CHARTER
ANCILLARY AGREEMENT


by
and among


SHIP
FINANCE INTERNATIONAL LIMITED,


THE
VESSEL OWNING SUBSIDIARIES NAMED HEREIN,


FRONTLINE
LTD.


AND


FRONTLINE
SHIPPING LIMITED




























CHARTER
ANCILLARY AGREEMENT




THIS
CHARTER ANCILLARY AGREEMENT is entered into as of January 1, 2004 by and among
Ship Finance International Limited, a Bermuda corporation (the “Company”), the
vessel owning subsidiaries named on Schedule A hereto (the “Owners”), Frontline
Ltd., a Bermuda corporation (“Frontline”), and Frontline Shipping Limited, a
Bermuda corporation (the “Charterer”). The Company, the Owners, Frontline and
the Charterer and any Substitute Owners that execute counterpart signature pages
pursuant to Section 8.6(b) are collectively referred to herein as the
“Parties.”




RECITALS:




WHEREAS,
the Owners are the owners of those vessels (the “Vessels”) set forth opposite
their names on Schedule A hereto;




WHEREAS,
pursuant to the Fleet Purchase Agreement, Frontline has agreed to sell to the
Company, and the Company has agreed to purchase from Frontline, either directly
or indirectly through intermediate holding companies, all of the issued and
outstanding shares of capital stock of each of the Owners on the terms and
subject to the conditions set forth therein;




WHEREAS,
pursuant to the Charters, each of the Owners has agreed to charter its Vessel to
the Charterer, on the terms and subject to the conditions set forth
therein;




WHEREAS,
pursuant to the Management Agreements, Frontline Management has agreed to
provide to the Owners certain technical and operational management services with
respect to the Vessels, on the terms and subject to the conditions set forth
therein;




WHEREAS,
pursuant to the Administrative Services Agreement, Frontline Management has
agreed to provide to the Company certain administrative support services,
including corporate compliance, payroll, tax, regulatory compliance, legal and
other administrative services, on the terms and subject to the conditions set
forth therein;




WHEREAS,
pursuant to the Performance Guarantee, Frontline has agreed to guarantee the
performance of the obligations of the Charterer under the Charters (other than
the payment of charter hire) and this Agreement and the obligations of Frontline
Management under the Management Agreements and the Administrative Services
Agreement;




WHEREAS,
the Parties desire to enter into this Agreement to evidence the Parties’
understanding with respect to, among other things, the Charter Service Reserve,
the deferral of certain payments owing by the Charterer to the Owners under the
Charters in certain circumstances, the payment by the Charterer to the Company
of certain profit sharing bonus amounts and certain collateral arrangements with
respect to the Charterer’s obligations under this Agreement and the
Charters;




NOW,
THEREFORE, in consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
hereby agree as follows:


















ARTICLE
I


DEFINITIONS;
INTERPRETATION; EFFECTIVE DATE




1.1  Definitions.




As
used in this Agreement, the following terms shall have the respective meanings
set forth below. Capitalized terms that are used but not defined herein shall
have the meanings set forth in the Fleet Purchase Agreement.




“Accumulated Off Hire Allowance”means, with respect to a Vessel, the aggregate Off Hire Allowance for
such Vessel giving effect to the Off Hire Allowance for the calendar year in
which such determination is made and for all prior years from inception of its
respective Charter until any date of determination.




“Accumulated Off Hire Amount”means, with respect to a Vessel, the aggregate Off Hire Amount for such
Vessel from inception of its respective Charter until any date of
determination.




“Administrative Services Agreement”means that certain Administrative Services Agreement, dated as of January
1, 2004, among Frontline Management, the Company and the Owners.




“Affiliate”of a Person means
any Person directly or indirectly controlling, controlled by, or under common
control with such Person.




“Agreement”means this
Charter Ancillary Agreement, as it may be amended, modified, or supplemented
from time to time.




“Annual Financial Statements”has the meaning set forth in Section 2.4(c).




“Bonus Deferral”has the
meaning set forth in Section 4.3(b).




“Bonus Payment”has the
meaning set forth in Section 4.1.




“Bonus Payment Date”has the
meaning set forth in Section 4.3(a).




“Bonus Payment Schedule”has
the meaning set forth in Section 4.2(a).




“Business Day”means any day
other than (a) Saturday or Sunday or (b) any other day on which banks in New
York, New York or Oslo, Norway are permitted or required to be
closed.




“Cash”means United States
currency on hand and on deposit and demand deposits.


















“Cash Equivalents”
means:




(1)           securities
issued or directly and fully guaranteed or insured by the United States
Government or any agency or instrumentality of the United States (provided that
the full faith and credit of the United States is pledged in support thereof),
having maturities of not more than one year from the date of
acquisition;




(2)           marketable
general obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition and, at the time of
acquisition, having a credit rating of “A” or better from either Standard &
Poor’s Ratings Services or Moody’s Investors Service, Inc.;




(3)           certificates
of deposit, time deposits, eurodollar time deposits, overnight bank deposits or
bankers’ acceptances having maturities of not more than one year from the date
of acquisition thereof issued by any bank or financial institution the long-term
debt of which is rated at the time of acquisition thereof at least “A” or the
equivalent thereof by Standard & Poor’s Ratings Services, or “A” or the
equivalent thereof by Moody’s Investors Service, Inc., and having combined
capital and surplus in excess of $500.0 million;




(4)           repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (1), (2) and (3) entered into with any bank
meeting the qualifications specified in clause (3) above;




(5)           commercial
paper rated at the time of acquisition thereof at least “A-2” or the equivalent
thereof by Standard & Poor’s Ratings Services or “P-2” or the equivalent
thereof by Moody’s Investors Service, Inc., or carrying an equivalent rating by
a nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in any case maturing within one
year after the date of acquisition thereof; and




(6)           interests
in any investment company or money market fund which invests primarily in
instruments of the type specified in clauses (1) through (5) above.




“Charter Service Reserve”means, at any time of determination, all Cash and Cash Equivalents held
by the Charterer, except for any such Cash and Cash Equivalents in excess of the
then applicable Minimum Reserve.




“Charters”means those
certain Time Charters, dated as of January 1, 2004, between the Charterer and
the Owners, in each case with respect to the Vessel owned by each such Owner, as
set forth on Schedule A.




“Earnings Account”has the
meaning set forth in Section 2.5.













“Event of Default”means:




(a)           any
material breach by the Charterer of any provision of any Charter (including the
failure to make charter payments thereunder when due; provided, however, that
the exercise by the Charterer of its rights under Article III of this Agreement
shall not be deemed to be an Event of Default);




(b)           any
material breach by the Charterer or Frontline of any provision of this Agreement
or the Performance Guarantee;




(c)           any
material breach by Frontline Management of any provision of any Management
Agreement; or




(d)           the
failure of the Charterer at any time to hold at least $55,000,000 in
Cash




or
Cash Equivalents.




“Fleet Closing Date”has the
meaning set forth in Section 1.3.




“Fleet Purchase Agreement”means that certain Fleet Purchase Agreement, dated as of December 11,
2003, between Frontline and the Company.




“Frontline Management”means
Frontline Management (Bermuda) Ltd., a Bermuda corporation and wholly owned
subsidiary of Frontline.




“GAAP”means United States
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, which
are in effect from time to time.




“Indebtedness”means at a
particular time, without duplication, (i) any indebtedness for borrowed money or
issued in substitution for or exchange of indebtedness for borrowed money, (ii)
any indebtedness evidenced by any note, bond, debenture or other debt security,
(iii) any indebtedness for the deferred purchase price of property or services
with respect to which a Person is liable, contingently or otherwise, as obligor
or otherwise, (iv) any commitment by which a Person assures a creditor against
loss (including, without limitation, contingent reimbursement obligations with
respect to letters of credit), (v) any indebtedness guaranteed in any manner by
a Person (including, without limitation, guarantees in the form of an agreement
to repurchase or reimburse), (vi) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise as obligor,
guarantor or otherwise, or with respect to which obligations a Person assures a
creditor against loss, and (vii) any indebtedness secured by a lien on a
Person’s assets; provided, however, that the obligations of the Charterer under
the Charters shall not be deemed to be Indebtedness.


















“Lien”means any mortgage,
pledge, security interest, encumbrance, lien or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement or like instrument under the laws of
any jurisdiction).




“Management Agreements”means
those certain Management Agreements entered into or to be entered into between
Frontline Management and the Owners, in each case with respect to the Vessel
owned by each such Owner, as set forth on Schedule A.




“Minimum Reserve”means
US$250,000,000 (provided, however, that the Minimum Reserve shall be decreased
by an amount equal to US$5,300,000 upon the termination of any Charter after the
date hereof other than by reason of default by the Charterer under this
Agreement or the Charters).




“Off Hire Allowance”means,
for any calendar year with respect to a Vessel, an amount equal to 5 multiplied
by the charter hire rate (set forth in Clause 44 of the applicable Charter)
applicable to such Vessel under its respective Charter.




“Off Hire Amount”means, with
respect to a Vessel, an amount equal to the number of days of actual off-hire
for such Vessel multiplied by the charter hire rate (set forth in Clause 44 of
the applicable Charter) applicable to such Vessel under its respective
Charter.




“Organizational Documents”means, with respect to a particular Person (other than an individual),
the certificate or articles of incorporation, bylaws, partnership agreement,
limited liability company agreement or similar organizational document or
agreement, as applicable, of such person.




“Payment Date”has the
meaning set forth in Section 2.2(i).




“Performance Guarantee”means
that certain Performance Guarantee, dated as of the date hereof, issued by
Frontline in favor of the Company and the Owners.




“Permitted Liens”
means:




(a)           Liens
for taxes or assessments that are not yet delinquent or, if delinquent, are
being contested in good faith by appropriate actions and for which adequate
reserves or other appropriate provisions, if any, as required by GAAP, have been
established;




(b)           materialmen’s,
mechanic’s, repairman’s, employee’s, contractor’s, operator’s and other similar
Liens or charges arising in the ordinary course of business for amounts that are
not yet delinquent (including any amounts being withheld as provided by law), or
if delinquent, are being contested in good faith by appropriate actions and for
which adequate reserves or other appropriate provisions, if any, as required by
GAAP, have been established;


















(c)           vessel
chartering, drydocking or maintenance, the furnishing of supplies and bunkers to
vessels, repairs and improvements to vessels, crews’ wages and other maritime
Liens incurred in the ordinary course of business;




(d)           Liens
for salvage and general average; and




(e)           easements,
rights-of-way, servitudes, permits, surface leases and other rights in respect
of surface operations arising or incurred in the ordinary course of
business.




“Person”means any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, limited liability company,
government or any agency or political subdivision thereof or any other
entity.




“Quarterly Financial Statements”has the meaning set forth in Section 2.4(b).




“Security Interests”has the
meaning set forth in Section 5.1.




“Subsidiaries”means the
Owners and any other current or future direct or indirect subsidiary of the
Company.




“Substitute Owner”has the
meaning set forth in Section 8.6(b).




“Successful Public Listing”means the completion of one or more transactions that result in at least
20% of the then outstanding common stock of the Company being listed or quoted
for public trading on the Oslo Stock Exchange, the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market System or other United
States national securities exchange.




“Suezmax”means each of the
Vessels that is classified as a Suezmax tanker vessel (between 120,000 and
200,000 dwt).




“Suezmax Bonus Amount”means
the portion of a Bonus Payment for any period of determination attributable to
the Suezmaxes and shall be calculated in accordance with the following
formula:




Suezmax
Bonus Amount = 0.20 x (TCE revenues of Suezmaxes - ($21,100 x number of days
during the period of determination x Number of Suezmaxes))




where
(i) “TCE revenues of Suezmaxes” means the revenues of the Charterer on a time
charter equivalent basis attributable to the Suezmaxes during such period of
determination (calculated in a manner consistent with that used in Frontline’s
public reports) and (ii) “Number of Suezmaxes” means the weighted average number
of Suezmaxes during such period of determination; and provided that (x) for
purposes of calculating bareboat revenues on a time charter equivalent basis,
expenses shall be













assumed
to equal $6,500 per day and (y) no non-double-hulled Vessels shall be included
in the calculation of the Suezmax Bonus Amount for any period after
2010.




“Vessels”has the meaning set
forth in the first recital.




“VLCC”means each of the
Vessels that is classified as a VLCC tanker vessel (between 200,000 and 295,000
dwt).




“VLCC Bonus Amount”means the
portion of a Bonus Payment for any period of determination attributable to the
VLCCs and shall be calculated in accordance with the following
formula:




VLCC
Bonus Amount = 0.20 x (TCE revenues of VLCCs – ($25,575 x number of days during
the period of determination x Number of VLCCs))




where
(i) “TCE revenues of VLCCs” means the revenues of the Charterer on a time
charter equivalent basis attributable to the VLCCs during such period of
determination (calculated in a manner consistent with that used in Frontline’s
public reports) and (ii) “Number of VLCCs” means the weighted average number of
VLCCs during such period of determination; and provided that (x) for purposes of
calculating bareboat revenues on a time charter equivalent basis, expenses shall
be assumed to equal $6,500 per day and (y) no non-double-hulled Vessels shall be
included in the calculation of the VLCC Bonus Amount for any period after
2010.




1.2References;
Headings; Interpretation.All references in this Agreement to Annexes,
Exhibits, Schedules, Articles, Sections, subsections and other subdivisions
refer to the corresponding Annexes, Exhibits, Schedules, Articles, Sections,
subsections and other subdivisions of or to this Agreement unless expressly
provided otherwise. Titles appearing at the beginning of any Articles, Sections,
subsections or other subdivisions of this Agreement are for convenience only, do
not constitute any part of this Agreement, and shall be disregarded in
construing the language hereof. The words “this Agreement,” “herein,” “hereby,”
“hereunder” and “hereof” and words of similar import refer to this Agreement as
a whole and not to any particular subdivision unless expressly so limited. The
words “this Article,” “this Section” and “this subsection” and words of similar
import refer only to the Article, Section or subsection hereof in which such
words occur. The word “or” is not exclusive, and the word “including” (in its
various forms) means including without limitation. Pronouns in masculine,
feminine or neuter genders shall be construed to state and include any other
gender, and words, terms and titles (including terms defined herein) in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.




1.3Effective
Date.This Agreement shall be effective as of the date (the “Fleet
Closing Date”) on which the Company has completed the purchase from Frontline of
the Interests (as defined in the Fleet Purchase Agreement), directly or
indirectly through intermediate holding companies, in at least 45 of the Vessel
Owning Subsidiaries set forth on Schedule 3.19 to the Fleet Purchase
Agreement.


















ARTICLE
II


COVENANTS




2.1  Charter Service
Reserve




(a)           On
or prior to the Fleet Closing Date, Frontline will make a capital contribution
to the Charterer of Cash or Cash Equivalents in an amount equal to at least
US$250,000,000 to initially fund the Charter Service Reserve.




(b)           The
Charterer shall be entitled to use the Charter Service Reserve only (i) to make
charter payments to the Company under any Charter or (ii) for reasonable working
capital purposes to meet short-term voyage expenses.




2.2Negative
Covenants of the Charterer.The Charterer hereby covenants and undertakes
with the Company and each of the Owners that the Charterer will not, without the
consent of the Company:




(a)           amend
its Organizational Documents in a manner that would adversely affect the
Company;




(b)           take
any action, or omit to take any action, which could reasonably be expected to
result in a violation of its Organizational Documents;




(c)           fail
at any time to have at least one independent director in accordance with its
Organizational Documents;




(d)           engage
in any business other than the operation and chartering of the Vessels and the
activities incidental thereto;




(e)           incur
any Indebtedness, other than trade payables and other current liabilities
incurred in the ordinary course of business;




(f)           enter
into any transaction that involves (i) a sale, exchange or other disposition of
all or substantially all of the assets of the Charterer and its subsidiaries
taken as a whole, (ii) a sale, exchange or other disposition of all or
substantially all of the assets of any subsidiary of the Charterer or (iii) any
merger, consolidation or business combination of the Charterer or any of its
subsidiaries with another Person (other than a merger, consolidation or business
combination among two or more of such subsidiaries);




(g)           enter
into any transaction with any Affiliate (other than the Company or any
Subsidiary), except for any such transaction entered into on an arm’s-length
basis and on terms no less favorable to the Charterer than would be available
from a disinterested or unconnected third party;




(h)           permit
the incurrence of any Lien on any of its assets, other than Permitted Liens and
other than as contemplated by Article V (Collateral Arrangements);


















(i)           declare
or make any dividend or distribution of any kind whatsoever to its shareholders
(including through a buyback, redemption or repurchase of its securities) or
loan, repay or make any other payment in respect of Indebtedness of the
Charterer or any affiliate thereof (other than the Company and the Subsidiaries)
unless (i) the Charterer is then in compliance with all of its obligations under
this Agreement, (ii) after giving effect to the declaration or payment of any
such dividend or distribution or loan or payment in respect of such
Indebtedness, (A) the Charterer will continue to be in compliance with all of
its obligations under this Agreement, (B) the Charter Service Reserve equals at
least the then applicable Minimum Reserve and (C) the chief financial officer of
the Charterer certifies to the Company that he reasonably believes that the
amount of the Charter Service Reserve will equal or exceed the then applicable
Minimum Reserve for at least 30 days after the date of any such payment (each, a
“Payment Date”), taking into consideration the Charterer’s reasonably expected
payment obligations during such 30-day period, (iii) any charter payments
deferred pursuant to Article III have been paid to the Company prior to any such
Payment Date and (iv) any Bonus Payments deferred pursuant to Article IV have
been paid to the Company prior to any such Payment Date;




(j)           issue
or grant to any Person other than Frontline any shares of capital stock or other
ownership interests in the Charterer or any warrants, options, convertible or
exchangeable securities or indebtedness, or any other rights to purchase or
acquire, or exercisable for or convertible into or exchangeable into, any such
shares of capital stock or such other ownership interests; and




(k)           make
any investment in, acquire or purchase any stock, partnership or joint venture
interest or other security of, or loan, advance or contribute capital to, or
grant a financial guaranty or other similar assurance for the benefit of,
another Person, other than investments in short-term interest bearing marketable
securities;




2.3Covenants
of Frontline.Frontline hereby covenants and undertakes with the Company
and each of the Owners that:




(a)           the
Charterer will at all times be a wholly owned subsidiary of Frontline;
and




(b)           except
as contemplated by Article V, Frontline will not sell, transfer, assign or
otherwise dispose of legal or beneficial ownership of any securities of the
Charterer held by Frontline.




2.4Financial
Statements and Other Information.The Charterer hereby covenants and
undertakes with the Company that it will deliver to the Company:




(a)           as
soon as practicable and in any event within (i) 10 days after the end of each
month in each fiscal year or (ii) two Business Days after request by the
Company, a certificate executed by its chief financial officer which (1) sets
forth the balance of the Charter Service Reserve as of the beginning and end of
such month, (2) sets forth in reasonable detail all payments into and from the
Charter Service Reserve during such month and (3) provides that no Event of
Default is then occurring or, if there is an Event of Default then occurring,
describes in reasonable detail such Event of Default;

















(b)           following
a Successful Public Listing, as soon as practicable and in any event within 45
days after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income, changes in
stockholders’ equity and changes in financial position of the Charterer for such
quarterly period and for the period from the beginning of the current fiscal
year to the end of such quarterly period, and a consolidated balance sheet of
the Charterer as at the end of such quarterly period, all unaudited but prepared
in accordance with GAAP on a basis consistent with past practice (collectively,
the “Quarterly Financial Statements”); and




(c)           following
a Successful Public Listing, as soon as practicable and in any event within 120
days after the end of each fiscal year, consolidated statements of income,
changes in stockholders’ equity and changes in financial position of the
Charterer for such year, and a consolidated balance sheet of the Charterer as at
the end of such year, in each case audited for the Charterer by independent
public accountants of recognized standing selected by the Charterer, whose
report shall state that such consolidated financial statements present fairly
the results of operations, cash flows and financial position of the Charterer in
accordance with GAAP on a basis consistent with prior periods except as noted
therein and that the examination by such accountants has been made in accordance
with generally accepted auditing standards (collectively, the “Annual Financial
Statements”).




2.5Earnings
Account.The Charterer shall cause all of its revenues to be deposited into
an earnings account (the “Earnings Account”).




ARTICLE
III


DEFERRAL
OF CHARTER PAYMENTS




3.1Deferral
of Charter Payments.For any period during which the Cash and Cash
Equivalents held by the Charterer is less than $75,000,000, each Owner agrees
that the Charterer shall be entitled to defer from the monthly payments due
under each Charter up to $4,600 per day for each VLCC and up to $3,400 per day
for each Suezmax; provided, however, that in no event shall any such deferral
with respect to any particular Charter be outstanding with respect to more than
one year at any given time. The Charterer shall immediately use all charter
payments received by the Charterer from third parties under any subcharters with
respect to the Vessels that are in excess of the then applicable fixed daily
charter rates for such Vessels payable to the Company under the applicable
Charters to pay any amounts so deferred at such time as the Cash and Cash
Equivalents held by the Charterer are greater than $75,000,000; provided,
however, that the Charterer shall not be obligated to make any such payment (x)
if the chief financial officer of the Charterer reasonably believes that the
amount of Cash and Cash Equivalents held by the Charterer will not equal or
exceed $75,000,000 for at least 30 days after the date of such payment taking
into consideration the Charterer’s reasonably expected payment obligations
during such 30-day period and (y) until such payment would be at least
$2,000,000. The Charterer shall not be obligated to pay any interest on any
amounts so deferred.


















3.2Notice
of Deferral.The Charterer shall promptly notify the Company in
accordance with Section 7.6 of its decision to exercise its right to defer
payments under Section 3.1 and shall provide the Company with a certificate
executed by the chief financial officer of the Charterer, setting forth in
reasonable detail the basis for such deferral.




ARTICLE
IV


BONUS
PAYMENTS




4.1Bonus
Payments.The Charterer shall pay to the Company periodic profit sharing
bonus payments (each, a “Bonus Payment”) equal to (a) the VLCC Bonus Amount for
the applicable period plus (b) the Suezmax Bonus Amount for the applicable
period (provided, however, that in no event shall such Bonus Payment be less
than $0), as determined in accordance with the terms of this Article
IV.




4.2  Preparation and
Delivery of Bonus Payment Schedules.




(a)           No
later than March 1, 2005, the Charterer shall prepare or cause to be prepared,
and shall deliver to the Company, a schedule (each, a “Bonus Payment Schedule”)
with respect to the period from February 1, 2004 through December 31, 2004. Such
Bonus Payment Schedule shall set forth, in each case with respect to such
period, (i) the TCE revenues of the VLCCs, (ii) the TCE revenues of the
Suezmaxes and (iii) the Charterer’s calculation of the VLCC Bonus Amount, the
Suezmax Bonus Amount and the Bonus Payment, if any. The Charterer shall
thereafter provide to the Company such supporting work papers or other
supporting information as may be reasonably requested by the Company. Such Bonus
Payment Schedule shall be prepared in accordance with GAAP, consistent with the
preparation of Frontline’s accounts, and shall be certified by the chief
financial officer of the Charterer and, if requested by the Company, the
Charterer’s independent accountants.




(b)           No
later than March 1 of each calendar year after 2005, the Charterer shall prepare
or cause to be prepared, and shall deliver to the Company, a Bonus Payment
Schedule with respect to the preceding calendar year. Each Bonus Payment
Schedule shall set forth, in each case with respect to the preceding calendar
year, (i) the TCE revenues of the VLCCs, (ii) the TCE revenues of the Suezmaxes
and (iii) the Charterer’s calculation of the VLCC Bonus Amount, the Suezmax
Bonus Amount and the Bonus Payment, if any. The Charterer shall thereafter
provide to the Company such supporting work papers or other supporting
information as may be reasonably requested by the Company. Such Bonus Payment
Schedule shall be prepared in accordance with GAAP, consistent with the
preparation of Frontline’s accounts, and shall be certified by the chief
financial officer of the Charterer and, if requested by the Company, the
Charterer’s independent accountants.


















4.3  Delivery of Bonus
Payment.




(a)           Subject
to the other provisions of this Section 4.3, any Bonus Payments determined to be
payable by the Charterer to the Company shall be made by wire transfer of
immediately available funds to the wire transfer address of the Company no later
than five Business Days following the date on which the Charterer is required to
deliver the corresponding Bonus Payment Schedule (each, a “Bonus Payment Date”),
which wire transfer address shall be designated by the Company by notice to the
Charterer on or before the second Business Day prior to such Bonus Payment Date;
provided that if no such notice is delivered by the Company, the Charterer shall
make payment to the wire transfer address previously designated by the
Company.




(b)           If
(i) the amount of the Charter Service Reserve on any Bonus Payment Date is less
than the then applicable Minimum Reserve or (ii) the payment of any Bonus
Payment on any such Bonus Payment Date would cause the amount of the Charter
Service Reserve to fall below the then applicable Minimum Reserve, then the
Charterer shall be entitled to defer without interest the payment of (x) in the
case of clause (i) above, all or any portion of such Bonus Payment and (y) in
the case of clause (ii) above, all or any portion of an amount equal to (1) the
amount of such Bonus Payment minus (2) the difference between (A) the amount of
the Charter Service Reserve on such Bonus Payment Date prior to any such payment
minus (B) the then applicable Minimum Reserve (each, a “Bonus
Deferral”).




(c)           The
Charterer shall immediately use all charter payments received by the Charterer
from third parties under any subcharters with respect to the Vessels that are in
excess of the then applicable fixed daily charter rates for such Vessels payable
to the Company under the applicable Charters to pay any Bonus Payment amounts so
deferred at such time as the Charter Service Reserve equals or exceeds the
Minimum Reserve; provided, however, that the Charterer shall not be obligated to
make any such payment (x) if the chief financial officer of the Charterer
reasonably believes that the amount of the Charter Service Reserve will not
equal or exceed the Minimum Reserve for at least 30 days after the date of such
payment taking into consideration the Charterer’s reasonably expected payment
obligations during such 30-day period and (y) until such payment would be at
least $2,000,000.




(d)           Prior
to any such deferral of any Bonus Payment, the Charterer shall provide the
Company with a certificate executed by the chief financial officer of the
Charterer, setting forth the amount of the Charter Service Reserve on such Bonus
Payment Date.




4.4Marketing;
Preferential Treatment.During the term of this Agreement, the Charterer
shall use its commercial best efforts to charter the Vessels on market terms
(including, without limitation, ensuring that preferential treatment is not
given to any other vessels owned, managed by or under control of Frontline or
any of its affiliates (including, without limitation, Greenwich Holdings Ltd and
any affiliates thereof) when marketing any of the Vessels).


















ARTICLE
V


COLLATERAL
ARRANGEMENTS




5.1Collateral.The Charterer, the Company and Frontline covenant and agree that the
Charterer’s obligations under this Agreement and the Charters shall be secured
by (a) a first priority floating charge over all of the undertaking and all of
the assets and rights (including the Earnings Account and Charter Service
Reserve) of the Charterer whatsoever and wheresoever both present and future and
(b) a first priority fixed charge over all outstanding capital stock of the
Charterer (collectively, the “Security Interests”). The Charterer and Frontline
agree that they shall execute such documents and do such things as may
reasonably be required by the Company’s lenders in order to give full effect to
their covenants in this Section 5.1.




ARTICLE
VI


OFF-HIRE




6.1Off-Hire.Irrespective of the actual
number of days off-hire for any one Vessel under its respective Charter, the
Charterer agrees to continue to pay the agreed charter hire payments under the
Charter to the Owner of such Vessel, and will not deduct for any off-hire, as
long as the aggregate Accumulated Off Hire Amount for all Vessels then in the
fleet is less than or equal to the aggregate Accumulated Off Hire Allowance for
all such Vessels.




6.2  Off-Hire
Certifications.




(a)           In
any month in which the Charterer makes any deductions for off-hire from any
charter hire payments due under any Charter, the Charterer shall, concurrently
with such monthly charter hire payment, provide the Company with a certificate
executed by an officer of the Charterer, setting forth in reasonable detail the
basis for such deduction.




(b)           No
later than February 1 of each calendar year, the Charterer shall promptly
provide the Company with a certificate executed by the chief financial officer
of the Charterer, setting forth in reasonable detail (i) the aggregate
Accumulated Off Hire Allowance for all Vessels in the fleet and (ii) the
aggregate Accumulated Off Hire Amount for all Vessels in the fleet, in each case
as of the end of the preceding calendar year.




ARTICLE
VII


DEFAULTS




7.1Defaults.Upon the occurrence of any Event of Default that remains uncorrected for
a period of 30 days following notice thereof by the Company to the Charterer,
then the Company shall have the option to declare such Event of Default to be a
breach by the Charterer of any or all of the Charters, in which case the Company
or the Owners may (a) terminate any or all of the Charters by delivery of notice
to the Charterer in accordance with Section 8.7, (b) foreclose upon any or all
of the Security Interests or (c) exercise any or all other rights and remedies
available to the Company or the Owners at law or in equity.


















ARTICLE
VIII


MISCELLANEOUS




8.1Term.Following effectiveness in accordance with Section 1.3, this Agreement
shall terminate upon the termination of the last Charter then in effect;
provided, however, that the termination of this Agreement shall not impair any
rights or obligations of any Party arising hereunder prior to such
termination.




8.2Choice
of Law.This
Agreement shall be governed by and construed in accordance with the laws of
England.




8.3Arbitration.Any dispute arising under this Agreement shall be resolved by arbitration
in London in accordance with the provisions this Section 8.3 and the provisions
of the Arbitration Act 1996, or any statutory modification or re-enactment
thereof for the time being in force save to the extent necessary to give effect
to the provisions of this Section 8.3. The arbitration shall be conducted in
accordance with the London Maritime Arbitrators Association (LMAA) on terms
current at the time when the arbitration proceedings are commenced. The
reference shall be to three arbitrators: one to be appointed by the Company and
the Owners, one to be appointed by the Charterer and Frontline and the third to
be appointed by the two arbitrators so chosen, The decision of a majority of the
arbitrators shall be final and binding on the Parties. Nothing herein shall
prevent the parties from agreeing in writing to vary these provisions to provide
for the appointment of a sole arbitrator. In cases where neither the claim nor
any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties
may agree) the arbitration shall be conducted in accordance with the LMAA Small
Claims Procedure current at the time when the arbitration proceedings are
commenced.




8.4Entire
Agreement.This Agreement constitutes the entire agreement of the Parties
relating to the matters contained herein, superseding all prior contracts or
agreements, whether oral or written, relating to the matters contained
herein.




8.5Amendment
or Modification.This Agreement may be amended or modified from time to
time only by the written agreement of all of the Parties.




8.6  Assignment;
Joinder.




(a)           No
Party shall have the right to assign its rights or obligations under this
Agreement without the consent of the other Parties hereto.




(b)           Each
of the Parties acknowledges that the Fleet Purchase Agreement provides for the
purchase by the Company of all of the issued and outstanding shares of capital
stock of one or more vessel-owning entities owned by Frontline (each, a
“Substitute Owner”) in place of one or more of the Vessel Owning Subsidiaries
set forth on Schedule 3.19 to the Fleet Purchase Agreement in certain
circumstances. In the event that the Company acquires any such Substitute Owner,
Frontline and the Company agree that they shall cause such Substitute Owner (if
it owns its vessel directly) or the subsidiary of such Substitute Owner that
owns such vessel directly (if such Substitute Owner does not own its vessel
directly) to become an Owner hereunder by executing a counterpart signature page
to this Agreement, in the form attached hereto, prior to the closing under the
Fleet Purchase Agreement of the acquisition of such Substitute Owner. The
Parties agree that such Substitute Owner or such Substitute Owner’s subsidiary,
as the case may be, shall be deemed to be a Party and that the vessel owned by
such Substitute Owner or such Substitute Owner’s subsidiary, as the case may be,
shall be deemed to be a Vessel for all purposes under this Agreement. The
Parties further agree that the Owner for which such Substitute Owner or such
Substitute Owner’s subsidiary, as the case may be, was substituted shall no
longer be deemed to be a Party and that the vessel owned by such Owner shall no
longer be deemed to be a Vessel for any purpose under this
Agreement.

















8.7Notices.Unless otherwise provided herein, any notice, request, consent,
instruction or other document to be given hereunder by any Party to another
Party shall be in writing and will be deemed given (a) when received if
delivered personally or by courier; or (b) on the date receipt is acknowledged
if delivered by certified mail, postage prepaid, return receipt requested or (c)
on the day of transmission if sent by facsimile transmission and receipt thereof
is confirmed, as follows:




(a)           if
to the Company, addressed to:




Ship
      Finance International Limited
              Par-La-Ville
      Place
              14
      Par-La-Ville Road
              Hamilton,
      Bermuda HM 08
              Attention:
      Finance Department
              Facsimile:
      +1 (441) 295-3494


(b)           if
to any Owner, c/o the Company at the Company’s address set forth
above;




(c)           if
to Frontline, addressed to:




Frontline
      Ltd.
              Par-La-Ville
      Place
              14
      Par-La-Ville Road
              Hamilton,
      Bermuda HM 08
              Attention:
      Finance Department
              Facsimile:
      +1 (441) 295-3494


(d)           if
to the Charterer, c/o Frontline at Frontline’s address set forth
above;




or
to such other place and with such other copies as any Party may designate as to
itself by written notice to the others in accordance with this Section
7.6.


















8.8Counterparts.This Agreement may be
executed in any number of counterparts with the same effect as if all signatory
parties had signed the same document. All counterparts shall be construed
together and shall constitute one and the same instrument.




8.9Severability.If any provision of this Agreement or the application thereof to any
Person or circumstance shall be held invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected thereby and shall be enforced to
the greatest extent permitted by law.




8.10U.S. Currency.All sums and amounts payable to or to be payable pursuant to the
provisions of this Agreement shall be payable in coin or currency of the United
States of America that, at the time of payment, is legal tender for the payment
of public and private debts in the United States of America.













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




SHIP
      FINANCE INTERNATIONAL LIMITEDBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGRANITE
      SHIPPING CO. LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGOLDEN
      CURRENT LIMITEDBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactBONFIELD
      SHIPPING LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFOURWAYS
      MARINE LIMITEDBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      ARDENNE INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      BRABANT INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














FRONT
      FALCON INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      GLORY SHIPPING INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      PRIDE SHIPPING INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      SAGA INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      SERENADE INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      SPLENDOUR SHIPPING INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      STRATUS INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














GOLDEN
      BAYSHORE SHIPPING CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGOLDEN
      ESTUARY CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGOLDEN
      FJORD CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGOLDEN
      SEAWAY CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGOLDEN
      SOUND CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactGOLDEN
      TIDE CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactKATONG
      INVESTMENTS LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














LANGKAWI
      SHIPPING LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactPATRIO
      SHIPPING LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactRAKIS
      MARITIME S.A.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactSEA
      ACE CORPORATIONBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactSIBU
      SHIPPING LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactSOUTHWEST
      TANKERS INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactWEST
      TANKERS INC.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














PUERTO
      REINOSA SHIPPING CO S.A.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactASPINALL
      PTD LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactBLIZANA
      PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactBOLZANO
      PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactCIREBON
      SHIPPING PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFOX
      MARITIME PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      DUA PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














FRONT
      EMPAT PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      ENAM PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      LAPAN PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      LIMA PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      TIGA PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      TUJUH PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONT
      SEMBILAN PTD LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














RETTIE
      PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactTRANSCORP
      PTE LTD.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactEDINBURGH
      NAVIGATION S.A.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactARIAKE
      TRANSPORT CORP.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactHITATCHI
      HULL # 4983 CORP.By:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactOSCILLA
      SHIPPING LIMITEDBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-FactFRONTLINE
      SHIPPING LIMITEDBy:
            /s/
      Matthew R. CooleyName:
      Matthew R. CooleyTitle:
      Attorney-in-Fact














FRONTLINE
      LTD.By:
            /s/
      Gary J. WolfeName:
      Gary J. WolfeTitle:
      Attorney-in-Fact



















Counterpart
Signature Page for Substitute Owners pursuant to Section 8.6(b)




Pursuant
to Section 8.6(b) hereof, the undersigned hereby executes and delivers and
becomes an Owner under this Agreement as of the date set forth
below.




[NAME
      OF SUBSTITUTE OWNER]By:Name:Title:














SCHEDULE
A




OWNERS
AND VESSELS




Owner
            
            VesselGranite
      Shipping Co. Ltd.
            
            Front
      GraniteGolden
      Current Limited
            
            OpaliaBonfield
      Shipping Ltd.
            
            Front
      DriverFourways
      Marine Limited
            
            Front
      SpiritFront
      Ardenne Inc.
            
            Front
      ArdenneFront
      Brabant Inc.
            
            Front
      BrabantFront
      Falcon Inc.
            
            Front
      FalconFront
      Glory Shipping Inc.
            
            Front
      GloryFront
      Pride Shipping Inc.
            
            Front
      PrideFront
      Saga Inc.
            
            Front
      PageFront
      Serenade Inc.
            
            Front
      SerenadeFront
      Splendour Shipping Inc.
            
            Front
      SplendourFront
      Stratus Inc.
            
            Front
      StratusGolden
      Bayshore Shipping Corporation
            
            Navix
      AstralGolden
      Estuary Corporation
            
            Front
      ComancheGolden
      Fjord Corporation
            
            Front
      CommerceGolden
      Seaway Corporation
            
            New
      VanguardGolden
      Sound Corporation
            
            New
      VistaGolden
      Tide Corporation
            
            New
      CircassiaKatong
      Investments Ltd.
            
            Front
      BreakerLangkawi
      Shipping Ltd.
            
            Front
      BirchPatrio
      Shipping Ltd.
            
            Front
      HunterRakis
      Maritime S.A.
            
            Front
      FighterSea
      Ace Corporation
            
            Front
      AceSibu
      Shipping Ltd.
            
            Front
      MapleSouthwest
      Tankers Inc.
            
            Front
      SundaWest
      Tankers Inc.
            
            Front
      ComorPuerto
      Reinosa Shipping Co. S.A.
            
            Front
      LilloAspinall
      Ptd Ltd.
            
            Front
      ViewerBlizana
      Pte Ltd.
            
            Front
      RiderBolzano
      Pte Ltd.
            
            MindanaoCirebon
      Shipping Pte Ltd.
            
            Front
      VanadisFox
      Maritime Pte Ltd.
            
            Front
      SabangFront
      Dua Pte Ltd.
            
            Front
      DuchessFront
      Empat Pte Ltd.
            
            Front
      HighnessFront
      Enam Pte Ltd.
            
            Front
      LordFront
      Lapan Pte Ltd.
            
            Front
      ClimberFront
      Lima Pte Ltd.
            
            Front
      LadyFront
      Tiga Pte Ltd.
            
            Front
      DukeFront
      Tujuh Pte Ltd.
            
            Front
      EmperorFront
      Sembilan Ptd Ltd.
            
            Front
      LeaderRettie
      Pte Ltd.
            
            Front
      StriverTranscorp
      Pte Ltd.
            
            Front
      GuiderEdinburgh
      Navigation S.A.
            
            EdinburghOscilla
      Shipping Limited
            
            OscillaAriake
      Transport Corp.
            
            AriakeHitachi
      Hull # 4983 Corp.
            
            Hakata











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