transfer title to, or grant any interest or right relating to, the Ship or to exercise any power which is referred to in Clauses 7.1 or 7.2 or which is conferred by any Finance Document; or

(d)to enable or assist the Mortgagee to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to the Ship in any country or under the law of any country.

9.3Terms of further assurances.  The Mortgagee may specify the terms of any document to be executed by the Owner under Clause 9.1, and those terms may include any covenants, undertakings, powers and provisions which the Mortgagee considers appropriate to protect its interests.

9.4Obligation to comply with notice.  The Owner shall comply with a notice under Clause 9.1 by the date specified in the notice.

9.5Additional corporate action.  At the same time as the Owner delivers to the Mortgagee any document executed under Clause 9.1(a), the Owner shall also deliver to the Mortgagee a certificate signed by 2 of the Owner’s officers which shall:

(a)set out the text of a resolution of the Owner’s directors specifically authorising the execution of the document specified by the Mortgagee; and

(b)state that either the resolution was duly passed at a meeting of the directors validly convened and held throughout which a quorum of directors entitled to vote on the resolution was present or that the resolution has been signed by all the directors and is valid under the Owner’s articles of incorporation or other constitutional documents.

10POWER OF ATTORNEY

10.1Appointment.  For the purpose of securing the Mortgagee’s interest in the Ship and the due and punctual performance the Owner’s obligations to the Mortgagee under this Mortgage and every other Finance Document to which the Owner is or is to be a party, the Owner irrevocably and by way of security appoints the Mortgagee its attorney, on behalf of the Owner and in its name or otherwise, to execute or sign any document and do any act or thing which the Owner is obliged to do under any Finance Document.

10.2Ratification of actions of attorney.  For the avoidance of doubt and without limiting the generality of Clause 10.1, the Owner confirms that Clause 10.1 authorises the Mortgagee to execute on its behalf a document ratifying any transaction or action which the Mortgagee has purported to enter into or to take and which the Mortgagee considers was or might have been outside its powers or otherwise invalid.

10.3Delegation.  The Mortgagee may sub-delegate to any person or persons all or any of the powers (including the discretions) conferred on the Mortgagee by Clauses 10.1 and/or 10.2, and may do so on terms authorising successive sub-delegations.

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11INCORPORATION OF LOAN AGREEMENT PROVISIONS

11.1Incorporation of specific provisions.  The following provisions of the Loan Agreement apply to this Mortgage as if they were expressly incorporated in this Mortgage with any necessary modifications:

clause 24, no set-off or tax deduction;

clause 29, variations and waivers;

clause 30, notices; and

clause 31, supplemental.

11.2Incorporation of general provisions.  Clause 11.1 is without prejudice to the application to this Mortgage of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents generally or this Mortgage specifically.

12TOTAL AMOUNT, ETC.

12.1Total amount.  For the purpose of recording this Mortgage as required by Chapter 3 of the Republic of The Marshall Islands Maritime Act 1990 as amended, the total amount of the direct and contingent obligations secured by this Mortgage is Two hundred and ten million Dollars $210,000,000 together with interest, fees, commissions and performance of mortgage covenants.  The date of maturity of this Mortgage is on demand and there is no separate discharge amount.

13SUPPLEMENTAL

13.1No restriction on other rights.  Nothing in this Mortgage shall be taken to exclude or restrict any power, right or remedy which the Mortgagee may at any time have under:

(a)any other Finance Document; or

(b)the law of any country or territory the courts of which have or claim any jurisdiction in respect of the Owner or the Ship.

13.2Exercise of other rights.  The Mortgagee may exercise any right under this Mortgage before it has exercised any right referred to in Clause 13.1(a) or (b).

13.3Settlement or discharge conditional.  Any settlement or discharge under this Mortgage between the Mortgagee and the Owner shall be conditional upon no security or payment to the Mortgagee by the Owner or any other person being set aside, adjusted or ordered to be repaid, whether under any insolvency law or otherwise.

14LAW AND JURISDICTION

14.1Marshall Islands law.  This Mortgage shall be governed by, and construed in accordance with, Marshall Islands law.

14.2Choice of forum.  The Mortgagee reserves the rights:

(a)to commence proceedings in relation to any matter which arises out of or in connection with this Mortgage in the courts of any country which have or claim jurisdiction to that matter; and

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(b)to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in the Marshall Islands or without commencing proceedings in the Marshall Islands.

14.3Action against Ship.  The rights referred to in Clause 14.2 include the right of the Mortgagee to arrest and take action against the Ship at whatever place the Ship shall be found lying and for the purpose of any action which the Mortgagee may bring before the courts of that jurisdiction or other judicial authority and for the purpose of any action which the Mortgagee may bring against the Ship, any writ, notice, judgment or other legal process or documents may (without prejudice to any other method of service under applicable law) be served upon the Master of the Ship (or upon anyone acting as the Master) and such service shall be deemed good service on the Owner for all purposes.

14.4Mortgagee’s rights unaffected.  Nothing in this Clause 14 shall exclude or limit any right which the Mortgagee may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.

14.5Meaning of “proceedings”.  In this Clause 14, “proceedings” means proceedings of any kind, including an application for a provisional or protective measure.

IN WITNESS whereof the Owner has caused this Mortgage to be executed by its duly authorised Attorney-in-Fact the day and year first before written.

KTL MAYFAIR, INC.
By	/s/ Michael Thorne

9

ACKNOWLEDGEMENT OF MORTGAGE

STATE OF NEW YORK	)
	)  S.S.
COUNTY OF NEW YORK)	)

On this 18th day of March 2004 before me personally appeared Michael Thorne to me known who being by me duly sworn did depose and say that he resides at One University Place, New York, New York 10003 that he is an attorney-in-fact for KTL MAYFAIR, INC. the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the Board of Directors of said Corporation.

/s/ Sonia D. Odom

Notary Public

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EX-4.41.1

Exhibit 4.41.1

Date 29 March 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

KNIGHTSBRIDGE TANKERS LIMITED

as “Chargor”

DEED OF RELEASE

relating to a Floating Charge dated 12 February 1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE
3	FURTHER ASSURANCE
4	COUNTERPARTS
5	GOVERNING LAW
6	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on 29 March 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)KNIGHTSBRIDGE TANKERS LIMITED, a company incorporated in Bermuda whose registered office is at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM08, Bermuda (the “Chargor”).

WHEREAS:

(A)Pursuant to the Floating Charge, the Chargor charged in favour of the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all of the assets of the Chargor not otherwise charged to the Agent under any other Security Document, save for the Chargor’s right, title and interest in the Excluded Account.

(B)The Agent has agreed to release the security created by the Floating Charge.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Floating Charge” means the floating charge dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Floating Charge shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Floating Charge apply, with any necessary modifications, to this Deed.

2RELEASE

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Floating Charge and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

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4COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

5GOVERNING LAW

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

6EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED
by KNIGHTSBRIDGE TANKERS LIMITED		)	/s/ Nicholas Sherriff
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

4

EX-4.41.2

Exhibit 4.41.2

Date 15 March 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

INWOOD TANKERS LDC

as “Chargor”

DEED OF RELEASE

relating to a Floating Charge dated 12 February 1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE
3	FURTHER ASSURANCE
4	COUNTERPARTS
5	GOVERNING LAW
6	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on 15 March 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)INWOOD TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Chargor”).

WHEREAS:

(A)Pursuant to the Floating Charge, the Chargor charged in favour of the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all of the assets of the Chargor not otherwise charged to the Agent under any other Security Document, save for the Chargor’s right, title and interest in (i) the Suspense Account; (ii) the assets comprised in or supporting the Lease Senior Security, including, without limitation, the Account; (iii) the assets comprised in the Permitted Funds; and (iv) the Direct Support Agreement to which the Chargor is a party.

(B)The Agent has agreed to release the security created by the Floating Charge.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Floating Charge” means the floating charge dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Floating Charge shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Floating Charge apply, with any necessary modifications, to this Deed.

2RELEASE

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Floating Charge and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of

3

release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

4COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

5GOVERNING LAW

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

6EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Martin Bennett
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by INWOOD TANKERS LDC		)
acting by  Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

4

EX-4.41.3

Exhibit 4.41.3

Date 5 March 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

LAWRENCE TANKERS LDC

as “Chargor”

DEED OF RELEASE

relating to a Floating Charge dated 12 February 1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE
3	FURTHER ASSURANCE
4	COUNTERPARTS
5	GOVERNING LAW
6	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on 5 March 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)LAWRENCE TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Chargor”).

WHEREAS:

(A)Pursuant to the Floating Charge, the Chargor charged in favour of the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all of the assets of the Chargor not otherwise charged to the Agent under any other Security Document, save for the Chargor’s right, title and interest in (i) the Suspense Account; (ii) the assets comprised in or supporting the Lease Senior Security, including, without limitation, the Account; (iii) the assets comprised in the Permitted Funds; and (iv) the Direct Support Agreement to which the Chargor is a party.

(B)The Agent has agreed to release the security created by the Floating Charge.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Floating Charge” means the floating charge dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Floating Charge shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Floating Charge apply, with any necessary modifications, to this Deed.

2RELEASE

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Floating Charge and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of

3

release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

4COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

5GOVERNING LAW

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

6EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Daniel Perrott
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by LAWRENCE TANKERS LDC		)
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Kavita Shah

4

EX-4.41.4

Exhibit 4.41.4

Date 11 March 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

HEWLETT TANKERS LDC

as “Chargor”

DEED OF RELEASE

relating to a Floating Charge dated 12 February 1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE
3	FURTHER ASSURANCE
4	COUNTERPARTS
5	GOVERNING LAW
6	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on 11 March 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)HEWLETT TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Chargor”).

WHEREAS:

(A)Pursuant to the Floating Charge, the Chargor charged in favour of the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all of the assets of the Chargor not otherwise charged to the Agent under any other Security Document, save for the Chargor’s right, title and interest in (i) the Suspense Account; (ii) the assets comprised in or supporting the Lease Senior Security, including, without limitation, the Account; (iii) the assets comprised in the Permitted Funds; and (iv) the Direct Support Agreement to which the Chargor is a party.

(B)The Agent has agreed to release the security created by the Floating Charge.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Floating Charge” means the floating charge dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Floating Charge shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Floating Charge apply, with any necessary modifications, to this Deed.

2RELEASE

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Floating Charge and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of

3

release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

4COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

5GOVERNING LAW

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

6EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Charmaine Rumbelow	)
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by HEWLETT TANKERS LDC		)
acting by		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

4

EX-4.41.5

Exhibit 4.41.5

Date 29 March 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

WOODMERE TANKERS LDC

as “Chargor”

DEED OF RELEASE

relating to a Floating Charge dated 12 February 1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE
3	FURTHER ASSURANCE
4	COUNTERPARTS
5	GOVERNING LAW
6	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on 29 March 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)WOODMERE TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Chargor”).

WHEREAS:

(A)Pursuant to the Floating Charge, the Chargor charged in favour of the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all of the assets of the Chargor not otherwise charged to the Agent under any other Security Document, save for the Chargor’s right, title and interest in (i) the Suspense Account; (ii) the assets comprised in or supporting the Lease Senior Security, including, without limitation, the Account; (iii) the assets comprised in the Permitted Funds; and (iv) the Direct Support Agreement to which the Chargor is a party.

(B)The Agent has agreed to release the security created by the Floating Charge.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Floating Charge” means the floating charge dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Floating Charge shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Floating Charge apply, with any necessary modifications, to this Deed.

2RELEASE

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Floating Charge and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of

3

release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

4COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

5GOVERNING LAW

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

6EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by WOODMERE TANKERS LDC		)
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

4

EX-4.41.6

Exhibit 4.41.6

Date 18 March 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

CEDARHURST TANKERS LDC

as “Chargor”

DEED OF RELEASE

relating to a Floating Charge dated 12 February 1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE
3	FURTHER ASSURANCE
4	COUNTERPARTS
5	GOVERNING LAW
6	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on 18 March 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)CEDARHURST TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Chargor”).

WHEREAS:

(A)Pursuant to the Floating Charge, the Chargor charged in favour of the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all of the assets of the Chargor not otherwise charged to the Agent under any other Security Document, save for the Chargor’s right, title and interest in (i) the Suspense Account; (ii) the assets comprised in or supporting the Lease Senior Security, including, without limitation, the Account; (iii) the assets comprised in the Permitted Funds; and (iv) the Direct Support Agreement to which the Chargor is a party.

(B)The Agent has agreed to release the security created by the Floating Charge.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Floating Charge” means the floating charge dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Floating Charge shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Floating Charge apply, with any necessary modifications, to this Deed.

2RELEASE

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Floating Charge and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of

3

release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

4COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

5GOVERNING LAW

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

6EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED			)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC			)
acting by Robert J. Manners			)
its duly authorised attorney in the presence of:			)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by CEDARHURST TANKERS LDC			)
acting by Nicholas Sherriff			)
its duly authorised attorney in the presence of:			)
Signature of Witness:		/s/ illegible

4

EX-4.42.1

Exhibit 4.42.1

Date March 15, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

INWOOD TANKERS LDC

as “Assignor”

DEED OF RELEASE AND REASSIGNMENT

relating to a Guarantor Assignment dated 12 February
1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE AND REASSIGNMENT
3	NOTICE OF RELEASE AND REASSIGNMENT
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS
SCHEDULE

2

THIS DEED OF RELEASE AND REASSIGNMENT is made on March 15, 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)INWOOD TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Assignor”).

WHEREAS:

(A)Pursuant to the Guarantor Assignment, the Assignor assigned to the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities (i) all the Assigned Rights, the Assigned Contracts and the Assigned Accounts and (ii) with effect from the end of the Charter Period, all its rights, title and interest in or to each Post-Delivery Charter, the Earnings, the Insurances, Requisition Compensation and all moneys payable in respect of a Total Loss, on the terms therein.

(B)The Agent has agreed to release the security created by the Guarantor Assignment and to reassign all rights, title and interest in and to the Assigned Rights, the Assigned Contracts and the Assigned Accounts to the Assignor.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between Knightsbridge Tankers Limited as borrower, the Subsidiaries of the Borrower as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Guarantor Assignment” means the guarantor assignment dated 12 February 1997 made between the Assignor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Guarantor Assignment shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Guarantor Assignment apply, with any necessary modifications, to this Deed.

2RELEASE AND REASSIGNMENT

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally:

(a)releases the security created by the Guarantor Assignment over the Assigned Rights, the Assigned Contracts and the Assigned Accounts; and

(b)reassigns absolutely to the Assignor without recourse or warranty all such rights, title and interest in and to any part of the Assigned Rights, the Assigned Contracts and the Assigned Accounts which have been assigned to the Agent pursuant to the Guarantor Assignment.

3NOTICE OF RELEASE AND REASSIGNMENT

3.1Following the execution of this Deed, the Agent undertakes to send to each Contract Counterparty (other than the Lessor) in respect of an Assigned Contract listed in Schedule 1 of the Guarantor Assignment and to the Account Bank, a notice of the release of security and reassignment to the Assignor of the Assigned Rights, the Assigned Contracts and the Assigned Accounts created by this Deed substantially in the form set out in the Schedule to this Deed.

4FURTHER ASSURANCE

The Agent covenants with the Assignor that, upon the Assignor’s written request and at the sole cost of the Assignor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security and the reassignment of the Assigned Rights, the Assigned Contracts and the Assigned Accounts contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Martin Bennett
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by INWOOD TANKERS LDC		)
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

2

SCHEDULE

Form of notice of release and reassignment

To whom it may concern

Dear Sirs

Guarantor Assignment (the “Assignment”) dated 12 February 1997 made between Inwood Tankers LDC (the “Assignor”) and Goldman Sachs International (“Goldman”) for itself and as agent and trustee for the Finance Parties, as the agency role was transferred from Goldman to The Royal Bank of Scotland plc (the “Agent”)

The Agent hereby notifies you that by a deed of release and reassignment dated March 15, 2004 the Agent has:

1released the security created by the Assignment; and

2reassigned to the Assignor such rights, title and interest in the Assigned Rights, the Assigned Contracts and the Assigned Accounts as were assigned to the Agent pursuant to the Assignment.

Capitalised terms not defined here shall have the meaning given to those terms in the Assignment.  This notice shall be governed by English law.

Yours faithfully

for and on behalf of

The Royal Bank of Scotland plc

3

EX-4.42.2

Exhibit 4.42.2

Date March 5, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

LAWRENCE TANKERS LDC

as “Assignor”

DEED OF RELEASE AND REASSIGNMENT

relating to a Guarantor Assignment dated 12 February
1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE AND REASSIGNMENT
3	NOTICE OF RELEASE AND REASSIGNMENT
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS
SCHEDULE

2

THIS DEED OF RELEASE AND REASSIGNMENT is made on March 5, 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)LAWRENCE TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Assignor”).

WHEREAS:

(A)Pursuant to the Guarantor Assignment, the Assignor assigned to the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities (i) all the Assigned Rights, the Assigned Contracts and the Assigned Accounts and (ii) with effect from the end of the Charter Period, all its rights, title and interest in or to each Post-Delivery Charter, the Earnings, the Insurances, Requisition Compensation and all moneys payable in respect of a Total Loss, on the terms therein.

(B)The Agent has agreed to release the security created by the Guarantor Assignment and to reassign all rights, title and interest in and to the Assigned Rights, the Assigned Contracts and the Assigned Accounts to the Assignor.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between Knightsbridge Tankers Limited as borrower, the Subsidiaries of the Borrower as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Guarantor Assignment” means the guarantor assignment dated 12 February 1997 made between the Assignor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Guarantor Assignment shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Guarantor Assignment apply, with any necessary modifications, to this Deed.

2RELEASE AND REASSIGNMENT

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally:

(a)releases the security created by the Guarantor Assignment over the Assigned Rights, the Assigned Contracts and the Assigned Accounts; and

(b)reassigns absolutely to the Assignor without recourse or warranty all such rights, title and interest in and to any part of the Assigned Rights, the Assigned Contracts and the Assigned Accounts which have been assigned to the Agent pursuant to the Guarantor Assignment.

3NOTICE OF RELEASE AND REASSIGNMENT

3.1Following the execution of this Deed, the Agent undertakes to send to each Contract Counterparty (other than the Lessor) in respect of an Assigned Contract listed in Schedule 1 of the Guarantor Assignment and to the Account Bank, a notice of the release of security and reassignment to the Assignor of the Assigned Rights, the Assigned Contracts and the Assigned Accounts created by this Deed substantially in the form set out in the Schedule to this Deed.

4FURTHER ASSURANCE

The Agent covenants with the Assignor that, upon the Assignor’s written request and at the sole cost of the Assignor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security and the reassignment of the Assigned Rights, the Assigned Contracts and the Assigned Accounts contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Daniel Perrott
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by LAWRENCE TANKERS LDC		)
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Kavita Shah

2

SCHEDULE

Form of notice of release and reassignment

To whom it may concern

Dear Sirs

Guarantor Assignment (the “Assignment”) dated 12 February 1997 made between Lawrence Tankers LDC (the “Assignor”) and Goldman Sachs International (“Goldman”) for itself and as agent and trustee for the Finance Parties, as the agency role was transferred from Goldman to The Royal Bank of Scotland plc (the “Agent”)

The Agent hereby notifies you that by a deed of release and reassignment dated March 5, 2004 the Agent has:

1released the security created by the Assignment; and

2reassigned to the Assignor such rights, title and interest in the Assigned Rights, the Assigned Contracts and the Assigned Accounts as were assigned to the Agent pursuant to the Assignment.

Capitalised terms not defined here shall have the meaning given to those terms in the Assignment.  This notice shall be governed by English law.

Yours faithfully

for and on behalf of

The Royal Bank of Scotland plc

3

EX-4.42.3

Exhibit 4.42.3

Date March 11, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

HEWLETT TANKERS LDC

as “Assignor”

DEED OF RELEASE AND REASSIGNMENT
relating to a Guarantor Assignment dated 12 February
1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE AND REASSIGNMENT
3	NOTICE OF RELEASE AND REASSIGNMENT
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS
SCHEDULE

2

THIS DEED OF RELEASE AND REASSIGNMENT is made on March 11, 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)HEWLETT TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Assignor”).

WHEREAS:

(A)Pursuant to the Guarantor Assignment, the Assignor assigned to the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities (i) all the Assigned Rights, the Assigned Contracts and the Assigned Accounts and (ii) with effect from the end of the Charter Period, all its rights, title and interest in or to each Post-Delivery Charter, the Earnings, the Insurances, Requisition Compensation and all moneys payable in respect of a Total Loss, on the terms therein.

(B)The Agent has agreed to release the security created by the Guarantor Assignment and to reassign all rights, title and interest in and to the Assigned Rights, the Assigned Contracts and the Assigned Accounts to the Assignor.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between Knightsbridge Tankers Limited as borrower, the Subsidiaries of the Borrower as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Guarantor Assignment” means the guarantor assignment dated 12 February 1997 made between the Assignor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Guarantor Assignment shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Guarantor Assignment apply, with any necessary modifications, to this Deed.

2RELEASE AND REASSIGNMENT

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally:

(a)releases the security created by the Guarantor Assignment over the Assigned Rights, the Assigned Contracts and the Assigned Accounts; and

(b)reassigns absolutely to the Assignor without recourse or warranty all such rights, title and interest in and to any part of the Assigned Rights, the Assigned Contracts and the Assigned Accounts which have been assigned to the Agent pursuant to the Guarantor Assignment.

3NOTICE OF RELEASE AND REASSIGNMENT

3.1Following the execution of this Deed, the Agent undertakes to send to each Contract Counterparty (other than the Lessor) in respect of an Assigned Contract listed in Schedule 1 of the Guarantor Assignment and to the Account Bank, a notice of the release of security and reassignment to the Assignor of the Assigned Rights, the Assigned Contracts and the Assigned Accounts created by this Deed substantially in the form set out in the Schedule to this Deed.

4FURTHER ASSURANCE

The Agent covenants with the Assignor that, upon the Assignor’s written request and at the sole cost of the Assignor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security and the reassignment of the Assigned Rights, the Assigned Contracts and the Assigned Accounts contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by HEWLETT TANKERS LDC		)
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

2

SCHEDULE

Form of notice of release and reassignment

To whom it may concern

Dear Sirs

Guarantor Assignment (the “Assignment”) dated 12 February 1997 made between Hewlett Tankers LDC (the “Assignor”) and Goldman Sachs International (“Goldman”) for itself and as agent and trustee for the Finance Parties, as the agency role was transferred from Goldman to The Royal Bank of Scotland plc (the “Agent”)

The Agent hereby notifies you that by a deed of release and reassignment dated March 11, 2004 the Agent has:

1released the security created by the Assignment; and

2reassigned to the Assignor such rights, title and interest in the Assigned Rights, the Assigned Contracts and the Assigned Accounts as were assigned to the Agent pursuant to the Assignment.

Capitalised terms not defined here shall have the meaning given to those terms in the Assignment.  This notice shall be governed by English law.

Yours faithfully

for and on behalf of
The Royal Bank of Scotland plc

3

EX-4.42.4

Exhibit 4.42.4

Date March 29, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

WOODMERE TANKERS LDC

as “Assignor”

DEED OF RELEASE AND REASSIGNMENT

relating to a Guarantor Assignment dated 12 February

1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE AND REASSIGNMENT
3	NOTICE OF RELEASE AND REASSIGNMENT
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS
SCHEDULE

2

THIS DEED OF RELEASE AND REASSIGNMENT is made on March 29, 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)WOODMERE TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Assignor”).

WHEREAS:

(A)Pursuant to the Guarantor Assignment, the Assignor assigned to the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities (i) all the Assigned Rights, the Assigned Contracts and the Assigned Accounts and (ii) with effect from the end of the Charter Period, all its rights, title and interest in or to each Post-Delivery Charter, the Earnings, the Insurances, Requisition Compensation and all moneys payable in respect of a Total Loss, on the terms therein.

(B)The Agent has agreed to release the security created by the Guarantor Assignment and to reassign all rights, title and interest in and to the Assigned Rights, the Assigned Contracts and the Assigned Accounts to the Assignor.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between Knightsbridge Tankers Limited as borrower, the Subsidiaries of the Borrower as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Guarantor Assignment” means the guarantor assignment dated 12 February 1997 made between the Assignor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Guarantor Assignment shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Guarantor Assignment apply, with any necessary modifications, to this Deed.

2RELEASE AND REASSIGNMENT

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally:

(a)releases the security created by the Guarantor Assignment over the Assigned Rights, the Assigned Contracts and the Assigned Accounts; and

(b)reassigns absolutely to the Assignor without recourse or warranty all such rights, title and interest in and to any part of the Assigned Rights, the Assigned Contracts and the Assigned Accounts which have been assigned to the Agent pursuant to the Guarantor Assignment.

3NOTICE OF RELEASE AND REASSIGNMENT

3.1Following the execution of this Deed, the Agent undertakes to send to each Contract Counterparty (other than the Lessor) in respect of an Assigned Contract listed in Schedule 1 of the Guarantor Assignment and to the Account Bank, a notice of the release of security and reassignment to the Assignor of the Assigned Rights, the Assigned Contracts and the Assigned Accounts created by this Deed substantially in the form set out in the Schedule to this Deed.

4FURTHER ASSURANCE

The Agent covenants with the Assignor that, upon the Assignor’s written request and at the sole cost of the Assignor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security and the reassignment of the Assigned Rights, the Assigned Contracts and the Assigned Accounts contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED		)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC		)
acting by Robert J. Manners		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED		)	/s/ Nicholas Sherriff
by WOODMERE TANKERS LDC		)
acting by Nicholas Sherriff		)
its duly authorised attorney in the presence of:		)
Signature of Witness:	/s/ illegible

2

SCHEDULE

Form of notice of release and reassignment

To whom it may concern

Dear Sirs

Guarantor Assignment (the “Assignment”) dated 12 February 1997 made between Woodmere Tankers LDC (the “Assignor”) and Goldman Sachs International (“Goldman”) for itself and as agent and trustee for the Finance Parties, as the agency role was transferred from Goldman to The Royal Bank of Scotland plc (the “Agent”)

The Agent hereby notifies you that by a deed of release and reassignment dated March 29, 2004 the Agent has:

1released the security created by the Assignment; and

2reassigned to the Assignor such rights, title and interest in the Assigned Rights, the Assigned Contracts and the Assigned Accounts as were assigned to the Agent pursuant to the Assignment.

Capitalised terms not defined here shall have the meaning given to those terms in the Assignment.  This notice shall be governed by English law.

Yours faithfully

for and on behalf of
The Royal Bank of Scotland plc

3

EX-4.42.5

Exhibit 4.42.5

Date March 18, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

CEDARHURST TANKERS LDC

as “Assignor”

DEED OF RELEASE AND REASSIGNMENT

relating to a Guarantor Assignment dated 12 February

1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE AND REASSIGNMENT
3	NOTICE OF RELEASE AND REASSIGNMENT
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS
SCHEDULE

2

THIS DEED OF RELEASE AND REASSIGNMENT is made on March 18, 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)CEDARHURST TANKERS LDC, a company incorporated in the Cayman Islands whose registered office is at 3rd Floor, CIBC Financial Centre, PO Box 1234, George Town, Grand Cayman Island (the “Assignor”).

WHEREAS:

(A)Pursuant to the Guarantor Assignment, the Assignor assigned to the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities (i) all the Assigned Rights, the Assigned Contracts and the Assigned Accounts and (ii) with effect from the end of the Charter Period, all its rights, title and interest in or to each Post-Delivery Charter, the Earnings, the Insurances, Requisition Compensation and all moneys payable in respect of a Total Loss, on the terms therein.

(B)The Agent has agreed to release the security created by the Guarantor Assignment and to reassign all rights, title and interest in and to the Assigned Rights, the Assigned Contracts and the Assigned Accounts to the Assignor.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between Knightsbridge Tankers Limited as borrower, the Subsidiaries of the Borrower as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Guarantor Assignment” means the guarantor assignment dated 12 February 1997 made between the Assignor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Guarantor Assignment shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Guarantor Assignment apply, with any necessary modifications, to this Deed.

2RELEASE AND REASSIGNMENT

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally:

(a)releases the security created by the Guarantor Assignment over the Assigned Rights, the Assigned Contracts and the Assigned Accounts; and

(b)reassigns absolutely to the Assignor without recourse or warranty all such rights, title and interest in and to any part of the Assigned Rights, the Assigned Contracts and the Assigned Accounts which have been assigned to the Agent pursuant to the Guarantor Assignment.

3NOTICE OF RELEASE AND REASSIGNMENT

3.1Following the execution of this Deed, the Agent undertakes to send to each Contract Counterparty (other than the Lessor) in respect of an Assigned Contract listed in Schedule 1 of the Guarantor Assignment and to the Account Bank, a notice of the release of security and reassignment to the Assignor of the Assigned Rights, the Assigned Contracts and the Assigned Accounts created by this Deed substantially in the form set out in the Schedule to this Deed.

4FURTHER ASSURANCE

The Agent covenants with the Assignor that, upon the Assignor’s written request and at the sole cost of the Assignor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security and the reassignment of the Assigned Rights, the Assigned Contracts and the Assigned Accounts contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED			)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC			)
acting by Robert J. Manners			)
its duly authorised attorney in the presence of:			)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by CEDARHURST TANKERS LDC			)
acting by Nicholas Sherriff			)
its duly authorised attorney in the presence of:			)
Signature of Witness:		/s/ illegible

2

SCHEDULE

Form of notice of release and reassignment

To whom it may concern

Dear Sirs

Guarantor Assignment (the “Assignment”) dated 12 February 1997 made between Cedarhurst Tankers LDC (the “Assignor”) and Goldman Sachs International (“Goldman”) for itself and as agent and trustee for the Finance Parties, as the agency role was transferred from Goldman to The Royal Bank of Scotland plc (the “Agent”)

The Agent hereby notifies you that by a deed of release and reassignment dated [•] 2004 the Agent has:

1released the security created by the Assignment; and

2reassigned to the Assignor such rights, title and interest in the Assigned Rights, the Assigned Contracts and the Assigned Accounts as were assigned to the Agent pursuant to the Assignment.

Capitalised terms not defined here shall have the meaning given to those terms in the Assignment.  This notice shall be governed by English law.

Yours faithfully

for and on behalf of

The Royal Bank of Scotland plc

3

EX-4.42.6

Exhibit 4.42.6

Date March 29, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

KNIGHTSBRIDGE TANKERS LIMITED

as “Assignor”

DEED OF RELEASE AND REASSIGNMENT

relating to a Borrower Assignment dated 12 February

1997

INDEX

Clause
1	DEFINITIONS AND INTERPRETATION
2	RELEASE AND REASSIGNMENT
3	NOTICE OF RELEASE AND REASSIGNMENT
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS
SCHEDULE

2

THIS DEED OF RELEASE AND REASSIGNMENT is made on March 29, 2004

BETWEEN:

(1)THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)KNIGHTSBRIDGE TANKERS LIMITED, a company incorporated in Bermuda whose registered office is at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM08, Bermuda (the “Assignor”).

WHEREAS:

(A)Pursuant to the Borrower Assignment, the Assignor assigned to the Agent as agent and trustee for itself and on behalf of the other Finance Parties as security for the Secured Liabilities all the Assigned Rights, the Assigned Contracts and the Assigned Accounts on the terms therein.

(B)The Agent has agreed to release the security created by the Borrower Assignment and to reassign all rights, title and interest in and to the Assigned Rights, the Assigned Contracts and the Assigned Accounts to the Assignor.

1DEFINITIONS AND INTERPRETATION

1.1In this Deed the following definitions apply:

“Borrower Assignment” means the borrower assignment dated 12 February 1997 made between the Assignor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent; and

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Assignor as borrower, the Subsidiaries of the Assignor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent.

1.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Borrower Assignment shall have the same meanings in this Deed (including in the Recitals hereto).

1.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Borrower Assignment apply, with any necessary modifications, to this Deed.

2RELEASE AND REASSIGNMENT

2.1With effect from the date of this Deed, the Agent irrevocably and unconditionally:

(a)releases the security created by the Borrower Assignment over the Assigned Rights, the Assigned Contracts and the Assigned Accounts; and

(b)reassigns absolutely to the Assignor without recourse or warranty all such rights, title and interest in and to any part of the Assigned Rights, the Assigned Contracts and the Assigned Accounts which have been assigned to the Agent pursuant to the Borrower Assignment.

3NOTICE OF RELEASE AND REASSIGNMENT

3.1Following the execution of this Deed, the Agent undertakes to send to each Contract Counterparty in respect of an Assigned Contract listed in Schedule 1 of the Borrower Assignment and to the Account Bank a notice of the release of security and reassignment to the Assignor of the Assigned Rights, the Assigned Contracts and the Assigned Accounts created by this Deed substantially in the form set out in the Schedule to this Deed.

4FURTHER ASSURANCE

The Agent covenants with the Assignor that, upon the Assignor’s written request and at the sole cost of the Assignor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security and the reassignment of the Assigned Rights, the Assigned Contracts and the Assigned Accounts contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED			)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC			)
acting by Robert J. Manners			)
its duly authorised attorney in the presence of:			)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by KNIGHTSBRIDGE TANKERS LIMITED			)
acting by Nicholas Sherriff			)
its duly authorised attorney in the presence of:			)
Signature of Witness:		/s/ illegible

2

SCHEDULE

Form of notice of release and reassignment

To whom it may concern

Dear Sirs

Borrower Assignment (the “Assignment”) dated 12 February 1997 made between Knightsbridge Tankers Limited (the “Assignor”) and Goldman Sachs International (“Goldman”) for itself and as agent and trustee for the Finance Parties, as the agency role was transferred from Goldman to The Royal Bank of Scotland plc (the “Agent”)

The Agent hereby notifies you that by a deed of release and reassignment dated March 29, 2004 the Agent has:

1released the security created by the Assignment; and

2reassigned to the Assignor such rights, title and interest in the Assigned Rights, the Assigned Contracts and the Assigned Accounts as were assigned to the Agent pursuant to the Assignment.

Capitalised terms not defined here shall have the meaning given to those terms in the Assignment.  This notice shall be governed by English law.

Yours faithfully

for and on behalf of

The Royal Bank of Scotland plc

3

EX-4.43

Exhibit 4.43

Date March 29, 2004

THE ROYAL BANK OF SCOTLAND PLC

as “Agent”

- and -

KNIGHTSBRIDGE TANKERS LIMITED

as “Chargor”

DEED OF RELEASE

relating to a Mortgage of Shares dated 12 February

1997

INDEX

Clause
2	DEFINITIONS AND INTERPRETATION
3	RELEASE
4	FURTHER ASSURANCE
5	COUNTERPARTS
6	GOVERNING LAW
7	EXCLUSION OF THIRD PARTY RIGHTS

2

THIS DEED OF RELEASE is made on March 29, 2004

BETWEEN:

(1)           THE ROYAL BANK OF SCOTLAND PLC, registered in Scotland under number SC090312 whose registered office is at 36 St. Andrew Square, Edinburgh EH2 2YB (as successor to Goldman Sachs International (“Goldman”) as agent and trustee for the Finance Parties (as defined in the Facility Agreement as defined below)) (the “Agent”) and

(2)           KNIGHTSBRIDGE TANKERS LIMITED, a company incorporated in Bermuda whose registered office is at Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton HM08, Bermuda (the “Chargor”).

WHEREAS:

(A)          Pursuant to the Mortgage of Shares, the Chargor, as security for the Secured Liabilities:

(i)mortgaged and charged the Shares to the Agent, by way of a first legal mortgage; and

(ii)(subject to Clause 6 of the Mortgage of Shares) mortgaged and agreed to mortgage and charge to the Agent by way of a first legal mortgage (a) all dividends paid or payable after the date of the Mortgage of Shares on all or any of the shares, (b) all stocks, shares, securities, rights, moneys or property accruing or offered at any time (whether by way of redemption, bonus, preference, option rights or otherwise) to or in respect of any of the Shares or in substitution or exchange for or otherwise derived from, any of the Shares and (c) all dividends, interest or other income in respect of any such asset as is referred to in (b) of this paragraph (ii).

(B)           The Agent has agreed to release the security created by the Mortgage of Shares.

2DEFINITIONS AND INTERPRETATION

2.1In this Deed the following definitions apply:

“Facility Agreement” means the facility agreement dated 6 February 1997 and made between the Chargor as borrower, the Subsidiaries of the Chargor as Guarantors, Goldman as Arranger, the Banks, the Swap Parties and Goldman as agent, as the agency role was transferred from Goldman to the Agent; and

“Mortgage of Shares” means the mortgage of shares dated 12 February 1997 and made between the Chargor and Goldman for itself and as agent and trustee for the other Finance Parties, as the agency role was transferred from Goldman to the Agent.

2.2Defined expressions.  Unless otherwise defined herein or the context shall otherwise require, the meanings ascribed to words and expressions in the Mortgage of Shares shall have the same meanings in this Deed (including in the Recitals hereto).

2.3Construction.  The provisions of Clause 1.2 (Interpretation) of the Mortgage of Shares apply, with any necessary modifications, to this Deed.

3RELEASE

3.1With effect from the date of this Deed, the Agent irrevocably and unconditionally releases the security created by the Mortgage of Shares and releases to the Chargor all of the right, title and interest of the Agent in or to the Security Assets.

3

4FURTHER ASSURANCE

The Agent covenants with the Chargor that, upon the Chargor’s written request and at the sole cost of the Chargor, it will sign and execute such further deeds or instruments of release, issue notices or directions and do such things as may reasonably be required to give effect to the release of security contained in this Deed.

5COUNTERPARTS

This Deed may be executed in counterparts which, when taken together, shall constitute one and the same agreement.

6GOVERNING LAW

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

7EXCLUSION OF THIRD PARTY RIGHTS

A person who is not a party to this Deed may not enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999.

EXECUTED as a DEED on the date appearing the beginning of this Deed.

EXECUTED AS A DEED			)	/s/ Robert J. Manners
by THE ROYAL BANK OF SCOTLAND PLC			)
acting by Robert J. Manners			)
its duly authorised attorney in the presence of:			)
Signature of Witness:	/s/ Charmaine Rumbelow
EXECUTED AS A DEED			)	/s/ Nicholas Sherriff
by KNIGHTSBRIDGE TANKERS LIMITED			)
acting by Nicholas Sherriff			)
its duly authorised attorney in the presence of:			)
Signature of Witness:		/s/ illegible

4

EX-4.44.1

Exhibit 4.44.1

THE ROYAL BANK OF SCOTLAND PLC

18 March 2004

To:KTL Mayfair, Inc. (the “Borrower”)

Cedarhurst Tankers LDC (the “Lessee”)

Knightsbridge Tankers Limited (“KTL”)

Lawrence Tankers LDC (“LDC” and, together with KTL, the “Shareholders”)

Daylight Overdraft Facility

1We are writing to confirm the terms and conditions on which we, The Royal Bank of Scotland plc (the “Lender”) are willing to make available to the Borrower a daylight overdraft facility.

2Words and expressions defined in the Loan Agreement entered into or to be entered into on or around the date hereof among, inter alios, the Lender, KTL and the Borrower (as a guarantor) (the “Term Loan Agreement”) shall have the same meanings when used herein.  In addition the following words and expressions shall have the following meaning:

“Loan”  means the amount to be advanced to the Borrower pursuant to this letter agreement or, as the context may require, the amount advanced and outstanding;

3The Lender hereby agrees to make available to the Borrower a daylight overdraft facility on the terms and conditions set out below:

Amount:	US$34,498,175
Purpose:	to part-finance the purchase by the Borrower of its Ship.
Drawdown:	on the date on which the Borrower acquires title to its Ship pursuant to the relevant Conditional Sale Agreement Transfer and Title Transfer Documents.
Repayment:	on the date of the drawdown.
Conditions Precedent:	satisfaction of the conditions precedent to the corresponding Advance under the Loan Agreement, together with such further

conditions as the Lender shall specify by reasonable notice to the Borrower.

4The proceeds of the Loan shall be paid direct to the Lessor in partial satisfaction of the obligation of the Borrower to pay the consideration due under the relevant Conditional Sale Agreement Transfer, the Borrower hereby irrevocably authorising and instructing the Lender so to pay the proceeds of the Loan.

5The Loan shall be repaid to the Lender within London banking hours on the date of drawdown.

6The proceeds of the Loan, once received by the Lessor, will be paid and applied as follows:

(a)by the Lessor to the Lessee as part of the rebate of rental due under the lease of the Ship between the Lessor and the Lessee; then

(b)by the Lessee to the Shareholders by way of payment of a dividend; then

(c)by KTL to the Borrower by way of an equity injection; then

(d)by the Borrower to the Lender in repayment of the Loan.

7Each of the Lessee, the Shareholders, the Borrower and the Lender hereby irrevocably agrees that payment of the applicable amount due to it as referred to in paragraph 6 above will be satisfied by the Lessor making payment of an equal amount to the Lender.  The Lessee hereby agrees to give an instruction in writing to the Lessor directing it to make the payment of the relevant portion of the rebate of rental referred to in paragraph 6 (a) above to the Lender.  In particular, this letter agreement shall constitute the instructions of the Shareholders to the Lessee that the dividends referred to in paragraph 6(b) shall be paid in the manner provided for herein.

8The representations and warranties by the Borrower and KTL contained in Clause 11 of the Term Loan Agreement shall be re-stated by the Borrower with all references to “this Agreement” being construed to refer to this letter agreement.

9Each of the Lessee and LDC represents and warrants to the Lender that:

(a)it is duly incorporated and validly existing and in good standing under the laws of the Cayman Islands;

(b)it has the corporate capacity, and has taken all corporate action and obtained all consents, licences, approvals and authorisations necessary for it to perform its obligations under this letter agreement and make the dividend payment referred to in paragraph 6 (b) above;

(c)this letter agreement constitutes its legal, valid and binding obligations enforceable against the Lessee in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally;

(d)its execution of this letter agreement and the payment to be made by it as referred to herein will not involve or lead to a contravention of any law or regulation, its constitutional documents or any contractual or other restriction which is binding on it.

2

10The Borrower shall pay to the Lender a fee of $9,000 on the date of drawdown of the Loan.

11The following provisions of the Term Loan Agreement shall, as between the Borrower, KTL and the Lender, apply to this letter agreement as if, with any necessary consequential amendments, set out in full:

Clause 6 (Default Interest)

Clause 12 (General Undertakings)

Clause 13 (Corporate and Financial Undertakings)

Clause 19 (Payments and Calculations)

Clause 22 (Fees and Expenses) (excluding Clause 22.1)

Clause 23 (Indemnities) (excluding Clauses 23.4 and 23.8)

Clause 24 (No set-off or tax deduction)

Clause 25 (Illegality)

Clause 26 (Increased Costs)

Clause 27 (Set-off)

Clause 28 (Assignments, Transfers and Changes in Lending Office)

Clause 29 (Variations and Waivers)

Clause 30 (Notices) (and so that notices to and from the Lessee shall be sent accordingly)

Clause 31 (Supplemental)

12This letter agreement is governed by English law.

13The parties agree as follows in relation to jurisdiction:

3

(a)subject to sub-paragraph (c) below, the courts of England have exclusive jurisdiction to settle any dispute arising out of, or in connection with, this letter agreement (including a dispute regarding the existence, validity or termination of this letter agreement) (a “Dispute”);

(b)the Lender, the Borrower, the Lessee and the Shareholders agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly none of them will argue to the contrary;

(c)the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions;

(d)without prejudice to any other mode of service allowed under any relevant law, each of the Borrower, the Lessee and the Shareholders:

(i)irrevocably appoints Maritime Recovery Limited currently of 20 Salcott Road, PO Box 239, London SW11 6DJ as its agent for service of process in relation to any proceedings before the English courts in connection with this letter agreement; and

(ii)agrees that failure by the process agent to notify it of the process will not invalidate the proceedings concerned.

Please indicate your agreement to this matters set out in this letter agreement by executing the form of acknowledgement set out below.

Yours faithfully

/s/ Robert J. Manners

for and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

Witnessed by: /s/ Charmaine Rumbelow

We hereby agree to the matters set out in the above letter and agree to be bound by its terms.

/s/ Nicholas Sherriff

for and on behalf of

KTL MAYFAIR, INC.

4

/s/ Nicholas Sherriff

for and on behalf of

CEDARHURST TANKERS LDC

/s/ Nicholas Sherriff

for and on behalf of

KNIGHTSBRIDGE TANKERS LIMITED

/s/ Nicholas Sherriff

for and on behalf of

LAWRENCE TANKERS LDC

5

EX-4.44.2

Exhibit 4.44.2

THE ROYAL BANK OF SCOTLAND PLC

29 March 2004

To:KTL Kensington, Inc. (the “Borrower”)

Woodmere Tankers LDC (the “Lessee”)

Knightsbridge Tankers Limited (“KTL”)

Hewlett Tankers LDC (“LDC” and, together with KTL, the “Shareholders”)

Daylight Overdraft Facility

1We are writing to confirm the terms and conditions on which we, The Royal Bank of Scotland plc (the “Lender”) are willing to make available to the Borrower a daylight overdraft facility.

2Words and expressions defined in the Loan Agreement entered into or to be entered into on or around the date hereof among, inter alios, the Lender, KTL and the Borrower (as a guarantor) (the “Term Loan Agreement”) shall have the same meanings when used herein.  In addition the following words and expressions shall have the following meaning:

“Loan”  means the amount to be advanced to the Borrower pursuant to this letter agreement or, as the context may require, the amount advanced and outstanding;

3The Lender hereby agrees to make available to the Borrower a daylight overdraft facility on the terms and conditions set out below:

Amount:	US$34,498,192
Purpose:	to part-finance the purchase by the Borrower of its Ship.
Drawdown:	on the date on which the Borrower acquires title to its Ship pursuant to the relevant Conditional Sale Agreement Transfer and Title Transfer Documents.
Repayment:	on the date of the drawdown.
Conditions Precedent:	satisfaction of the conditions precedent to the corresponding Advance under the Loan Agreement, together with such further

conditions as the Lender shall specify by reasonable notice to the Borrower.

4The proceeds of the Loan shall be paid direct to the Lessor in partial satisfaction of the obligation of the Borrower to pay the consideration due under the relevant Conditional Sale Agreement Transfer, the Borrower hereby irrevocably authorising and instructing the Lender so to pay the proceeds of the Loan.

5The Loan shall be repaid to the Lender within London banking hours on the date of drawdown.

6The proceeds of the Loan, once received by the Lessor, will be paid and applied as follows:

(a)by the Lessor to the Lessee as part of the rebate of rental due under the lease of the Ship between the Lessor and the Lessee; then

(b)by the Lessee to the Shareholders by way of payment of a dividend; then

(c)by KTL to the Borrower by way of an equity injection; then

(d)by the Borrower to the Lender in repayment of the Loan.

7Each of the Lessee, the Shareholders, the Borrower and the Lender hereby irrevocably agrees that payment of the applicable amount due to it as referred to in paragraph 6 above will be satisfied by the Lessor making payment of an equal amount to the Lender.  The Lessee hereby agrees to give an instruction in writing to the Lessor directing it to make the payment of the relevant portion of the rebate of rental referred to in paragraph 6 (a) above to the Lender.  In particular, this letter agreement shall constitute the instructions of the Shareholders to the Lessee that the dividends referred to in paragraph 6(b) shall be paid in the manner provided for herein.

8The representations and warranties by the Borrower and KTL contained in Clause 11 of the Term Loan Agreement shall be re-stated by the Borrower with all references to “this Agreement” being construed to refer to this letter agreement.

9Each of the Lessee and LDC represents and warrants to the Lender that:

(a)it is duly incorporated and validly existing and in good standing under the laws of the Cayman Islands;

(b)it has the corporate capacity, and has taken all corporate action and obtained all consents, licences, approvals and authorisations necessary for it to perform its obligations under this letter agreement and make the dividend payment referred to in paragraph 6 (b) above;

(c)this letter agreement constitutes its legal, valid and binding obligations enforceable against the Lessee in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally;

(d)its execution of this letter agreement and the payment to be made by it as referred to herein will not involve or lead to a contravention of any law or regulation, its constitutional documents or any contractual or other restriction which is binding on it.

2

10The Borrower shall pay to the Lender a fee of $9,000 on the date of drawdown of the Loan.

11The following provisions of the Term Loan Agreement shall, as between the Borrower, KTL and the Lender, apply to this letter agreement as if, with any necessary consequential amendments, set out in full:

Clause 6 (Default Interest)

Clause 12 (General Undertakings)

Clause 13 (Corporate and Financial Undertakings)

Clause 19 (Payments and Calculations)

Clause 22 (Fees and Expenses) (excluding Clause 22.1)

Clause 23 (Indemnities) (excluding Clauses 23.4 and 23.8)

Clause 24 (No set-off or tax deduction)

Clause 25 (Illegality)

Clause 26 (Increased Costs)

Clause 27 (Set-off)

Clause 28 (Assignments, Transfers and Changes in Lending Office)

Clause 29 (Variations and Waivers)

Clause 30 (Notices) (and so that notices to and from the Lessee shall be sent accordingly)

Clause 31 (Supplemental)

12This letter agreement is governed by English law.

13The parties agree as follows in relation to jurisdiction:

3

(a)subject to sub-paragraph (c) below, the courts of England have exclusive jurisdiction to settle any dispute arising out of, or in connection with, this letter agreement (including a dispute regarding the existence, validity or termination of this letter agreement) (a “Dispute”);

(b)the Lender, the Borrower, the Lessee and the Shareholders agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly none of them will argue to the contrary;

(c)the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions;

(d)without prejudice to any other mode of service allowed under any relevant law, each of the Borrower, the Lessee and the Shareholders:

(i)irrevocably appoints Maritime Recovery Limited currently of 20 Salcott Road, PO Box 239, London SW11 6DJ as its agent for service of process in relation to any proceedings before the English courts in connection with this letter agreement; and

(ii)agrees that failure by the process agent to notify it of the process will not invalidate the proceedings concerned.

Please indicate your agreement to this matters set out in this letter agreement by executing the form of acknowledgement set out below.

Yours faithfully

/s/ Robert J. Manners

for and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

Witnessed by: /s/ Charmaine Rumbelow

We hereby agree to the matters set out in the above letter and agree to be bound by its terms.

/s/ Nicholas Sherriff

for and on behalf of

KTL KENSINGTON, INC.

4

/s/ Nicholas Sherriff

for and on behalf of

WOODMERE TANKERS LDC

/s/ Nicholas Sherriff

for and on behalf of

KNIGHTSBRIDGE TANKERS LIMITED

/s/ Nicholas Sherriff

for and on behalf of

HEWLETT TANKERS LDC

5

EX-4.44.3

Exhibit 4.44.3

THE ROYAL BANK OF SCOTLAND PLC

5 March 2004

To:KTL Chelsea, Inc. (the “Borrower”)

Lawrence Tankers LDC (the “Lessee”)

Knightsbridge Tankers Limited (“KTL”)

Inwood Tankers LDC (“LDC” and, together with KTL, the “Shareholders”)

Daylight Overdraft Facility

1We are writing to confirm the terms and conditions on which we, The Royal Bank of Scotland plc (the “Lender”) are willing to make available to the Borrower a daylight overdraft facility.

2Words and expressions defined in the Loan Agreement entered into or to be entered into on or around the date hereof among, inter alios, the Lender, KTL and the Borrower (as a guarantor) (the “Term Loan Agreement”) shall have the same meanings when used herein.  In addition the following words and expressions shall have the following meaning:

“Loan”  means the amount to be advanced to the Borrower pursuant to this letter agreement or, as the context may require, the amount advanced and outstanding;

3The Lender hereby agrees to make available to the Borrower a daylight overdraft facility on the terms and conditions set out below:

Amount:	US$34,498,180
Purpose:	to part-finance the purchase by the Borrower of its Ship.
Drawdown:	on the date on which the Borrower acquires title to its Ship pursuant to the relevant Conditional Sale Agreement Transfer and Title Transfer Documents.
Repayment:	on the date of the drawdown.
Conditions Precedent:	satisfaction of the conditions precedent to the corresponding Advance under the Loan Agreement, together with such further

conditions as the Lender shall specify by reasonable notice to the Borrower.

4The proceeds of the Loan shall be paid direct to the Lessor in partial satisfaction of the obligation of the Borrower to pay the consideration due under the relevant Conditional Sale Agreement Transfer, the Borrower hereby irrevocably authorising and instructing the Lender so to pay the proceeds of the Loan.

5The Loan shall be repaid to the Lender within London banking hours on the date of drawdown.

6The proceeds of the Loan, once received by the Lessor, will be paid and applied as follows:

(a)by the Lessor to the Lessee as part of the rebate of rental due under the lease of the Ship between the Lessor and the Lessee; then

(b)by the Lessee to the Shareholders by way of payment of a dividend; then

(c)by KTL to the Borrower by way of an equity injection; then

(d)by the Borrower to the Lender in repayment of the Loan.

7Each of the Lessee, the Shareholders, the Borrower and the Lender hereby irrevocably agrees that payment of the applicable amount due to it as referred to in paragraph 6 above will be satisfied by the Lessor making payment of an equal amount to the Lender.  The Lessee hereby agrees to give an instruction in writing to the Lessor directing it to make the payment of the relevant portion of the rebate of rental referred to in paragraph 6 (a) above to the Lender.  In particular, this letter agreement shall constitute the instructions of the Shareholders to the Lessee that the dividends referred to in paragraph 6(b) shall be paid in the manner provided for herein.

8The representations and warranties by the Borrower and KTL contained in Clause 11 of the Term Loan Agreement shall be re-stated by the Borrower with all references to “this Agreement” being construed to refer to this letter agreement.

9Each of the Lessee and LDC represents and warrants to the Lender that:

(a)it is duly incorporated and validly existing and in good standing under the laws of the Cayman Islands;

(b)it has the corporate capacity, and has taken all corporate action and obtained all consents, licences, approvals and authorisations necessary for it to perform its obligations under this letter agreement and make the dividend payment referred to in paragraph 6 (b) above;

(c)this letter agreement constitutes its legal, valid and binding obligations enforceable against the Lessee in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally;

(d)its execution of this letter agreement and the payment to be made by it as referred to herein will not involve or lead to a contravention of any law or regulation, its constitutional documents or any contractual or other restriction which is binding on it.

2

10The Borrower shall pay to the Lender a fee of $9,000 on the date of drawdown of the Loan.

11The following provisions of the Term Loan Agreement shall, as between the Borrower, KTL and the Lender, apply to this letter agreement as if, with any necessary consequential amendments, set out in full:

Clause 6 (Default Interest)

Clause 12 (General Undertakings)

Clause 13 (Corporate and Financial Undertakings)

Clause 19 (Payments and Calculations)

Clause 22 (Fees and Expenses) (excluding Clause 22.1)

Clause 23 (Indemnities) (excluding Clauses 23.4 and 23.8)

Clause 24 (No set-off or tax deduction)

Clause 25 (Illegality)

Clause 26 (Increased Costs)

Clause 27 (Set-off)

Clause 28 (Assignments, Transfers and Changes in Lending Office)

Clause 29 (Variations and Waivers)

Clause 30 (Notices) (and so that notices to and from the Lessee shall be sent accordingly)

Clause 31 (Supplemental)

12This letter agreement is governed by English law.

13The parties agree as follows in relation to jurisdiction:

3

(a)subject to sub-paragraph (c) below, the courts of England have exclusive jurisdiction to settle any dispute arising out of, or in connection with, this letter agreement (including a dispute regarding the existence, validity or termination of this letter agreement) (a “Dispute”);

(b)the Lender, the Borrower, the Lessee and the Shareholders agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly none of them will argue to the contrary;

(c)the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions;

(d)without prejudice to any other mode of service allowed under any relevant law, each of the Borrower, the Lessee and the Shareholders:

(i)irrevocably appoints Maritime Recovery Limited currently of 20 Salcott Road, PO Box 239, London SW11 6DJ as its agent for service of process in relation to any proceedings before the English courts in connection with this letter agreement; and

(ii)agrees that failure by the process agent to notify it of the process will not invalidate the proceedings concerned.

Please indicate your agreement to this matters set out in this letter agreement by executing the form of acknowledgement set out below.

Yours faithfully

/s/ Robert J. Manners

for and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

We hereby agree to the matters set out in the above letter and agree to be bound by its terms.

/s/ Nicholas Sherriff

for and on behalf of

KTL CHELSEA, INC.

4

/s/ Nicholas Sherriff

for and on behalf of

LAWRENCE TANKERS LDC

/s/ Nicholas Sherriff

for and on behalf of

KNIGHTSBRIDGE TANKERS LIMITED

/s/ Nicholas Sherriff

for and on behalf of

INWOOD TANKERS LDC

5

EX-4.44.4

Exhibit 4.44.4

THE ROYAL BANK OF SCOTLAND PLC

11 March 2004

To:KTL Hampstead, Inc. (the “Borrower”)

Hewlett Tankers LDC (the “Lessee”)

Knightsbridge Tankers Limited (“KTL”)

Cedarhurst Tankers LDC (“LDC” and, together with KTL, the “Shareholders”)

Daylight Overdraft Facility

1We are writing to confirm the terms and conditions on which we, The Royal Bank of Scotland plc (the “Lender”) are willing to make available to the Borrower a daylight overdraft facility.

2Words and expressions defined in the Loan Agreement entered into or to be entered into on or around the date hereof among, inter alios, the Lender, KTL and the Borrower (as a guarantor) (the “Term Loan Agreement”) shall have the same meanings when used herein.  In addition the following words and expressions shall have the following meaning:

“Loan”means the amount to be advanced to the Borrower pursuant to this letter agreement or, as the context may require, the amount advanced and outstanding;

3The Lender hereby agrees to make available to the Borrower a daylight overdraft facility on the terms and conditions set out below:

Amount:	US$38,998,200
Purpose:	to part-finance the purchase by the Borrower of its Ship.
Drawdown:	on the date on which the Borrower acquires title to its Ship pursuant to the relevant Conditional Sale Agreement Transfer and Title Transfer Documents.
Repayment:	on the date of the drawdown.
Conditions Precedent:	satisfaction of the conditions precedent to the corresponding Advance under the Loan Agreement, together with such further

conditions as the Lender shall specify by reasonable notice to the Borrower.

4The proceeds of the Loan shall be paid direct to the Lessor in partial satisfaction of the obligation of the Borrower to pay the consideration due under the relevant Conditional Sale Agreement Transfer, the Borrower hereby irrevocably authorising and instructing the Lender so to pay the proceeds of the Loan.

5The Loan shall be repaid to the Lender within London banking hours on the date of drawdown.

6The proceeds of the Loan, once received by the Lessor, will be paid and applied as follows:

(a)by the Lessor to the Lessee as part of the rebate of rental due under the lease of the Ship between the Lessor and the Lessee; then

(b)by the Lessee to the Shareholders by way of payment of a dividend; then

(c)by KTL to the Borrower by way of an equity injection; then

(d)by the Borrower to the Lender in repayment of the Loan.

7Each of the Lessee, the Shareholders, the Borrower and the Lender hereby irrevocably agrees that payment of the applicable amount due to it as referred to in paragraph 6 above will be satisfied by the Lessor making payment of an equal amount to the Lender.  The Lessee hereby agrees to give an instruction in writing to the Lessor directing it to make the payment of the relevant portion of the rebate of rental referred to in paragraph 6 (a) above to the Lender.  In particular, this letter agreement shall constitute the instructions of the Shareholders to the Lessee that the dividends referred to in paragraph 6(b) shall be paid in the manner provided for herein.

8The representations and warranties by the Borrower and KTL contained in Clause 11 of the Term Loan Agreement shall be re-stated by the Borrower with all references to “this Agreement” being construed to refer to this letter agreement.

9Each of the Lessee and LDC represents and warrants to the Lender that:

(a)it is duly incorporated and validly existing and in good standing under the laws of the Cayman Islands;

(b)it has the corporate capacity, and has taken all corporate action and obtained all consents, licences, approvals and authorisations necessary for it to perform its obligations under this letter agreement and make the dividend payment referred to in paragraph 6 (b) above;

(c)this letter agreement constitutes its legal, valid and binding obligations enforceable against the Lessee in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally;

(d)its execution of this letter agreement and the payment to be made by it as referred to herein will not involve or lead to a contravention of any law or regulation, its constitutional documents or any contractual or other restriction which is binding on it.

2

10The Borrower shall pay to the Lender a fee of $9,000 on the date of drawdown of the Loan.

11The following provisions of the Term Loan Agreement shall, as between the Borrower, KTL and the Lender, apply to this letter agreement as if, with any necessary consequential amendments, set out in full:

Clause 6 (Default Interest)

Clause 12 (General Undertakings)

Clause 13 (Corporate and Financial Undertakings)

Clause 19 (Payments and Calculations)

Clause 22 (Fees and Expenses) (excluding Clause 22.1)

Clause 23 (Indemnities) (excluding Clauses 23.4 and 23.8)

Clause 24 (No set-off or tax deduction)

Clause 25 (Illegality)

Clause 26 (Increased Costs)

Clause 27 (Set-off)

Clause 28 (Assignments, Transfers and Changes in Lending Office)

Clause 29 (Variations and Waivers)

Clause 30 (Notices) (and so that notices to and from the Lessee shall be sent accordingly)

Clause 31 (Supplemental)

12This letter agreement is governed by English law.

13The parties agree as follows in relation to jurisdiction:

3

(a)subject to sub-paragraph (c) below, the courts of England have exclusive jurisdiction to settle any dispute arising out of, or in connection with, this letter agreement (including a dispute regarding the existence, validity or termination of this letter agreement) (a “Dispute”);

(b)the Lender, the Borrower, the Lessee and the Shareholders agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly none of them will argue to the contrary;

(c)the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions;

(d)without prejudice to any other mode of service allowed under any relevant law, each of the Borrower, the Lessee and the Shareholders:

(i)irrevocably appoints Maritime Recovery Limited currently of 20 Salcott Road, PO Box 239, London SW11 6DJ as its agent for service of process in relation to any proceedings before the English courts in connection with this letter agreement; and

(ii)agrees that failure by the process agent to notify it of the process will not invalidate the proceedings concerned.

Please indicate your agreement to this matters set out in this letter agreement by executing the form of acknowledgement set out below.

Yours faithfully

/s/ Robert J. Manners

for and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

Witnessed by: /s/ Charmaine Rumbelow

We hereby agree to the matters set out in the above letter and agree to be bound by its terms.

/s/ Nicholas Sherriff

for and on behalf of

KTL HAMPSTEAD, INC.

4

/s/ Nicholas Sherriff

for and on behalf of

HEWLETT TANKERS LDC

/s/ Nicholas Sherriff

for and on behalf of

KNIGHTSBRIDGE TANKERS LIMITED

/s/ Nicholas Sherriff

for and on behalf of

CEDARHURST TANKERS LDC

5

EX-4.44.5

Exhibit 4.44.5

THE ROYAL BANK OF SCOTLAND PLC

15 March 2004

To:KTL Camden, Inc. (the “Borrower”)

Inwood Tankers LDC (the “Lessee”)

Knightsbridge Tankers Limited (“KTL”)

Woodmere Tankers LDC (“LDC” and, together with KTL, the “Shareholders”)

Daylight Overdraft Facility

1We are writing to confirm the terms and conditions on which we, The Royal Bank of Scotland plc (the “Lender”) are willing to make available to the Borrower a daylight overdraft facility.

2Words and expressions defined in the Loan Agreement entered into or to be entered into on or around the date hereof among, inter alios, the Lender, KTL and the Borrower (as a guarantor) (the “Term Loan Agreement”) shall have the same meanings when used herein.  In addition the following words and expressions shall have the following meaning:

“Loan”  means the amount to be advanced to the Borrower pursuant to this letter agreement or, as the context may require, the amount advanced and outstanding;

3The Lender hereby agrees to make available to the Borrower a daylight overdraft facility on the terms and conditions set out below:

Amount:	US$34,498,190
Purpose:	to part-finance the purchase by the Borrower of its Ship.
Drawdown:	on the date on which the Borrower acquires title to its Ship pursuant to the relevant Conditional Sale Agreement Transfer and Title Transfer Documents.
Repayment:	on the date of the drawdown.
Conditions Precedent:	satisfaction of the conditions precedent to the corresponding Advance under the Loan Agreement, together with such further conditions as the Lender shall specify by reasonable notice to the Borrower.

4The proceeds of the Loan shall be paid direct to the Lessor in partial satisfaction of the obligation of the Borrower to pay the consideration due under the relevant Conditional Sale Agreement Transfer, the Borrower hereby irrevocably authorising and instructing the Lender so to pay the proceeds of the Loan.

5The Loan shall be repaid to the Lender within London banking hours on the date of drawdown.

6The proceeds of the Loan, once received by the Lessor, will be paid and applied as follows:

(a)by the Lessor to the Lessee as part of the rebate of rental due under the lease of the Ship between the Lessor and the Lessee; then

(b)by the Lessee to the Shareholders by way of payment of a dividend; then

(c)by KTL to the Borrower by way of an equity injection; then

(d)by the Borrower to the Lender in repayment of the Loan.

7Each of the Lessee, the Shareholders, the Borrower and the Lender hereby irrevocably agrees that payment of the applicable amount due to it as referred to in paragraph 6 above will be satisfied by the Lessor making payment of an equal amount to the Lender.  The Lessee hereby agrees to give an instruction in writing to the Lessor directing it to make the payment of the relevant portion of the rebate of rental referred to in paragraph 6 (a) above to the Lender.  In particular, this letter agreement shall constitute the instructions of the Shareholders to the Lessee that the dividends referred to in paragraph 6(b) shall be paid in the manner provided for herein.

8The representations and warranties by the Borrower and KTL contained in Clause 11 of the Term Loan Agreement shall be re-stated by the Borrower with all references to “this Agreement” being construed to refer to this letter agreement.

9Each of the Lessee and LDC represents and warrants to the Lender that:

(a)it is duly incorporated and validly existing and in good standing under the laws of the Cayman Islands;

(b)it has the corporate capacity, and has taken all corporate action and obtained all consents, licences, approvals and authorisations necessary for it to perform its obligations under this letter agreement and make the dividend payment referred to in paragraph 6 (b) above;

(c)this letter agreement constitutes its legal, valid and binding obligations enforceable against the Lessee in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally;

(d)its execution of this letter agreement and the payment to be made by it as referred to herein will not involve or lead to a contravention of any law or regulation, its constitutional documents or any contractual or other restriction which is binding on it.

10The Borrower shall pay to the Lender a fee of $9,000 on the date of drawdown of the Loan.

2

11The following provisions of the Term Loan Agreement shall, as between the Borrower, KTL and the Lender, apply to this letter agreement as if, with any necessary consequential amendments, set out in full:

Clause 6 (Default Interest)

Clause 12 (General Undertakings)

Clause 13 (Corporate and Financial Undertakings)

Clause 19 (Payments and Calculations)

Clause 22 (Fees and Expenses) (excluding Clause 22.1)

Clause 23 (Indemnities) (excluding Clauses 23.4 and 23.8)

Clause 24 (No set-off or tax deduction)

Clause 25 (Illegality)

Clause 26 (Increased Costs)

Clause 27 (Set-off)

Clause 28 (Assignments, Transfers and Changes in Lending Office)

Clause 29 (Variations and Waivers)

Clause 30 (Notices) (and so that notices to and from the Lessee shall be sent accordingly)

Clause 31 (Supplemental)

12This letter agreement is governed by English law.

13The parties agree as follows in relation to jurisdiction:

(a)subject to sub-paragraph (c) below, the courts of England have exclusive jurisdiction to settle any dispute arising out of, or in connection with, this letter agreement (including a dispute regarding the existence, validity or termination of this letter agreement) (a “Dispute”);

3

(b)the Lender, the Borrower, the Lessee and the Shareholders agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly none of them will argue to the contrary;

(c)the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions;

(d)without prejudice to any other mode of service allowed under any relevant law, each of the Borrower, the Lessee and the Shareholders:

(i)irrevocably appoints Maritime Recovery Limited currently of 20 Salcott Road, PO Box 239, London SW11 6DJ as its agent for service of process in relation to any proceedings before the English courts in connection with this letter agreement; and

(ii)agrees that failure by the process agent to notify it of the process will not invalidate the proceedings concerned.

Please indicate your agreement to this matters set out in this letter agreement by executing the form of acknowledgement set out below.

Yours faithfully

/s/ Robert J. Manners

for and on behalf of

THE ROYAL BANK OF SCOTLAND PLC

Witnessed by: /s/ Charmaine Rumbelow

We hereby agree to the matters set out in the above letter and agree to be bound by its terms.

/s/ Nicholas Sherriff

for and on behalf of

KTL CAMDEN, INC.

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/s/ Nicholas Sherriff

for and on behalf of

INWOOD TANKERS LDC

/s/ Nicholas Sherriff

for and on behalf of

KNIGHTSBRIDGE TANKERS LIMITED

/s/ Nicholas Sherriff

for and on behalf of

WOODMERE TANKERS LDC

5

EX-11.1

Exhibit 11.1

CORPORATE CODE OF BUSINESS ETHICS AND CONDUCT

Introduction

Knightsbridge Tankers Limited (the “Company” or “Knightsbridge”) and all entities controlled by the Company have a strong commitment to promoting honest conduct and ethical business conduct by all Employees (as defined below) and compliance with the laws that govern the conduct of our business worldwide.  We believe that a commitment to honesty, ethical conduct and integrity is a valuable asset that builds trust with our customers, suppliers, employees, shareholders and the communities in which we operate.  To implement our commitment, we have developed a code of business ethics and conduct (the “Code”). This Code has been designed to deter wrongdoing and to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships and avoidance of conflicts of interest. The Code establishes rules and standards regarding behavior and performance and constitutes a part of the terms and conditions of employment.  Violation of the rules and standards embodied in the Code is not tolerated and will subject those responsible to disciplinary action.

The Code applies to all entities controlled by the Company and all employees, directors, officers and agents of the Company, including representatives and agents of the Company’s manager, ICB Shipping (Bermuda) Limited, (collectively, “Employee(s)”). All Employees are required to read and understand the Code and certain Employees will be required to provide a certification to that effect. We encourage all Employees to ask questions regarding the application of the Code.  Employees may direct such questions to their manager (in the absence of an actual or potential conflict of interest), or to an Audit Committee member.

Employees individually are ultimately responsible for their compliance with the Code.  Every manager will also be responsible for administering the Code as it applies to Employees and operations within each manager’s area of supervision.

The Company’s policy is to distribute the Code to affiliated companies and urge that they have in force similar polices and procedures to secure compliance with the principles of business integrity and ethics set forth in this Code.

Employees who observe or become aware of a situation that they believe to be a violation of the Code have an obligation to notify their manager or an Audit Committee member unless the Code directs otherwise.  Violations involving a manager should be reported directly to an Audit Committee member. When a manager receives a report of a violation, it will be the manager’s responsibility to handle the matter in consultation with an Audit Committee member. If an Employee reporting a violation wishes to remain anonymous, all reasonable steps will be taken to keep their identity confidential.  All communications will be taken seriously and, if warranted, any reports of violations will be investigated.

Procedures Regarding Waivers

Because of the importance of the matters involved in this Code, waivers will be granted only in limited circumstances and where and circumstances would support a waiver.  Waivers of the Code may only be made by the Audit Committee.

                                                                                                                                       The Board of Directors

CORPORATE CODE OF BUSINESS ETHICS AND CONDUCT

Compliance with Laws, Rules and Regulations

All Employees are responsible for complying with the various laws, rules and regulations of the countries and regulatory authorities that affect the Company’s business. Questions with respect to your duties under the law should be directed to your manager.

Honest and Fair Dealing

Employees must endeavor to deal honestly, ethically and fairly with the Company’s customers, suppliers, competitors and employees.  No Employee should take unfair advantage of anyone through manipulation, concealment, abuse of privilege information, misrepresentation of material facts, or any other unfair-dealing practice.

Conflict of Interest and Corporate Opportunity

Employees must a) avoid any interest that conflicts or appears to conflict with the interests of the Company or that could reasonably be determined to harm the Company’s reputation and b) report any actual or potential conflict of interest (including any material transaction or relationship that reasonably could be expected to give rise to such conflict) immediately to your manager or an Audit Committee member and adhere to instructions concerning how to address such conflict of interest.  A conflict of interest exists if actions by any Employee are, or could reasonably appear to be, influenced directly or indirectly by personal considerations, duties owed to persons or entities other than the Company, or by actual or potential personal benefit or gain.

Employees owe a duty to advance the legitimate interests of the Company when the opportunities to do so arise. Employees may not take for themselves personally opportunities that are discovered through the use of corporate property, information or position.

Confidentiality and Privacy

It is important that you protect the confidentiality of Company information. Employees may have access to propriety and confidential information concerning the Company’s business, clients and suppliers.  Confidential information includes such items as non-public information concerning the Company’s business, financial results and prospects and potential corporate transactions. Employees are required to keep such information confidential during employment as well as thereafter, and not to use, disclose, or communicate that confidential information other than in the course of employment.  The consequences to the Company and the Employee concerned can be severe where there is unauthorized disclosure of any non-public, privileged or proprietary information.

To ensure the confidentiality of any personal information collected and to comply with applicable laws, any Employee in possession of non-public, personal information about the Company’s customers, potential customers, or Employees, must maintain the highest degree of confidentiality and must not disclose any personal information unless authorization is obtained.

Proper Use of Company Assets

The Company’s assets are only to be used for legitimate business purposes and only by authorized Employees or their designees. This applies to tangible assets (such as office

equipment, telephone, copy machines, etc.) and intangible assets (such as trade secrets and confidential information). Employees have a responsibility to protect the Company’s assets from theft and loss and to ensure their efficient use.  Theft, carelessness and waste have a direct impact on the Company’s profitability. If you become aware of theft, waste or misuse of the Company’s assets you should report this to your manager.

Corporate communications policy

Only certain designated Employees may discuss the Company with the news media, securities analysts and investors. All inquiries from regulatory authorities or government representatives should be referred to the appropriate manager.  Employees exposed to media contact when in the course of employment must not comment on rumours or speculation regarding the Company’s activities.

Securities Trading

Because we are a public company we are subject to a number of laws concerning the purchase of our shares and other publicly traded securities. Company policy prohibits Employees and their family members from trading securities while in possession of material, non-public information relating to the Company or any other company, including a customer or supplier that has a significant relationship with the Company.

Information is “material” when there is a substantial likelihood that a reasonable investor would consider the information important in deciding whether to buy, hold or sell securities.  In short, any information that could reasonably affect the price of securities is material. Information is considered to be “public” only when it has been released to the public through appropriate channels and enough time has elapsed to permit the investment market to absorb and evaluate the information.  If you have any doubt as to whether you possess material nonpublic information, you should contact a manager and the advice of legal counsel may be sought.

Investment by Employees in Knightsbridge securities is encouraged.  In order to protect the Company and its Employees from liability that could result from a violation of legal requirements, the Company requires Employees to engage in purchases or sales of the Company’s stock only during “Window Periods”.  Window Periods begin at the opening of trading on the second full trading day following the public release of quarterly or annual financial results and end on the last day of the third calendar month of that calendar quarter.  No person may buy or sell Knightsbridge securities, even during Window Periods, if such person is in possession of material, non-public information.

At any time, the Board of Directors has authority to designate a “blackout period” over all trading in Knightsbridge securities (even during a Window Period).  A blackout period compels all trading in the securities affected to cease immediately for the period designated by the Board of Directors. A blackout period may be exercised over securities of companies with which the Company does or may do business or in which the Company invests or may invest.  No one may disclose to any outside third party that a blackout period has been designated.

Failure to comply with the Company’s securities trading policy may subject Employees or Employees’ family members to criminal or civil penalties, as well as to disciplinary action by the Company up to and including termination for cause.  Responsibility for complying with applicable laws as well as the Company’s policy rests with Employees individually.

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Drugs and Alcohol

Company policy prohibits the illegal use, sale, purchase, transfer, possession or consumption of controlled substances, other than medically prescribed drugs, while on the Company premises.  Company policy also prohibits the use, sale, purchase, transfer or possession of alcoholic beverages by Employees while on Company premises, except as authorized by the Company.  This policy requires that the Company must abide by applicable laws and regulations relative to the use of alcohol or other controlled substances.  The Company, in its discretion, reserves the right to randomly test Employees for the use of alcohol or other controlled substances unless prohibited by prevailing local law.

Policies against Discrimination and Harassment

The Company prohibits discrimination against any Employee or prospective Employee on the basis of sex, race, color, age, religion, sexual preference, marital status, national origin, disability, ancestry, political opinion, or any other basis prohibited by the laws that govern its operations.

The Company prohibits unlawful harassment.  Employees are expected to treat one another with respect.  “Harassment” includes any conduct likely to cause offense or humiliation to any person or that might, on reasonable grounds, be perceived by a reasonable person to place a condition on employment or on any opportunity for training or promotion.

Electronic communication

Electronic communications include all aspects of voice, video, and data communications, such as voice mail, e-mail, fax, and Internet.  Employees should use electronic communications for business purposes and refrain from personal use.  Among other things, you should not participate in any online forum where the business of the Company or its customers or suppliers is discussed: this may give rise to a violation of the Company’s confidentiality policy or subject the Company to legal action for defamation.  The Company reserves the right to inspect all electronic communications involving the use of the Company’s equipment, software, systems, or other facilities (“Systems”) within the confines of applicable local law and Employees should not have an expectation of privacy when using Company Systems.

Integrity of Corporate Records

All business records, expense accounts, vouchers, bills, payrolls, service records, reports to government agencies and other reports must accurately reflect the facts.  Without limiting the foregoing, all reports and documents filed with the U.S. Securities and Exchange Commission, as well as other public communications should be full, fair, accurate and understandable.

The books and records of Knightsbridge must be prepared with care and honesty and must accurately reflect our transactions.  All corporate funds and assets must be recorded in accordance with Company procedures. No undisclosed or unrecorded funds or assets shall be established for any purpose.

The Company’s accounting personnel must provide the independent public accountants and the Audit Committee with all information they request. Employees must not, and must not direct others to, take any action to fraudulently influence, coerce, manipulate or mislead independent public accountants engaged in the audit or review of the Company’s financial statements for the purpose of rendering those financial statements materially misleading.

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Entertainment, Gifts, Payments and Bribery

Decisions by the Company and its agents relating to the procurement and provision of goods and services should always be free from even a perception that favorable treatment was sought, received or given as the result of furnishing or receiving gift, favours, hospitality, entertainment or other similar gratuity.  The giving or receiving of anything of value to induce such decisions is prohibited. You should never solicit a gift or favour from those with whom we do business. Providing or receiving gifts or entertainment of nominal value motivated by commonly accepted business courtesies is permissible, but not if such gifts or entertainment would reasonably be expect to cause favouritism or a sense of obligation.

No bribes or other similar payments and benefits, directly or indirectly, shall be paid to employees of suppliers or customers.

Compliance with Anti-Trust Laws

The Company’s business may be subject to United States, European Union and other foreign government anti-trust and similar laws. All Employees must comply with such laws and you should confer with your manager whenever you have a question with respect to the possible anti-competitive effect of particular transactions.

Health, Safety and Environmental Protection

The Company will conduct its business in a manner designed to protect the health and safety of its Employees, its customers, the public, and the environment.  The Company’s policy is to operate its business and its vessels in accordance with all applicable safety, environmental and safety laws and regulations so as to ensure the protection of the environment and the Company’s personnel and property.  All Employees should conduct themselves in a manner that is consistent with this policy. Any departure or suspected departure from this policy must be reported promptly.

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ACKNOWLEDGEMENT

                I understand that the Knightsbridge Code of Business Ethics and Conduct (the “Code”) forms a part of my terms of employment.

                I understand that it is my responsibility to read, to understand, and to keep up to date the contents of the Code and to seek clarification or further information, if needed, and to comply with the contents of the Code.

                I acknowledge that I have received a copy of the Code for my review.  I also understand that breach or violation of the Code may result in disciplinary action (which may include termination of employment).

                I further acknowledge that I have been afforded the opportunity to ask any questions I have concerning the content of the Code.

Signature
Date
Name
	(Please print)

5

EX-12.1

EXHIBIT 12.1 CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Tor Olav Troim, certify that:

1.

I have reviewed this annual report on Form 20-F of Knightsbridge Tankers Limited;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.

The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent function):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 1, 2004

/s/ Tor Olav Troim Tor Olav Troim
Chief Executive Officer

EX-12.2

EXHIBIT 12.2 CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, Kate Blankenship, certify that:

1.

I have reviewed this annual report on Form 20-F of Knightsbridge Tankers Limited;

2.

Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3.

Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5.

The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent function):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: June 1, 2004

/s/ Kate Blankenship Kate Blankenship
Chief Financial Officer

EX-13

EXHIBIT 13 CERTIFICATIONS UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned certifies that this periodic report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in this periodic report fairly represents, in all material respects, the financial condition and results of operations of Knightsbridge Tankers Limited.

/s/ Tor Olav Troim Tor Olav Troim
Chief Executive Officer

/s/ Kate Blankenship Kate Blankenship
Chief Financial Officer

Date: June 1, 2004