Exhibit
10.2


 


FLEET PURCHASE AGREEMENT


 


BY AND BETWEEN


 


FRONTLINE LTD.


 


AND


 


SHIP FINANCE
INTERNATIONAL LIMITED


 


Dated as of December 11,
2003


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Definitions

  	
   

  
	
  1.2.

  	
  References;
  Headings; Interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II PURCHASE OF PURCHASED INTERESTS

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Purchase of Purchased
  Interests by Buyer.

  	
   

  
	
  2.2.

  	
  Purchase
  Price/Certain Economic Provisions.

  	
   

  
	
  2.3.

  	
  Closing.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPRESENTATIONS AND WARRANTIES
  OF SELLER

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Organization

  	
   

  
	
  3.2.

  	
  Authority and
  Enforceability

  	
   

  
	
  3.3.

  	
  No
  Conflicts

  	
   

  
	
  3.4.

  	
  Consents

  	
   

  
	
  3.5.

  	
  Purchased
  Interests and Subsidiaries

  	
   

  
	
  3.6.

  	
  Financial Statements

  	
   

  
	
  3.7.

  	
  Undisclosed Liabilities

  	
   

  
	
  3.8.

  	
  Compliance with Laws

  	
   

  
	
  3.9.

  	
  Title
  to Property

  	
   

  
	
  3.10.

  	
  Intellectual Property

  	
   

  
	
  3.11.

  	
  Litigation; Orders

  	
   

  
	
  3.12.

  	
  Employment Arrangements

  	
   

  
	
  3.13.

  	
  [Intentionally Omitted.]

  	
   

  
	
  3.14.

  	
  Taxes

  	
   

  
	
  3.15.

  	
  Brokerage Commissions

  	
   

  
	
  3.16.

  	
  Licenses, Other
  Authorizations, Etc.

  	
   

  
	
  3.17.

  	
  Material Contracts

  	
   

  
	
  3.18.

  	
  Environmental Matters

  	
   

  
	
  3.19.

  	
  Vessels.

  	
   

  
	
  3.20.

  	
  Books
  and Records

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
  BUYER

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Organization

  	
   

  
	
  4.2.

  	
  Authority and
  Enforceability

  	
   

  
	
  4.3.

  	
  No Conflicts

  	
   

  
	
  4.4.

  	
  Consents

  	
   

  
	
  4.5.

  	
  Brokerage Commissions

  	
   

  



 

















 


	
  ARTICLE V CERTAIN COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Investigation
  of Business; Access to Properties and Records, Etc.

  	
   

  
	
  5.2.

  	
  Efforts;
  Obtaining Consents and Approvals

  	
   

  
	
  5.3.

  	
  Conduct of Business

  	
   

  
	
  5.4.

  	
  Total Loss.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI CONDITIONS TO CLOSING

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Conditions
  Precedent to Obligations of Buyer.

  	
   

  
	
  6.2.

  	
  Conditions
  Precedent to Obligations of Seller.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII INDEMNIFICATION

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Survival
  of Representations, Warranties and Indemnities.

  	
   

  
	
  7.2.

  	
  Indemnification.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Choice
  of Law.

  	
   

  
	
  8.2.

  	
  Entire
  Agreement.

  	
   

  
	
  8.3.

  	
  Amendment or Modification.

  	
   

  
	
  8.4.

  	
  Assignment.

  	
   

  
	
  8.5.

  	
  Notices.

  	
   

  
	
  8.6.

  	
  Counterparts.

  	
   

  
	
  8.7.

  	
  Severability.

  	
   

  
	
  8.8.

  	
  U.S. Currency.

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 2.2

  	
  Purchase Price

  	
   

  
	
  Schedule 3.4

  	
  Consents

  	
   

  
	
  Schedule 3.5

  	
  Purchased Companies

  	
   

  
	
  Schedule 3.7

  	
  Undisclosed Liabilities/Vessel
  Indebtedness

  	
   

  
	
  Schedule 3.19

  	
  Vessels

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  Form
  of Charter

  	
   

  
	
  Exhibit B

  	
  Form of Charter Ancillary Agreement

  	
   

  
	
  Exhibit C

  	
  Form of Management Agreement

  	
   

  
	
  Exhibit D

  	
  Form of Administrative Services Agreement

  	
   

  
	
  Exhibit E

  	
  Form of Performance Guarantee

  	
   

  
				



 


ii

















 


FLEET PURCHASE AGREEMENT


 


FLEET PURCHASE AGREEMENT, dated as of December 11,
2003 (this “Agreement”), by and between SHIP FINANCE INTERNATIONAL
LIMITED, a Bermuda exempted company (“Buyer”) and FRONTLINE LTD., a
Bermuda exempted company (“Seller”).


 


W  I
T  N  E  S  S  E  T  H:


 


WHEREAS, Seller is or will be the owner of all of the
Interests in each of the entities set forth on Schedule 3.5 hereto
(each, a “Purchased Company”);


 


WHEREAS, each Purchased Company either owns or will
own directly (a) 100% of the interests in the Vessel set forth opposite such
Purchased Company’s name on Schedule 3.5 hereto (each such Purchased Company
sometimes referred to herein as a “Direct Holding Subsidiary”) or (b)
100% of the interests in another wholly owned subsidiary that in turn, as
indicated on Schedule 3.5 hereto, owns directly 100% of the interests in
the Vessel set forth opposite such Purchased Company’s name on Schedule 3.5
hereto (each such subsidiary sometimes referred to herein as an “Intermediate
Holding Subsidiary” and, together with the Direct Holding Subsidiaries, the
“Vessel Owning Subsidiaries”);


 


WHEREAS, each of the Vessel Owning Subsidiaries will
enter into a time charter (each, a “Charter”) with the Charterer
substantially in the form of Exhibit A hereto, pursuant to which each Vessel
Owning Subsidiary will agree to charter the Vessel owned by such Vessel Owning
Subsidiary to the Charterer, on the terms and subject to the conditions set
forth therein;


 


WHEREAS, Buyer, each of the Vessel Owning
Subsidiaries, Frontline and the Charterer will enter into a charter ancillary
agreement (the “Charter Ancillary Agreement”) substantially in the form
of Exhibit B hereto, pursuant to which they will agree on certain matters with
respect to, among other things, the Charter Service Reserve (as defined
therein), the Bonus Payments (as defined therein), certain payment deferral
rights under the Charters and certain collateral arrangements with respect to
the Charterer’s obligations thereunder and under the Charters, on the terms and
subject to the conditions set forth therein;


 


WHEREAS, each of the Vessel Owning Subsidiaries will
enter into a management agreement (each, a “Management Agreement”) with
Frontline Management substantially in the form of Exhibit C hereto, pursuant to
which Frontline Management will agree to provide to each Vessel Owning
Subsidiary certain technical management services with respect to the Vessel
owned by such Vessel Owning Subsidiary, on the terms and subject to the
conditions set forth therein;


 


WHEREAS, Buyer and each of the Vessel Owning
Subsidiaries will enter into an administrative services agreement (“the “Administrative
Services Agreement”) with Frontline Management substantially in the form of
Exhibit D hereto, pursuant to which Frontline Management will agree to provide
to Buyer and each Vessel Owning Subsidiary 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, Frontline will issue a performance guarantee
(the “Performance Guarantee”) substantially in the form of Exhibit E
hereto, pursuant to which Frontline will agree to guarantee the performance of
the obligations of the Charterer under the Charters and the Charter Ancillary
Agreement and the obligations of Frontline Management under the Management
Agreements and the Administrative Services Agreement; and


 


WHEREAS, Seller desires to sell and transfer to Buyer
all of the Interests in each Purchased Company, and Buyer wishes to purchase
all of the Interests in each Purchased Company, all upon the terms and subject
to the conditions herein contained;


 


NOW, THEREFORE, in consideration of the mutual
covenants described below and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby covenant and agree as follows:


 


ARTICLE I



DEFINITIONS


 


1.1.          Definitions.  As used herein, the following terms have the
respective meanings set forth below:


 


“Administrative Services Agreement” has the
meaning set forth in the recitals.


 


“Affiliate” means, at any time, and with
respect to any Person, any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is Controlled by, or
is under common Control with, such first Person.  As used in this definition, “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.


 


“Agreement” has the meaning set forth in the
preamble.


 


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


 


“Buyer” has the meaning set forth in the
preamble.


 


“Charter” has the meaning set forth in the
recitals.


 


“Charter Ancillary Agreement” has the meaning
set forth in the recitals.


 


“Charterer” means Frontline Shipping Ltd., a
Bermuda exempted company and wholly owned subsidiary of Seller.


 


2

















 


“Closing” has the meaning set forth in Section
2.3.


 


“Closing Date” has the meaning set forth in
Section 2.3.


 


“Direct Holding Subsidiary” has the meaning set
forth in the recitals.


 


“Damages” means any and all losses,
liabilities, obligations, demands, claims, actions, cause of actions, costs,
expenses, damages and judgments, including, without limitation, all out of
pocket attorneys’ fees and expenses.


 


“Environmental Laws” means any and all foreign,
federal, state, commonwealth or local laws, ordinances or regulations relating
to pollution, the protection of the environment and the discharge or release of
materials into the environment.


 


“Financial Statements” means the predecessor
combined carve-out financial statements of Buyer and the related notes thereto
included in the Offering Circular.


 


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


 


“GAAP” means generally accepted accounting
principles as in effect from time to time in the United States of America.


 


“Governmental Authority” means with respect to
any Person: (a) the government of (i) the United States of America or any State
or other political subdivision thereof or (ii) any jurisdiction in which such
Person or any of its subsidiaries conducts all or any part of its business, or
which asserts jurisdiction over any properties of such Person or any of its
subsidiaries; or (b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.


 


“Hazardous Material” means any substance,
chemical, compound, product, solid, gas, liquid, waste or byproduct which is
classified or regulated as “hazardous” or “toxic” pursuant to any Environmental
Law.


 


“Indemnified Party” has the meaning set forth
in Section 7.3.


 


“Indemnifying Party” has the meaning set forth
in Section 7.3.


 


“Independent Director” means, with respect to a
Person, a duly appointed member of the Board of Directors of such Person who is
not at the time of and during such appointment, and has not been during the
immediately preceding 24 months, (a) an officer, director or employee,
affiliate, associate, material supplier or material customer of such Person or
any of its affiliates, or (b) a direct or indirect shareholder or beneficial
owner of such Person or any of its affiliates.


 


“Intellectual Property” means all of the following:
patents, patent rights, copyrights, works which are the subject matter of
copyrights, trademarks, tradenames, tradestyles, patent and trademark
applications and licenses and rights thereunder, and all other


 


3

















 


rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing,
and all rights to sue for past, present, and future infringement of any of the
foregoing; inventions, trade secrets, formulae, processes, compounds, drawings,
designs, blueprints, surveys, reports, manuals, and operating standards;
goodwill, customer and other lists, in whatever form maintained; and trade
secret rights, copyright rights, patent rights, rights in works of authorship,
and contract rights relating to computer software programs, in whatever form
created or maintained.


 


“Intellectual Property Rights” means the rights
or interest of any Person in or to any Intellectual Property.


 


“Interest” means (a) capital stock, member interests,
partnership interests, other equity interests, rights to profits or revenue and
any other similar interest, (b) any security or other interest convertible
into or exchangeable or exercisable for any of the foregoing and (c) any
right (contingent or otherwise) to acquire any of the foregoing.


 


“Intermediate Holding Subsidiary” has the
meaning set forth in the recitals.


 


“ISM Code” means the International Safety
Management Code for the Safe Operating of Ships and for Pollution Prevention
constituted pursuant to Resolution A 741(18) of the International Maritime
Organization and incorporated into the Safety of Life at Sea Convention.


 


“Legal Requirements” means all laws, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and requirements of
Governmental Authorities.


 


“License” has the meaning set forth in Section
3.16.


 


“Lien” means, with respect to any Person, any
mortgage, lien, pledge, charge, security interest or other encumbrance or
rights of others, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or other
title retention agreement or capital lease, upon or with respect to any
property or asset of such Person.


 


“Loss Proceeds” has the meaning set forth in
Section 5.4.


 


“Management Agreement” has the meaning set
forth in the recitals.


 


“Material Adverse Effect” means with respect to
a Person, a material adverse effect on (a) the business, operations,
affairs, financial condition, assets, properties or prospects of such Person
and its subsidiaries taken as a whole, or (b) the ability of such Person
to perform its obligations under this Agreement, or (c) the validity or
enforceability of this Agreement.


 


“Material Contract” means: (a) any agreement
for the purchase, sale or lease of raw materials, commodities, supplies,
products, or other personal property, or for the furnishing or receipt of
services, the performance of which will extend over a period of more than one
year or involve consideration in excess of $100,000; (b) any agreement
concerning a partnership or joint venture; (c) any vessel lease, bareboat
charter or time charter; (d) any contract or agreement


 


4

















 


with respect to any newbuilding or vessel under construction, (e) any
commercial or technical management agreements or pooling agreements; (f) any
agreement under which a Person has created, incurred, assumed, or guaranteed
any indebtedness for borrowed money, or any capitalized lease obligation, in
excess of $100,000 or under which it has granted a Lien with respect to any of
its assets; (g) any collective bargaining agreement; (h) any agreement for the
employment of any individual on a full-time, part-time, consulting, or other
basis providing annual compensation in excess of $100,000; and (i) any other
agreement the performance of which involves consideration in excess of
$100,000.


 


“Notice of Claim” has the meaning set forth in
Section 7.3.


 


“Offering Circular” means that certain offering
circular of Buyer, dated as of the date hereof, with respect to Buyer’s senior
unsecured notes in the principal amount of $580 million.


 


“Performance Guarantee” has the meaning set
forth in the recitals.


 


“Permitted Liens” means any (a) liens for
current taxes or ad valorem taxes (i) not yet due and payable or (ii)
contested in good faith, if a reserve or other appropriate provision, if any,
as may be required by GAAP shall have been made therefor, (b) statutory liens
of landlords, liens of carriers, warehouse persons, mechanics and material
persons and other liens imposed by law incurred in the ordinary course of
business for sums (i) not yet due and payable or (ii) contested in good faith,
if a reserve or other appropriate provision, if any, as may be required by GAAP
shall have been made therefor, (c) liens incurred or deposits made in
connection with workers’ compensation, unemployment insurance and other similar
types of social security programs or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return of money bonds and similar obligations, in
each case in the ordinary course of business, (d) liens incurred in the
ordinary course of business of Buyer or any Subsidiary arising from vessel
chartering, drydocking, maintenance, the furnishing of supplies and bunkers to
vessels, repairs and improvements to vessels, crews’ wages and maritime Liens;
(e) liens for salvage and general average; and (f) liens in favor of commercial
banks presently existing or hereafter arising securing indebtedness with
respect to any of the Vessels.


 


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


 


“Purchase Price” has the meaning set forth in
Section 2.2.


 


“Purchased Company” has the meaning set forth
in the recitals.


 


“Purchased Interests” has the meaning set forth
in Section 2.1.


 


“Release” means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the outdoor environment, which shall include without
limitation, seas and waterways.


 


5

















 


“Seller” has the meaning set forth in the
preamble.


 


“Subsidiary” means each Purchased Company,
Intermediate Holding Subsidiary and each Vessel Owning Subsidiary.


 


“Total Loss” means, with respect to a Vessel, a
total loss, destruction, condemnation, confiscation, requisition, seizure,
forfeiture, blocking and trapping or other taking of title to or use of such
Vessel (provided that such loss, destruction, condemnation, confiscation,
requisition, seizure, forfeiture, blocking and trapping or other taking of
title to or use of such Vessel was covered by insurance or resulted in the
actual payment of compensation, indemnification or similar payments to such
Person).


 


“Vessel Owning Subsidiary” has the meaning set
forth in the recitals.


 


“Vessels” has the meaning set forth in Section
3.19(a).


 


1.2.          References; Headings; Interpretation.  All references in this Agreement to Exhibits,
Schedules, Articles, Sections, subsections and other subdivisions refer to the
corresponding 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.


 


ARTICLE II



PURCHASE OF PURCHASED INTERESTS


 


2.1.          Purchase of Purchased Interests
by Buyer.


 


Upon the terms and subject to
the conditions of this Agreement, at each Closing Seller shall sell and
transfer to Buyer all of the Interests in the Purchased Company or Purchased
Companies to be transferred to Buyer at such Closing (such Interests, with
respect to each Purchased Company, the “Purchased Interests”), free and
clear of any and all Liens (except for Permitted Liens), and Buyer shall
purchase all such Purchased Interests for the consideration provided for in
Section 2.2.  Seller and Buyer
shall, and Seller shall cause the Charterer, Frontline Management and the
Subsidiaries to, execute and deliver at or prior to each Closing all
documentation necessary to effect the sale and transfer of the applicable
Purchased Interests (and, if applicable, any Loss Proceeds) to Buyer, as set
forth in Article VI.


 


6

















 


2.2.          Purchase Price/Certain Economic
Provisions.


 


(a)           In
consideration of the sale and transfer of the Purchased Interests in all of the
Purchased Companies, Buyer shall pay to Seller a purchase price (the “Purchase
Price”) equal to the aggregate sum of $U.S. 950 million, based upon the
aggregate book value of all of the Purchased Companies, as set forth on
Schedule 2.2, excluding working capital that will be retained by Seller and
other intercompany balances that will be eliminated.  Each Purchased Company shall be sold to Buyer with its existing
secured indebtedness and Buyer shall purchase each Purchased Company subject to
such indebtedness.  At each Closing,
Buyer shall pay to Seller that portion of the Purchase Price allocable to the
Purchased Interests being purchased at such Closing as set forth on Schedule
2.2.  The aggregate Purchase Price shall
be paid partly in cash and partly by a deemed equity contribution by Seller
such that after Buyer has purchased all of the Purchased Interests, Seller
shall be deemed to have contributed to Buyer $525 million in equity.  All payments of the cash portion
of the Purchase Price for the Purchased Interests shall be made in immediately
available funds by wire transfer to an account designated in writing by Seller.


 


(b)           Notwithstanding
anything to the contrary contained herein, Buyer and Seller hereby agree that
the Charters, the Charter Ancillary Agreement, the Management Agreements, the
Administrative Services Agreement and the Performance Guarantee shall each be
given economic effect as of January 1, 2004 regardless of the terms of any
underlying agreements between Buyer, Seller, any of their respective
subsidiaries or any other Person.


 


2.3.          Closing.


 


Subject to satisfaction or waiver of the conditions
set forth in Article VI, the sale and transfer of the Purchased Interests in
each Purchased Company (each such sale and transfer, a “Closing”) shall
take place on or prior to March 17, 2004 at such times and on such dates (each
such date, a “Closing Date”) as the parties may mutually agree, it being
understood that each Closing shall occur as soon as practicable after the date
hereof.


 


ARTICLE III



REPRESENTATIONS AND WARRANTIES OF SELLER


 


Representations and Warranties of Seller.  Seller hereby represents and warrants to
Buyer that:


 


3.1.          Organization. 
Each of Seller and the Subsidiaries is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization.  Each of Seller and the Subsidiaries (a) has
all requisite power to own, operate or lease its properties and assets as now
owned, operated or leased and to carry on its business as it is now being
conducted and (b) is in good standing and is duly qualified to transact
business in each jurisdiction in which the nature of property owned or leased
by it or the conduct of its business requires it to be so qualified, except
where the failure to be in good standing or to be duly qualified to transact


 


7

















 


business would not reasonably be expected to have a Material Adverse
Effect on Seller or any Subsidiary.


 


3.2.          Authority and Enforceability.  Seller has the full right, power and
authority to enter into this Agreement and to transfer, convey and sell to
Buyer the Purchased Interests and to consummate the transactions contemplated
hereby.  The execution, delivery and
performance of this Agreement has been duly authorized by all necessary action
on the part of Seller and constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).


 


3.3.          No Conflicts. 
The execution, delivery and performance by Seller of this Agreement will
not conflict with or result in any violation of or constitute a breach of any
of the terms or provisions of, or result in the acceleration of any obligation
under, or constitute a default under any provision of, (a) the articles of
incorporation or bylaws or other organizational documents of Seller or any
Subsidiary, (b) any mortgage, bond, indenture, agreement, franchise, license,
permit or other instrument or obligation to which Seller or any Subsidiary is a
party or is subject or by which any of their respective assets or properties
may be bound, or (c) any Legal Requirement affecting or binding upon Seller or
any Subsidiary or any of their respective assets or properties.


 


3.4.          Consents. 
Except as set forth on Schedule 3.4, no consent, permit, approval or
authorization of, notice or declaration to or filing with any Governmental
Authority or any other Person is required in connection with the execution and
delivery by Seller of this Agreement or the consummation by Seller or any
Subsidiary of the transactions contemplated hereunder.


 


3.5.          Purchased Interests and
Subsidiaries.


 


(a)           Schedule 3.5
sets forth a true and complete list that accurately reflects (i) the name
of each Purchased Company and (ii) Seller’s current ownership percentage
of the Interests in each Purchased Company. 
As of each Closing, Seller will own 100% of the Purchased Interests in
each Purchased Company and there will be no other issued and outstanding
Interests in any of the Purchased Companies other than the Purchased Interests.


 


(b)           Seller is the record
and beneficial owner of, and has good, valid and marketable title to, the
Interests of each Purchased Company set forth on Schedule 3.5 and shall be the
record and beneficial owner of, and have good, valid and marketable title to,
the Purchased Interests of each Purchased Company purchased at each
Closing.  Seller owns the Interests of
each Purchased Company free and clear of all Liens (except for Permitted
Liens), and, upon consummation of the purchase of the Purchased Interests at
any Closing as contemplated hereby, Buyer will acquire from Seller good, valid
and marketable title to such Purchased Interests, free and clear of all Liens
(except for Permitted Liens).


 


8

















 


(c)           The Purchased Interests
in each of the Purchased Companies have been duly authorized, are validly
issued and are fully paid and non-assessable and were not issued in violation
of, and are not subject to, any preemptive rights, rights of first refusal or
other similar rights of any Person.  As
of each Closing, the Purchased Interests in each of the Purchased Companies
shall have been duly authorized, validly issued, fully paid and non-assessable
and not issued in violation of, and not subject to, any preemptive rights,
rights of first refusal or other similar rights of any Person.


 


(d)           There are no contracts,
agreements or other understandings (including, without limitation, options,
warrants, calls and preemptive rights), except with respect to Permitted Liens,
obligating any of the Purchased Companies (i) to issue, sell, pledge,
dispose of or encumber any Interests in such Purchased Company, (ii) to
redeem, purchase or acquire in any manner any Interests in such Purchased
Company or (iii) to make any dividend or distribution of any kind with
respect to any Interests in such Purchased Company.


 


(e)           There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights affecting the Interests in any of the
Purchased Companies, and there are no voting trusts, proxies, or other
shareholder or similar agreements or understandings with respect to the voting
of the Interests in any of the Purchased Companies.


 


(f)            Complete and accurate
copies of the organizational documents, each as amended to date and presently
in effect, of each of the Subsidiaries have been provided by Seller to Buyer.


 


3.6.          Financial Statements.  There have been no transactions involving
the businesses of the Subsidiaries which properly should have been set forth in
the Financial Statements and which have not been accurately so set forth.  There has been no Material Adverse Effect on
any Subsidiary and, to the knowledge of Seller, no fact or condition exists
which would be reasonably expected to cause a Material Adverse Effect on any
Subsidiary.


 


3.7.          Undisclosed Liabilities.  Except as reflected, reserved against or
otherwise disclosed in the Financial Statements (or any accompanying notes
thereto), and except as incurred in the ordinary course, there is no material
liability, debt or obligation of or claim against any of the Subsidiaries known
to Seller which would have been required to be reflected on such Financial
Statements in accordance with GAAP.  The
estimated amount of the indebtedness on each of the Vessels outstanding as of
December 31, 2003 is set forth on Schedule 3.7 hereto.  As of each Closing, all intercompany account
balances between Seller and the applicable Subsidiary shall have been
eliminated.


 


3.8.          Compliance with Laws.  Each of Seller and the Subsidiaries has
complied with all applicable Legal Requirements except for such non-compliance
which would not reasonably be expected to have a Material Adverse Effect on any
Subsidiary.  No notice, citation,
summons or order has been issued, no complaint has been filed, no penalty has
been assessed and, to the knowledge of Seller, no investigation or review is
pending or threatened by any


 


9

















 


Governmental Authority with respect to any alleged violation by any
Subsidiary of any applicable Legal Requirement.


 


3.9.          Title to Property.  Each Subsidiary has good and defensible title to its assets and
properties, tangible and intangible, that individually or in the aggregate are
material, in each case free and clear of Liens except for Permitted Liens.


 


3.10.        Intellectual
Property.  To the knowledge of
Seller, (a) no Intellectual Property owned or used by any Subsidiary infringes
in any material respect any Intellectual Property Right owned or used by any
other Person; and (b) there is no material violation by any Person of any
Intellectual Property Right owned or used by any Subsidiary.


 


3.11.        Litigation;
Orders.  There are no actions,
suits or proceedings pending or, to the knowledge of Seller, threatened at law
or in equity, before or by any Governmental Authority or before any arbitrator
of any kind, against Seller (other than any such actions, suits or proceedings
that could not reasonably be expected to adversely impact the ability of Seller
to consummate the transactions contemplated hereby) or any Subsidiary which
would be reasonably expected to have a Material Adverse Effect on such
Subsidiary and (ii) no Subsidiary is subject to any settlements, consent
decrees, judgments, injunctions, orders or findings, in each case that would
have a Material Adverse Effect on such Subsidiary that would reasonably be
expected to adversely impact the ability of Seller or such Subsidiary to
consummate the transactions contemplated hereby.


 


3.12.        Employment
Arrangements.  No Subsidiary has
any obligation, contingent or otherwise, under (a) any employment, collective
bargaining or other labor agreement, (b) any written or oral agreement
containing severance or termination pay arrangements, (c) any deferred
compensation agreement, retainer or consulting arrangements, (d) any pension or
retirement plan, bonus or profit-sharing plan, or stock option or stock
purchase plan, or (e) any other employee contract or non-terminable (whether
with or without penalty) employment arrangement; in each case other than in the
ordinary course of business.


 


3.13.        [Intentionally
Omitted.]


 


3.14.        Taxes.  Except as would not have a Material Adverse
Effect, Seller and each Subsidiary has correctly prepared and filed all tax
returns or reports that are required to have been filed in any jurisdiction,
and has timely paid in full all taxes due and payable with respect thereto and
all other taxes and assessments levied upon it or its properties, assets,
income or franchises or otherwise payable by it, to the extent such taxes and
assessments have become due and payable and before they have become delinquent.  Except as would not have a Material Adverse
Effect, no tax Liens have been filed with respect to any property, business or
asset of Seller or any Subsidiary.


 


3.15.        Brokerage
Commissions.  No broker, finder
or similar agent has been employed by or on behalf of Seller or its Affiliates
(other than Buyer) and no Person is entitled to any brokerage commission,
finder’s fee or any similar compensation, in connection with this Agreement or
the transactions contemplated hereby.


 


10

















 


3.16.        Licenses,
Other Authorizations, Etc.  Each
Subsidiary owns or possesses all material licenses, permits, franchises,
registrations and similar authorizations of any Government Authority which are
necessary and used in the operation of its business as of the date hereof
(collectively, “Licenses”).  No
such License will terminate or be subject to termination or revocation as a
result of the consummation of the transactions contemplated hereby, except
those whose termination or revocation would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect on any
Subsidiary.  All Licenses are in full
force and effect except for those whose failure to be in full force and effect
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on any Subsidiary. 
No proceeding is pending or, to the knowledge of Seller, threatened
seeking the revocation or limitation of any such License that, individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect on any Subsidiary.  All required
filings with respect to Licenses have been timely made and all required
applications for renewal thereof have been timely filed except for those which
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on any Subsidiary.


 


3.17.        Material
Contracts.  True and complete
copies (including all amendments) of each Material Contract have been made
available to Buyer.  Each Material Contract
is the legal and valid obligation of the Subsidiary party thereto, binding and
enforceable against such Subsidiary in accordance with its terms.  Each Material Contract has not been
terminated, and neither such Subsidiaries nor, to the knowledge of Seller, any
other Person is in material breach or default thereunder, and no event has
occurred that with notice or lapse of time, or both, would constitute a
material breach or default, or permit termination, modification in any manner
adverse to such Subsidiaries or acceleration thereunder.  No party to any such Material Contract has
asserted or, to Seller’s knowledge, has (except by operation of law) any right
to offset, discount or otherwise abate any amount owing under the Material
Contract except as expressly set forth in such Material Contract.


 


3.18.        Environmental
Matters.  The Subsidiaries have
obtained all environmental consents, approvals, licenses and permits required
for their operations by any applicable Environmental Law except for failures to
obtain that, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on any Subsidiary.  No Subsidiary has caused any Release, threatened Release or
disposal of any Hazardous Material, except as permitted by Legal Requirements
or as would not reasonably be expected to have a Material Adverse Effect on any
Subsidiary.


 


3.19.        Vessels.


 


(a)           Schedule
3.19 lists all vessels owned, leased, chartered or operated by each Vessel
Owning Subsidiary (the “Vessels”), setting forth, for each such Vessel,
as of the date hereof, its (i) name, (ii) vessel type (iii)
owner,  (iv) flag, (v) dwt, (vi)
year in which the vessel was constructed and (vii) the term of the current charter
for each Vessel to the extent such charter expires after December 31, 2003.


 


(b)           Except
as set forth on Schedule 3.19, each of the Vessels: (i) is free and
clear of all Liens, except for Permitted Liens, (ii) is adequate and suitable
for use by the Vessel Owning Subsidiaries in their business as presently conducted
by them in all material respects,


 


11

















 


ordinary wear and tear and depreciation excepted; (iii) is seaworthy in
all material respects for hull and machinery insurance warranty purposes and is
in good running order and repair; (iv) is insured against all risks and in
amounts consistent with applicable Legal Requirements and common industry
practices; (v) is in compliance with all charters covering such Vessels and
material maritime Legal Requirements (including maritime Environmental Laws);
(vi) complies with the requirements of the ISM Code, (vii) is duly registered
under the flag set forth opposite the Vessel’s name in Schedule 3.19;
(viii) is in compliance in all material respects with the requirements of its
present class and classification society. All class certificates and national
and international certificates of the Vessels are clean and valid and free of
recommendations affecting class.


 


3.20.        Books and Records.  The respective minute books and records of
each of the Subsidiaries contain accurate records of all meetings of, and
actions taken by the respective shareholders and board of directors (or similar
governing bodies) of the Subsidiaries.


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES OF BUYER


 


Representations and Warranties of Buyer.  Buyer hereby represents and warrants to
Seller that:


 


4.1.          Organization.  Buyer is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization.  Buyer (a) has all requisite power to own,
operate or lease its properties and assets as now owned, operated or leased and
to carry on its business as it is now being conducted and (b) is in good
standing and is duly qualified to transact business in each jurisdiction in which
the nature of property owned or leased by it or the conduct of its business
requires it to be so qualified, except where the failure to be in good standing
or to be duly qualified to transact business, would not reasonably be expected
to have a Material Adverse Effect on Buyer.


 


4.2.          Authority and Enforceability.  Buyer has all requisite power and authority
to enter into this Agreement and to purchase the Purchased Interests and to
consummate the transactions contemplated hereby.  The execution, delivery and performance of this Agreement by
Buyer and the consummation of the transactions contemplated hereby has been
duly authorized by all necessary action on the part of Buyer and constitutes a
legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms, except as such enforceability may be limited by: (a)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors’ rights generally, and (b) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).


 


4.3.          No
Conflicts.  The
execution, delivery and performance by Buyer of this Agreement will not
conflict with or result in any violation of or constitute a breach of any of
the terms or provisions of, or result in the acceleration of any obligation
under, or constitute a default under any provision of, (a) the articles of
incorporation or bylaws or other organizational


 


12

















 


documents of Buyer, (b) any mortgage, bond, indenture, agreement,
franchise, license, permit or other instrument or obligation to which Buyer is
a party or is subject or by which any of its assets or properties may be bound,
or (c) any Legal Requirement affecting or binding upon, Buyer or upon any of
its assets or properties.


 


4.4.          Consents.  No consent, permit, approval or
authorization of, notice or declaration to or filing with any Governmental
Authority or any other Person is required in connection with the execution and
delivery by Buyer of this Agreement or the consummation by Buyer of the
transactions contemplated hereunder except those that shall have been obtained
or made at or prior to each Closing.


 


4.5.          Brokerage Commissions.  No broker, finder or similar agent has been
employed by or on behalf of Buyer and no Person is entitled to any brokerage
commission, finder’s fee or any similar compensation, in connection with this
Agreement or the transactions contemplated hereby.


 


ARTICLE V



CERTAIN COVENANTS


 


5.1.          Investigation of Business; Access
to Properties and Records, Etc. 
After the date hereof, Seller will cause to be afforded to
Buyer and its representatives reasonable access to Seller’s and each
Subsidiary’s offices, properties, books and records during normal business
hours, in order that Buyer may have full opportunity to make such
investigations as it may reasonably require of the affairs of each Subsidiary,
provided that such investigation will only be upon reasonable notice and will
not unreasonably disrupt Seller’s operations.


 


5.2.          Efforts; Obtaining Consents and
Approvals.  Subject to
the terms and conditions herein provided, each party will use its reasonable
best efforts to take or cause to be taken all actions and to do or cause to be
done all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated hereby and to
cooperate with the other in connection with the foregoing, including using all
reasonable best efforts to obtain all necessary consents, approvals and
authorizations from each Governmental Authority and each other Person that are
required to consummate the transactions contemplated under this Agreement.


 


5.3.          Conduct of Business.  After the date of this Agreement and prior
to the Closing Date applicable to a Subsidiary, except as contemplated by the
Offering Circular, or the refinancing of indebtedness, or except with the
consent of Buyer, Seller agrees to cause each such Subsidiary:


 


(a)           to
operate its business in the ordinary course of business, consistent with past
practice;


 


(b)           to
refrain from making or causing to be made any change in its articles of
incorporation, bylaws or other organizational documents;


 


13

















 


(c)           not
to acquire by merging or consolidating with, or agreeing to merge or
consolidate with, or purchase substantially all of the stock or assets of, or
otherwise acquire, any business or any corporation, partnership, association or
other business organization or division thereof;


 


(d)           not
to enter into any partnership, joint venture or similar type of arrangement;


 


(e)           not
to issue or agree to issue any additional Interests in such Subsidiary;


 


(f)            not
to purchase or redeem, directly or indirectly, any of its Interests;


 


(g)           except
as otherwise provided by law or GAAP, to refrain from making or causing to be
made any change in its accounting methods, principles or practices;


 


(h)           not
to sell, transfer, license, lease or otherwise dispose of or encumber any of
its material properties or assets, except for Permitted Liens and charters
entered into in the ordinary course of business;


 


(i)            not
to enter into any employment agreement or grant any increase in the
compensation of officers or employees; and


 


(j)            not
to incur, assume or guarantee any indebtedness which will constitute a
liability of a Subsidiary as of the Closing Date applicable to such Subsidiary.


 


Notwithstanding anything
to the contrary contained herein, the foregoing shall not prohibit any
Subsidiary from re-domiciling to another jurisdiction or re-flagging its Vessel
in another jurisdiction so long as the new jurisdiction is one that is
reasonably acceptable to institutional lenders in the shipping industry;
provided, however, that any new entity created in connection with such
re-domiciling or re-flagging shall be deemed to take the place of the
Subsidiary engaging in such re-domiciling or re-flagging for all purposes of
this Agreement.


 


5.4.          Total Loss. 
Notwithstanding anything to the contrary contained herein, if prior to a
Closing, there is a Total Loss of a Vessel owned by a Vessel Owning Subsidiary,
then Seller shall, no later than June 15, 2004 either (a) irrevocably transfer
and assign to Buyer all insurance proceeds, damages, indemnities or other
amounts (the “Loss Proceeds”) it has received or may receive in
connection with such Total Loss or (b) substitute a separate wholly owned
subsidiary of Seller that owns a vessel of similar age, size and classification
as the Vessel that suffered the Total Loss and transfer such substitute wholly
owned subsidiary to Buyer for a similar purchase price, free and clear of all
Liens.  In the event of a substitution
in accordance with clause (b) above, such substituted wholly owned subsidiary
shall for all purposes hereunder be deemed to take the place of the Vessel
Owning Subsidiary whose Vessel suffered the Total Loss, including with respect
to the representations and warranties concerning, and the conditions to closing
the purchase of, such Vessel Owning Subsidiary.


 


14

















 


ARTICLE VI

CONDITIONS TO CLOSING


 


6.1.          Conditions Precedent to
Obligations of Buyer.


 


The obligation of Buyer to purchase the Purchased
Interests in a Purchased Company is subject to the fulfillment, prior to or at
each applicable Closing, of each of the following conditions (any or all of
which may be waived in whole or in part by Buyer):


 


(a)           all
representations and warranties made by Seller to Buyer shall be true and
correct in all material respects as of the date hereof and as of the time of
such Closing with the same effect as though made again at and as of that time;


 


(b)           Seller
shall have performed and complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with by
Seller prior to or at such Closing;


 


(c)           there
shall be no actions, suits or proceedings pending or threatened against or
affecting Seller or such Purchased Company or any property of Seller or such
Purchased Company in any court or before any arbitrator of any kind or before
or by any Governmental Authority that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on such Purchased Company;


 


(d)           all
notifications, consents, authorizations, approvals and clearances from each
Governmental Authority and any other Person required to be made or obtained, in
connection with the transactions provided for in this Agreement shall have been
made or obtained on terms satisfactory to Buyer;


 


(e)           such
Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased
Company (if such Purchased Company is an Intermediate Holding Subsidiary) shall
have entered into a Charter with the Charterer with respect to the Vessel owned
by it and such Charter shall not have been terminated or amended in any
respect;


 


(f)            Buyer,
the Charterer, Seller and such Purchased Company (if such Purchased Company is
itself a Vessel Owning Subsidiary) or each of the Vessel Owning Subsidiaries
owned by such Purchased Company (if such Purchased Company is an Intermediate
Holding Subsidiary) shall have entered into the Charter Ancillary Agreement and
such Charter Ancillary Agreement shall not have been terminated or amended in
any respect;


 


(g)           such
Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased
Company (if such Purchased Company is an Intermediate Holding Subsidiary) shall
have entered into a Management Agreement with Frontline Management with respect
to the Vessel owned by it and such Management Agreement shall not have been
terminated or amended in any respect;


 


(h)           Buyer
and such Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased


 


15

















 


Company (if such Purchased Company is an Intermediate Holding
Subsidiary) shall have entered into the Administrative Services Agreement with
Frontline Management and such Administrative Services Agreement shall not have
been terminated or amended in any respect;


 


(i)            Seller
shall have executed the Performance Guarantee and such Performance Guarantee
shall not have been terminated or amended in any respect;


 


(j)            Buyer
shall have received financing in an aggregate amount with respect to all of
such Closings in an amount not less than $1.058 billion, on terms satisfactory
to Buyer;


 


(k)           all
proceedings to be taken in connection with the transactions contemplated by
this Agreement and all documents incident thereto shall be reasonably
satisfactory in form and substance to Buyer and its counsel, and Buyer shall
have received copies of all such documents and other evidence as it or its
counsel may reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith;


 


(l)            since
the date of this Agreement there shall have been no Material Adverse Effect on
such Purchased Company or, if applicable, any of its Vessel Owning
Subsidiaries, except as contemplated by Section 5.4; and


 


(m)          Seller
shall have delivered to Buyer certificate(s), if any, representing the
Purchased Interests in such Purchased Company, accompanied by powers duly
endorsed or executed in blank, and all other documents necessary to transfer to
Buyer the Purchased Interests in such Purchased Company free and clear of any
Lien.


 


6.2.          Conditions Precedent to
Obligations of Seller.


 


The obligation of Seller to sell and transfer the
Purchased Interests in a Purchased Company is subject to the fulfillment, prior
to or at each applicable Closing, of each of the following conditions (any or
all of which may be waived in whole or in part by Seller):


 


(a)           all
representations and warranties of Buyer to Seller shall be true and correct in
all material respects as of the date hereof and at and as of the time of such
Closing with the same effect as though those representations and warranties had
been made at and as of that time;


 


(b)           Buyer
shall have performed and complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied with by
Buyer prior to or at such Closing;


 


(c)           all
notifications, consents, authorizations, approvals and clearances from each
Governmental Authority and any other Person required to be made or obtained, in
connection with the transactions provided for in this Agreement shall have been
made or obtained on terms satisfactory to Seller;


 


(d)           such
Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased
Company (if such Purchased Company is an Intermediate Holding Subsidiary) shall
have entered into a Charter with the Charterer with respect to the Vessel owned
by it;


 


16

















 


(e)           Buyer
and such Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased
Company (if such Purchased Company is an Intermediate Holding Subsidiary) shall
have entered into the Charter Ancillary Agreement;


 


(f)            such
Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased
Company (if such Purchased Company is an Intermediate Holding Subsidiary) shall
have entered into a Management Agreement with Frontline Management with respect
to the Vessel owned by it;


 


(g)           Buyer
and such Purchased Company (if such Purchased Company is itself a Vessel Owning
Subsidiary) or each of the Vessel Owning Subsidiaries owned by such Purchased
Company (if such Purchased Company is an Intermediate Holding Subsidiary) shall
have entered into the Administrative Services Agreement; and


 


(h)           Buyer
shall have paid to Seller the applicable portion of the Purchase Price for the
Purchased Interests in such Purchased Company being purchased in the amount and
by the method set forth in Section 2.2 and Schedule 2.2 hereof.


 


ARTICLE VII



INDEMNIFICATION


 


7.1.          Survival of Representations,
Warranties and Indemnities.


 


The representations and warranties of Seller and Buyer
contained in Articles III and IV, respectively, shall survive each Closing
until the second anniversary of the respective Closing Date.


 


7.2.          Indemnification.


 


(a)           Seller
agrees to indemnify, defend and hold harmless Buyer, its Affiliates and, if
applicable, their respective directors, officers, shareholders, employees,
attorneys, accountants, agents and representatives and their heirs, successors
and assigns from and against any and all Damages based upon, arising out of or
otherwise in respect of (i) any inaccuracy in or any breach of any
representation or warranty of Seller contained in this Agreement, (ii) the
failure of Seller to perform or observe fully any covenant, agreement or
provision to be performed or observed by Seller pursuant to this Agreement or
(iii) any Third-Party Claim arising out of or in connection with the operation
of the business of Seller or any Subsidiary on or before such Subsidiary’s
respective Closing Date.


 


(b)           Buyer
agrees to indemnify, defend and hold harmless Seller, its Affiliates and, if
applicable, their respective directors, officers, shareholders, employees,
attorneys, accountants, agents and representatives and their heirs, successors
and assigns from and against any and all Damages based upon, arising out of or
otherwise in respect of (i) any inaccuracy in or any breach of any
representation or warranty of Buyer contained in this Agreement or (ii) the
failure of


 


17

















 


Buyer to perform or observe fully any covenant, agreement or provision
to be performed or observed by Buyer pursuant to this Agreement.Third-Party
Claims.


 


(c)           If
any party entitled to be indemnified pursuant to Section 7.2 (an “Indemnified
Party”) receives notice of the assertion of any claim in respect of
Damages, such Indemnified Party shall give the party who may become obligated
to provide indemnification hereunder (the “Indemnifying Party”) written
notice describing such claim or fact in reasonable detail (the “Notice of
Claim”) promptly (and in any event within ten (10) Business Days after
receiving any written notice from a third party).  The failure by the Indemnified Party to timely provide a Notice
of Claim to the Indemnifying Party shall not relieve the Indemnifying Party of
any liability, except to the extent that the Indemnifying Party is prejudiced
by the Indemnified Party’s failure to provide timely notice hereunder.


 


(d)           In
the event any Indemnifying Party notifies the Indemnified Party within ten (10)
Business Days after the Indemnified Party has given notice of the matter that
the Indemnifying Party is assuming the defense thereof: (i) the Indemnifying
Party will defend the Indemnified Party against the matter with counsel of its
choice reasonably satisfactory to the Indemnified Party; (ii) the Indemnified
Party may retain separate co-counsel at its sole cost and expense (except that
the Indemnifying Party will be responsible for the fees and expenses of the
separate co-counsel to the extent the Indemnified Party reasonably concludes
that the counsel the Indemnifying Party has selected has a conflict of
interest); (iii) the Indemnified Party will not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the
written consent of the Indemnifying Party which consent shall not be
unreasonably withheld; and (iv) the Indemnifying Party will not consent to the
entry of any judgment with respect to the matter, or enter into any settlement
which does not include a provision whereby the plaintiff or claimant in the
matter releases the Indemnified Party from all liability with respect thereto,
and, in a settlement or compromise which does not involve only the payment of
money by the Indemnifying Party, without the prior written consent of the
Indemnified Party which consent shall not be unreasonably withheld.


 


(e)           In
the event the Indemnifying Party does not notify the Indemnified Party within
ten (10) Business Days after the Indemnified Party has received a Notice of
Claim that the Indemnifying Party is assuming the defense thereof, then the
Indemnified Party shall have the right, subject to the provisions of this
Article, to undertake the defense, compromise or settlement of such claim for
the account of the Indemnifying Party. 
Unless and until the Indemnifying Party assumes the defense of any
claim, the Indemnifying Party shall advance to the Indemnified Party any of its
reasonable attorneys’ fees and other costs and expenses incurred in connection
with the defense of any such action or proceeding.  Each Indemnified Party shall agree in writing prior to any such
advance that, in the event it receives any such advance, such Indemnified Party
shall reimburse the Indemnifying Party for such fees, costs and expenses to the
extent that it shall be determined that it was not entitled to indemnification
under this Article VII.


 


(f)            In
the event that the Indemnifying Party undertakes the defense of any claim, the
Indemnifying Party will keep the Indemnified Party advised as to all material
developments in connection with such claim, including, but not limited to,
promptly furnishing the Indemnified Party with copies of all material documents
filed or served in connection therewith.


 


18

















 


ARTICLE VIII


 


MISCELLANEOUS


 


8.1.          Choice of Law.


 


This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to conflicts
of laws principles.


 


8.2.          Entire Agreement.


 


This Agreement, including the Schedules and Exhibits
hereto, 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.


 


8.3.          Amendment or Modification.


 


This Agreement may be amended or modified from time to
time only by the written agreement of all of the parties; provided, however,
that any such amendment or modification must be approved by a majority of the
Board of Directors of Buyer (which majority must include the approval of a
majority of the Independent Directors of Buyer).


 


8.4.          Assignment.


 


No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.


 


8.5.          Notices.


 


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:if to Buyer,
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


 


if to Seller,
addressed to:


 


Frontline Ltd.


Par-La-Ville Place


14 Par-La-Ville Road


 


19

















 


Hamilton, Bermuda HM 08


Attention: 
Finance Department


Facsimile: +1 (441) 295-3494


 


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.


 


8.6.          Counterparts.


 


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.


 


8.7.          Severability.


 


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.


 


8.8.          U.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.


 


20

















 


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


 


	
   

  	
  FRONTLINE LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kate Blankenship

  	
   

  
	
   

  	
  Name: Kate Blankenship

  
	
   

  	
  Title: Director,
  Secretary, Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SHIP FINANCE
  INTERNATIONAL

  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kate Blankenship

  	
   

  
	
   

  	
  Name: Kate Blankenship

  
	
   

  	
  Title: Director,
  Secretary, Attorney-in-Fact

  



 

















 


SCHEDULE 2.2


PURCHASE PRICE


 


	
  Purchased Company

  	
   

  	
  Vessel

  	
   

  	
  Purchase
  Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Granite Shipping
  Co. Ltd.

  	
   

  	
  Front Granite

  	
   

  	
  $

  	
  24,651,232

  	
   

  
	
  Golden Current
  Limited

  	
   

  	
  Opalia

  	
   

  	
  56,343,723

  	
   

  
	
  Oscilla Shipping
  Limited

  	
   

  	
  Oscilla

  	
   

  	
  51,364,002

  	
   

  
	
  Bonfield
  Shipping Ltd.

  	
   

  	
  Front Driver

  	
   

  	
  34,483,616

  	
   

  
	
  Fourways Marine
  Limited

  	
   

  	
  Front Spirit

  	
   

  	
  29,736,708

  	
   

  
	
  Front Ardenne
  Inc.

  	
   

  	
  Front Ardenne

  	
   

  	
  41,351,909

  	
   

  
	
  Front Brabant
  Inc.

  	
   

  	
  Front Brabant

  	
   

  	
  41,358,378

  	
   

  
	
  Front Falcon
  Inc.

  	
   

  	
  Front Falcon

  	
   

  	
  73,498,862

  	
   

  
	
  Front Glory
  Shipping Inc.

  	
   

  	
  Front Glory

  	
   

  	
  39,223,825

  	
   

  
	
  Front Pride
  Shipping Inc.

  	
   

  	
  Front Pride

  	
   

  	
  35,601,323

  	
   

  
	
  Front Saga Inc.

  	
   

  	
  Front Page

  	
   

  	
  72,480,897

  	
   

  
	
  Front Serenade
  Inc.

  	
   

  	
  Front Serenade

  	
   

  	
  70,640,255

  	
   

  
	
  Front Splendour
  Shipping Inc.

  	
   

  	
  Front Splendour

  	
   

  	
  39,519,675

  	
   

  
	
  Front Stratus
  Inc.

  	
   

  	
  Front Stratus

  	
   

  	
  72,229,427

  	
   

  
	
  Golden Bayshore
  Shipping Corporation

  	
   

  	
  Navix Astral

  	
   

  	
  49,683,613

  	
   

  
	
  Golden Estuary
  Corporation

  	
   

  	
  Front Comanche

  	
   

  	
  68,193,882

  	
   

  
	
  Golden Fjord
  Corporation

  	
   

  	
  Front Commerce

  	
   

  	
  68,526,501

  	
   

  
	
  Golden Seaway
  Corporation

  	
   

  	
  New Vanguard

  	
   

  	
  67,431,819

  	
   

  
	
  Golden Sound
  Corporation

  	
   

  	
  New Vista

  	
   

  	
  67,662,762

  	
   

  
	
  Golden Tide
  Corporation

  	
   

  	
  New Circassia

  	
   

  	
  64,184,079

  	
   

  
	
  Katong Investments
  Ltd.

  	
   

  	
  Front Breaker

  	
   

  	
  35,438,232

  	
   

  
	
  Langkawi
  Shipping Ltd.

  	
   

  	
  Front Birch

  	
   

  	
  25,244,984

  	
   

  
	
  Patrio Shipping
  Ltd.

  	
   

  	
  Front Hunter

  	
   

  	
  41,731,293

  	
   

  
	
  Rakis Maritime
  S.A.

  	
   

  	
  Front Fighter

  	
   

  	
  41,637,071

  	
   

  
	
  Sea Ace
  Corporation

  	
   

  	
  Front Ace

  	
   

  	
  44,126,960

  	
   

  
	
  Sibu Shipping
  Ltd.

  	
   

  	
  Front Maple

  	
   

  	
  25,376,672

  	
   

  
	
  Southwest
  Tankers Inc.

  	
   

  	
  Front Sunda

  	
   

  	
  26,950,136

  	
   

  
	
  West Tankers
  Inc.

  	
   

  	
  Front Comor

  	
   

  	
  28,427,159

  	
   

  
	
  Sakura Transport
  Corp.

  	
   

  	
  Sakura I

  	
   

  	
  74,247,705

  	
   

  
	
  Ariake Transport
  Corp.

  	
   

  	
  Ariake

  	
   

  	
   

  	
  *

  
	
  Edinburgh
  Navigation S.A.

  	
   

  	
  Edinburgh

  	
   

  	
  42,938,988

  	
   

  
	
  Dundee
  Navigation S.A.

  	
   

  	
  Dundee

  	
   

  	
   

  	
  **

  
	
  Tokyo Transport
  Corp.

  	
   

  	
  Tanabe

  	
   

  	
  75,310,055

  	
   

  
	
  Hitatchi Hull #
  4983 Corp.

  	
   

  	
  Hakata

  	
   

  	
   

  	
  ***

  
	
  Puerto Reinosa
  Shipping Co. S.A.

  	
   

  	
  Front Lillo

  	
   

  	
  26,168,474

  	
   

  
	
  Madeira
  International Corp.(1)

  	
   

  	
  Front Viewer

  	
   

  	
  38,781,295

  	
   

  
	
  Madeira
  International Corp.(2)

  	
   

  	
  Front Rider

  	
   

  	
  38,439,499

  	
   

  
	
  Madeira
  International Corp.(3)

  	
   

  	
  Mindanao

  	
   

  	
  39,320,280

  	
   

  
	
  Madeira
  International Corp.(4)

  	
   

  	
  Front Vanadis

  	
   

  	
  34,674,308

  	
   

  
	
  Madeira
  International Corp.(5)

  	
   

  	
  Front Sabang

  	
   

  	
  33,537,308

  	
   

  
	
  Madeira
  International Corp.(6)

  	
   

  	
  Front Duchess

  	
   

  	
  45,451,803

  	
   

  
	
  Madeira
  International Corp.(7)

  	
   

  	
  Front Highness

  	
   

  	
  38,925,161

  	
   

  
							



 

















 


	
  Madeira International Corp.(8)

  	
   

  	
  Front Lord

  	
   

  	
  38,873,902

  	
   

  
	
  Madeira
  International Corp.(9)

  	
   

  	
  Front Climber

  	
   

  	
  31,052,994

  	
   

  
	
  Madeira
  International Corp.(10)

  	
   

  	
  Front Lady

  	
   

  	
  39,234,534

  	
   

  
	
  Madeira
  International Corp.(11)

  	
   

  	
  Front Duke

  	
   

  	
  42,285,596

  	
   

  
	
  Madeira
  International Corp.(12)

  	
   

  	
  Front Emperor

  	
   

  	
  27,554,389

  	
   

  
	
  Madeira
  International Corp.(13)

  	
   

  	
  Front Leader

  	
   

  	
  31,025,808

  	
   

  
	
  Madeira
  International Corp.(14)

  	
   

  	
  Front Striver

  	
   

  	
  37,104,624

  	
   

  
	
  Madeira
  International Corp.(15)

  	
   

  	
  Front Guider

  	
   

  	
  36,371,734

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  2,108,397,451

  	
  ****

  



 












*                                         This
vessel owning subsidiary may replace Sakura Transport Corp.


**                                  This
vessel owning subsidiary may replace Edinburgh Navigation S.A.


***                           This
vessel owning subsidiary may replace Tokyo Transport Corp.


****                    Includes
existing senior secured indebtedness.


 


(1) Owns 100% of
Aspinall Pte Ltd., the Vessel Owning Subsidiary


(2) Owns 100% of
Blizana Pte Ltd., the Vessel Owning Subsidiary


(3) Owns 100% of
Bolzano Pte Ltd., the Vessel Owning Subsidiary


(4) Owns 100% of
Cirebon Shipping Pte Ltd., the Vessel Owning Subsidiary


(5) Owns 100% of
Fox Maritime Pte Ltd., the Vessel Owning Subsidiary


(6) Owns 100% of
Front Dua Pte Ltd., the Vessel Owning Subsidiary


(7) Owns 100% of
Front Empat Pte Ltd., the Vessel Owning Subsidiary


(8) Owns 100% of
Front Enam Pte Ltd., the Vessel Owning Subsidiary


(9) Owns 100% of
Front Lapan Pte Ltd., the Vessel Owning Subsidiary


(10) Owns 100% of
Front Lima Pte Ltd., the Vessel Owning Subsidiary


(11) Owns 100% of
Front Tiga Pte Ltd., the Vessel Owning Subsidiary


(12) Owns 100% of
Front Tujuh Pte Ltd., the Vessel Owning Subsidiary


(13) Owns 100% of
Front Sembilan Pte Ltd., the Vessel Owning Subsidiary


(14) Owns 100% of
Rettie Pte Ltd., the Vessel Owning Subsidiary


(15) Owns 100% of
Transcorp Pte Ltd., the Vessel Owning Subsidiary


 

















 


SCHEDULE 3.4

CONSENTS


 


 


Consents required under
senior secured credit facility for each Subsidiary


 

















 


SCHEDULE 3.5


PURCHASED COMPANIES


 


	
  Name of Subsidiary

  	
   

  	
  Vessel

  	
   

  	
  Country of

  Incorporation

  	
   

  	
  Current

  Seller

  Ownership of

  Interests (%)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Granite Shipping
  Co. Ltd.

  	
   

  	
  Front Granite

  	
   

  	
  Bahamas

  	
   

  	
  100

  	
   

  
	
  Golden Current
  Limited

  	
   

  	
  Opalia

  	
   

  	
  Isle of Man

  	
   

  	
  100

  	
   

  
	
  Oscilla Shipping
  Limited

  	
   

  	
  Oscilla

  	
   

  	
  Isle of Man

  	
   

  	
  100

  	
  (i)

  
	
  Bonfield
  Shipping Ltd.

  	
   

  	
  Front Driver

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Fourways Marine
  Limited

  	
   

  	
  Front Spirit

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Ardenne
  Inc.

  	
   

  	
  Front Ardenne

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Brabant
  Inc.

  	
   

  	
  Front Brabant

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Falcon
  Corp.

  	
   

  	
  Front Falcon

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Glory
  Shipping Inc.

  	
   

  	
  Front Glory

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Pride
  Shipping Inc.

  	
   

  	
  Front Pride

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Saga Inc.

  	
   

  	
  Front Page

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Serenade
  Inc.

  	
   

  	
  Front Serenade

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Splendour
  Shipping Inc.

  	
   

  	
  Front Splendour

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Front Stratus
  Inc.

  	
   

  	
  Front Stratus

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Golden Bayshore
  Shipping Corporation

  	
   

  	
  Navix Astral

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Golden Estuary
  Corporation

  	
   

  	
  Front Comanche

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Golden Fjord
  Corporation

  	
   

  	
  Front Commerce

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Golden Seaway
  Corporation

  	
   

  	
  New Vanguard

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Golden Sound
  Corporation

  	
   

  	
  New Vista

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Golden Tide
  Corporation

  	
   

  	
  New Circassia

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Katong
  Investments Ltd.

  	
   

  	
  Front Breaker

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Langkawi
  Shipping Ltd.

  	
   

  	
  Front Birch

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Patrio Shipping
  Ltd.

  	
   

  	
  Front Hunter

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Rakis Maritime
  S.A.

  	
   

  	
  Front Fighter

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Sea Ace
  Corporation

  	
   

  	
  Front Ace

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Sibu Shipping
  Ltd.

  	
   

  	
  Front Maple

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Southwest
  Tankers Inc.

  	
   

  	
  Front Sunda

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  West Tankers
  Inc.

  	
   

  	
  Front Comor

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Ariake Transport
  Corporation *

  	
   

  	
  Ariake

  	
   

  	
  Liberia

  	
   

  	
  50.1

  	
   

  
	
  Dundee
  Navigation S.A.*

  	
   

  	
  Dundee

  	
   

  	
  Liberia

  	
   

  	
  50.1

  	
   

  
	
  Edinburgh
  Navigation S.A.*

  	
   

  	
  Edinburgh

  	
   

  	
  Liberia

  	
   

  	
  50.1

  	
   

  
	
  Hitachi Hull
  #4983 Corporation *

  	
   

  	
  Hakata

  	
   

  	
  Liberia

  	
   

  	
  50.1

  	
   

  
	
  Sakura Transport
  Corporation *

  	
   

  	
  Sakura I

  	
   

  	
  Liberia

  	
   

  	
  50.1

  	
   

  
	
  Tokyo Transport
  Corporation *

  	
   

  	
  Tanabe

  	
   

  	
  Liberia

  	
   

  	
  50.1

  	
   

  
	
  Madeira
  International Corp.

  	
   

  	
  Holding Company

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  



 

















 


	
  Puerto Reinosa
  Shipping Co. S.A.

  	
   

  	
  Front Lillo

  	
   

  	
  Panama

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(1)

  	
   

  	
  Front Viewer

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(2)

  	
   

  	
  Front Rider

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(3)

  	
   

  	
  Mindanao

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(4)

  	
   

  	
  Front Vanadis

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(5)

  	
   

  	
  Front Sabang

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(6)

  	
   

  	
  Front Duchess

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(7)

  	
   

  	
  Front Highness

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(8)

  	
   

  	
  Front Lord

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(9)

  	
   

  	
  Front Climber

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(10)

  	
   

  	
  Front Lady

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(11)

  	
   

  	
  Front Duke

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(12)

  	
   

  	
  Front Emperor

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(13)

  	
   

  	
  Front Leader

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(14)

  	
   

  	
  Front Striver

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  
	
  Madeira
  International Corp.(15)

  	
   

  	
  Front Guider

  	
   

  	
  Liberia

  	
   

  	
  100

  	
   

  



 












(i)  Seller owns the Vessel Owning Subsidiary and
intends to acquire and exercise an option to purchase the Oscilla.


 


*  Seller is a partial owner of each of these companies,
with the remaining Interests in each company owned by a third party.  Seller will acquire the remaining Interests
in three of these companies and then transfer 100% of such Interests, including
their respective vessels, to Buyer.  The
remaining companies and their respective vessels will not be sold to Buyer.


 


(1) Owns 100% of Aspinall Pte Ltd., the Vessel Owning Subsidiary


(2) Owns 100% of Blizana Pte Ltd., the Vessel Owning Subsidiary


(3) Owns 100% of Bolzano Pte Ltd., the Vessel Owning Subsidiary 


(4) Owns 100% of Cirebon Shipping Pte Ltd., the Vessel Owning
Subsidiary


(5) Owns 100% of Fox Maritime Pte Ltd., the Vessel Owning Subsidiary 


(6) Owns 100% of Front Dua Pte Ltd., the Vessel Owning Subsidiary


(7) Owns 100% of Front Empat Pte Ltd., the Vessel Owning Subsidiary


(8) Owns 100% of Front Enam Pte Ltd., the Vessel Owning Subsidiary


(9) Owns 100% of Front Lapan Pte Ltd., the Vessel Owning Subsidiary


(10) Owns 100% of Front Lima Pte Ltd., the Vessel Owning Subsidiary


(11) Owns 100% of Front Tiga Pte Ltd., the Vessel Owning Subsidiary


(12) Owns 100% of Front Tujuh Pte Ltd., the Vessel Owning Subsidiary


(13) Owns 100% of Front Sembilan Pte Ltd., the Vessel Owning Subsidiary


(14) Owns 100% of Rettie Pte Ltd., the Vessel Owning Subsidiary


(15) Owns 100% of Transcorp Pte Ltd., the Vessel Owning Subsidiary


 

















 


SCHEDULE 3.7

UNDISCLOSED LIABILITIES/VESSEL INDEBTEDNESS


 


	
  Purchased Company

  	
   

  	
  Vessel

  	
   

  	
  Estimated

  Outstanding Debt as

  of 12/31/03

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Granite Shipping Co. Ltd.

  	
   

  	
  Front Granite

  	
   

  	
  $10,855,385

  	
   

  
	
  Golden Current
  Limited

  	
   

  	
  Opalia

  	
   

  	
  42,000,000

  	
   

  
	
  Oscilla Shipping
  Limited

  	
   

  	
  Oscilla

  	
   

  	
  42,994,002

  	
   

  
	
  Bonfield
  Shipping Ltd.

  	
   

  	
  Front Driver

  	
   

  	
  16,819,494

  	
   

  
	
  Fourways Marine
  Limited

  	
   

  	
  Front Spirit

  	
   

  	
  14,300,000

  	
   

  
	
  Front Ardenne
  Inc.

  	
   

  	
  Front Ardenne

  	
   

  	
  24,420,000

  	
   

  
	
  Front Brabant
  Inc.

  	
   

  	
  Front Brabant

  	
   

  	
  25,320,000

  	
   

  
	
  Front Falcon
  Inc.

  	
   

  	
  Front Falcon

  	
   

  	
  45,625,962

  	
   

  
	
  Front Glory
  Shipping Inc.

  	
   

  	
  Front Glory

  	
   

  	
  19,720,000

  	
   

  
	
  Front Pride
  Shipping Inc.

  	
   

  	
  Front Pride

  	
   

  	
  18,560,000

  	
   

  
	
  Front Saga Inc.

  	
   

  	
  Front Page

  	
   

  	
  43,384,357

  	
   

  
	
  Front Serenade
  Inc.

  	
   

  	
  Front Serenade

  	
   

  	
  45,052,083

  	
   

  
	
  Front Splendour
  Shipping Inc.

  	
   

  	
  Front Splendour

  	
   

  	
  19,720,000

  	
   

  
	
  Front Stratus
  Inc.

  	
   

  	
  Front Stratus

  	
   

  	
  45,918,750

  	
   

  
	
  Golden Bayshore
  Shipping Corporation

  	
   

  	
  Navix Astral

  	
   

  	
  41,855,187

  	
   

  
	
  Golden Estuary
  Corporation

  	
   

  	
  Front Comanche

  	
   

  	
  48,779,950

  	
   

  
	
  Golden Fjord
  Corporation

  	
   

  	
  Front Commerce

  	
   

  	
  41,100,000

  	
   

  
	
  Golden Seaway
  Corporation

  	
   

  	
  New Vanguard

  	
   

  	
  42,978,141

  	
   

  
	
  Golden Sound
  Corporation

  	
   

  	
  New Vista

  	
   

  	
  49,796,724

  	
   

  
	
  Golden Tide
  Corporation

  	
   

  	
  New Circassia

  	
   

  	
  54,821,319

  	
   

  
	
  Katong Investments
  Ltd.

  	
   

  	
  Front Breaker

  	
   

  	
  16,812,539

  	
   

  
	
  Langkawi
  Shipping Ltd.

  	
   

  	
  Front Birch

  	
   

  	
  11,409,232

  	
   

  
	
  Patrio Shipping
  Ltd.

  	
   

  	
  Front Hunter

  	
   

  	
  21,375,000

  	
   

  
	
  Rakis Maritime
  S.A.

  	
   

  	
  Front Fighter

  	
   

  	
  21,125,000

  	
   

  
	
  Sea Ace
  Corporation

  	
   

  	
  Front Ace

  	
   

  	
  18,260,000

  	
   

  
	
  Sibu Shipping
  Ltd.

  	
   

  	
  Front Maple

  	
   

  	
  11,409,232

  	
   

  
	
  Southwest
  Tankers Inc.

  	
   

  	
  Front Sunda

  	
   

  	
  11,409,232

  	
   

  
	
  West Tankers
  Inc.

  	
   

  	
  Front Comor

  	
   

  	
  11,963,078

  	
   

  
	
  Sakura Transport
  Corp.

  	
   

  	
  Sakura I

  	
   

  	
  39,978,771

  	
   

  
	
  Ariake Transport
  Corp.

  	
   

  	
  Ariake

  	
   

  	
   

  	
  *

  
	
  Edinburgh
  Navigation S.A.

  	
   

  	
  Edinburgh

  	
   

  	
  18,141,226

  	
   

  
	
  Dundee
  Navigation S.A.

  	
   

  	
  Dundee

  	
   

  	
   

  	
  **

  
	
  Tokyo Transport
  Corp.

  	
   

  	
  Tanabe

  	
   

  	
  40,794,436

  	
   

  
	
  Hitatchi Hull #
  4983 Corp.

  	
   

  	
  Hakata

  	
   

  	
   

  	
  ***

  
	
  Puerto Reinosa
  Shipping Co. S.A.

  	
   

  	
  Front Lillo

  	
   

  	
  13,000,000

  	
   

  
	
  Madeira
  International Corp.(1)

  	
   

  	
  Front Viewer

  	
   

  	
  12,608,400

  	
   

  
	
  Madeira
  International Corp.(2)

  	
   

  	
  Front Rider

  	
   

  	
  20,659,634

  	
   

  
	
  Madeira
  International Corp.(3)

  	
   

  	
  Mindanao

  	
   

  	
  22,750,000

  	
   

  
	
  Madeira
  International Corp.(4)

  	
   

  	
  Front Vanadis

  	
   

  	
  14,953,844

  	
   

  
	
  Madeira
  International Corp.(5)

  	
   

  	
  Front Sabang

  	
   

  	
  13,133,336

  	
   

  



 

















 


	
  Purchased Company

  	
   

  	
  Vessel

  	
   

  	
  Estimated

  Outstanding Debt as

  of 12/31/03

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Madeira
  International Corp.(6)

  	
   

  	
  Front Duchess

  	
   

  	
  16,258,200

  	
   

  
	
  Madeira
  International Corp.(7)

  	
   

  	
  Front Highness

  	
   

  	
  16,258,200

  	
   

  
	
  Madeira International Corp.(8)

  	
   

  	
  Front Lord

  	
   

  	
  16,258,200

  	
   

  
	
  Madeira
  International Corp.(9)

  	
   

  	
  Front Climber

  	
   

  	
  12,608,400

  	
   

  
	
  Madeira
  International Corp.(10)

  	
   

  	
  Front Lady

  	
   

  	
  16,258,200

  	
   

  
	
  Madeira
  International Corp.(11)

  	
   

  	
  Front Duke

  	
   

  	
  16,258,200

  	
   

  
	
  Madeira
  International Corp.(12)

  	
   

  	
  Front Emperor

  	
   

  	
  10,783,500

  	
   

  
	
  Madeira
  International Corp.(13)

  	
   

  	
  Front Leader

  	
   

  	
  12,608,400

  	
   

  
	
  Madeira
  International Corp.(14)

  	
   

  	
  Front Striver

  	
   

  	
  12,608,400

  	
   

  
	
  Madeira
  International Corp.(15)

  	
   

  	
  Front Guider

  	
   

  	
  12,608,400

  	
   

  



 












*                                         This
vessel owning subsidiary may replace Sakura Transport Corp.


**                                  This
vessel owning subsidiary may replace Edinburgh Navigation S.A.


***                           This
vessel owning subsidiary may replace Tokyo Transport Corp.


 

















 


SCHEDULE 3.19


VESSELS


 


	
  Name of Vessel

  	
   

  	
  Type

  	
   

  	
  Vessel
  Owning Subsidiary

  	
   

  	
  Flag

  	
   

  	
  Dwt.

  	
   

  	
  Year

  Built

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Front Granite

  	
   

  	
  Suezmax

  	
   

  	
  Granite Shipping
  Co. Ltd.

  	
   

  	
  Norway

  	
   

  	
  142,000

  	
   

  	
  1991

  	
   

  
	
  Opalia (i)

  	
   

  	
  VLCC

  	
   

  	
  Golden Current
  Limited

  	
   

  	
  Isle of Man

  	
   

  	
  302,000

  	
   

  	
  1999

  	
   

  
	
  Oscilla (ii)

  	
   

  	
  VLCC

  	
   

  	
  Oscilla Shipping
  Limited(a)

  	
   

  	
  Isle of Man

  	
   

  	
  302,000

  	
   

  	
  2000

  	
   

  
	
  Front Driver
  (iii)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Bonfield
  Shipping Ltd.

  	
   

  	
  Norway

  	
   

  	
  169,000

  	
   

  	
  1991

  	
   

  
	
  Front Spirit

  	
   

  	
  Suezmax

  	
   

  	
  Fourways Marine
  Limited

  	
   

  	
  Norway

  	
   

  	
  147,000

  	
   

  	
  1993

  	
   

  
	
  Front Ardenne

  	
   

  	
  Suezmax

  	
   

  	
  Front Ardenne
  Inc.

  	
   

  	
  Norway

  	
   

  	
  153,000

  	
   

  	
  1997

  	
   

  
	
  Front Brabant
  (iv)

  	
   

  	
  Suezmax

  	
   

  	
  Front Brabant
  Inc.

  	
   

  	
  Norway

  	
   

  	
  153,000

  	
   

  	
  1998

  	
   

  
	
  Front Falcon

  	
   

  	
  VLCC

  	
   

  	
  Front Falcon
  Corp.

  	
   

  	
  Bahamas

  	
   

  	
  308,000

  	
   

  	
  2002

  	
   

  
	
  Front Glory

  	
   

  	
  Suezmax

  	
   

  	
  Front Glory
  Shipping Inc.

  	
   

  	
  Norway

  	
   

  	
  150,000

  	
   

  	
  1995

  	
   

  
	
  Front Pride

  	
   

  	
  Suezmax

  	
   

  	
  Front Pride
  Shipping Inc.

  	
   

  	
  Norway

  	
   

  	
  150,000

  	
   

  	
  1993

  	
   

  
	
  Front Page

  	
   

  	
  VLCC

  	
   

  	
  Front Saga Inc.

  	
   

  	
  Liberia

  	
   

  	
  299,000

  	
   

  	
  2002

  	
   

  
	
  Front Serenade

  	
   

  	
  VLCC

  	
   

  	
  Front Serenade
  Inc.

  	
   

  	
  Liberia

  	
   

  	
  299,000

  	
   

  	
  2002

  	
   

  
	
  Front Splendour

  	
   

  	
  Suezmax

  	
   

  	
  Front Splendour
  Shipping Inc.

  	
   

  	
  Norway

  	
   

  	
  150,000

  	
   

  	
  1995

  	
   

  
	
  Front Stratus

  	
   

  	
  VLCC

  	
   

  	
  Front Stratus
  Inc.

  	
   

  	
  Bahamas

  	
   

  	
  299,000

  	
   

  	
  2002

  	
   

  
	
  Navix Astral (v)

  	
   

  	
  VLCC

  	
   

  	
  Golden Bayshore
  Shipping Corporation

  	
   

  	
  Panama

  	
   

  	
  276,000

  	
   

  	
  1996

  	
   

  
	
  Front Comanche
  (vi)

  	
   

  	
  VLCC

  	
   

  	
  Golden Estuary
  Corporation

  	
   

  	
  France

  	
   

  	
  300,000

  	
   

  	
  1999

  	
   

  
	
  Front Commerce

  	
   

  	
  VLCC

  	
   

  	
  Golden Fjord
  Corporation

  	
   

  	
  Liberia

  	
   

  	
  300,000

  	
   

  	
  1999

  	
   

  
	
  New Vanguard
  (vii)

  	
   

  	
  VLCC

  	
   

  	
  Golden Seaway
  Corporation

  	
   

  	
  Hong Kong

  	
   

  	
  300,000

  	
   

  	
  1998

  	
   

  
	
  New Vista (viii)

  	
   

  	
  VLCC

  	
   

  	
  Golden Sound
  Corporation

  	
   

  	
  Hong Kong

  	
   

  	
  300,000

  	
   

  	
  1998

  	
   

  
	
  New Circassia

  	
   

  	
  VLCC

  	
   

  	
  Golden Tide
  Corporation

  	
   

  	
  Panama

  	
   

  	
  306,000

  	
   

  	
  1999

  	
   

  
	
  Front Breaker
  (ix)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Katong
  Investments Ltd.

  	
   

  	
  Norway

  	
   

  	
  169,000

  	
   

  	
  1991

  	
   

  
	
  Front Birch

  	
   

  	
  Suezmax

  	
   

  	
  Langkawi
  Shipping Ltd.

  	
   

  	
  Norway

  	
   

  	
  152,000

  	
   

  	
  1991

  	
   

  
	
  Front Hunter

  	
   

  	
  Suezmax

  	
   

  	
  Patrio Shipping
  Ltd.

  	
   

  	
  Norway

  	
   

  	
  153,000

  	
   

  	
  1998

  	
   

  



 












(i)            charter
expires in February of 2004


(ii)           charter
expires in April of 2005


(iii)          charter
expires in July of 2004 with option extending to October of 2006


(iv)          charter
expires in July of 2004 with option extending to October of 2004


(v)           charter
expires in March of 2011


(vi)          charter
expires in December of 2007


(vii)         charter
expires in March of 2008


(viii)        charter
expires in March of 2008


(ix)           charter
expires in July of 2004 with option extending to October of 2004


 

















 


	
  Front Fighter

  	
   

  	
  Suezmax

  	
   

  	
  Rakis Maritime
  S.A.

  	
   

  	
  Norway

  	
   

  	
  153,000

  	
   

  	
  1998

  	
   

  
	
  Front Ace

  	
   

  	
  VLCC

  	
   

  	
  Sea Ace
  Corporation

  	
   

  	
  Liberia

  	
   

  	
  276,000

  	
   

  	
  1993

  	
   

  
	
  Front Maple

  	
   

  	
  Suezmax

  	
   

  	
  Sibu Shipping
  Ltd.

  	
   

  	
  Norway

  	
   

  	
  152,000

  	
   

  	
  1991

  	
   

  
	
  Front Sunda

  	
   

  	
  Suezmax

  	
   

  	
  Southwest
  Tankers Inc.

  	
   

  	
  Norway

  	
   

  	
  142,000

  	
   

  	
  1992

  	
   

  
	
  Front Comor

  	
   

  	
  Suezmax

  	
   

  	
  West Tankers
  Inc.

  	
   

  	
  Norway

  	
   

  	
  142,000

  	
   

  	
  1993

  	
   

  
	
  Sakura I

  	
   

  	
  VLCC

  	
   

  	
  Sakura Transport
  Corporation(1)

  	
   

  	
  Bahamas

  	
   

  	
  298,530

  	
   

  	
  2001

  	
   

  
	
  Ariake*

  	
   

  	
  VLCC

  	
   

  	
  Ariake Transport
  Corporation(1)

  	
   

  	
  Bahamas

  	
   

  	
  298,000

  	
   

  	
  2001

  	
   

  
	
  Edinburgh

  	
   

  	
  VLCC

  	
   

  	
  Edinburgh
  Navigation S.A.(1)

  	
   

  	
  Liberia

  	
   

  	
  302,000

  	
   

  	
  1993

  	
   

  
	
  Dundee**

  	
   

  	
  VLCC

  	
   

  	
  Dundee
  Navigation S.A.(1)

  	
   

  	
  Liberia

  	
   

  	
  302,432

  	
   

  	
  1993

  	
   

  
	
  Tanabe

  	
   

  	
  VLCC

  	
   

  	
  Tokyo Transport
  Corp.(1)

  	
   

  	
  Bahamas

  	
   

  	
  296,000

  	
   

  	
  2002

  	
   

  
	
  Hakata***

  	
   

  	
  VLCC

  	
   

  	
  Hitachi Hull
  #4983 Corporation(1)

  	
   

  	
  Bahamas

  	
   

  	
  296,000

  	
   

  	
  2002

  	
   

  
	
  Front Lillo

  	
   

  	
  Suezmax

  	
   

  	
  Puerto Reinosa
  Shipping Co. S.A.

  	
   

  	
  Norway

  	
   

  	
  147,000

  	
   

  	
  1991

  	
   

  
	
  Front Viewer (x)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Aspinall Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  169,000

  	
   

  	
  1992

  	
   

  
	
  Front Rider (xi)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Blizana Pte Ltd.

  	
   

  	
  Singapore

  	
   

  	
  169,000

  	
   

  	
  1992

  	
   

  
	
  Mindanao

  	
   

  	
  Suezmax

  	
   

  	
  Bolzano Pte Ltd.

  	
   

  	
  Singapore

  	
   

  	
  158,000

  	
   

  	
  1998

  	
   

  
	
  Front Vanadis

  	
   

  	
  VLCC

  	
   

  	
  Cirebon Shipping
  Pte Ltd.

  	
   

  	
  Singapore

  	
   

  	
  286,000

  	
   

  	
  1990

  	
   

  
	
  Front Sabang

  	
   

  	
  VLCC

  	
   

  	
  Fox Maritime Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  286,000

  	
   

  	
  1990

  	
   

  
	
  Front Duchess

  	
   

  	
  VLCC

  	
   

  	
  Front Dua Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  284,000

  	
   

  	
  1993

  	
   

  
	
  Front Highness

  	
   

  	
  VLCC

  	
   

  	
  Front Empat Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  284,000

  	
   

  	
  1991

  	
   

  
	
  Front Lord

  	
   

  	
  VLCC

  	
   

  	
  Front Enam Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  284,000

  	
   

  	
  1991

  	
   

  
	
  Front Climber
  (xii)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Front Lapan Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  169,000

  	
   

  	
  1991

  	
   

  
	
  Front Lady

  	
   

  	
  VLCC

  	
   

  	
  Front Lima Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  284,000

  	
   

  	
  1991

  	
   

  
	
  Front Duke

  	
   

  	
  VLCC

  	
   

  	
  Front Tiga Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  284,000

  	
   

  	
  1992

  	
   

  
	
  Front Emperor

  	
   

  	
  Suezmax

  	
   

  	
  Front Tujuh Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  147,000

  	
   

  	
  1992

  	
   

  
	
  Front Leader
  (xiii)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Front Sembilan
  Pte Ltd.

  	
   

  	
  Singapore

  	
   

  	
  169,000

  	
   

  	
  1991

  	
   

  
	
  Front Striver
  (xiv)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Rettie Pte Ltd.

  	
   

  	
  Singapore

  	
   

  	
  169,000

  	
   

  	
  1992

  	
   

  
	
  Front Guider
  (xv)

  	
   

  	
  Suezmax / OBO

  	
   

  	
  Transcorp Pte
  Ltd.

  	
   

  	
  Singapore

  	
   

  	
  169,000

  	
   

  	
  1991

  	
   

  



 












(x)            charter
expires in October of 2004 with option extending to December of 2004


(xi)           charter
expires in August of 2004 with option extending to November of 2004


(xii)          charter
expires in July of 2004 with option extending to October of 2004


(xiii)         charter
expires in March of 2006


(xiv)        charter
expires in November of 2006 with option extending to April of 2007


(xv)         charter expires in
April of 2006 with option extending to October of 2006 


 

















 


(a)  Seller owns the Vessel Owning Subsidiary and
intends to acquire and exercise an option to purchase the Oscilla.


 


*  This vessel owning subsidiary
may replace Sakura Transport Corp.


**  This vessel owning
subsidiary may replace Edinburgh Navigation S.A.


***  This vessel owning
subsidiary may replace Tokyo Transport Corp.


 


(1)  Seller is a partial owner
of each of these companies, with the remaining Interests in each company owned
by a third party.  Seller will acquire
the remaining Interests in three of these companies and then transfer 100% of
such Interests, including their respective vessels, to Buyer.  The remaining companies and their respective
vessels will not be sold to Buyer.


 

















 


EXHIBIT
A

[Form of Charter is Attached]


 


Vessel-specific
information required for each Charter can be found in the attached data sheets.


 


All performance
specifications for Clause 24 of the Charters are included in the attached data
sheets or will be agreed upon by the Charterer and the Company.