| (1) | SHIP FINANCE INTERNATIONAL LIMITED (the "Company"); |
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| (2) | THE VESSEL OWNING SUBSIDIARIES LISTED IN SCHEDULE A HERETO (the "Owners"); |
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| (3) | FRONTLINE LTD. ("Frontline"); and |
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| (4) | FRONTLINE SHIPPING II LIMITED (the "Charterer"). |
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| (A) | The Parties are parties to the Agreement, setting forth, inter alia, the terms of certain arrangements supporting and securing the Charterer's ability to pay charter hire under separate charter parties between the Charterer and each of the Owners (the "Charters"). |
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| (B) | Frontline is in the process of completing a financial restructuring (the "Restructuring"). |
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| (C) | As part of the Restructuring, the Charterer and Frontline has asked the Company and the Owners to consent to a reduction of the base charter rate per vessel per day of USD 6,500 under each of the Charters for the period from 1 January 2012 until 31 December 2015 (the "Rate Reduction"). |
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| (D) | As a condition for the Rate Reduction, the Parties wish to make certain changes to the Agreement, including but not limited to (i) release and payment of the Charter Service Reserve (as defined in the Agreement) to the Company, (ii) amendment of the Bonus Payment (as defined in the Agreement), (iii) prepayment of the Bonus Payment in an amount of USD 12 million and (iv) establishment of the Cash Sweep Bonus Payment (as defined below). |
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| (E) | The Company will apply the funds received from the Charterer mentioned in recital (D) above as prepayments under a loan facility relating to the Vessels. |
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| (F) | This Addendum No. 3 is entered into in order to document the said changes to the Agreement. |
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| 1. | DEFINITIONS |
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| 2. | CANCELLATION OF AGREEMENT DATED 6 JULY 2011 |
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| 3. | AMENDMENTS |
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| (a) | Definition of "Bonus Amount" |
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| (b) | Definition of "Cash" |
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| (c) | Definition of "Cash Equivalents" |
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| (d) | Definition of "Cash Sweep Bonus Amount" |
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| (e) | Definition of "Cash Sweep Bonus Payment" |
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| (f) | Definition of "Cash Sweep Schedule" |
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| (g) | Definition of "Charter Service Reserve" |
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| (h) | Definition of "Current Base Rate" |
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| (i) | Definition of "Event of Default" |
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| (a) | any material breach by the Charterer of any provision of any Charter (including the failure to make charter payments thereunder when due); |
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| (b) | any material breach by the Charterer or Frontline of any provision of this Agreement or the Performance Guarantee; or |
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| (c) | any material breach by Frontline Management of any provision of any Management Agreement. |
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| (j) | Definition of "Former Base Rate" |
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| (k) | Definition of "Minimum Reserve" |
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| (l) | Definition of "Performance Guarantee" |
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| (m) | Changes to Section 2.1 (Charter Service Reserve) |
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| (n) | Changes to Section 2.2 (Negative covenants of the Charterer) |
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|   | (h) | 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 its obligations under the Charters and this Agreement and (ii) the Charterer, after giving effect to the declaration or repayment of any such dividend or distribution or the disbursement of any such loan or payment in respect of such Indebtedness, continues to be in compliance with all its obligations under the Charters and this Agreement; |
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|   | (k) | fail at any time to comply with all laws to which it may be subject if failure so to comply will materially impair its ability to perform its obligations under this Agreement or the Charters; and |
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|   | (l) | fail at any time to comply with all national, international and state laws, rules, regulations, treaties and conventions applicable to the Vessels, pertaining to the pollution or protection of human health or the environment including, without limitation, the carriage of oil and other pollutants and actual or threatened emissions, spills, releases or discharges of oil and other pollutants. |
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| (o) | Changes to Section 2.3 (Covenants of Frontline) |
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|   | (c) | Frontline shall remain listed on a well known and reputable stock exchange acceptable to the Company; and |
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|   | (d) | Frontline shall comply with all laws to which it may be subject if failure so to comply will materially impair its or the Charterer's ability to perform its obligations under this Agreement, the Charters and/or the Performance Guarantee, as applicable. |
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| (p) | Changes to Section 2.4 (Financial Statements and Other Information) |
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| Section 2.4 sub-clause (a) shall be deleted and replaced with the following: |
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| (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 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; |
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|   | (a) | as soon as the same becomes available, but in any event within 180 days after the end of each financial year, Frontline's audited financial statements for that financial year; |
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|   | (b) | as soon as the same becomes available, but in any event within 60 days after the end of each financial quarter, Frontline's unaudited quarterly financial statements; |
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|   | (c) | all public documents dispatched by Frontline to the New York Stock Exchange and/or the Oslo Stock Exchange as soon as possible after they are dispatched; and |
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|   | (d) | promptly, such further information regarding any of Frontline's or the Charterer's financial condition, business and operations as the Company and/or its lenders may reasonably request. |
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| (q) | Changes to Section 2.5 of the Agreement |
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| (r) | Changes to Section 3.3 of the Agreement |
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| (s) | New Section 3.5 (Cash Sweep Bonus Payment) of the Agreement |
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| (a) | The Company shall be entitled to periodic profit sharing bonus payments equal to the Cash Sweep Bonus Amount for the applicable period. |
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| (b) | The period upon which the Cash Sweep Bonus Amount shall be determined and booked shall be three calendar months and shall coincide with the calendar quarters of each calendar year. All calculations of the Cash Sweep Bonus Amount shall be made on a year to date basis, less |
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|   | accumulated Cash Sweep Bonus Amounts for the preceding quarters in such calendar year. |
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| (c) | No later than on the last Business Day in the calendar month following the end of each calendar quarter, the Charterer shall prepare or cause to be prepared, and shall deliver to the Company, a schedule with respect to the preceding quarter (each, a "Cash Sweep Schedule"). Each Cash Sweep Schedule shall set forth, in each case on a year to date basis, (i) the TCE revenues of Vessels (broken down per Vessel) and (ii) the Charterer's calculation of the Cash Sweep Bonus Amount. The Charterer shall, at the same time, provide to the Company such supporting work papers or other supporting information as may be reasonably requested by the Company in order to verify the calculation of the Cash Sweep Bonus Amount for the preceding quarter. Such Cash Sweep 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, by the Charterer's independent accountants. |
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| (d) | It is agreed and understood between the Parties that the Cash Sweep Bonus Amount pertaining to a quarter can be positive or negative. |
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| (e) | Following the Charterer's submittal of the Cash Sweep Schedule for the fourth quarter of each calendar year to the Company and the Company's acceptance thereof and subject to the other provisions of this Section 3.5, the Cash Sweep Bonus Amounts (whether positive or negative) for the four quarters of each calendar year shall be aggregated (each, a "Cash Sweep Bonus Payment"). |
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| (f) | Each Cash Sweep Bonus Payment shall be paid by the Charterer by wire transfer of immediately available funds to the wire transfer address of the Company. Such payment shall be made on a Business Day no later than 1 March in the calendar year subsequent to which it pertains. |
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| (g) | The Cash Sweep Bonus Payment for each calendar year shall, in no event, (i) be less than $0 or (ii) exceed the difference between (a) the Former Base Rate multiplied with the number of days each Vessel has been chartered to the Charterer in the relevant calendar year and (b) the Current Base Rate multiplied with the number of days each Vessel has been chartered to the Charterer in the relevant calendar year. |
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| (t) | Changes to Section 4.1 (Collateral) of the Agreement |
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| 4. | PREPAYMENT OF BONUS PAYMENT |
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| 5. | CHARTER SERVICE RESERVE |
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| 6. | MISCELLEANEOUS |
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|  For and on behalf ofSHIP FINANCE INTERNATIONAL LIMITED   /s/Harald GurvinSignature Harald Gurvin Attorney-in-FactName with block letters                                                                                                             |  For and on behalf ofFRONTLINE LTD.   /s/ Magnus VaalerSignature Magnus VaalerName with block letters                                              |   |
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|  For and on behalf ofULTIMATE SHIPPING LIMITEDMILLCROFT MARITIME SAGOLDEN NARROW CORPORATIONHUDSON BAY MARINE COMPANY LIMITEDNEWBOND SHIPPING COMPANY LIMITED    /s/Harald GurvinSignature Harald Gurvin Attorney-in-FactName with block letters |  For and on behalf ofFRONTLINE SHIPPING II LIMITED        /s/ Magnus VaalerSignature Magnus VaalerName with block letters |

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