Exhibit 4.4


 


Execution Copy


 




 





 


SHIP FINANCE INTERNATIONAL LIMITED,


 


as Issuer


 


AND


 


WILMINGTON TRUST COMPANY,


 


as Trustee


 


INDENTURE


 


Dated as of December 18, 2003


 


 


Providing for Issuance of


 


81⁄2%
Senior
Notes due 2013


 




 





 

















 


Table of
Contents


 


	
  ARTICLE I

  	
   

  	
   

  
	
  Definitions and
  Incorporation by Reference

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Other Definitions

  	
   

  
	
  Section 1.3

  	
  Incorporation by Reference of Trust Indenture Act

  	
   

  
	
  Section 1.4

  	
  Rules of Construction

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
  The Securities

  	
   

  	
   

  
	
  Section 2.1

  	
  Form, Dating and Terms

  	
   

  
	
  Section 2.2

  	
  Execution and Authentication

  	
   

  
	
  Section 2.3

  	
  Registrar and Paying Agent

  	
   

  
	
  Section 2.4

  	
  Paying Agent to Hold Money in Trust

  	
   

  
	
  Section 2.5

  	
  Securityholder Lists

  	
   

  
	
  Section 2.6

  	
  Transfer and Exchange

  	
   

  
	
  Section 2.7

  	
  Form of Certificate to be Delivered in Connection
  with Transfers to Institutional Accredited Investors

  	
   

  
	
  Section 2.8

  	
  Form of Certificate to be Delivered in Connection
  with Transfers Pursuant to Regulation S

  	
   

  
	
  Section 2.9

  	
  Mutilated, Destroyed, Lost or Stolen Securities

  	
   

  
	
  Section 2.10

  	
  Outstanding Securities

  	
   

  
	
  Section 2.11

  	
  Temporary Securities

  	
   

  
	
  Section 2.12

  	
  Cancellation

  	
   

  
	
  Section 2.13

  	
  Payment of Interest; Defaulted Interest

  	
   

  
	
  Section 2.14

  	
  Computation of Interest

  	
   

  
	
  Section 2.15

  	
  CUSIP AND ISIN Numbers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
  Covenants

  	
   

  	
   

  
	
  Section 3.1

  	
  Payment of Securities; Payment of Additional
  Amounts

  	
   

  
	
  Section 3.2

  	
  SEC Reports

  	
   

  
	
  Section 3.3

  	
  Limitation on Indebtedness

  	
   

  
	
  Section 3.4

  	
  Limitation on Restricted Payments

  	
   

  
	
  Section 3.5

  	
  Limitation on Liens

  	
   

  
	
  Section 3.6

  	
  Limitation on Restrictions on Distributions from
  Restricted Subsidiaries

  	
   

  
	
  Section 3.7

  	
  Limitation on Sales of Assets and Subsidiary
  Stock.

  	
   

  
	
  Section 3.8

  	
  Limitation on Affiliate Transactions

  	
   

  
	
  Section 3.9

  	
  Change of Control.

  	
   

  
	
  Section 3.10

  	
  Limitation on Sale of Capital Stock of Restricted
  Subsidiaries

  	
   

  
	
  Section 3.11

  	
  Limitation on Sale/Leaseback Transactions

  	
   

  



 


i

















 


	
  Section 3.12

  	
  Future Subsidiary Guarantors

  	
   

  
	
  Section 3.13

  	
  Limitation on Lines of Business

  	
   

  
	
  Section 3.14

  	
  Maintenance of Office or Agency

  	
   

  
	
  Section 3.15

  	
  Corporate Existence

  	
   

  
	
  Section 3.16

  	
  Payment of Taxes and Other Claims

  	
   

  
	
  Section 3.17

  	
  Payments for Consent

  	
   

  
	
  Section 3.18

  	
  Compliance Certificate

  	
   

  
	
  Section 3.19

  	
  Further Instruments and Acts

  	
   

  
	
  Section 3.20

  	
  Statement by Officers as to Default

  	
   

  
	
  Section 3.21

  	
  Amendments of Material Agreements

  	
   

  
	
  Section 3.22

  	
  Insurance

  	
   

  
	
  Section 3.23

  	
  Suspended Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
  Successor Company

  	
   

  
	
  Section 4.1

  	
  Merger and Consolidation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
   

  
	
  Redemption of Securities

  	
   

  
	
  Section 5.1

  	
  Optional Redemption; Optional Tax Redemption

  	
   

  
	
  Section 5.2

  	
  Applicability of Article

  	
   

  
	
  Section 5.3

  	
  Election to Redeem; Notice to Trustee

  	
   

  
	
  Section 5.4

  	
  Selection by Trustee of Securities to Be Redeemed

  	
   

  
	
  Section 5.5

  	
  Notice of Redemption

  	
   

  
	
  Section 5.6

  	
  Deposit of Redemption Price

  	
   

  
	
  Section 5.7

  	
  Securities Payable on Redemption Date

  	
   

  
	
  Section 5.8

  	
  Securities Redeemed in Part

  	
   

  
	
  Section 5.9

  	
  Special Mandatory Redemption.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
   

  
	
  Defaults and Remedies

  	
   

  
	
  Section 6.1

  	
  Events of Default

  	
   

  
	
  Section 6.2

  	
  Acceleration

  	
   

  
	
  Section 6.3

  	
  Other Remedies

  	
   

  
	
  Section 6.4

  	
  Waiver of Past Defaults

  	
   

  
	
  Section 6.5

  	
  Control by Majority

  	
   

  
	
  Section 6.6

  	
  Limitation on Suits

  	
   

  
	
  Section 6.7

  	
  Rights of Holders to Receive Payment

  	
   

  
	
  Section 6.8

  	
  Collection Suit by Trustee

  	
   

  
	
  Section 6.9

  	
  Trustee May File Proofs of Claim

  	
   

  
	
  Section 6.10

  	
  Priorities

  	
   

  
	
  Section 6.11

  	
  Undertaking for Costs

  	
   

  
	
  Section 6.12

  	
  Additional Payments

  	
   

  



 


ii

















 


	
  ARTICLE VII

  	
   

  	
   

  
	
  Trustee

  	
   

  	
   

  
	
  Section 7.1

  	
  Duties of Trustee

  	
   

  
	
  Section 7.2

  	
  Rights of Trustee

  	
   

  
	
  Section 7.3

  	
  Individual Rights of Trustee

  	
   

  
	
  Section 7.4

  	
  Trustee’s Disclaimer

  	
   

  
	
  Section 7.5

  	
  Notice of Defaults

  	
   

  
	
  Section 7.6

  	
  Reports by Trustee to Holders

  	
   

  
	
  Section 7.7

  	
  Compensation and Indemnity

  	
   

  
	
  Section 7.8

  	
  Replacement of Trustee

  	
   

  
	
  Section 7.9

  	
  Successor Trustee by Merger

  	
   

  
	
  Section 7.10

  	
  Eligibility; Disqualification

  	
   

  
	
  Section 7.11

  	
  Preferential Collection of Claims Against Company

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
   

  
	
  Discharge of
  Indenture; Defeasance

  	
   

  
	
  Section 8.1

  	
  Discharge of Liability on Securities; Defeasance

  	
   

  
	
  Section 8.2

  	
  Conditions to Defeasance

  	
   

  
	
  Section 8.3

  	
  Application of Trust Money

  	
   

  
	
  Section 8.4

  	
  Repayment to Company

  	
   

  
	
  Section 8.5

  	
  Indemnity for U.S. Government Securities

  	
   

  
	
  Section 8.6

  	
  Reinstatement

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
   

  
	
  Amendments

  	
   

  	
   

  
	
  Section 9.1

  	
  Without Consent of Holders

  	
   

  
	
  Section 9.2

  	
  With Consent of Holders

  	
   

  
	
  Section 9.3

  	
  Compliance with Trust Indenture Act

  	
   

  
	
  Section 9.4

  	
  Revocation and Effect of Consents and Waivers

  	
   

  
	
  Section 9.5

  	
  Notation on or Exchange of Securities

  	
   

  
	
  Section 9.6

  	
  Trustee To Sign Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
   

  
	
  Subsidiary Guarantees

  	
   

  
	
  Section 10.1

  	
  Subsidiary Guarantees

  	
   

  
	
  Section 10.2

  	
  Limitation on Liability; Termination, Release and
  Discharge

  	
   

  
	
  Section 10.3

  	
  Right of Contribution

  	
   

  
	
  Section 10.4

  	
  No Subrogation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  	
   

  
	
  Section 11.1

  	
  Trust Indenture Act Controls

  	
   

  
	
  Section 11.2

  	
  Notices

  	
   

  
	
  Section 11.3

  	
  Communication by Holders with other Holders

  	
   

  
	
  Section 11.4

  	
  Certificate and Opinion as to Conditions Precedent

  	
   

  
	
  Section 11.5

  	
  Statements Required in Certificate or Opinion

  	
   

  



 


iii

















 


	
  Section 11.6

  	
  When Securities Disregarded

  	
   

  
	
  Section 11.7

  	
  Rules by Trustee, Paying Agent and Registrar

  	
   

  
	
  Section 11.8

  	
  Legal Holidays

  	
   

  
	
  Section 11.9

  	
  GOVERNING LAW

  	
   

  
	
  Section 11.10

  	
  No Recourse Against Others

  	
   

  
	
  Section 11.11

  	
  Successors

  	
   

  
	
  Section 11.12

  	
  Multiple Originals

  	
   

  
	
  Section 11.13

  	
  Qualification of Indenture

  	
   

  
	
  Section 11.14

  	
  Table of Contents; Headings

  	
   

  
	
  Section 11.15

  	
  Submission to Jurisdiction; Service of Process

  	
   

  
	
  Section 11.16

  	
  Indemnification for Foreign Currency Judgments

  	
   

  
	
  Section 11.17

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
  Form of the Unregistered Note

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT B

  	
  Form of the Registered Note

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT C

  	
  Form of Supplemental Indenture

  	
   

  
				



 


iv

















 


INDENTURE
dated as of December 18, 2003, between SHIP FINANCE INTERNATIONAL LIMITED, a
Bermuda exempted company (the “Company”), and WILMINGTON TRUST COMPANY, a
Delaware banking corporation (the “Trustee”) as Trustee.


 


Each party agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the Holders of (i) the
Company’s 81⁄2% Senior Notes due 2013, issued on the date hereof (the “Initial
Securities”), (ii) if and when issued, an unlimited principal amount
of additional 81⁄2% Senior Notes due 2013 in a non-registered offering or 81⁄2%
Senior Notes due 2013 in a registered offering of the Company that may be
offered from time to time subsequent to the Issue Date (the “Additional
Securities”) and (iii) if and when issued, the Company’s 81⁄2% Senior
Notes due 2013 that may be issued from time to time in exchange for Initial
Securities or any Additional Securities in an offer registered under the
Securities Act as provided in a Registration Rights Agreement (as hereinafter
defined the “Exchange Securities,” and together with the Initial
Securities and Additional Securities, the “Securities”).


 


ARTICLE
I

Definitions
and Incorporation by Reference


 


Section 1.1                                      Definitions.


 


“Additional Assets” means:


 


(1)                                  any
property or assets (other than Indebtedness and Capital Stock) used or useful
by the Company or a Restricted Subsidiary in a Related Business, including,
without limitation, a hull under construction or rights under a Vessel
Construction Contract, any installment payment under a Vessel Construction
Contract, and any repairs, improvements, additions, enhancements, drydocking or
capital improvement of any vessel;


 


(2)                                  the
Capital Stock of a Person that becomes a Restricted Subsidiary as a result of
the acquisition of such Capital Stock by the Company or a Restricted Subsidiary
of the Company; or


 


(3)                                  Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company;


 


provided,
however,
that, in the case of clauses (2) and (3), such Restricted Subsidiary is
primarily engaged in a Related Business.


 


“Additional Securities” has the meaning
ascribed to it in the second introductory paragraph of this Indenture.


 


“Affiliate” of any specified Person means
any other Person, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person. For the purposes
of this definition, “control” when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms 


 

















 


“controlling” and
“controlled” have meanings correlative to the foregoing.  For purposes of the foregoing, Knightsbridge
Tankers Limited shall be deemed to be an Affiliate of Frontline.


 


“Applicable Premium” means, with respect to
a Security at any Redemption Date, the greater of (i) 1.0% of the principal
amount of such Security and (ii) the excess of (A) the present value at such
time of (1) the redemption price of such Security at December 15, 2008 (such
redemption price as set forth in Section 5.1) plus (2) all required
interest payments due on such Security through December 15, 2008, computed
using a discount rate equal to the Treasury Rate plus 50 basis points, over
(B) the principal amount of such Security.


 


“Asset Disposition” means any direct or
indirect sale, lease (other than a charter or an operating lease entered into
in the ordinary course of business), transfer, issuance or other disposition
(including by way of a Total Loss), or a series of related sales, leases,
transfers, issuances or dispositions that are part of a common plan, of shares
of Capital Stock of a Subsidiary (other than directors’ qualifying shares),
property or other assets (each referred to for the purposes of this definition
as a “disposition”) by the Company or any of its Restricted Subsidiaries,
including any disposition by means of a merger, consolidation or similar
transaction.


 


Notwithstanding the preceding, the following items
shall not be deemed to be Asset Dispositions:


 


(1)                                  a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly Owned Subsidiary;


 


(2)                                  the
sale of Cash Equivalents in the ordinary course of business;


 


(3)                                  a
disposition of inventory in the ordinary course of business;


 


(4)                                  a
disposition of obsolete, scrap or worn out assets that are no longer useful in
the conduct of the business of the Company and its Restricted Subsidiaries and
that is disposed of in each case in the ordinary course of business;


 


(5)                                  transactions
permitted under Section 4.1;


 


(6)                                  an
issuance of Capital Stock by a Restricted Subsidiary of the Company to the
Company or to a Wholly Owned Subsidiary;


 


(7)                                  for
purposes of Section 3.7 only, the making of a Permitted Investment or a
disposition subject to Section 3.4;


 


(8)                                  dispositions
of assets in a single transaction or series of related transactions with an
aggregate fair market value in any calendar year of less than $5.0 million;


 


(9)                                  dispositions
in connection with Liens permitted to be incurred under this Indenture;


 


2

















 


(10)                            the
licensing or sublicensing of intellectual property or other general intangibles
and licenses, leases or subleases of other property in the ordinary course of
business which do not materially interfere with the business of the Company and
its Restricted Subsidiaries;


 


(11)                            foreclosure
on assets; and


 


(12)                            Asset
Swaps.


 


“Asset Swap” means concurrent purchase and
sale or exchange of Related Business Assets between the Company or any of its
Restricted Subsidiaries and another Person; provided that any cash received must be
applied in accordance with Section 3.7.


 


“Attributable Indebtedness” in respect of a
Sale/Leaseback Transaction means, as at the time of determination, the present
value (discounted at the rate of interest implicit in such transaction
determined in accordance with GAAP) of the total obligations of the lessee for
rental payments during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease has been
extended).


 


“Available
Surplus Cash” means, for any quarter, all cash and Cash
Equivalents on hand at the end of that quarter, less the amount of any cash
reserves necessary or appropriate in the reasonable discretion of the Board of
Directors to (a) provide for the proper conduct of the business of the
Company and its Subsidiaries, including reserves for anticipated future credit
needs and future capital expenditures, after that quarter, or (b) comply
with applicable law or any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which the company is a party or
by which the Company or any Subsidiary is bound or to which its assets are
subject.


 


“Average Life” means, as of the date of
determination, with respect to any Indebtedness or Preferred Stock, the
quotient obtained by dividing (1) the sum of the products of the numbers of
years from the date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Preferred Stock multiplied by the amount of such payment by (2)
the sum of all such payments.


 


“Bankruptcy Law” means Title 11, United
States Code or any bankruptcy, insolvency or other similar law of Bermuda or
any other foreign jurisdiction or any similar Federal, state or foreign law for
the relief of debtors.


 


“Board of Directors” means, as to any
Person, the board of directors of such Person or any duly authorized committee
thereof.


 


“Board Resolution” means a copy of a
resolution certified by the Secretary or an Assistant Secretary of a Person to
have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification.


 


“Capital Stock” of any Person means any and
all shares, interests, rights to purchase, warrants, options, participation or
other equivalents of or interests in (however designated) equity of such
Person, including any Preferred Stock, but excluding any debt securities
convertible into such equity.


 


3

















 


“Capitalized Lease Obligations” means an
obligation that is required to be classified and accounted for as a capitalized
lease for financial reporting purposes in accordance with GAAP, and the amount
of Indebtedness represented by such obligation will be the capitalized amount
of such obligation at the time any determination thereof is to be made as
determined in accordance with GAAP, and the Stated Maturity thereof will be the
date of the last payment of rent or any other amount due under such lease prior
to the first date such lease may be terminated without penalty.


 


“Cash Equivalents” means:


 


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


 


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


 


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


 


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


 


(5)                                  commercial
paper rated at the time of acquisition thereof at least “A-2” or the equivalent
thereof by S&P or “P-2” or the equivalent thereof by Moody’s, or carrying
an equivalent rating by a nationally recognized Rating Agency, if both of the
two named Rating Agencies cease publishing ratings of investments, and in any
case maturing within one year after the date of acquisition thereof; and


 


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


 


“Change of Control” means:


 


(1)                                  any
“person” or “group” of related persons (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that such person or group shall be deemed to have
“beneficial ownership” of all shares that any such person or group has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
voting power of


 


4

















 


the Voting
Stock of the Company (or its successor by merger, consolidation or purchase of
all or substantially all of its assets) (for the purposes of this clause, such
person or group shall be deemed to beneficially own any Voting Stock of the
Company held by a parent entity, if such person or group “beneficially owns”
(as defined above), directly or indirectly, more than 50% of the voting power
of the Voting Stock of such parent entity); or


 


(2)                                  the
first day on which a majority of the members of the Board of Directors (but not
committees thereof) of the Company are not Continuing Directors; or


 


(3)                                  the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole to any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act); or


 


(4)                                  the
adoption by the stockholders of the Company of a plan or proposal for the
liquidation or dissolution of the Company.


 


“Charter Ancillary Agreement” means the
Charter Ancillary Agreement to be entered into pursuant to the Fleet Purchase
Agreement between the Company, the Charterer and others, as such agreement
shall be amended from time to time.


 


“Charterer” means Frontline Shipping
Limited, a Bermuda exempted company and wholly owned subsidiary of Frontline,
and its successors.


 


“Charters” means the Charters contemplated
by the Fleet Purchase Agreement.


 


“Code” means the Internal Revenue Code of
1986, as amended.


 


“Common Stock” means with respect to any
Person, any and all shares, interest or other participations in, and other
equivalents (however designated and whether voting or nonvoting) of such
Person’s common stock whether or not outstanding on the Issue Date, and
includes, without limitation, all series and classes of such common stock.


 


“Consolidated Cash Flow” for any period
means, without duplication, the Consolidated Net Income of the Company for such
period, plus
the portion of lease payments allocated as a reduction in the net investment in
capital leases in accordance with GAAP to the extent not included in
Consolidated Net Income, plus the following to the extent deducted
in calculating such Consolidated Net Income:


 


(1)                                  Consolidated
Interest Expense;


 


(2)                                  Consolidated
Income Taxes;


 


(3)                                  consolidated
depreciation expense;


 


(4)                                  consolidated
amortization of intangibles;


 


5

















 


(5)                                  other
non-cash charges reducing Consolidated Net Income (excluding any such non-cash
charge to the extent it represents an accrual of or reserve for cash charges in
any future period or amortization of a prepaid cash expense that was paid in a
prior period not included in the calculation).


 


Notwithstanding the preceding sentence, clauses (2) through (5)
relating to amounts of a Restricted Subsidiary will be added to Consolidated
Net Income of the Company to compute its Consolidated Cash Flow only to the
extent (and in the same proportion) that the net income (loss) of such
Restricted Subsidiary was included in calculating the Consolidated Net Income
of the Company and, to the extent the amounts set forth in clause (1) and
clauses (3) through (5) are in excess of those necessary to offset a net loss
of such Restricted Subsidiary or if such Restricted Subsidiary has net income
for such period included in Consolidated Net Income, only if a corresponding
amount would be permitted at the date of determination to be dividended to the
Company by such Restricted Subsidiary without prior approval (that has not been
obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders.


 


“Consolidated Coverage Ratio” means as of
any date of determination, with respect to any Person, the ratio of (x) the
aggregate amount of Consolidated Cash Flow of such Person for the period of the
most recent four consecutive fiscal quarters ending prior to the date of such
determination for which financial statements are in existence to (y)
Consolidated Interest Expense for such four fiscal quarters, provided,
however,
that:


 


(1)                                  if
the Company or any Restricted Subsidiary:


 


(a)                                  has
Incurred any Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, Consolidated Cash Flow and Consolidated Interest Expense for such
period will be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period (except that in making such computation, the amount of Indebtedness
under any revolving credit facility outstanding on the date of such calculation
will be computed based on (i) the average daily balance of such Indebtedness
during such four fiscal quarters or such shorter period for which such facility
was outstanding or (ii) if such facility was created after the end of such four
fiscal quarters, the average daily balance of such Indebtedness during the
period from the date of creation of such facility to the date of such
calculation) and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period; or


 


(b)                                 has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness incurred under any revolving credit facility unless
such Indebtedness has 


 


6

















 


been
permanently repaid and the related commitment terminated), Consolidated Cash
Flow and Consolidated Interest Expense for such period will be calculated after
giving effect on a pro forma basis to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness or otherwise, as if such
discharge had occurred on the first day of such period;


 


(2)                                  if
since the beginning of such period the Company or any Restricted Subsidiary
will have made any Asset Disposition or if the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio is an Asset Disposition:


 


(a)                                  the
Consolidated Cash Flow for such period will be reduced by an amount equal to
the Consolidated Cash Flow (if positive) attributable to the assets which are
the subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated Cash Flow (if negative) directly attributable thereto
for such period; and


 


(b)                                 Consolidated
Interest Expense for such period will be reduced by an amount equal to the
Consolidated Interest Expense attributable to any Indebtedness of the Company
or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after such sale);


 


(3)                                  if
since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) will have made an Investment in any Restricted Subsidiary
(or any Person which becomes a Restricted Subsidiary or is merged with or into
the Company) or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of an operating unit,
division or line of business (or for purposes of this subsection, any Vessel),
Consolidated Cash Flow and Consolidated Interest Expense for such period will
be calculated after giving pro forma effect thereto (including the Incurrence
of any Indebtedness) as if such Investment or acquisition occurred on the first
day of such period; and


 


(4)                                  if
since the beginning of such period any Person that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period will have made any Asset
Disposition or any Investment or acquisition of assets that would have required
an adjustment pursuant to clause (2) or (3) above if made by the Company or a
Restricted Subsidiary during such period, Consolidated Cash Flow and
Consolidated Interest Expense for such period will be calculated after giving
pro forma effect thereto as if such Asset Disposition or Investment or
acquisition of assets occurred on the first day of such period.


 


For purposes of this definition, whenever pro forma effect is to be
given to any calculation under this definition, the pro forma calculations will
be determined in good faith by a responsible financial or accounting officer of
the Company (including pro forma expense and cost reductions 


 


7

















 


calculated on a basis consistent with Regulation S-X under the
Securities Act). For purposes of this definition, whenever pro forma effect is
to be given to an acquisition or construction of a Vessel or the Capital Stock
of a Vessel owning company or the financing thereof, the Company may
(a) if the relevant Vessel is to be subject to a time charter with a
remaining term longer than six months, apply pro forma earnings (losses) for
such period for such Vessel based upon such charter, or (b) if such Vessel
is not to be subject to a time charter, is under time charter that is due to
expire within six months or less, or is to be subject to charter on a voyage
charter basis (whether or not any such charter is in place for such Vessel),
then in each case apply earnings (losses) for such period for such Vessel based
upon the average of the historical earnings of comparable Vessels in the Company’s
fleet (as determined in good faith by its Board of Directors) during such
period or if there is no such comparable Vessel, then based upon industry
average earnings for comparable Vessels (as determined in good faith by its
Board of Directors). If any Indebtedness bears a floating rate of interest and
is being given pro forma effect, the interest expense on such Indebtedness will
be calculated as if the rate in effect on the date of determination had been
the applicable rate for the entire period (taking into account any Interest
Rate Agreement applicable to such Indebtedness).


 


“Consolidated Income Taxes” means, with
respect to for any period, taxes imposed upon the Company and its consolidated
Restricted Subsidiaries or other payments required to be made by any such
Person by any governmental authority which taxes or other payments are
calculated by reference to the income or profits any of the Company and its
consolidated Restricted Subsidiaries (to the extent such income or profits were
included in computing Consolidated Net Income for such period), regardless of
whether such taxes or payments are required to be remitted to any governmental
authority.


 


“Consolidated Interest Expense” means, for
any period, the total interest expense of the Company and its consolidated
Restricted Subsidiaries, whether paid or accrued, plus, to the extent not
included in such interest expense:


 


(1)                                  interest
expense attributable to Capitalized Lease Obligations and the interest portion
of rent expense associated with Attributable Indebtedness in respect of the
relevant lease giving rise thereto, determined as if such lease were a
capitalized lease in accordance with GAAP and the interest component of any
deferred payment obligations;


 


(2)                                  amortization
of debt discount and debt issuance cost;


 


(3)                                  non-cash
interest expense;


 


(4)                                  commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers’ acceptance financing;


 


(5)                                  the
interest expense on Indebtedness of another Person that is Guaranteed by such
Person or one of its Restricted Subsidiaries or secured by a Lien on assets of
such Person or one of its Restricted Subsidiaries;


 


(6)                                  net
costs associated with Hedging Obligations (other than under Fuel Hedging
Agreements) (including amortization of fees);


 


8

















 


(7)                                  the
consolidated interest expense of the Company and its Restricted Subsidiaries
that was capitalized during such period;


 


(8)                                  the
product of (a) all dividends paid or payable in cash, Cash Equivalents or
Indebtedness or accrued during such period on any series of Disqualified Stock
of the Company or on Preferred Stock of its Restricted Subsidiaries payable to
a party other than the Company or a Wholly Owned Subsidiary, times (b) a fraction,
the numerator of which is one and the denominator of which is one minus the
then current combined federal, state, provincial and local statutory tax rate
of the Company, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP; and


 


(9)                                  the
cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than the Company) in connection with Indebtedness
Incurred by such plan or trust; provided, however, that there will be
excluded therefrom any such interest expense of any Unrestricted Subsidiary to
the extent the related Indebtedness is not Guaranteed or paid by the Company or
any Restricted Subsidiary.


 


For purposes of this definition, total interest expense will be
determined after giving effect to any net payments made or received by the
Company and its Subsidiaries with respect to Interest Rate Agreements.


 


“Consolidated Net Income” means, for any period,
the net income (loss) of the Company and its consolidated Restricted
Subsidiaries determined in accordance with GAAP; provided, however, that
there will not be included in such Consolidated Net Income:


 


(1)                                  any
net income (loss) of any Person if such Person is not a Restricted Subsidiary,
except that:


 


(a)                                  subject
to the limitations contained in clauses (3), (4) and (5) below, the Company’s
equity in the net income of any such Person for such period will be included in
such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to a Restricted Subsidiary, to the limitations
contained in clause (2) below); and


 


(b)                                 the
Company’s equity in a net loss of any such Person (other than an Unrestricted
Subsidiary) for such period will be included in determining such Consolidated
Net Income to the extent such loss has been funded with cash from the Company
or a Restricted Subsidiary;


 


(2)                                  any
net income (but not loss) of any Restricted Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that:


 


(a)                                  subject
to the limitations contained in clauses (3), (4) and (5) below, the Company’s
equity in the net income of any such Restricted Subsidiary for such period will
be included in such Consolidated Net Income up to the aggregate amount of cash 


 


9

















 


that could
have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend (subject, in the case of
a dividend to another Restricted Subsidiary, to the limitation contained in
this clause); and


 


(b)                                 the
Company’s equity in a net loss of any such Restricted Subsidiary for such
period will be included in determining such Consolidated Net Income;


 


(3)                                  any
gain (loss) realized upon the sale, writedown or other disposition of any
property, plant or equipment of the Company or its consolidated Restricted
Subsidiaries (including pursuant to any Sale/Leaseback Transaction) and any
gain (loss) realized upon the sale or other disposition of any Capital Stock of
any Person in each case, not in the ordinary course of business.


 


(4)                                  any
extraordinary gain or loss; and


 


(5)                                  the
cumulative effect of a change in accounting principles.


 


“Consolidated Net Tangible Assets” of any
Person means, as of any date of determination, the sum of the assets of such
Person after eliminating intercompany items, determined on a consolidated basis
in accordance with GAAP, including appropriate deductions for any minority
interest in tangible assets of such Person’s Subsidiaries, less (without
duplication) (a) the net book value of all of its licenses, patents, patent
applications, copyrights, trademarks, trade names, goodwill, non-compete agreements
or organizational expenses and other like intangibles, (b) unamortized
Indebtedness discount and expenses, (c) all reserves for depreciation,
obsolescence, depletion and amortization of its properties and (d) all other
proper reserves which in accordance with GAAP should be provided in connection
with the business conducted by such Person.


 


“Continuing Directors” means, as of any
date of determination, any member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this Indenture; or
(2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.


 


“Credit Facilities” means one or more debt
facilities with commercial banks providing for revolving credit loans, term
loans, receivables financing or trade letters of credit, in each case as
amended, restated, modified, renewed, refunded, replaced or refinanced by commercial
banks in whole or in part from time to time.


 


“Currency Agreement” means in respect of a
Person any foreign exchange contract, currency swap agreement or other similar
agreement as to which such Person is a party or a beneficiary.


 


“Custodian” means any receiver, trustee,
assignee, liquidator, custodian or similar official under any Bankruptcy Law.


 


“Default” means any event which is, or
after notice or passage of time or both would be, an Event of Default.


 


10

















 


“Definitive Securities” means certificated
Securities.


 


“Disqualified Stock” means, with respect to
any Person, any Capital Stock of such Person which by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event:


 


(1)                                  matures
or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise;


 


(2)                                  is
convertible or exchangeable for Indebtedness or Disqualified Stock (excluding
Capital Stock which is convertible or exchangeable solely at the option of the
Company or a Restricted Subsidiary); or


 


(3)                                  is
redeemable at the option of the holder of the Capital Stock thereof, in whole
or in part,


 


in each case on or prior to the date that is 91 days after the date (a)
on which the Securities mature or (b) on which there are no Securities
outstanding, provided that only the portion of Capital Stock which so matures
or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such date will be
deemed to be Disqualified Stock; provided, further, that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof
have the right to require the Company to repurchase such Capital Stock upon the
occurrence of a change of control or asset disposition (each defined in a
substantially identical manner to the corresponding definitions in this
Indenture) shall not constitute Disqualified Stock if the terms of such Capital
Stock (and all such securities into which it is convertible or for which it is
ratable or exchangeable) provide that the Company may not repurchase or redeem
any such Capital Stock (and all such securities into which it is convertible or
for which it is ratable or exchangeable) pursuant to such provision prior to
compliance by the Company with the provisions of this Indenture described under
Section 3.9 and Section 3.7 and such repurchase or
redemption complies with Section 3.4.


 


“DTC” means The Depository Trust Company,
its nominees and their respective successors and assigns, or such other
depository institution hereafter appointed by the Company.


 


“Escrow Agent” means the Wilmington Trust
Company in its capacity as Escrow Agent under the Escrow Agreement.


 


“Escrow Agreement” means the Escrow
Agreement dated as of the date of this Indenture among the Initial Purchasers,
Frontline, the Company, the Trustee and the Escrow Agent.


 


“Escrow Funds” has the meaning set forth in
the Escrow Agreement.


 


“Escrow Release” means the release of the
Escrow Funds held under the Escrow Agreement to the Company pursuant to Section
5(a) thereof.


 


“Exchange Act” means the Securities
Exchange Act of 1934, as amended.


 


11

















 


“Exchange Offer” has the meaning set forth
in the applicable Registration Rights Agreement.


 


“Exchange Securities” has the meaning
ascribed to it in the second introductory paragraph of this Indenture.


 


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


 


“Fleet Purchase Completion” means the
satisfaction of the conditions specified in clauses (1) through (7) of Annex A
to the Escrow Agreement, which shall be evidenced by an Officers’ Certificate delivered
to the Trustee.


 


“Frontline” means Frontline Ltd., an
exempted Bermuda company, and its successors.


 


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


 


“Fuel Hedging Agreements” means any spot,
forward or option fuel price protection agreements and other types of fuel
hedging agreements designed to protect against or manage exposure to
fluctuations in fuel prices.


 


“GAAP” means generally accepted accounting
principles in the United States of America as in effect as of the date of this
Indenture, including those set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as approved by
a significant segment of the accounting profession. All ratios and computations
based on GAAP contained in this Indenture will be computed in conformity with
GAAP.


 


“Guarantee” means any obligation,
contingent or otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person:


 


(1)                                  to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise); or


 


(2)                                  entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that the term
“Guarantee” will not include endorsements for collection or deposit in the
ordinary course of business. The term “Guarantee” used as a verb has the
corresponding meaning.


 


“Guarantor Subordinated Obligation” means,
with respect to a Subsidiary Guarantor, any Indebtedness of such Subsidiary
Guarantor (whether outstanding on the Issue Date or 


 


12

















 


thereafter
Incurred) which is expressly subordinate in right of payment to the obligations
of such Subsidiary Guarantor under its Subsidiary Guarantee pursuant to a
written agreement.


 


“Hedging Obligations” of any Person means
the obligations of such Person pursuant to any Interest Rate Agreement, Currency
Agreement or Fuel Hedging Agreement.


 


“Incur” means issue, create, assume,
Guarantee, incur or otherwise become liable for; provided, however,
that any Indebtedness or Capital Stock of a Person existing at the time such
Person becomes a Restricted Subsidiary (whether by merger, consolidation,
acquisition or otherwise) will be deemed to be incurred by such Restricted
Subsidiary at the time it becomes a Restricted Subsidiary; and the terms
“Incurring,” “Incurred” and “Incurrence” have meanings correlative to the
foregoing.


 


“Indebtedness” means, with respect to any
Person on any date of determination (without duplication):


 


(1)                                  the
principal of and premium (if any) in respect of indebtedness of such Person for
borrowed money;


 


(2)                                  the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;


 


(3)                                  the
principal component of all obligations of such Person in respect of letters of
credit, bankers’ acceptances or other similar instruments (including
reimbursement obligations with respect thereto except to the extent such
reimbursement obligation relates to a trade payable and such obligation is
satisfied within 30 days of Incurrence);


 


(4)                                  the
principal component of all obligations of such Person to pay the deferred and
unpaid purchase price of property (except trade payables), which purchase price
is due more than six months after the date of placing such property in service
or taking delivery and title thereto;


 


(5)                                  Capitalized
Lease Obligations and all Attributable Indebtedness of such Person;


 


(6)                                  the
principal component or liquidation preference of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends);


 


(7)                                  the
principal component of all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided,
however,
that the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of such
Indebtedness of such other Persons;


 


(8)                                  the
principal component of Indebtedness of other Persons to the extent Guaranteed
by such Person; and


 


13

















 


(9)                                  to
the extent not otherwise included in this definition, net obligations of such
Person under Currency Agreements, Fuel Hedging Agreements and Interest Rate
Agreements (the amount of any such obligations to be equal at any time to the
termination value of such agreement or arrangement giving rise to such
obligation that would be payable by such Person at such time).


 


The amount of Indebtedness of any Person at any date will be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.


 


In addition, “Indebtedness” of any Person shall
include Indebtedness described in the preceding paragraph that would not appear
as a liability on the balance sheet of such Person if:


 


(1)                                  such
Indebtedness is the obligation of a Joint Venture;


 


(2)                                  such
Person or a Restricted Subsidiary of such Person is a general partner of the
Joint Venture (a “General Partner”); and


 


(3)                                  there
is recourse, by contract or operation of law, with respect to the payment of
such Indebtedness to property or assets of such Person or a Restricted
Subsidiary of such Person; and then such Indebtedness shall be included in an
amount not to exceed:


 


(a)                                  the
lesser of (x) the net assets of the General Partner and (y) the amount of such
obligations to the extent that there is recourse, by contract or operation of
law, to the property or assets of such Person or a Restricted Subsidiary of
such Person; or


 


(b)                                 if
less than the amount determined pursuant to clause (a) immediately above, the
actual amount of such Indebtedness that is recourse to such Person or a
Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a
writing and is for a determinable amount and the related interest expense shall
be included in Consolidated Interest Expense to the extent actually paid by the
Company or its Restricted Subsidiaries.


 


“Indenture” means this Indenture as amended
or supplemented from time to time.


 


“Independent Appraiser” means a Person:


 


(1)                                  engaged
in the business of appraising vessels who is generally acceptable to
institutional lenders to the shipping industry; and


 


(2)                                  who
(a) is independent of the parties to the transaction in question and their
Affiliates and (b) is not connected with the Company, any of the Restricted
Subsidiaries or any of such Affiliates as an officer, director, employee,
promoter, underwriter, trustee, partner or person performing similar functions.


 


“Initial Purchasers” means Jefferies &
Company, Inc. and Citigroup Global Markets Inc.


 


14

















 


“Initial Securities” has the meaning
ascribed to it in the second introductory paragraph of this Indenture.


 


“Interest Rate Agreement” means with
respect to any Person any interest rate protection agreement, interest rate
future agreement, interest rate option agreement, interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedge agreement or other similar agreement or arrangement as to which such
Person is party or a beneficiary.


 


“Investment” means, with respect to any
Person, all investments by such Person in other Persons (including Affiliates)
in the form of any direct or indirect advance, loan (other than advances to
customers in the ordinary course of business) or other extension of credit
(including by way of Guarantee or similar arrangement, but excluding any debt
or extension of credit represented by a bank deposit other than a time deposit)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by, such Person and all other items that are or
would be classified as investments on a balance sheet prepared in accordance
with GAAP; provided
that none of the following will be deemed to be an Investment:


 


(1)                                  Hedging
Obligations entered into in the ordinary course of business and in compliance
with this Indenture;


 


(2)                                  endorsements
of negotiable instruments and documents in the ordinary course of business; and


 


(3)                                  an
acquisition of assets, Capital Stock or other securities by the Company or a
Subsidiary for consideration to the extent such consideration consists of
Common Stock of the Company.


 


For purposes of Section 3.4:


 


(1)                                  “Investment”
will include the portion (proportionate to the Company’s equity interest in a
Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the
fair market value of the net assets of such Restricted Subsidiary of the
Company at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company will
be deemed to continue to have a permanent “Investment” in an Unrestricted
Subsidiary in an amount (if positive) equal to (a) the Company’s “Investment”
in such Subsidiary at the time of such redesignation less (b) the portion
(proportionate to the Company’s equity interest in such Subsidiary) of the fair
market value of the net assets (as conclusively determined by the Board of
Directors of the Company in good faith) of such Subsidiary at the time that
such Subsidiary is so re-designated a Restricted Subsidiary; and


 


(2)                                  any
property transferred to or from an Unrestricted Subsidiary will be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Board of Directors of the Company.


 


15

















 


“Investment
Grade Rating” means a rating equal to or higher than “Baa3”
(or the equivalent) by Moody’s or “BBB-” (or the equivalent) by S&P.


 


“Issue Date” means the first date on which
the Initial Securities are originally issued.


 


“Joint Venture” means a partnership or
joint venture that is not a Restricted Subsidiary.


 


“Lien” means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including any conditional
sale or other title retention agreement or lease in the nature thereof).


 


“Material Agreements” means the Charters,
the Charter Ancillary Agreement, the Performance Guarantee and the Management
Agreements, each entered into or to be entered into prior to the Escrow Release
in accordance with the Fleet Purchase Agreement.


 


“Moody’s” means Moody’s Investors Service,
Inc, or any successor to the rating agency business thereof.


 


“Net Available Cash” from an Asset
Disposition means cash payments actually received (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, but
excluding any other consideration received in the form of assumption by the
acquiring person of Indebtedness or other obligations relating to the
properties or assets that are the subject of such Asset Disposition or received
in any other noncash form) therefrom, in each case net of:


 


(1)                                  all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or
deductions and any tax sharing agreements), as a consequence of such Asset
Disposition;


 


(2)                                  all
payments made on any Indebtedness which is secured by any assets subject to
such Asset Disposition, in accordance with the terms of any Lien upon such
assets, or which must by its terms, or in order to obtain a necessary consent
to such Asset Disposition, or by applicable law be repaid out of the proceeds
from such Asset Disposition;


 


(3)                                  all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset
Disposition;


 


(4)                                  the
deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the assets
disposed of in such Asset Disposition and retained by the Company or any Restricted
Subsidiary after such Asset Disposition; and


 


(5)                                  all
expenditures incurred to inspect, repair or modify a Vessel and bring such
Vessel to the condition and place of delivery in connection with the sale of
such Vessel as may be specified in the related purchase and sale agreement or
otherwise as the Board of Directors of the Company shall determine as advisable
in connection with such sale.


 


16

















 


“Net Cash Proceeds,” with respect to any
issuance or sale of Capital Stock, means the cash proceeds of such issuance or
sale actually received net of attorneys’ fees, accountants’ fees, underwriters’
or placement agents’ fees, listing fees, discounts or commissions and
brokerage, consultant and other fees and charges actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale (after taking into account any available tax
credit or deductions and any tax sharing arrangements).


 


“Non-Recourse Debt” means Indebtedness as
to which:


 


(1)                                  neither
the Company nor any Restricted Subsidiary (a) provides any Guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise);


 


(2)                                  no
default with respect to which (including any rights that the holders thereof
may have to take enforcement action against an Unrestricted Subsidiary) would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Restricted Subsidiary to declare a default
under such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and


 


(3)                                  there
is no recourse against any of the assets of the Company or its Restricted
Subsidiaries.


 


“Non-U.S. Person” means a person who is not
a U.S. person, as defined in Regulation S.


 


“Note Register” has the meaning ascribed to
it Section 2.3.


 


“Offering  Circular” means the Offering
Circular dated December 11, 2003 pursuant to which the Initial Securities were
offered for sale.


 


“Officer” means the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer or the Secretary of the Company.


 


“Officers’ Certificate” means a certificate
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company.


 


“Opinion of Counsel” means a written
opinion from legal counsel who is reasonably acceptable to the Trustee.  The counsel may be an employee of or counsel
to the Company or the Trustee.


 


“Pari Passu Indebtedness” means
Indebtedness that ranks equally in right of payment to the Securities.


 


“Permitted Holders” means Frontline and its
Affiliates.


 


17

















 


“Permitted Investment” means an Investment
by the Company or any Restricted Subsidiary in:


 


(1)                                  a
Restricted Subsidiary or a Person which will, upon the making of such
Investment, become a Restricted Subsidiary; provided, however, that the primary
business of such Restricted Subsidiary is a Related Business;


 


(2)                                  another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary; provided, however,
that such Person’s primary business is a Related Business;


 


(3)                                  Investments
in Joint Ventures in connection with a Related Business in an aggregate
principal amount not to exceed, as of the most recent balance sheet date, the
lesser of (a) $25.0 million and (b) 2.5% of Consolidated Net Tangible Assets of
the Company at any one time outstanding;


 


(4)                                  cash
and Cash Equivalents;


 


(5)                                  receivables
owing to the Company or any Restricted Subsidiary created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade
terms may include such concessionary trade terms as the Company or any such
Restricted Subsidiary deems reasonable under the circumstances;


 


(6)                                  payroll,
travel and similar advances to cover matters that are expected at the time of
such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business;


 


(7)                                  stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor;


 


(8)                                  Investments
made as a result of the receipt of non-cash consideration from an Asset
Disposition that was made pursuant to and in compliance with Section 3.7;


 


(9)                                  Investments
in existence on the Issue Date;


 


(10)                            Currency
Agreements, Fuel Hedging Agreements and Interest Rate Agreements and related
Hedging Obligations, which transactions or obligations are Incurred in compliance
with Section 3.3;


 


(11)                            Guarantees
issued in accordance with Section 3.3; and


 


(12)                            in
addition to the items referred to in clauses (1) through (11) above, so long as
no Event of Default has occurred and is continuing, Investments by the Company
or any of its 


 


18

















 


Restricted
Subsidiaries, when taken together with other Investments made pursuant to this
clause (12), in an aggregate amount not to exceed $20.0 million outstanding at
any one time.


 


“Permitted Liens” means, with respect to
any Person:


 


(1)                                  Liens
securing Indebtedness and other obligations of the Company and its Restricted
Subsidiaries under Credit Facilities in an aggregate amount at any one time not
to exceed $1,160,000,000;


 


(2)                                  Liens
securing Indebtedness incurred to finance the construction, purchase or lease
of, or repairs, improvements or additions to, property of such Person,
including a Vessel (which term, for purposes of this clause (2), shall include
the Capital Stock of a Person substantially all of the assets of which is a
Vessel and any Related Assets, as the context may require); provided,
however, (A) subject to clause (B) below, in the case of a Vessel,
(i) except as provided in clauses (ii), (iii) and (iv) below, the principal amount
of Indebtedness secured by such a Lien does not exceed (x) with respect to
Indebtedness Incurred to finance the construction of such Vessel, 80% of the
sum of (1) the contract price pursuant to the Vessel Construction Contract for
such Vessel and (2) any other Ready for Sea Cost for such Vessel, and (y) with
respect to Indebtedness Incurred to finance the acquisition of such Vessel, 80%
of the sum of (1) the contract price for the acquisition of such Vessel and (2)
any other Ready for Sea Cost of such Vessel, (ii) in the case of Indebtedness
that matures within nine months after the Incurrence of such Indebtedness
(other than any Refinancing Indebtedness of such Indebtedness or Indebtedness
that matures within one year prior to the Stated Maturity of the Securities),
the principal amount of Indebtedness secured by such a Lien shall not exceed
the fair market value, as determined in good faith by the Board of Directors,
of such Vessel at the time such Lien is incurred, (iii) in the case of a
Sale/Leaseback Transaction, the principal amount of Indebtedness secured by
such a Lien shall not exceed the fair market value, as determined in good faith
by the Board of Directors, of such Vessel at the time such Lien is incurred and
(iv) in the case of Indebtedness representing Capitalized Lease Obligations
relating to a Vessel, the principal amount of Indebtedness secured by such a
Lien shall not exceed 100% of the sum of (1) the fair market value, as
determined in good faith by the Board of Directors, of such Vessel at the time
such Lien is incurred and (2) any Ready for Sea Cost for such Vessel and (B) in
the case of Additional Assets acquired directly or indirectly from Net
Available Cash pursuant to Section 3.7, the principal amount of
Indebtedness secured by such a Lien does not exceed the lesser of (i) 80% of
the contract price for the acquisition of such Additional Asset and (ii) the
contract price for the acquisition of such Additional Asset less the Net
Available Cash used to acquire such Additional Asset; provided further, however,
that such Lien may not extend to any other property owned by such Person or any
of its Subsidiaries at the time the Lien is Incurred and the Indebtedness
(other than any interest thereon) secured by the Lien may not be incurred more
than 180 days after the later of the acquisition, completion of construction,
repair, improvement, addition or commencement of full operation of the property
subject to the Lien;


 


(3)                                  pledges
or deposits by such Person under workmen’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than for the payment of Indebtedness) or
leases to which such Person is a party, or deposits to secure public or
statutory obligations of such Person or deposits or cash or United States
government bonds to secure surety or appeal bonds to which such 


 


19

















 


Person is a
party, or deposits as security for contested taxes or import or customs duties
or for the payment of rent, in each case Incurred in the ordinary course of
business;


 


(4)                                  Liens
imposed by law, including carriers’, warehousemen’s and mechanics’ Liens;


 


(5)                                  Liens
for taxes, assessments or other governmental charges not yet subject to
penalties for non-payment or which are being contested in good faith by
appropriate proceedings provided appropriate reserves required pursuant to GAAP
have been made in respect thereof;


 


(6)                                  Liens
in favor of issuers of surety or performance bonds or letters of credit or
bankers’ acceptances issued pursuant to the request of and for the account of
such Person in the ordinary course of its business; provided, however,
that such letters of credit do not constitute Indebtedness;


 


(7)                                  encumbrances,
easements or reservations of, or rights of others for, licenses, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real properties or
liens incidental to the conduct of the business of such Person or to the
ownership of its properties which do not in the aggregate materially adversely
affect the value of said properties or materially impair their use in the
operation of the business of such Person;


 


(8)                                  Liens
securing Hedging Obligations so long as the related Indebtedness is, and is
permitted to be under this Indenture, secured by a Lien on the same property
securing such Hedging Obligation;


 


(9)                                  leases
and subleases of real property which do not materially interfere with the
ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries;


 


(10)                            judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired;


 


(11)                            Liens
for the purpose of securing the payment of all or a part of the purchase price
of, or Capitalized Lease Obligations with respect to, assets or property (other
than Vessels) acquired or constructed in the ordinary course of business,
provided that:


 


(a)                                  the
aggregate principal amount of Indebtedness secured by such Liens is otherwise
permitted to be Incurred under this Indenture and does not exceed the cost of
the assets or property so acquired or constructed; and


 


(b)                                 such
Liens are created within 180 days of construction or acquisition of such assets
or property and do not encumber any other assets or property of the Company or
any Restricted Subsidiary other than such assets or property and assets affixed
or appurtenant thereto;


 


20

















 


(12)                            Liens
arising solely by virtue of any statutory or common law provisions relating to
banker’s Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depositary institution; provided
that:


 


(a)                                  such
deposit account is not a dedicated cash collateral account and is not subject
to restrictions against access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board; and


 


(b)                                 such
deposit account is not intended by the Company or any Restricted Subsidiary to
provide collateral to the depository institution;


 


(13)                            Liens
arising from Uniform Commercial Code financing statements;


 


(14)                            Liens
existing on the Issue Date;


 


(15)                            Liens
on property or shares of stock of a Person at the time such Person becomes a
Restricted Subsidiary; provided, however, that such Liens are
not created, incurred or assumed in connection with, or in contemplation of,
such other Person becoming a Restricted Subsidiary; provided further, however,
that any such Lien may not extend to any other property owned by the Company or
any Restricted Subsidiary;


 


(16)                            Liens
on property at the time the Company or a Restricted Subsidiary acquired the
property, including any acquisition by means of a merger or consolidation with
or into the Company or any Restricted Subsidiary; provided, however,
that such Liens are not created, incurred or assumed in connection with, or in
contemplation of, such acquisition; provided further, however, that such Liens may
not extend to any other property owned by the Company or any Restricted
Subsidiary;


 


(17)                            Liens
securing Indebtedness or other obligations of a Restricted Subsidiary owing to
the Company or a Wholly Owned Subsidiary;


 


(18)                            Liens
securing the Securities and Subsidiary Guarantees;


 


(19)                            Liens
securing Refinancing Indebtedness incurred to refinance Indebtedness that was
previously so secured, provided that any such Lien is limited to all or part of
the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
Indebtedness being refinanced or is in respect of property that is the security
for a Permitted Lien hereunder;


 


(20)                            Liens
incurred in the ordinary course of business of the Company or any Restricted
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;


 


(21)                            any
Lien or pledge created or subsisting in the ordinary course of business over
documents of title, insurance policies or sale contracts in relation to
commercial goods to secure the purchase price thereof;


 


21

















 


(22)                            Liens
for salvage and general average; and


 


(23)                            in
addition to the items referred to in clauses (1) through (22) above, Liens
securing Indebtedness (other than Subordinated Obligations and Guarantor
Subordinated Obligations) in an aggregate principal amount outstanding at any
one time not to exceed $20.0 million.


 


Notwithstanding the foregoing, clauses (2), (15) and
(16) of this definition shall not apply with respect to the transactions
contemplated by the Fleet Purchase Agreement.


 


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


 


“Preferred Stock,” as applied to the
Capital Stock of any corporation, means Capital Stock of any class or classes
(however designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation.


 


“Public Equity Offering” means an offering
for cash by the Company of its common stock, or options, warrants or rights
with respect to its common stock made pursuant to a registration statement that
has been declared effective by the Securities and Exchange Commission (other
than on Form S-4 or S-8 or their foreign private issuer equivalent, if any).


 


“Rating Agency” means each of S&P and
Moody’s, or if S&P or Moody’s or both shall not make a rating on the
Securities publicly available, a nationally recognized statistical rating
agency or agencies, as the case may be, selected by the Company (as certified
by a resolution of its Board of Directors) which shall be substituted for
S&P or Moody’s or both, as the case may be.


 


“Ready for Sea Cost” means with respect to
a Vessel or Vessels to be acquired or leased (pursuant to a Capitalized Lease
Obligation) by the Company or any Restricted Subsidiary of the Company, the
aggregate amount of all expenditures incurred to acquire or construct and bring
such Vessel or Vessels to the condition and location necessary for its intended
use, including any and all inspections, appraisals, repairs, modifications,
construction related insurance, additions, permits and licenses in connection
with such acquisition or lease.


 


“Refinancing Indebtedness” means
Indebtedness that is Incurred to refund, refinance, replace, exchange, renew,
repay or extend (including pursuant to any defeasance or discharge mechanism)
(collectively, “refinance” and “refinances” and “refinanced” shall have
correlative meanings) any Indebtedness existing Issue Date or Incurred in
compliance with this Indenture (including Indebtedness of the Company that
refinances Indebtedness of any Restricted Subsidiary and Indebtedness of any
Restricted Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing Indebtedness, provided,
however,
that:


 


22

















 


(1)                                  (a)
if the Stated Maturity of the Indebtedness being refinanced is earlier than the
Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated
Maturity no earlier than the Stated Maturity of the Indebtedness being
refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced
is later than the Stated Maturity of the Securities, the Refinancing
Indebtedness has a Stated Maturity at least 91 days later than the Stated
Maturity of the Securities;


 


(2)                                  the
Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced;


 


(3)                                  such
Refinancing Indebtedness is Incurred in an aggregate principal amount (or if
issued with original issue discount, an aggregate issue price) that is equal to
or less than the sum of the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of
Indebtedness being refinanced (plus, without duplication, any additional
Indebtedness Incurred to pay interest or premiums required by the instruments
governing such existing Indebtedness and fees incurred in connection
therewith); and


 


(4)                                  if
the Indebtedness being refinanced is subordinated in right of payment to the
Securities or any Subsidiary Guarantee, such Refinancing Indebtedness is
subordinated in right of payment to the Securities or any Subsidiary Guarantee
on terms at least as favorable to the Holders of Securities as those contained
in the documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.


 


“Registration Rights Agreement” means that
certain registration rights agreement dated as of the date of this Indenture by
and between the Company and the Initial Purchasers set forth therein and future
registration rights agreements with respect to Additional Securities.


 


“Related Asset” means, with respect to a
Vessel, (a) any insurance policies and contracts from time to time in force
with respect to such Vessel, (b) the Capital Stock of any Subsidiary of the
Company owning such Vessel and related assets, (c) any requisition compensation
payable in respect of any compulsory acquisition thereof, (d) any earnings
derived from the use or operation thereof and/or any earnings account with
respect to such earnings, (e) any charters, operating leases and related
agreements entered into in respect of such Vessel and any security or guarantee
in respect of the charterer’s or lessee’s obligations under such charter, lease
or agreement, (f) any cash collateral account established with respect to such
Vessel pursuant to the financing arrangement with respect thereto, (g) any
building, conversion or repair contracts relating to such Vessel and any
security or guarantee in respect of the builder’s obligations under such
contracts and (h) any security interest in, or agreement or assignment relating
to, any of the foregoing or any mortgage in respect of such Vessel.


 


“Related Business” means any business which
is the same as or related, ancillary or complementary to any of the businesses
of the Company and its Restricted Subsidiaries on the date of this Indenture or
any other business that the Board of Directors determines in good faith is an
appropriate business for the Company or a Restricted Subsidiary.


 


“Related Business Assets” means assets used
or useful in a Related Business.


 


23

















 


“Representative” means any trustee, agent
or representative (if any) of an issue of Indebtedness; provided that when used in
connection with the Credit Facilities, the term “Representative” shall refer to
the administrative agent under the Credit Facilities.


 


“Restricted Investment” means any
Investment other than a Permitted Investment.


 


“Restricted Subsidiary” means any
Subsidiary of the Company other than an Unrestricted Subsidiary.


 


“S&P” means Standard & Poor’s
Ratings Services, a division of The McGraw-Hill Companies, Inc, or any
successor to the rating agency business thereof.


 


“SEC” means the Securities and Exchange
Commission of the United States of America.


 


“Sale/Leaseback Transaction” means an
arrangement relating to property now owned or hereafter acquired whereby the Company
or a Restricted Subsidiary transfers such property to a Person and the Company
or a Restricted Subsidiary leases it from such Person.


 


“Secured Indebtedness” means Indebtedness
that is secured by a lien on the property or assets of the relevant obligor.


 


“Securities” has the meaning ascribed to it
in the second introductory paragraph of this Indenture.


 


“Securities Act” means the Securities Act
of 1933, as amended.


 


“Securities Custodian” means the custodian
with respect to the Global Security (as appointed by DTC), or any successor
Person thereto and shall initially be the Trustee.


 


“Securityholder” or “Holder” means the Person in
whose name a Security is registered in the Note Register.


 


“Significant Subsidiary” means any
Restricted Subsidiary that would be a “Significant Subsidiary” of the Company
within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.


 


“Special Mandatory Redemption Trigger”
shall be deemed to have occurred if either of the following conditions has not
been satisfied as of 5:01 p.m. Eastern time on March 17, 2004: (a) a Release
Certificate and Opinion of Counsel shall have been delivered to the Trustee in
accordance with Section 5(a) of the Escrow Agreement, and (b) the Fleet
Purchase Completion shall have occurred.


 


“Stated Maturity” means, with respect to
any security, the date specified in such security as the fixed date on which
the payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision, but shall not include any
contingent obligations to repay, redeem or repurchase any such principal prior
to the date originally scheduled for the payment thereof.


 


24

















 


“Subordinated Obligation” means any
Indebtedness of the Company (whether outstanding on the Issue Date or
thereafter Incurred) which is subordinate or junior in right of payment to the
Securities pursuant to a written agreement.


 


“Subsidiary” of any Person means any
corporation, association, partnership, joint venture, limited liability company
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership and joint
venture interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (1) such Person,
(2) such Person and one or more Subsidiaries of such Person or (3) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary will refer to a Subsidiary of the Company.


 


“Subsidiary Guarantee” means, individually,
any Guarantee of payment of the Securities by a Subsidiary Guarantor pursuant
to the terms of this Indenture and any supplemental indenture hereto, and,
collectively, all such Guarantees.


 


“Subsidiary Guarantor” means (1) each
Subsidiary of the Company in existence on the date of the Escrow Release and
(2) each other Subsidiary of the Company that becomes a Subsidiary
Guarantor in accordance with Section 3.12, in each case until such
Subsidiary Guarantor ceases to be such in accordance with this Indenture.


 


“Successful
Public Listing” means the completion of one or more transactions
that result in at least 20% of the then outstanding Common Stock of the Company
being listed or quoted for public trading on the Oslo Stock Exchange or the New
York Stock Exchange, American Stock Exchange, Nasdaq National Market System or
other United States national securities exchange, as evidenced by an Officers’
Certificate delivered to the Trustee to such effect.


 


“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).


 


“Treasury Rate” means the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least two
business days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source or similar market data))
most nearly equal to the period from the Redemption Date to December 15, 2008; provided,
however, that if the period from the Redemption Date to December 15,
2008 is not equal to the constant maturity of a United States Treasury security
for which a weekly average yield is given, the Treasury Rate shall be obtained
by linear interpolation (calculated to the nearest one-twelfth of a year) from
the weekly average yields of United States Treasury securities for which such
yields are given, except that if the period from the Redemption Date to
December 15, 2008 is less than one year, the weekly 


 


25

















 


average yield on
actually traded United States Treasury securities adjusted to a constant maturity
of one year shall be used.


 


“TIA” or “Trust Indenture Act” means
the Trust Indenture Act of 1939 (15U.S.C. §§ 77aaa-77bbbb), as in effect
on the date of this Indenture.


 


“Trust Officer” shall mean, when used with
respect to the Trustee, any officer within the corporate trust department of
the Trustee, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person’s knowledge of and
familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.


 


“Trustee” means the party named as such in
this Indenture until a successor replaces it and, thereafter, means the
successor.


 


“U.S. Dollar Equivalent” means, with
respect to any monetary amount in a currency other than the U.S. dollar, at or
as of any time for the determination thereof, the amount of U.S. dollars
obtained by converting such foreign currency involved in such computation into
U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable
foreign currency as quoted by Reuters (or, if Reuters ceases to provide such
spot quotations, by any other reputable service as is providing such spot
quotations, as selected by the Company) at approximately 11:00 a.m. (New
York City time) on the date not more than two business days prior to such
determination.


 


“U.S. Government Securities” means
non-callable direct obligations of, or obligations guaranteed by, the United
States of America for the payment of which guarantee or obligations the full
faith and credit of the United States is pledged.


 


“Unrestricted Subsidiary” means:


 


(1)                                  any
Subsidiary of the Company that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors of the Company in the
manner provided below; and


 


(2)                                  any
Subsidiary of an Unrestricted Subsidiary.


 


The Board of Directors of the Company may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) to be an Unrestricted Subsidiary only if:


 


(1)                                  such
Subsidiary or any of its Subsidiaries does not own any Capital Stock or
Indebtedness of or have any Investment in, or own or hold any Lien on any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;


 


26

















 


(2)                                  all
the Indebtedness of such Subsidiary and its Subsidiaries shall consist of
Non-Recourse Debt;


 


(3)                                  such
designation and the Investment of the Company in such Subsidiary complies with Section 3.4;


 


(4)                                  such
Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially
all of the business of the Company and its Subsidiaries;


 


(5)                                  such
Subsidiary is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation:


 


(a)                                  to
subscribe for additional Capital Stock of such Person; or


 


(b)                                 to
maintain or preserve such Person’s financial condition or to cause such Person
to achieve any specified levels of operating results; and


 


(6)                                  on
the date such Subsidiary is designated an Unrestricted Subsidiary, such
Subsidiary is not a party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary with terms
substantially less favorable to the Company than those that might have been
obtained from Persons who are not Affiliates of the Company.


 


Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a Board
Resolution giving effect to such designation and an Officers’ Certificate
certifying that such designation complies with the preceding conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary shall be deemed to be Incurred as of such date.


 


The Board of Directors of the Company may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately
after giving effect to such designation, no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof and the
Company could incur at least $1.00 of additional Indebtedness under the first
paragraph of Section 3.3 on a pro forma basis taking into account
such designation.


 


“Vessel” means one or more shipping vessels
whose primary purpose is the maritime transportation of cargo and/or passengers
or which are otherwise engaged, used or useful in any business activities of
the Company and its Restricted Subsidiaries and which are owned by and
registered (or to be owned by and registered) in the name of the Company or any
of its Restricted Subsidiaries or operated or to be operated by the Company or
any of its Restricted Subsidiaries pursuant to a lease or other operating
agreement constituting a Capitalized Lease Obligation, in each case together
with all related spares, equipment and any additions or improvements.


 


27

















 


“Vessel Construction Contract” means any
contract for the construction (or construction and acquisition) of a Vessel
entered into by the Company or any Restricted Subsidiary, including any
amendments, supplements or modifications thereto or change orders in respect
thereof.


 


“Voting Stock” of a Person means all
classes of Capital Stock of such Person then outstanding and normally entitled
to vote in the election of directors, managers or trustees of such Person.


 


“Wholly Owned Subsidiary” means a Restricted
Subsidiary of the Company, all of the Capital Stock of which (other than
directors’ qualifying shares) is owned by the Company or another Wholly Owned
Subsidiary.


 


Section 1.2                                      Other
Definitions.


 




	
  TERM

  	
   

  	
  DEFINED IN

  SECTION

  
	
  “Additional
  Amounts”

  	
  3.1(b)

  
	
  “Additional
  Restricted Securities”

  	
  2.1(b)

  
	
  “Affiliate
  Transaction”

  	
  3.8

  
	
  “Agent
  Member”

  	
  2.1(e)

  
	
  “Agreement
  Currency”

  	
  11.16

  
	
  “Asset
  Disposition Offer Amount”

  	
  3.7(c)(1)

  
	
  “Asset
  Disposition Offer Period”

  	
  3.7(c)(1)

  
	
  “Asset
  Disposition Offer”

  	
  3.7(b)

  
	
  “Asset Disposition
  Purchase Date”

  	
  3.7(c)(1)

  
	
  “Authenticating
  Agent”

  	
  2.2

  
	
  “Certificate
  of Destruction”

  	
  2.12

  
	
  “Change in
  Tax Law”

  	
  5.1(b)

  
	
  “Change of
  Control Offer”

  	
  3.9(b)

  
	
  “Change of
  Control Payment Date”

  	
  3.9(b)(2)

  
	
  “Change of
  Control Payment”

  	
  3.9(b)(1)

  
	
  “Company Order”

  	
  2.2

  
	
  “Corporate
  Trust Office”

  	
  3.14

  
	
  “covenant
  defeasance option”

  	
  8.1(b)

  
	
  “Defaulted
  Interest”

  	
  2.13

  
	
  “Distribution
  Compliance Period”

  	
  2.6(b)

  
	
  “Event of
  Default”

  	
  6.1

  
	
  “Excess
  Proceeds”

  	
  3.7(b)

  
	
  “Exchange
  Global Note”

  	
  2.1(b)

  
	
  “Global
  Securities”

  	
  2.1(b)

  
	
  “IAI”

  	
  2.1(b)

  
	
  “Institutional
  Accredited Investor Global Note”

  	
  2.1(b)

  
	
  “Institutional
  Accredited Investor Note”

  	
  2.1(b)

  
	
  “Judgment
  Currency”

  	
  11.16

  
	
  “legal
  defeasance option”

  	
  8.1(b)

  
	
  “Legal
  Holiday”

  	
  11.8

  
	
  “Note
  Register”

  	
  2.3

  






 


28

















 




	
  TERM

  	
   

  	
  DEFINED IN

  SECTION

  
	
  “Obligations”

  	
  10.1

  
	
  “Pari Passu
  Notes”

  	
  3.7(b)

  
	
  “Paying
  Agent”

  	
  2.3

  
	
  “payment
  default”

  	
  6.1(6)(a)

  
	
  “Payor”

  	
  3.1(b)

  
	
  “Private
  Placement Legend”

  	
  2.1(d)

  
	
  “protected
  purchaser”

  	
  2.9

  
	
  “QIB”

  	
  2.1(b)

  
	
  “Redemption
  Date”

  	
  5.1

  
	
  “Registrar”

  	
  2.3

  
	
  “Regulation
  S Global Note”

  	
  2.1(b)

  
	
  “Regulation
  S Note”

  	
  2.1(b)

  
	
  “Regulation
  S”

  	
  2.1(b)

  
	
  “Relevant
  Tax Jurisdiction”

  	
  3.1(b)

  
	
  “Required
  Filing Dates”

  	
  3.2

  
	
  “Resale
  Restriction Termination Date”

  	
  2.6(a)

  
	
  “Restricted
  Payment”

  	
  3.4

  
	
  “Rule 144A
  Global Note”

  	
  2.1(b)

  
	
  “Rule 144A
  Note”

  	
  2.1(b)

  
	
  “Rule 144A”

  	
  2.1(b)

  
	
  “SK”

  	
  11.15

  
	
  “Special
  Interest Payment Date”

  	
  2.13(a)

  
	
  “Special
  Record Date”

  	
  2.13(a)

  
	
  “Successor
  Company”

  	
  4.1

  






 


Section 1.3                                      Incorporation
by Reference of Trust Indenture Act. 
This Indenture is subject to the mandatory provisions of the TIA which
are incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:


 


“Commission” means the Securities and Exchange
Commission.


 


“indenture securities” means the Securities.


 


“indenture security holder” means a Securityholder.


 


“indenture to be qualified” means this Indenture.


 


“indenture trustee” or “institutional trustee” means
the Trustee.


 


“obligor” on this Indenture securities means the
Company and any other obligor on this Indenture securities.


 


All other TIA terms used in this Indenture that are
defined by the TIA, defined in the TIA by reference to another statute or
defined by Commission rule have the meanings assigned to them by such
definitions.


 


29

















 


Section 1.4                                      Rules
of Construction.  Unless the context
otherwise requires:


 


(1)                                  a
term has the meaning assigned to it;


 


(2)                                  an
accounting term not otherwise defined has the meaning assigned to it in accordance
with GAAP;


 


(3)                                  “or”
is not exclusive;


 


(4)                                  “including”
means including without limitation;


 


(5)                                  words
in the singular include the plural and words in the plural include the
singular;


 


(6)                                  unsecured
Indebtedness shall not be deemed to be subordinate or junior to Secured
Indebtedness merely by virtue of its nature as unsecured Indebtedness;


 


(7)                                  the
principal amount of any noninterest bearing or other discount security at any
date shall be the principal amount thereof that would be shown on a balance
sheet of the issuer dated such date prepared in accordance with GAAP;


 


(8)                                  the
principal amount of any Preferred Stock shall be (i) the maximum liquidation
value of such Preferred Stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such Preferred Stock, whichever is
greater;


 


(9)                                  references
to U.S. dollar amounts mean the U.S. Dollar Equivalent as of the date of any
determination thereof; and


 


(10)                            the
term “merger” includes an amalgamation, a compulsory share exchange, a
conversion of a corporation into another business entity and any other
transaction having effects substantially similar to a merger under the General
Corporation Laws of the State of Delaware


 


ARTICLE
II

The Securities


 


Section 2.1                                      Form,
Dating and Terms.


 


(a)                                  The
aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited. The Initial Securities issued on
the Issue Date will be in an aggregate principal amount of $580,000,000.  In addition, the Company may issue, from
time to time in accordance with the provisions of this Indenture, including,
without limitation, Section 3.3 hereof, Additional Securities and
Exchange Securities. Furthermore, Securities may be authenticated and delivered
upon registration of transfer, or in exchange for or in lieu of, other
Securities pursuant to Section 2.2, 2.6, 2.9, 2.11, 5.8 or 9.5 or in
connection with an Asset Disposition Offer pursuant to Section 3.7 or a
Change of Control Offer pursuant to Section 3.9.


 


The Initial Securities, Additional Securities and
Exchange Securities shall be known and designated as “81⁄2 % Senior Notes due
2013” of the Company.


 


30

















 


The Initial Securities, the Additional Securities and
the Exchange Securities shall be considered collectively as a single class for
all purposes of this Indenture. Holders of the Initial Securities, the
Additional Securities and the Exchange Securities will vote and consent
together on all matters to which such Holders are entitled to vote or consent
as one class, and none of the Holders of the Initial Securities, the Additional
Securities or the Exchange Securities shall have the right to vote or consent
as a separate class on any matter to which such Holders are entitled to vote or
consent.


 


(b)                                 The
Initial Securities are being offered and sold by the Company pursuant to a
Purchase Agreement, dated December 11, 2003, among the Company, Frontline and
the Initial Purchasers. The Initial Securities and any Additional Securities
(if issued as Restricted Securities) (the “Additional Restricted Securities”)
will be resold initially only to (A) qualified institutional buyers (as defined
in Rule 144A under the Securities Act (“Rule 144A”)) in reliance on Rule 144A
(“QIBs”), (B) Persons other than U.S. Persons in reliance on Regulation S under
the Securities Act (“Regulation S”) and (C) institutional “accredited
investors” (as defined in Rules 501(a)(1), (2), (3) and (7) under the
Securities Act) who are not QIBs (“IAIs”) in accordance with Rule 501 of the
Securities Act. Such Initial Securities and Additional Restricted Securities
may thereafter be transferred to, among others, QIBs, purchasers in reliance on
Regulation S and IAIs in accordance with the procedures described herein.


 


Initial Securities and Additional Restricted
Securities offered and sold to QIBs in the United States of America in reliance
on Rule 144A (the “Rule 144A Notes”) shall be issued in the form of a permanent
global Security, without interest coupons, substantially in the form of Exhibit
A, which is hereby incorporated by reference and made a part of this Indenture,
including appropriate legends as set forth in Section 2.1(d) (the “Rule
144A Global Note”), deposited with the Trustee, as custodian for DTC, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Rule 144A Global Note may be represented by more than one
certificate, if so required by DTC’s rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal
amount of the Rule 144A Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.


 


Initial Securities and Additional Securities offered
and sold outside the United States of America (the “Regulation S Notes”) in
reliance on Regulation S shall be issued in the form of a permanent global
Security, without interest coupons, substantially in the form of Exhibit A (the
“Regulation S Global Note”) deposited with the Trustee, as custodian for DTC,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The Regulation S Global Note may be represented by more than one
certificate, if so required by DTC’s rules regarding the maximum principal
amount to be represented by a single certificate. The aggregate principal
amount of the Regulation S Global Note may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
DTC or its nominee, as hereinafter provided.


 


Initial Securities and Additional Securities offered
and sold to IAIs (the “Institutional Accredited Investor Notes”) in the United
States of America shall be issued in the form of a permanent global Security,
without interest coupons, substantially in the form of Exhibit A (the
“Institutional Accredited Investor Global Note”) deposited with the Trustee, as
custodian for


 


31

















 


DTC, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
Institutional Accredited Investor Global Note may be represented by more than
one certificate, if so required by DTC’s rules regarding the maximum principal amount
to be represented by a single certificate. The aggregate principal amount of
the Institutional Accredited Investor Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC or its nominee, as hereinafter provided.


 


Exchange Securities exchanged for interests in the
Rule 144A Notes, the Regulation S Notes and the Institutional Accredited
Investor Notes will be issued in the form of a permanent global Security,
without interest coupons, substantially in the form of Exhibit B, which is
hereby incorporated by reference and made a part of this Indenture, deposited
with the Trustee as hereinafter provided, including the appropriate legend set
forth in Section 2.1(d) (the “Exchange Global Note”). The Exchange
Global Note may be represented by more than one certificate, if so required by
DTC’s rules regarding the maximum principal amount to be represented by a
single certificate.


 


The Rule 144A Global Note, the Regulation S Global
Note, the Institutional Accredited Investor Global Note and the Exchange Global
Note are sometimes collectively herein referred to as the “Global Securities.”


 


The principal of (and premium, if any) and interest on
the Securities shall be payable at the office or agency designated by the
Company maintained for such purpose in the City of New York, or at such other
office or agency of the Company as may be maintained for such purpose pursuant
to Section 2.3; provided, however, that, at the option of
the Company, each installment of interest may be paid by (i) check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Note Register or (ii) wire transfer to an account located in the United States
maintained by the payee. Payments in respect of Securities represented by a
Global Security (including principal, premium and interest) will be made by
wire transfer of immediately available funds to the accounts specified by DTC.


 


The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage, in addition to
those set forth on Exhibit A and Exhibit B and in Section 2.1(d).
The terms of the Securities set forth in Exhibit A and Exhibit B are part of
the terms of this Indenture and, to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
be bound by such terms.


 


(c)                                  Denominations.  The Securities shall be issuable only in
fully registered form, without coupons, and only in denominations of $1,000 and
any integral multiple thereof.


 


(d)                                 Restrictive
Legends.  Unless and until
(i) an Initial Security or Additional Security is sold under an effective
registration statement or (ii) an Initial Security or Additional Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the applicable Registration Rights
Agreement or a similar agreement,


 


(A)                              the
Rule 144A Global Note, the Regulation S Global Note and the Institutional Accredited
Investor Global Note shall bear the following legend (the “Private Placement
Legend”) on the face thereof:


 


32

















 


“THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.


 


THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS
A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT, OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF
THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED
INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S, OR TRANSFER AGENT’S, AS APPLICABLE,
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR


 


33

















 


TRANSFER
PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE OR REGISTRAR.


 


BY ITS ACQUISITION OF THIS SECURITY THE HOLDER
THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER
(I) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS
SECURITY CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), OF PLANS, INDIVIDUAL RETIREMENT ACCOUNTS OR OTHER ARRANGEMENTS THAT
ARE SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE “CODE”), OR PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER
LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE
(COLLECTIVELY, “SIMILAR LAWS”), OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE
CONSIDERED TO INCLUDE “PLAN ASSETS” OF SUCH PLANS, ACCOUNTS OR ARRANGEMENTS, OR
(II) THE PURCHASE AND HOLDING OF THIS SECURITY WILL NOT CONSTITUTE A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.”


 


(B)                                The
Global Securities, whether or not an Initial Security, shall bear the following
legend on the face thereof:


 


“UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR


 


34

















 


TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THIS INDENTURE
REFERRED TO ON THE REVERSE HEREOF.”


 


(e)                                  Book-Entry
Provisions


 


(i)                                     This
Section 2.1(e) shall apply only to Global Securities deposited with the
Trustee, as custodian for DTC.


 


(ii)                                  Each
Global Security initially shall (x) be registered in the name of DTC, (y) be
delivered to the Trustee as custodian for DTC and (z) bear legends as set forth
in Section 2.1(d).


 


(iii)                               Members
of, or participants in, DTC (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Security held on their behalf by DTC
or by the Trustee as the custodian of DTC or under such Global Security, and
DTC may be treated by the Company, the Trustee and any agent of the Company or
the Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices of DTC governing the exercise of the rights of a Holder of a
beneficial interest in any Global Security.


 


(iv)                              In
connection with any transfer of a portion of the beneficial interest in a
Global Security pursuant to subsection (f) of this Section 2.1 to
beneficial owners who are required to hold Definitive Securities, the custodian
shall reflect on its books and records the date and a decrease in the principal
amount of such Global Security in an amount equal to the principal amount of
the beneficial interest in the Global Security to be transferred, and the
Company shall execute, and the Trustee shall authenticate and deliver, one or
more Definitive Securities of like tenor and amount.


 


(v)                                 In
connection with the transfer of an entire Global Security to beneficial owners
pursuant to subsection (f) of this Section 2.1, such Global Security
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by DTC in exchange for its beneficial interest in
such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.


 


(vi)                              The
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.


 


35

















 


(f)                                    Definitive
Securities.


 


(i) Except as provided below, owners of beneficial interests in Global
Securities will not be entitled to receive Definitive Securities. If required
to do so pursuant to any applicable law or regulation, beneficial owners may
obtain Definitive Securities in exchange for their beneficial interests in a
Global Security upon written request in accordance with DTC’s and the
Registrar’s procedures. In addition, Definitive Securities shall be transferred
to all beneficial owners in exchange for their beneficial interests in a Global
Security if (a) DTC notifies the Company that it is unwilling or unable to
continue as depositary for such Global Security or DTC ceases to be a clearing
agency registered under the Exchange Act, at a time when DTC is required to be
so registered in order to act as depositary, and in each case a successor
depositary is not appointed by the Company within 90 days of such notice or,
(b) the Company executes and delivers to the Trustee and Registrar an Officers’
Certificate stating that such Global Security shall be so exchangeable or (c)
an Event of Default has occurred and is continuing and the Registrar has
received a request from DTC.


 


(ii)                                  Any
Definitive Security delivered in exchange for an interest in a Global Security
pursuant to Section 2.1(e)(iv) or (v) shall, except as otherwise
provided by Section 2.6(c), bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in Section
2.1(d).


 


(iii)                               In
connection with the exchange of a portion of a Definitive Security for a
beneficial interest in a Global Security, the Trustee shall cancel such
Definitive Security, and the Company shall execute, and the Trustee shall
authenticate and deliver, to the transferring Holder a new Definitive Security
representing the principal amount not so transferred.


 


Section 2.2                                      Execution
and Authentication.  One Officer
shall sign the Securities for the Company by manual or facsimile signature. If
an Officer whose signature is on a Security no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid nevertheless,
after giving effect to any exchange of Initial Securities for Exchange
Securities.


 


A Security shall not be valid until an authorized
signatory of the Trustee manually authenticates the Security. The signature of
the Trustee on a Security shall be conclusive evidence that such Security has
been duly and validly authenticated and issued under this Indenture. A Security
shall be dated the date of its authentication.


 


At any time and from time to time after the execution
and delivery of this Indenture, the Trustee shall authenticate and make
available for delivery: (1) Initial Securities for original issue on the Issue
Date in an aggregate principal amount of $580,000,000, (2) Additional
Securities for original issue and (3) Exchange Securities for issue only in an
Exchange Offer pursuant to the Registration Rights Agreement, and only in
exchange for Initial Securities or Additional Securities of an equal principal
amount, in each case upon a written order of the Company signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company (the “Company Order”). 
Such Company Order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated, whether the Securities are to be Initial Securities, Additional
Securities or


 


36

















 


Exchange Securities and
whether the Securities shall be issued in the form of Exhibit A or Exhibit B
hereto.


 


The Trustee may appoint an agent (the “Authenticating
Agent”) reasonably acceptable to the Company to authenticate the
Securities. Unless limited by the terms of such appointment, any such
Authenticating Agent may authenticate Securities whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.


 


In case the Company, pursuant to Article IV, shall be
consolidated or merged with or into any other Person or shall sell, lease,
convey, assign, transfer or otherwise dispose of all or substantially all its
assets to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a disposition as
aforesaid, shall have executed an indenture supplemental hereto with the
Trustee pursuant to Article IV, any of the Securities authenticated or
delivered prior to such consolidation, merger or other disposition may, from
time to time, at the request of the successor Person, be exchanged for other
Securities executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like
tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and
delivered in any new name of a successor Person pursuant to this Section 2.2
in exchange or substitution for or upon registration of transfer of any
Securities, such successor Person, at the option of the Holders but without expense
to them, shall provide for the exchange of all Securities at the time
outstanding for Securities authenticated and delivered in such new name.


 


Section 2.3                                      Registrar
and Paying Agent.  The Company shall
maintain in the City of New York or Wilmington, Delaware, an office or agency
where Securities may be presented for registration of transfer or for exchange
(the “Registrar”)
and an office or agency where Securities may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the
Securities and of their transfer and exchange (the “Note Register”).  The Company may have one or more
co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent.


 


The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement shall
implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the
name and address of each such agent.  If
the Company fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such and shall be entitled to appropriate compensation therefor pursuant
to Section 7.7.  The Company or
any of its Restricted Subsidiaries may act as Paying Agent, Registrar,
co-registrar or transfer agent.


 


The Company initially appoints the Trustee as
Registrar and Paying Agent for the Securities.


 


37

















 


Section 2.4                                      Paying
Agent to Hold Money in Trust.  By no
later than 10:00 a.m. (New York City time) on the date on which any principal
of or premium or interest on any Security is due and payable, the Company shall
deposit with the Paying Agent a sum sufficient in immediately available funds
to pay such principal, premium or interest when due. The Company shall require
each Paying Agent (other than the Trustee) to agree in writing that such Paying
Agent shall hold in trust for the benefit of Securityholders or the Trustee all
money held by such Paying Agent for the payment of principal of or premium or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Subsidiary Guarantor in making any such payment.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent (other than the Trustee) to pay
all money held by it to the Trustee and to account for any funds disbursed by
such Paying Agent. Upon complying with this Section, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent
for the Securities.


 


Section 2.5                                      Securityholder
Lists.  The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the Trustee
is not the Registrar, or to the extent otherwise required under the TIA, the
Company shall furnish to the Trustee, in writing at least five Business Days
before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders.


 


Section 2.6                                      Transfer
and Exchange.


 


(a)                                  The
following provisions shall apply with respect to any proposed transfer of a
Rule 144A Note or an Institutional Accredited Investor Note prior to the date
which is two years after the later of the date of its original issue and the
last date on which the Company or any Affiliate of the Company was the owner of
such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”):


 


(i)                                     a
transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a
beneficial interest therein to a QIB shall be made upon the representation of
the transferee in the form as set forth on the reverse of the Security that it
is purchasing for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
“qualified institutional buyer” within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;


 


(ii)                                  a
transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a
beneficial interest therein to an IAI shall be made upon receipt by the Trustee
or its agent of a certificate substantially in the form set forth in Section
2.7 from the


 


38

















 


proposed transferee and, if requested by the
Company or the Trustee, the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them; and


 


(iii)                               a
transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a
beneficial interest therein to a Non-U.S. Person shall be made upon receipt by
the Trustee or its agent of a certificate substantially in the form set forth
in Section 2.8 from the proposed transferee and, if requested by the
Company or the Trustee, the delivery of an opinion of counsel, certification
and/or other information satisfactory to each of them.


 


(b)                                 The
following provisions shall apply with respect to any proposed transfer of a
Regulation S Note prior to the expiration of the applicable distribution
compliance period specified in Rule 903(b) of Regulation S (the “Distribution
Compliance Period”):


 


(i)                                     a
transfer of a Regulation S Note or a beneficial interest therein to a QIB shall
be made upon the representation of the transferee, in the form of assignment on
the reverse of the certificate, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional
buyer” within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A;


 


(ii)                                  a
transfer of a Regulation S Note or a beneficial interest therein to an IAI
shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.7 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery of an
opinion of counsel, certification and/or other information satisfactory to each
of them; and


 


(iii)                               a
transfer of a Regulation S Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.8 hereof from the
proposed transferee and, if requested by the Company or the Trustee, receipt by
the Trustee or its agent of an opinion of counsel, certification and/or other
information satisfactory to each of them.


 


After the expiration of the Distribution Compliance
Period, interests in the Regulation S Note may be transferred without requiring
the certification set forth in Section 2.7, Section 2.8 or any
additional certification.


 


(c)                                  Restricted
Securities Legend.  Upon the
transfer, exchange or replacement of Securities not bearing a Restricted
Securities Legend, the Registrar shall deliver Securities that do not bear a
Restricted Securities Legend. Upon the transfer, exchange or replacement of
Securities bearing a Restricted Securities Legend, the Registrar shall deliver
only Securities that bear a Restricted Securities Legend unless there is
delivered to the Registrar an Opinion of


 


39

















 


Counsel to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.


 


(d)                                 The
Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.1 or this Section 2.6.  The Company shall have the right to inspect
and make copies of all such letters, notices or other written communications at
any reasonable time upon the giving of reasonable prior written notice to the
Registrar.


 


(e)                                  Obligations
with Respect to Transfers and Exchanges of Securities.


 


(i)                                     To
permit registrations of transfers and exchanges, the Company shall, subject to
the other terms and conditions of this Article II, execute and the Trustee
shall authenticate Definitive Securities and Global Securities at the
Registrar’s or co-registrar’s request.


 


(ii)                                  No
service charge shall be made to a Holder for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
transfer tax, assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments or similar
governmental charges payable upon exchange or transfer pursuant to Sections
3.7, 3.9 or 9.5).


 


(iii)                               The
Registrar or co-registrar shall not be required to register the transfer of or
exchange of any Security selected for redemption or for a period beginning 15
days before a selection of Securities to be redeemed.


 


(iv)                              Prior
to the due presentation for registration of transfer of any Security, the
Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may
deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.


 


(v)                                 Any
Definitive Security delivered in exchange for an interest in a Global Security
pursuant to Section 2.1(e) shall, except as otherwise provided by Section
2.6(c), bear the applicable legend regarding transfer restrictions
applicable to the Definitive Security set forth in Section 2.1(d).


 


(vi)                              All
Securities issued upon any transfer or exchange pursuant to the terms of this
Indenture shall evidence the same debt and shall be entitled to the same benefits
under this Indenture as the Securities surrendered upon such transfer or
exchange.


 


(f)                                    No
Obligation of the Trustee.


 


(i)                                     The
Trustee shall have no responsibility or obligation to any beneficial owner of a
Global Security, a member of, or a participant in, DTC or other Person with
respect to the accuracy of the records of DTC or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to


 


40

















 


the delivery to any participant, member,
beneficial owner or other Person (other than DTC) of any notice (including any
notice of redemption) or the payment of any amount or delivery of any
Securities (or other security or property) under or with respect to such
Securities. All notices and communications to be given to the Holders and all
payments to be made to Holders in respect of the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be DTC or
its nominee in the case of a Global Security). The rights of beneficial owners
in any Global Security shall be exercised only through DTC subject to the
applicable rules and procedures of DTC. The Trustee may rely and shall be fully
protected in relying upon information furnished by DTC with respect to its
members, participants and any beneficial owners.


 


(ii)                                  The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any
Security (including any transfers between or among DTC participants, members or
beneficial owners in any Global Security) other than to require delivery of
such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.


 


Section 2.7                                      Form
of Certificate to be Delivered in Connection with Transfers to Institutional
Accredited Investors.


 


[Date]


 


Ship Finance International Limited


c/o Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware 19890-0001


Attention: Corporate Trust Administration


 


Dear Sirs:


 


This certificate is
delivered to request a transfer of
$                           
principal amount of the 81⁄2% Senior Notes due 2013 (the “Securities”) of Ship Finance
International Limited (the “Company”).


 


Upon transfer, the Securities would be registered in
the name of the new beneficial owner as follows:


 


	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Address: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Taxpayer ID Number:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  We hereby confirm that:

  
							



 


41

















 


1.                                       We
are an institutional “Accredited Investor” within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (the “Securities Act”);


 


2.                                       Any
purchase of notes by us will be for our own account or the account of one or
more other Accredited Investors as to which we exercise sole investment
discretion;


 


3.                                       We
are not acquiring the notes for or on behalf of, and will not transfer the
notes to, any pension or welfare plan (as defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended) except as
permitted in the section entitled “Notice to Investors” of the Offering
Circular;


 


4.                                       We
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of purchasing the notes, and we
and any accounts for which we are acting are able to bear the economic risks of
an entire loss of our or their investment in the notes;


 


5.                                       We
are not acquiring notes with a view to any distribution thereof in a transaction
that would violate the Securities Act or the securities laws of any state of
the United States or any other applicable jurisdiction; provided that the
disposition of our property and the property of any accounts for which we are
acting as fiduciary shall remain at all times within our and their control;


 


6.                                       We
acknowledge that the notes have not been registered under the Securities Act
and that the notes may not be offered or sold within the United States or to,
or for the benefit of, U.S. persons except as set forth below.


 


We agree, on
our own behalf and on behalf of each account for which we acquire any notes,
that, for a period of two years after the later of the date of
(x) original issuance of the notes and (y) the last date on which the
notes or any part thereof were owned by the Company or an affiliate of the
Company, such notes may be offered, resold, pledged or otherwise transferred
only (i) to the Company, (ii) inside the United States to a person
that we reasonably believe to be a “Qualified Institutional Buyer” (as defined
in Rule 144A under the Securities Act) in compliance with Rule 144A,
(iii) inside the United States to a person we reasonably believe to be an
Accredited Investor that, prior to such transfer, furnishes to the trustee
under the indenture governing the notes (the “Trustee”) a signed letter
containing certain representations and agreements (a form of which can be
obtained from the Trustee), (iv) outside the United States to persons
other than U.S. persons in offshore transactions meeting the requirements of
Rule 904 under Regulation S under the Securities Act,
(v) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and in each case, in
accordance with any applicable laws of any state of the United States or any
other applicable jurisdiction.


 


We understand
that the Trustee will not be required to accept for registration of transfer
any notes acquired by us, except upon presentation of evidence satisfactory to
the Company and


 


42

















 


the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that
the notes purchased by us will bear a legend reflecting the substance of this
paragraph. We further agree to provide to any person acquiring any of the notes
from us a notice advising such person that resales of the notes are restricted
as stated herein and that certificates representing the notes will bear a
legend to that effect.


 


We acknowledge
that you, the Company, the Trustee and others will rely upon our
acknowledgements, representations and agreements set forth herein, and we agree
to notify you promptly in writing if any of our acknowledgements,
representations and agreements herein cease to be accurate and complete.


 


As used
herein, the terms “offshore transaction,” “United States” and “U.S. person”
have the respective meanings given to them in Regulation S under the
Securities Act.


 


 


	
   

  	
  TRANSFEREE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
   

  
				



 


Section 2.8                                      Form
of Certificate to be Delivered in Connection with Transfers Pursuant to
Regulation S.


 


[Date]


 


Ship Finance International Limited


c/o Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware 19890-0001


Attention: Corporate Trust Administration


 


Re:  Ship Finance International
Limited 81⁄2 % Senior Notes due 2013 (the “Securities”)


 


Ladies and Gentlemen:


 


In connection with our
proposed sale of
$                     
aggregate principal amount of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the United
States Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we represent that:


 


(a)                                  the offer of the
Securities was not made to a person in the United States;


 


(b)                                 either (i) at the time
the buy order was originated, the transferee was outside the United States or
we and any person acting on our behalf reasonably believed that the transferee


 


43

















 


was outside the United States or (ii) the transaction was executed in,
on or through the facilities of a designated off-shore securities market and
neither we nor any person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;


 


(c)                                  no directed selling
efforts have been made in the United States in contravention of the
requirements of Rule 903 or Rule 904 of Regulation S, as applicable; and


 


(d)                                 the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act.


 


In addition, if the sale
is made during a distribution compliance period and the provisions of Rule 903
or Rule 904 of Regulation S are applicable thereto, we confirm that such sale
has been made in accordance with the applicable provisions of Rule 903 or Rule
904, as the case may be.


 


You and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Authorized Signature]

  



 


Section 2.9                                      Mutilated,
Destroyed, Lost or Stolen Securities. 
If a mutilated Security is surrendered to the Registrar or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code
are met, such that the Securityholder (a) satisfies the Company or the Trustee
within a reasonable time after such Securityholder has notice of such loss,
destruction or wrongful taking and the Registrar does not register a transfer
prior to receiving such notification, (b) makes such request to the Company or
Trustee prior to the Security being acquired by a protected purchaser as
defined in Section 8-303 of the Uniform Commercial Code (a “protected
purchaser”) and (c) satisfies any other reasonable requirements of
the Trustee. If required by the Trustee or the Company, such Holder shall
furnish an indemnity bond sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar
and any co-registrar from any loss which any of them may suffer if a Security
is replaced, and, in the absence of notice to the Company, any Subsidiary
Guarantor or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon Company Order the Trustee shall
authenticate and make available for delivery, in exchange for any such
mutilated Security or in lieu of any such destroyed, lost or stolen Security, a
new Security of like tenor and principal amount, bearing a number not
contemporaneously outstanding.


 


44

















 


In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a new
Security, pay such Security.


 


Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.


 


Every new Security issued pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, any Subsidiary
Guarantor (if applicable) and any other obligor upon the Securities, whether or
not the mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.


 


The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.


 


Section 2.10                                Outstanding
Securities.  Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security shall be deemed to be outstanding in
the event the Company or an Affiliate of the Company holds the Security, provided,
however,
that (i) for purposes of determining which are outstanding for consent or
voting purposes hereunder, the provisions of Section 11.6 shall apply
and (ii) in determining whether the Trustee shall be protected in making a
determination whether the Holders of the requisite principal amount of
outstanding Securities are present at a meeting of Holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which a Trust Officer of the Trustee actually knows to be held by the Company
or an Affiliate of the Company shall not be considered outstanding.


 


If a Security is replaced pursuant to Section 2.9,
it ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a bona fide
purchaser.


 


If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, by 10:00 a.m. (New York City time) on a
Redemption Date or other maturity date money sufficient to pay all principal,
premium and interest payable on that date with respect to the Securities (or
portions thereof) to be redeemed or otherwise maturing, as the case may be,
then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.


 


Section 2.11                                Temporary
Securities.  In the event that Definitive Securities are
to be issued under the terms of this Indenture, until such Definitive
Securities are ready for delivery,


 


45

















 


the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities. After the preparation of Definitive Securities, the temporary
Securities shall be exchangeable for Definitive Securities upon surrender of
the temporary Securities at any office or agency maintained by the Company for
that purpose and such exchange shall be without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery in exchange therfor, one or more Definitive Securities representing an
equal principal amount of Securities. Until so exchanged, the Holder of
temporary Securities shall in all respects be entitled to the same benefits under
this Indenture as a Holder of Definitive Securities.


 


Section 2.12                                Cancellation.  The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Securities surrendered for registration of transfer, exchange,
payment or cancellation and destroy such Securities in accordance with its
internal policies including delivery of a certificate (a “Certificate of Destruction”)
describing such Securities disposed (subject to the record retention
requirements of the Exchange Act). The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.


 


Section 2.13                                Payment
of Interest; Defaulted Interest.  Interest on
any Security which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency
of the Company maintained for such purpose pursuant to Section 2.3.


 


Any interest on any Security which is payable, but is
not paid when the same becomes due and payable and such nonpayment continues
for a period of 30 days shall forthwith cease to be payable to the Holder on
the regular record date by virtue of having been such Holder, and such
defaulted interest and (to the extent lawful) interest on such defaulted
interest at the rate borne by the Securities (such defaulted interest and
interest thereon herein collectively called “Defaulted Interest”) shall
be paid by the Company, at its election in each case, as provided in clause (a)
or (b) below:


 


(a)                                  The
Company may elect to make payment of any Defaulted Interest to the Persons in
whose names the Securities (or their respective predecessor Securities) are
registered at the close of business on a Special Record Date (as defined below)
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date (not
less than 30 days after such notice) of the proposed payment (the “Special
Interest Payment Date”), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons


 


46

















 


entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a record date (the “Special
Record Date”) for the payment of such Defaulted Interest, which date
shall be not more than 15 days and not less than 10 days prior to the Special
Interest Payment Date and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date, and in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date therefor
to be given in the manner provided for in Section 11.2, not less than 10
days prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date and Special Interest Payment
Date therefor having been so given, such Defaulted Interest shall be paid on
the Special Interest Payment Date to the Persons in whose names the Securities
(or their respective predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable pursuant to
the following clause (b).


 


(b)                                 The
Company may make payment of any Defaulted Interest in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.


 


Subject to the foregoing provisions of this Section,
each Security delivered under this Indenture upon registration of transfer of,
or in exchange for or in lieu of, any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.


 


Section 2.14                                Computation
of Interest.  Interest on the Securities shall be computed
on the basis of a 360-day year of twelve 30-day months.


 


Section 2.15                                CUSIP
AND ISIN Numbers.  The Company in issuing the Securities may
use “CUSIP” and “ISIN” numbers (if then generally in use) and, if so, the
Trustee shall use CUSIP and ISIN numbers in notices of redemption as a
convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such CUSIP and ISIN numbers. The
Company shall promptly notify the Trustee in writing of any change in the CUSIP
and ISIN numbers.


 


ARTICLE
III

Covenants


 


Section 3.1                                      Payment
of Securities; Payment of Additional Amounts.


 


(a)                                  Payment of
Securities.  The Company
shall pay the principal of, premium on and interest on the Securities by 10:00
a.m. New York City time on the dates and in the manner provided in the
Securities and in this Indenture. All references in this Indenture to interest
on the Securities shall be deemed to include any Additional Interest that may
be payable with respect to


 


47

















 


the Securities pursuant to the applicable
Registration Rights Agreement. 
Principal, premium and interest shall be considered paid on the date due
if on such date the Trustee or the Paying Agent holds in accordance with this
Indenture immediately available funds sufficient to pay all principal, premium
and interest then due.


 


The Company shall pay interest on overdue principal or
premium at the rate specified therefor in the Securities, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.


 


Notwithstanding anything to the contrary contained in
this Indenture, the Company may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States
of America from payments hereunder.


 


(b)                                 Payment of
Additional Amounts.  If any
taxes, assessments or other governmental charges are imposed by any
jurisdiction where the Company, a Subsidiary Guarantor or a successor of either
(a “Payor”)
is organized or otherwise considered by a taxing authority to be a resident for
tax purposes, any jurisdiction from or through which the Payor makes a payment
on the Securities, or, in each case, any political organization or governmental
authority thereof or therein having the power to tax (the “Relevant Tax Jurisdiction”)
in respect of any payments under the Securities, the Payor will pay to each
Holder of a Security, to the extent it may lawfully do so, such additional
amounts (“Additional
Amounts”) as may be necessary in order that the net amounts paid to
such Holder will be not less than the amount specified in such Security to
which such Holder is entitled; provided, however, the Payor will not
be required to make any payment of Additional Amounts for or on account of:


 


(1)                                  any
tax, assessment or other governmental charge which would not have been imposed
but for (a) the existence of any present or former connection between such
Holder (or between a fiduciary, settlor, beneficiary, member or shareholder of,
or possessor of a power over, such Holder, if such Holder is an estate, trust,
partnership, limited liability company or corporation) and the Relevant Tax Jurisdiction
including, without limitation, such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a citizen
or resident thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment therein or
(b) the presentation of a Security (where presentation is required) for payment
on a date more than 30 days after (x) the date on which such payment became due
and payable or (y) the date on which payment thereof is duly provided for,
whichever occurs later (in either case (x) or (y), except to the extent that
the Holder would have been entitled to Additional Amounts had the Security been
presented for such 30-day period);


 


(2)                                  any
estate, inheritance, gift, sales, transfer, personal property or similar tax,
assessment or other governmental charge;


 


(3)                                  any
tax, assessment or other governmental charge that is imposed or withheld by
reason of the failure by the Holder or the beneficial owner of the Security to
comply with a reasonable and timely request of the Payor addressed to the
Holder to provide information, documents or other evidence concerning the
nationality, residence or identity of the Holder or such beneficial owner which
is required by a statute, treaty, regulation or administrative practice


 


48

















 


of the taxing jurisdiction as a precondition
to exemption from all or part of such tax, assessment or other governmental
charge; or


 


(4)                                  any
combination of the above;


 


nor will Additional Amounts be paid with respect to any payment of the
principal of, or any premium or interest on, any Security to any Holder who is
a fiduciary or partnership or limited liability company or other than the sole
beneficial owner of such payment to the extent such payment would be required
by the laws of the Relevant Tax Jurisdiction to be included in the income for
tax purposes of a beneficiary or settlor with respect to such fiduciary or a
member of such partnership, limited liability company or beneficial owner who
would not have been entitled to such Additional Amounts had it been the Holder
of such Security.


 


The Payor will provide the Trustee with the official
acknowledgment of the Relevant Tax Authority (or, if such acknowledgment is not
available, a certified copy thereof) evidencing the payment of the withholding
taxes by the Payor. Copies of such documentation will be made available to the
Holders of the Securities or the Paying Agents, as applicable, upon request therefor.


 


The Company and the Subsidiary Guarantors will pay any
present or future stamp, court or documentary taxes, or any other excise or
property taxes, charges or similar levies which arise in any jurisdiction from
the execution, delivery or registration of the Securities or any other document
or instrument referred to in this Indenture (other than a transfer of the
Securities), or the receipt of any payments with respect to the Securities,
excluding any such taxes, charges or similar levies imposed by any jurisdiction
outside Bermuda or any jurisdiction in which a Paying Agent is located, other
than those resulting from, or required to be paid in connection with, the
enforcement of this Indenture or any other such document or instrument
following the occurrence of any Event of Default.


 


All references in this Indenture to principal of,
premium, if any, and interest on the Securities will include any Additional
Amounts payable by the Payor in respect of such principal, such premium, if
any, and such interest.


 


Section 3.2                                      SEC
Reports.   (1) The Company shall,
for so long as any of the Securities remain outstanding, file with the SEC and
the Trustee all such reports and other information which the Company would
have been required to file with (and in such form as is required by) the SEC
pursuant to Section 13(a) or 15(d) of the Exchange Act or any successor
provision thereto applicable to a “foreign private issuer,” as that term is
defined in Rule 3b-4 under the Exchange Act, such documents to be filed
with the SEC on or prior to the respective dates (the “Required Filing Dates”) by
which the Company would be required so to file such documents and
(b) whether or not required pursuant to the immediately preceding clause,
(i) within 120 days following the end of each fiscal year of the
Company, annual reports on Form 20-F (or any successor form) containing
the information required to be contained therein (or required in such successor
form); and (ii) within 60 days after the end of each of the first
three fiscal quarters of each fiscal year of the Company, reports on
Form 6-K (or any successor form), containing unaudited financial
statements (including a balance sheet and statement of income, changes in
stockholders’ equity and cash flows) and Management’s Discussion and


 


49

















 


Analysis of Financial Condition
and Results of Operations for and as of the end of each such quarter (with
comparable financial statements for such quarter in the immediately preceding
fiscal year). The Company shall also in any event (a) within 15 days
of each Required Filing Date, as applicable, request that the Trustee transmit
such documents by mail to all Holders, as their names and addresses appear in
the Securities register, without cost to such Holders, and (b) if filing
such documents by the Company with the SEC is not permitted under the Exchange
Act, promptly upon written request supply copies of such documents to any
prospective Holder. Notwithstanding anything herein to the contrary, if the
Company is not subject to the reporting requirements of such Section 13(a)
or 15(d) of the Exchange Act, the Company shall be deemed to have satisfied
this Section 3.2 by supplying all of the foregoing information to the
Trustee and making all such information publicly available on the Company’s
website.


 


(2) If the
Company has designated any of its Subsidiaries as Unrestricted Subsidiaries,
then the quarterly and annual financial information required by the preceding
paragraph shall include a reasonably detailed presentation, either on the face
of the financial statements or in the footnotes to the financial statements,
and in Management’s Discussion and Analysis of Results of Operations and
Financial Condition of the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries.


 


(3) In addition, for so long as any Securities remain
outstanding, the Company and the Subsidiary Guarantors will furnish to the
Holders of the Securities and prospective purchasers of the Securities, upon
their request, the information, if any, required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.


 


(4)  The
Company shall at all times comply with TIA §314(a).


 


Section 3.3                                      Limitation
on Indebtedness.  The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that the Company and the
Subsidiary Guarantors may Incur Indebtedness if on the date thereof:


 


(1)                                  the
Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is
at least 2.00 to 1.00; and


 


(2)                                  no
Default or Event of Default will have occurred or be continuing or would occur
as a consequence of Incurring the Indebtedness.


 


The first paragraph of this Section 3.3 will
not prohibit the Incurrence of the following Indebtedness:


 


(1)                                  Indebtedness
of the Company and its Restricted Subsidiaries Incurred pursuant to the Credit
Facilities in an amount up to $1,160,000,000 at any time outstanding;


 


(2)                                  Indebtedness
of the Company or any Restricted Subsidiary Incurred to finance the replacement
(through construction or acquisition) of one or more Vessels, and any assets
that shall become Related Assets (and any Refinancing Indebtedness with respect
to such Vessels or assets), upon a Total Loss, in an aggregate amount no
greater than the Ready for Sea Cost for such replacement Vessel, in each case
less all compensation, damages and other payments


 


50

















 


(including insurance proceeds other than in
respect of business interruption insurance) actually received by the Company or
any Restricted Subsidiary from any Person in connection with the Total Loss in
excess of amounts actually used to repay Indebtedness secured by the Vessel
subject to the Total Loss;


 


(3)                                  the
Subsidiary Guarantees and other Guarantees by the Subsidiary Guarantors of
Indebtedness Incurred in accordance with the provisions of this Indenture; provided that
in the event such Indebtedness that is being Guaranteed is a Subordinated
Obligation or a Guarantor Subordinated Obligation, then the related Guarantee
shall be subordinated in right of payment to the Subsidiary Guarantee;


 


(4)                                  Indebtedness
of the Company owing to and held by any Restricted Subsidiary or Indebtedness
of a Restricted Subsidiary owing to and held by the Company or any Restricted
Subsidiary, provided,
however,


 


(a)                                  if
the Company is the obligor on such Indebtedness, such Indebtedness is unsecured
and expressly subordinated to all its obligations with respect to the
Securities; and


 


(b)                                 (x)
any subsequent issuance or transfer of Capital Stock or any other event that
results in any such Indebtedness being beneficially held by a Person other than
the Company or a Restricted Subsidiary and (y)                             any sale or other transfer
of any such Indebtedness to a Person other than the Company or a Restricted
Subsidiary, shall be deemed, in each case, to constitute an Incurrence of such
Indebtedness by the Company or such Subsidiary, as the case may be;


 


(5)                                  (a)
Indebtedness represented by the Securities (excluding any Additional Securities
issued after the Issue Date) and (b) any Refinancing Indebtedness Incurred in
respect of (w) the Securities, (x) any Indebtedness described in clause (2),
(y) and Indebtedness Incurred pursuant to the first paragraph of this covenant
or (z) any Indebtedness described in this clause (5);


 


(6)                                  Indebtedness
under Currency Agreements, Fuel Hedging Agreements and Interest Rate
Agreements; provided
that in the case of Currency Agreements and Fuel Hedging Agreements,
such Currency Agreements and Fuel Hedging Agreements are related to business
transactions of the Company or its Restricted Subsidiaries entered into in the
ordinary course of business or in the case of Currency Agreements, Fuel Hedging
Agreements and Interest Rate Agreements, such Currency Agreements, Fuel Hedging
Agreements and Interest Rate Agreements are entered into for bona fide hedging
purposes of the Company or its Restricted Subsidiaries (as determined in good
faith by the Board of Directors or senior management of the Company) and
substantially correspond in terms of notional amount, duration, currencies and
interest rates, as applicable, to Indebtedness of the Company or its Restricted
Subsidiaries Incurred without violation of this Indenture;


 


(7)                                  Indebtedness
of the Company or any Restricted Subsidiary Incurred in relation to: (a)
regular maintenance required to maintain the classification of any of the
Vessels owned, time chartered or bareboat chartered to or by the Company or any
Restricted Subsidiary; (b) scheduled


 


51

















 


dry-docking of any of the Vessels owned by
the Company or any Restricted Subsidiary for normal maintenance purposes; and
(c) any expenditures which will or may reasonably expected to be recoverable
from insurance on such Vessels;


 


(8)                                  Indebtedness
incurred in respect of workers’ compensation claims, self-insurance
obligations, performance, surety and similar bonds and completion guarantees
provided by the Company or a Restricted Subsidiary in the ordinary course of
business;


 


(9)                                  Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred in connection with the disposition of any business, assets or
Capital Stock of a Restricted Subsidiary, provided that the maximum aggregate
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Restricted Subsidiaries in
connection with such disposition;


 


(10)                            Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business, provided,
however,
that such Indebtedness is extinguished within five business days of Incurrence;
and


 


(11)                            in
addition to the items referred to in clauses (1) through (10) above,
Indebtedness of the Company and its Restricted Subsidiaries in an aggregate
outstanding principal amount which, when taken together with the principal
amount of all other Indebtedness Incurred pursuant to this clause (11) and then
outstanding, will not exceed $75.0 million.


 


The Company will not Incur any Indebtedness under the
preceding paragraph if the proceeds thereof are used, directly or indirectly,
to refinance any Subordinated Obligations of the Company unless such
Indebtedness will be subordinated to the Securities to at least the same extent
as such Subordinated Obligations. No Subsidiary Guarantor will incur any
Indebtedness if the proceeds thereof are used, directly or indirectly, to refinance
any Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such
Indebtedness will be subordinated to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee to at least the same extent as such
Guarantor Subordinated Obligations.


 


For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness Incurred pursuant
to and in compliance with, this Section 3.3:


 


(1)                                  in
the event that Indebtedness meets the criteria of more than one of the types of
Indebtedness described in the first and second paragraphs of this Section
3.3, the Company, in its sole discretion, will classify such item of
Indebtedness on the date of Incurrence (or later classify or reclassify such
Indebtedness) and only be required to include the amount and type of such
Indebtedness in one of such clauses; and


 


(2)                                  the
amount of Indebtedness issued at a price that is less than the principal amount
thereof will be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.


 


52

















 


Accrual of interest, accrual of dividends, the
accretion of value, the payment of interest in the form of additional
Indebtedness and the payment of dividends in the form of additional shares of
Preferred Stock will not be deemed to be an Incurrence of Indebtedness for
purposes of this Section 3.3. The amount of any Indebtedness outstanding
as of any date shall be (a) the accreted value of the Indebtedness in the case
of any Indebtedness issued with original issue discount and (b) the principal
amount or liquidation preference thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.


 


In addition, the Company will not permit any of its
Unrestricted Subsidiaries to Incur any Indebtedness or issue any shares of
Disqualified Stock, other than Non-Recourse Debt. If at any time an
Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of
such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary as of
such date (and, if such Indebtedness is not permitted to be Incurred as of such
date under this Section 3.3, the Company shall be in Default of
this Section 3.3).


 


Section 3.4                                      Limitation
on Restricted Payments.  The Company
shall not, and shall not permit any of its Restricted Subsidiaries, directly or
indirectly, to:


 


(1)                                  declare
or pay any dividend or make any distribution on or in respect of its Capital
Stock (including any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) except:


 


(a)                                  dividends
or distributions payable in Capital Stock of the Company (other than
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock; and


 


(b)                                 dividends
or distributions payable to the Company or a Restricted Subsidiary (and if such
Restricted Subsidiary is not a Wholly Owned Subsidiary, to its other holders of
Common Stock on a pro rata basis);


 


(2)                                  purchase,
redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any direct or indirect parent of the Company held by Persons other than the
Company or a Restricted Subsidiary (other than in exchange for Capital Stock of
the Company (other than Disqualified Stock));


 


(3)                                  purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations or Guarantor Subordinated Obligations (other than the
purchase, repurchase or other acquisition of Subordinated Obligations or
Guarantor Subordinated Obligations purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or acquisition); or


 


(4)                                  make
any Restricted Investment in any Person;


 


(any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Restricted Investment referred to
in clauses (1) through (4) shall be referred to herein as a “Restricted
Payment”), unless at the time of and after giving effect to such
Restricted


 


53

















 


Payment no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof and either:


 


(I)  Prior to completion of a
Successful Public Listing only, the Company is able to Incur an additional
$1.00 of Indebtedness pursuant to the first paragraph of Section 3.3
after giving effect, on a pro forma basis, to such Restricted Payment and the
aggregate amount of such Restricted Payment and all other Restricted Payments
declared or made subsequent to the Issue Date would not exceed the sum of:


 


(i)                                     15%
of Consolidated Cash Flow for the period (treated as one accounting period)
from the first day of the fiscal quarter in which the Issue Date occurs to the
end of the most recent fiscal quarter ending prior to the date of such
Restricted Payment for which financial statements are in existence; plus


 


(ii)                                  the
aggregate Net Cash Proceeds received by the Company from the issue or sale of
its Capital Stock (other than Disqualified Stock) or other capital
contributions subsequent to the Issue Date (other than Net Cash Proceeds
received from an issuance or sale of such Capital Stock to a Subsidiary of the
Company or an employee stock ownership plan, option plan or similar trust to
the extent such sale to an employee stock ownership plan, option plan or
similar trust is financed by loans from or guaranteed by the Company or any
Restricted Subsidiary unless such loans have been repaid with cash on or prior
to the date of determination); plus


 


(iii)                               $5.0
million; or


 


(II) 
From and after completion of a Successful Public Listing only,


 


(a)                                  if
the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries
is at least 1.75 to 1.0, such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries with respect to the fiscal quarter for which such Restricted
Payment is made, is less than Available Surplus Cash with respect to the
immediately preceding fiscal quarter, provided that the Company will not pay or
declare any extraordinary or one-time dividends on its Capital Stock
(“extraordinary or one-time dividends” meaning for such purpose dividends in
excess of amounts stated in the Company’s regular Capital Stock dividend policy
as determined from time to time by the Company’s Board of Directors); or


 


(b)                                 if
the Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries
is less than 1.75 to 1.00, such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its Restricted
Subsidiaries with respect to the quarter for which such Restricted Payment is
made (such Restricted Payments for purposes of this clause (b) meaning
only distributions on Common Stock of the Company), is less than $25.0 million
less the aggregate amount of all Restricted Payments made by the Company and
its Restricted Subsidiaries pursuant to this clause (b) during the


 


54

















 


period ending
on the last day of the fiscal quarter of the Company immediately preceding the
date of such Restricted Payment and beginning on the Issue Date.


 


Notwithstanding any of the foregoing provisions of this covenant,
neither the Company or any Restricted Subsidiary shall make any Restricted
Payment to the extent that, after giving effect to such Restricted Payment, the
sum of (a) cash and Cash Equivalents held by the Company and its
Restricted Subsidiaries and (b) cash and Cash Equivalents held by the
Charterer to support its obligations under its Vessel charters with the Company
or its Restricted Subsidiaries in accordance with the Charter Ancillary
Agreement, is less than $100.0 million. 
For the purposes of the foregoing, from and after completion of a
Successful Public Listing, the Company may rely in good faith upon written
confirmation from the Charterer, delivered no more than two Business Days prior
to its determination, as to the amount of cash and Cash Equivalents then held
by the Charterer.


 


The foregoing provisions of this Section 3.4
will not prohibit:


 


(1)                                  any
purchase or redemption of Capital Stock, Subordinated Obligations or Guarantor
Subordinated Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
or an employee stock ownership plan or similar trust to the extent such sale to
an employee stock ownership plan or similar trust is financed by loans from or
Guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination); provided,
however, that (a) such purchase or redemption will be excluded in
subsequent calculations of the amount of Restricted Payments and (b) the Net
Cash Proceeds from such sale will be excluded from clause I(ii) of the
preceding paragraph;


 


(2)                                  any
purchase or redemption of Subordinated Obligations or Guarantor Subordinated
Obligations made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Subordinated Obligations or Guarantor Subordinated
Obligations, respectively, that qualifies as Refinancing Indebtedness; provided,
however,
that such purchase or redemption will be excluded in subsequent calculations of
the amount of Restricted Payments;


 


(3)                                  dividends
paid within 60 days after the date of declaration if at such date of
declaration such dividend would have complied with this provision; provided,
however,
that such dividends will be included in subsequent calculations of the amount
of Restricted Payments;


 


(4)                                  so
long as no Default or Event of Default has occurred and is continuing, the
purchase, redemption or other acquisition, cancellation or retirement for value
of Capital Stock, or options, warrants, equity appreciation rights or other
rights to purchase or acquire Capital Stock of the Company or any Restricted
Subsidiary or any parent of the Company held by any existing or former
employees or management of the Company or any Restricted Subsidiary or their assigns,
estates or heirs, in each case in connection with the repurchase provisions
under employee or director stock option or stock purchase agreements or other
agreements to compensate management employees or directors; provided
that such redemptions or repurchases pursuant to this clause will not exceed
$2.5 million in the aggregate during any calendar year and $10.0 million in the
aggregate for all such redemptions and repurchases; provided, however,
that


 


55

















 


the amount of any such repurchase or
redemption will be included in subsequent calculations of the amount of
Restricted Payments;


 


(5)                                  so
long as no Default or Event of Default has occurred and is continuing, the
declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Company issued in accordance with the terms of this
Indenture to the extent such dividends are included in the definition of
“Consolidated Interest Expense;” provided that the payment of such dividends
will be included in subsequent calculations of the amount of Restricted
Payments; and


 


(6)                                  repurchases
of Capital Stock deemed to occur upon the exercise of stock options if such
Capital Stock represents a portion of the exercise price thereof; provided,
however,
that such repurchases will be excluded from subsequent calculations of the
amount of Restricted Payments.


 


The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of such Restricted Payment of
the asset(s) or securities proposed to be paid, transferred or issued by the
Company or such Restricted Subsidiary, as the case may be, pursuant to such
Restricted Payment. The fair market value of any cash Restricted Payment shall
be its face amount and any non-cash Restricted Payment shall be determined
conclusively by the Board of Directors of the Company acting in good faith by
resolution, such determination to be based upon an opinion or appraisal issued
by an investment banking firm of national standing if such fair market value is
estimated to exceed $25.0 million, or, in the case of a Vessel, to be based
upon a written appraisal of three Independent Appraisers.


 


Not later than the date of making any Restricted
Payment (excluding any Restricted Payment described in the preceding clause
(6)), the Company shall deliver to the Trustee an Officers’ Certificate stating
that such Restricted Payment is permitted and setting forth the basis upon
which the calculations required by this Section 3.4 were computed,
together with a copy of any fairness opinion or appraisal required by this
Indenture.


 


Section 3.5                                      Limitation
on Liens.  The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur or suffer to exist any Lien (other than Permitted
Liens) upon any of its property or assets (including Capital Stock), whether
owned on the date of this Indenture or acquired after that date, securing any
Indebtedness, unless contemporaneously with the Incurrence of the Liens
effective provision is made to secure the Indebtedness due under this Indenture
and the Securities or, in respect of Liens on any Restricted Subsidiary’s
property or assets, any Subsidiary Guarantee of such Restricted Subsidiary,
equally and ratably with (or prior to in the case of Liens with respect to
Subordinated Obligations or Guarantor Subordinated Obligations, as the case may
be) the Indebtedness secured by such Lien for so long as such Indebtedness is
so secured.


 


Section 3.6                                      Limitation
on Restrictions on Distributions from Restricted Subsidiaries.  The Company shall not, and shall not permit
any Restricted Subsidiary to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or consensual restriction on the ability
of any Restricted Subsidiary to:


 


56

















 


(1)                                  pay
dividends or make any other distributions on its Capital Stock to the Company
or any Restricted Subsidiary or pay any Indebtedness or other obligations owed
to the Company or any Restricted Subsidiary;


 


(2)                                  make
any loans or advances to the Company or any Restricted Subsidiary; or


 


(3)                                  transfer
any of its property or assets to the Company or any Restricted Subsidiary.


 


The preceding provisions will not prohibit:


 


(a)  any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by a
Restricted Subsidiary on or before the date on which such Restricted Subsidiary
was acquired by the Company (other than Indebtedness Incurred as consideration
in, or to provide all or any portion of the funds utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the Company or in
contemplation of the transaction) and outstanding on such date;


 


(b)                                 any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement effecting a refunding, replacement or refinancing of Indebtedness
Incurred pursuant to an agreement referred to in clause (a) of this paragraph
or this clause (b) or contained in any amendment to an agreement referred to in
clause (a) of this paragraph or this clause (b); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such agreement are no less favorable in any material respect
to the Holders of the Securities than the encumbrances and restrictions
contained in such agreements referred to in clause (a) of this paragraph on the
Issue Date or the date such Restricted Subsidiary became a Restricted
Subsidiary, whichever is applicable;


 


(c)                                  in
the case of clause (3) of the first paragraph of this Section 3.6, any
encumbrance or restriction:


 


(x)                                   that
restricts in a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a charter, lease, license or similar
contract, or the assignment or transfer of any such charter, lease, license or
other contract;


 


(y)                                 contained
in mortgages, pledges or other security agreements permitted under this
Indenture securing Indebtedness of the Company or a Restricted Subsidiary to
the extent such encumbrances or restrictions restrict the transfer of the
property subject to such mortgages, pledges or other security agreements; or


 


(z)                                   pursuant
to customary provisions restricting dispositions of real property interests set
forth in any reciprocal easement agreements of the Company or any Restricted
Subsidiary;


 


57

















 


(d)                                 purchase
money obligations for property acquired in the ordinary course of business that
impose encumbrances or restrictions of the nature described in clause (3) of
the first paragraph of this Section 3.6 on the property so acquired;


 


(e)                                  any
restriction with respect to a Restricted Subsidiary (or any of its property or
assets) imposed pursuant to an agreement entered into for the direct or
indirect sale or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary (or the property or assets that are subject to
such restriction) pending the closing of such sale or disposition; and


 


(f)                                    encumbrances
or restrictions arising or existing by reason of applicable law or any
applicable rule, regulation or order.


 


Section 3.7                                      Limitation
on Sales of Assets and Subsidiary Stock.


 


(a)                                  The Company shall
not, and shall not permit any of its Restricted Subsidiaries to, make any Asset
Disposition (excluding for purposes of the following clauses (1) and (2) an
Asset Disposition connected with a Total Loss) unless:


 


(1)                                  the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Disposition at least equal to the fair
market value, as determined in good faith by the Board of Directors (including
as to the value of all non-cash consideration), of the shares and assets
subject to such Asset Disposition;


 


(2)                                  at
least 80% of the consideration from such Asset Disposition received by the
Company or such Restricted Subsidiary, as the case may be, is in the form of
cash or Cash Equivalents; and


 


(3)                                  subject
to the requirement to make an Asset Disposition Offer as described below, an
amount equal to 100% of the Net Available Cash from such Asset Disposition (including
from an Asset Disposition connected with a Total Loss) is applied by the
Company or such Restricted Subsidiary, as the case may be, to any one of the
following:


 


(a)                                  to
prepay, repay or purchase Indebtedness (other than Disqualified Stock or Subordinated
Obligations) of the Company or Indebtedness (other than any Preferred Stock or
Guarantor Subordinated Obligation) of a Restricted Subsidiary (in each case
other than Indebtedness owed to the Company or an Affiliate of the Company)
within 360 days from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; provided, however, that, in connection
with any prepayment, repayment or purchase of Indebtedness pursuant to this
clause (a), the Company or such Restricted Subsidiary will retire such
Indebtedness and will cause the related commitment (if any) to be permanently
reduced in an amount equal to the principal amount so prepaid, repaid or
purchased; and


 


(b)                                 to
acquire or invest in Additional Assets or make installment or progress payments
in respect of such Additional Assets within 360 days from the


 


58

















 


later of the date of such Asset Disposition
or the receipt of such Net Available Cash.


 


(b)                                 Any Net Available Cash
from Asset Dispositions that are not applied or invested as provided in the
preceding paragraph will be deemed to constitute “Excess Proceeds.” On the
361st day after an Asset Disposition, if the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company shall make an offer (“Asset
Disposition Offer”) to all Holders of Securities and to the extent
required by the terms of other Pari Passu Indebtedness, to all holders of other
Pari Passu Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Pari Passu Indebtedness with the
proceeds from any Asset Disposition (“Pari Passu Notes”), to purchase the
maximum principal amount of Securities and any such Pari Passu Notes to which
the Asset Disposition Offer applies that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount of the Securities and Pari Passu Notes (or, in respect of the Pari Passu
Notes, such lesser offer price as many be applicable) plus accrued and unpaid
interest to the date of purchase, in accordance with the procedures set forth
in this Indenture or the agreements governing the Pari Passu Notes, as
applicable, in each case in integral multiples of $1,000. To the extent that
the aggregate amount of Securities and Pari Passu Notes so validly tendered and
not properly withdrawn pursuant to an Asset Disposition Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes, subject to the other covenants contained in this Indenture.
If the aggregate principal amount of Securities surrendered by Holders thereof
and other Pari Passu Notes surrendered by holders or lenders, collectively,
exceeds the amount of Excess Proceeds, the Trustee shall select the Securities
and Pari Passu Notes to be purchased on a pro rata basis on the basis of the
aggregate principal amount of tendered Securities and Pari Passu Notes. Upon
completion of such Asset Disposition Offer, the amount of Excess Proceeds shall
be reset at zero.


 


(c) (1) The Asset Disposition Offer will
remain open for a period of 20 Business Days following its commencement, except
to the extent that a longer period is required by applicable law (the “Asset
Disposition Offer Period”). No later than five Business Days after
the termination of the Asset Disposition Offer Period (the “Asset
Disposition Purchase Date”), the Company will purchase the principal
amount of Securities and Pari Passu Notes required to be purchased pursuant to
this Section 3.7 (the “Asset Disposition Offer Amount”) or, if
less than the Asset Disposition Offer Amount has been so validly tendered, all
Securities and Pari Passu Notes validly tendered in response to the Asset
Disposition Offer.


 


(2)                                  If the Asset
Disposition Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest will
be paid to the Person in whose name a Security is registered at the close of
business on such record date, and no additional interest will be payable to
Holders of the Securities who tender Securities pursuant to the Asset
Disposition Offer.


 


(3)                                  On or before the
Asset Disposition Purchase Date, the Company will, to the extent lawful, accept
for payment, on a pro rata basis to the extent necessary, the Asset Disposition
Offer Amount of Securities and Pari Passu Notes or portions of Securities and
Pari Passu Notes so validly tendered and not properly withdrawn pursuant to the
Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has
been validly tendered and not 


59

















 


properly withdrawn, all Securities and Pari
Passu Notes so validly tendered and not properly withdrawn, in each case in integral
multiples of $1,000. The Company will deliver to the Trustee an Officers’
Certificate stating that such Securities or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 3.7
and, in addition, the Company will deliver all certificates and Pari Passu
Notes required, if any, by the agreements governing the Pari Passu Notes. The
Company or the Paying Agent, as the case may be, will promptly (but in any case
not later than five Business Days after termination of the Asset Disposition
Offer Period) mail or deliver to each tendering Holder of Securities or holder
or lender of Pari Passu Notes, as the case may be, an amount equal to the
purchase price of the Securities or Pari Passu Notes so validly tendered and
not properly withdrawn by such holder or lender, as the case may be, and
accepted by the Company for purchase, and the Company will promptly issue a new
Security, and the Trustee, upon delivery of an Officers’ Certificate from the
Company will authenticate and mail or deliver such new Security to such Holder,
in a principal amount equal to any unpurchased portion of the Security
surrendered; provided that each such new Security will be in a principal
amount of $1,000 or an integral multiple of $1,000. In addition, the Company
will take any and all other actions required by the agreements governing the
Pari Passu Notes. Any Security not so accepted will be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly announce
the results of the Asset Disposition Offer on the Asset Disposition Purchase
Date.


 


For the purposes of this Section 3.7, the
following will be deemed to be cash:


 


(1)                                  the
assumption by the transferee of Indebtedness (other than Subordinated
Obligations or Disqualified Stock) of the Company or Indebtedness (other than
Guarantor Subordinated Obligations or Preferred Stock) of any Restricted
Subsidiary of the Company and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such
Asset Disposition (in which case the Company will, without further action, be
deemed to have applied such deemed cash to Indebtedness in accordance with
clause (a)(3)(a) above); and


 


(2)                                  securities,
notes or other obligations received by the Company or any Restricted Subsidiary
of the Company from the transferee that are converted by the Company or such
Restricted Subsidiary into cash within 90 days from the receipt of such
obligations.


 


The Company will, and will not permit any Restricted
Subsidiary to, engage in any Asset Swaps, unless:


 


(1)                                  at
the time of entering into such Asset Swap and immediately after giving effect
to such Asset Swap, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;


 


(2)                                  in
the event such Asset Swap involves the transfer by the Company or any
Restricted Subsidiary of assets having an aggregate fair market value, as
determined by the Board of Directors of the Company in good faith, in excess of
$5.0 million, the terms of such Asset Swap have been approved by a majority of
the members of the Board of Directors of the Company; and


 


60

















 


(3)                                  in
the event such Asset Swap involves the transfer by the Company or any
Restricted Subsidiary of assets having an aggregate fair market value, as
determined by the Board of Directors of the Company in good faith, in excess of
$30.0 million, the Company has received a written opinion from an independent
investment banking firm of nationally recognized standing (or, in the case of
Vessels, three Independent Appraisers), that such Asset Swap is fair to the
Company or such Restricted Subsidiary, as the case may be, from a financial
point of view.


 


(d)                                 The Company will
comply, to the extent applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in connection with
the repurchase of Securities pursuant to this Section 3.7. To the extent
that the provisions of any securities laws or regulations conflict with
provisions of this Section 3.7, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Indenture by virtue of any conflict.


 


Section 3.8                                      Limitation
on Affiliate Transactions.  (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an “Affiliate Transaction”)
unless:


 


(1)                                  the
terms of such Affiliate Transaction are no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable transaction at the time of such transaction in
arm’s-length dealings with a Person who is not such an Affiliate;


 


(2)                                  in
the event such Affiliate Transaction involves an aggregate amount in excess of
$5.0 million, the terms of such transaction have been approved by a majority of
the members of the Board of Directors of the Company and by a majority of the
members of such Board having no direct or indirect interest (other than with
respect to the Company) in such transaction, if any, (and such majority or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in clause (1) above); and


 


(3)                                  in
the event such Affiliate Transaction involves an aggregate amount in excess of
$10.0 million, the Company has received a written opinion from an independent
investment banking firm of nationally recognized standing (or, in the case of
Vessels, three Independent Appraisers) that such Affiliate Transaction is not
materially less favorable than those that might reasonably have been obtained
in a comparable transaction at such time on an arm’s-length basis from a Person
that is not an Affiliate.


 


(b)    The preceding paragraph
will not apply to:


 


(1)                                  any
Restricted Payment (other than a Restricted Investment) permitted to be made
pursuant to Section 3.4;


 


(2)                                  any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans and other reasonable fees, compensation,
benefits and indemnities paid or


 


61

















 


entered into by the Company or its Restricted
Subsidiaries in the ordinary course of business to or with officers, directors
or employees of the Company and its Restricted Subsidiaries;


 


(3)                                  any
transaction between the Company and a Wholly Owned Subsidiary or between Wholly
Owned Subsidiaries;


 


(4)                                  the
issuance or sale of any Company Stock of the Company or any contribution to the
capital of the Company or any Restricted Subsidiary of the Company; and


 


(5)                                  the
performance of obligations of the Company or any of its Restricted Subsidiaries
under the terms of any agreement to which the Company or any of its Restricted
Subsidiaries is a party on the Issue Date and disclosed in the Offering
Circular or identified on Schedule I to this Indenture, as these agreements may
be amended, modified or supplemented from time to time; provided, however,
that any future amendment, modification or supplement entered into after the
Issue Date will be permitted to the extent that its terms are not more
disadvantageous to the Holders of the Securities than the terms of the
agreements in effect on the Issue Date.


 


Section 3.9                                      Change
of Control.


 


(a)                                  If
a Change of Control occurs, each Holder of Securities will have the right to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder’s Securities at a purchase price in
cash equal to 101% of the principal amount of the Securities plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that notwithstanding
the foregoing, the Company shall not be obligated to repurchase the Securities
pursuant to this Section 3.9 if the Company has exercised its right to
redeem all of the Securities pursuant to the terms of Section 5.1.


 


(b)                                 Within
30 days following any Change of Control, the Company will mail a notice (the “Change of
Control Offer”) to each registered Holder with a copy to the Trustee
stating:


 


(1)                                   that
a Change of Control has occurred and that such Holder has the right to require
the Company to purchase such Holder’s Securities at a purchase price in cash
equal to 101% of the principal amount of such Securities plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on a record date to receive interest on the relevant interest payment
date) (the “Change
of Control Payment”);


 


(2)                                   the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed) (the “Change of Control Payment Date”); and


 


(3)                                   the
procedures determined by the Company, consistent with this Indenture, that a
Holder must follow in order to have its Securities repurchased.


 


(c)                                  On
the Change of Control Payment Date, the Company will, to the extent lawful:


 


62

















 


(1)                                   accept
for payment all Securities or portions of Securities (in integral multiples of
$1,000) properly tendered pursuant to the Change of Control Offer;


 


(2)                                   deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Securities or portions of Securities so tendered; and


 


(3)                                   deliver
or cause to be delivered to the Trustee the Securities so accepted together
with an Officers’ Certificate stating the aggregate principal amount of
Securities or portions of Securities being purchased by the Company.


 


(d)                                 The
Paying Agent will promptly deliver to each Holder of Securities so tendered the
Change of Control Payment for such Securities, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any; provided that each such new Security will
be in a principal amount of $1,000 or an integral multiple of $1,000.


 


(e)                                  If
the Change of Control Payment Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid
interest, if any, will be paid to the Person in whose name a Security is registered
at the close of business on such record date, and no additional interest will
be payable to Holders who tender pursuant to the Change of Control Offer.


 


(f)                                    In
the event that any issue of Indebtedness issued under an indenture or other
agreement may be violated by the payment of the Change of Control Offer, the
Company covenants to effect repayment of such Indebtedness or obtain from the
holders of such Indebtedness consent and waivers of any event of default within
30 days following any Change of Control, it being a Default of this Section
3.9 if the Company fails to comply with such covenant.


 


(g)                                 The
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change
of Control Offer.


 


(h)                                 The
Company will comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Securities pursuant to this Section
3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations described in this Indenture by virtue of the
conflict.


 


(i)                                     The
provisions of this Section 3.9 will apply whether or not any other
provisions of the Indenture are applicable.


 


Section 3.10                                Limitation
on Sale of Capital Stock of Restricted Subsidiaries.  The Company shall not, and shall not permit
any Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Voting Stock of any Restricted Subsidiary or to


 


63

















 


issue any of the Voting Stock
of a Restricted Subsidiary (other than, if necessary, shares of its Voting
Stock constituting directors’ qualifying shares) to any Person except:


 


(1)                                  to
the Company or a Wholly Owned Subsidiary; or


 


(2)                                  in
compliance with Section 3.7 and immediately after giving effect to such
issuance or sale, such Restricted Subsidiary would continue to be a Restricted
Subsidiary.


 


Notwithstanding the preceding paragraph, the Company
may sell all the Voting Stock of a Restricted Subsidiary as long as the Company
complies with the terms of Section 3.7.


 


Section 3.11                                Limitation
on Sale/Leaseback Transactions.  The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
enter into any Sale/Leaseback Transaction unless:


 


(1)                                  the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Sale/Leaseback Transaction at least equal to
the fair market value (as evidenced by a resolution of the Board of Directors
of the Company) of the property subject to such transaction;


 


(2)                                  the
Company or such Restricted Subsidiary could have Incurred Indebtedness in an
amount equal to the Attributable Indebtedness in respect of such Sale/Leaseback
Transaction pursuant to Section 3.3;


 


(3)                                  the
Company or such Restricted Subsidiary would be permitted to create a Lien on
the property subject to such Sale/Leaseback Transaction without securing the
Securities or any Subsidiary Guarantor of such Restricted Subsidiary as set
forth in Section 3.5; and


 


(4)                                  the
Sale/Leaseback Transaction is treated as an Asset Disposition and all of the
conditions of this Indenture described under Section 3.7 (including the
provisions concerning the application of Net Available Cash) are satisfied with
respect to such Sale/Leaseback Transaction, treating all of the consideration
received in such Sale/Leaseback Transaction as Net Available Cash for purposes
of such covenant.


 


Section 3.12                                Future
Subsidiary Guarantors.  After the
Issue Date, the Company will cause each Restricted Subsidiary created or
acquired by the Company or one or more of its Restricted Subsidiaries to
execute and deliver to the Trustee a supplement to this Indenture,
substantially in the form of Exhibit C hereto, providing for a Subsidiary
Guarantee; provided that with respect to any Restricted Subsidiary acquired
after the Issue Date but prior to the Escrow Release, the foregoing
requirements shall be deemed satisfied so long as they are complied with at or
prior to such Escrow Release.


 


Section 3.13                                Limitation
on Lines of Business.  The Company
will not, and will not permit any Restricted Subsidiary to, engage in any
business other than a Related Business.


 


Section 3.14                                Maintenance
of Office or Agency.  The Company
will maintain in The City of New York or Wilmington, Delaware, an office or agency
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The


 


64

















 


Company will give prompt
written notice to the Trustee of any change in the location of any such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such notices and demands may be made or served at the Trustee’s principal corporate
trust office (the “Corporate Trust Office”), and the Company
hereby appoints the Trustee as its agent to receive all such notices and
demands.


 


Section 3.15                                Corporate
Existence.  Subject to Article IV
and Section 10.2, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and that of each Subsidiary Guarantor and the corporate rights (charter and
statutory) licenses and franchises of the Company and each Subsidiary Guarantor;
provided,
however,
that the Company shall not be required to preserve any such existence (except
the Company), right, license or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof would not have a
material adverse effect on the ability of the Company to perform its
obligations under the Securities or this Indenture.


 


Section 3.16                                Payment
of Taxes and Other Claims.  The
Company will pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (ii)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a material liability or lien upon the property of the Company or any
Restricted Subsidiary, except for any Lien permitted to be incurred pursuant to
subsections (4) and (5) of the definition of “Permitted Liens”; provided,
however,
that the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which appropriate reserves, if necessary (in the good faith
judgment of management of the Company), are being maintained in accordance with
GAAP or where the failure to pay or discharge the same would not have a
material adverse effect on the ability of the Company to perform its
obligations under the Securities or this Indenture.


 


Section 3.17                                Payments
for Consent.  Neither the Company
nor any of its Subsidiaries will, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fees or otherwise, to any
Holder of any Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid or is paid to all Holders of
the Securities that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
amendment.


 


Section 3.18                                Compliance
Certificate.  The Company shall
deliver to the Trustee within 120 days after the end of each Fiscal Year of the
Company an Officers’ Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default or Event of Default and whether or not the
signers know of any Default or Event of Default that occurred during such
period. If they do, the certificate shall describe the Default or Event of
Default, its status and what action the Company


 


65

















 


is taking or proposes to take
with respect thereto. The Company also shall comply with TIA § 314(a)(4).


 


Section 3.19                                Further
Instruments and Acts.  Upon the
reasonable request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.


 


Section 3.20                                Statement
by Officers as to Default.  The
Company shall deliver to the Trustee, as soon as possible and in any event
within thirty days after the Company becomes aware of the occurrence of any
Event of Default or Default, an Officers’ Certificate setting forth the details
of such Event of Default or Default and the action which the Company proposes
to take with respect thereto.


 


Section 3.21                                Amendments
of Material Agreements.  Prior to
the completion of a Successful Public Listing, the Company will not, and will
not permit any Restricted Subsidiary to, amend or modify (or agree to amend or
modify) any of the Material Agreements in a manner that would materially
adversely affect the rights of the Company and its Restricted Subsidiaries
thereunder, taken as a whole.  For
purposes of the foregoing, a waiver of compliance shall be deemed a
modification.


 


Section 3.22                                Insurance.  The Company will maintain, and will cause
its Subsidiaries to maintain, insurance coverage by financially sound and
reputable insurers in such forms and amounts and against such risks as are at
that time customary for corporations of established reputation engaged in the
same or a similar business and owning and operating similar properties
including general liability insurance and (but without duplication) protection
and indemnity insurance, hull and machinery insurance and oil pollution
insurance.


 


Section 3.23                                Suspended
Covenants.  During any period of
time that the Securities have an Investment Grade Rating from both the Rating
Agencies and no Default or Event of Default has occurred and is continuing
under this Indenture, the Company and its Restricted Subsidiaries will not be
subject to the provisions of this Indenture corresponding with Sections 3.3,
3.4, 3.6, 3.7, 3.8, 3.10, and 3.13; provided, however, that if the Company and
its Restricted Subsidiaries are not subject to the Suspended Covenants for any
period of time as a result of this Section 3.23 and, subsequently, either
of the Rating Agencies withdraws its ratings or downgrades the ratings assigned
to the Securities below the Investment Grade Ratings so that the Securities do
not have an Investment Grade Rating from both Rating Agencies, or a Default or
Event of Default (other than with respect to the Suspended Covenants) occurs
and is continuing, the Company and its Restricted Subsidiaries will thereafter
again be subject to the Suspended Covenants, subject to the terms, conditions
and obligations set forth in this Indenture.


 


ARTICLE
IV

Successor Company


 


Section 4.1                                      Merger
and Consolidation.  The Company will
not consolidate with or merge with or into, or sell, lease, convey, assign,
transfer or otherwise dispose of all or substantially all its assets to, any
Person, unless:


 


66

















 


(1)                                  the
resulting, surviving or transferee Person (the “Successor Company”) will be
a corporation, partnership, trust or limited liability company organized and
existing under the laws of Bermuda, the United States of America, any State of
the United States or the District of Columbia or any other country recognized
by the United State of America and the Successor Company (if not the Company)
will expressly assume, by supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture;


 


(2)                                  immediately
after giving effect to such transaction (and treating any Indebtedness that
becomes an obligation of the Successor Company or any Subsidiary of the
Successor Company as a result of such transaction as having been Incurred by
the Successor Company or such Subsidiary at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;


 


(3)                                  except
in the case of a merger of the Company with or into a Restricted Subsidiary of
the Company, immediately after giving effect to such transaction, the Successor
Company would be able to Incur at least an additional $1.00 of Indebtedness
pursuant to the first paragraph of Section 3.3;


 


(4)                                  unless
the Company is the Successor Company, each Subsidiary Guarantor (unless it is
the other party to the transactions above, in which case clause (1) shall
apply) shall have by supplemental indenture confirmed that its Subsidiary
Guarantee shall apply to such Person’s obligations in respect of this Indenture
and the Securities and its obligations under the applicable Registration Rights
Agreement shall continue to be in effect;


 


(5)                                  if
the Successor Company is organized under the laws of a jurisdiction other than
Bermuda or the United States of America, any State thereof or the District of
Columbia, it delivers to the Trustee an Officers’ Certificate and Opinion of
Counsel experienced in such matters that, taken together, state that the
Holders of the Securities will not suffer any economic, legal or regulatory
disadvantage as a result of such transaction; and


 


(6)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such supplemental indenture (if any) comply with this Indenture.


 


For purposes of this Section 4.1, the sale,
lease, conveyance, assignment, transfer, or other disposition of all or
substantially all of the assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
disposition of all or substantially all of the assets of the Company.


 


The Successor Company will succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture, but, in the case of a lease of all or substantially all its
assets, the Company will not be released from the obligation to pay the
principal of and interest on the Securities.


 


67

















 


ARTICLE
V

Redemption of
Securities


 


Section 5.1                                      Optional
Redemption; Optional Tax Redemption.


 


(1)                                  Except
as set forth in this Section 5.1 and Section 5.9, the Securities
shall not be subject to redemption until December 15, 2008. On and after
December 15, 2008, the Company may redeem all or, from time to time, part of
the Securities upon not less than 30 nor more than 60 days’ notice, at the
following redemption prices (expressed as a percentage of principal amount) plus
accrued and unpaid interest on the Securities, if any, to the applicable date
of redemption (any such date, a “Redemption Date”) (subject to the right of
Holders on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the 12-month period beginning on December
15 of the years indicated below:


 


	
  YEAR

  	
   

  	
  PERCENTAGE

  	
   

  
	
  2008

  	
   

  	
  104.250

  	
  %

  
	
  2009

  	
   

  	
  102.833

  	
  %

  
	
  2010

  	
   

  	
  101.417

  	
  %

  
	
  2011 and thereafter

  	
   

  	
  100.000

  	
  %

  



 


(2)                                  Prior
to December 15, 2006, the Company may on any one or more occasions redeem up to
35% of the original principal amount of the Securities (including any
Additional Securities) with the Net Cash Proceeds of one or more Public Equity
Offerings at a redemption price of 108.50% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the redemption date (subject to the
right of Holders on the relevant record date to receive interest due on the
relevant interest payment date); provided that:


 


(a)                                  at
least 65% of the original principal amount of the Securities remains
outstanding after each such redemption; and


 


(b)                                 the
redemption occurs within 60 days after the closing of such Public Equity
Offering.


 


(3)                                  At
any time prior to December 15, 2008 the Securities may be redeemed in whole or
in part at the option of the Company upon (a) the occurrence of a Change of
Control or (b) if no more than 5.0% of the principal amount of the Securities
(including any Additional Securities) shall remain outstanding at any time, in
each case upon not less than 30 nor more than 60 days’ prior notice (but in no
event more than 90 days after the occurrence of such Change of Control event)
mailed by first-class mail to each Holder’s registered address, at a redemption
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued and unpaid interest, if any, to the Redemption Date (subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date). 
The Company shall deliver to the Trustee, at least one Business Day
prior to the Redemption Date, an Officers’ Certificate setting forth the
redemption price and showing in reasonable detail the method of its
determination.


 


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(4)                                  The
Payor may redeem all, but not less than all, of the Securities if as a result
of any change in or amendment to the laws, regulations or rulings of any
Relevant Tax Jurisdiction or any change in the official application or
interpretation of such laws, regulations or rulings, or any change in the
official application or interpretation of, or any execution of or amendment to,
any treaty or treaties affecting taxation to which such Relevant Tax
Jurisdiction is a party (a “Change in Tax Law”) the Payor is or would
be required on the next succeeding interest payment date to pay Additional
Amounts with respect to the Securities as set forth in Section 3.1, and
the payment of such Additional Amounts cannot be avoided by the use of any
reasonable measures available to the Payor; provided that the Board of
Directors of the Company determines in good faith that the aggregate amount of
such Additional Amounts would create additional annual costs in excess of 0.50%
of the aggregate principal amount of Securities then outstanding.  In the case of the Company, the Change in
Tax Law must become effective on or after the date of the Offering Circular. In
the case of a Subsidiary Guarantor, or a successor of either the Company or a
Subsidiary Guarantor, the Change in Tax Law must become effective after the
date that such entity first makes payment on the Securities. Further, the Payor
must deliver to the Trustee at least 30 days before the applicable Redemption
Date an Opinion of Counsel to the effect that the Payor has or will become
obligated to pay Additional Amounts as a result of such Change in Tax Law. The
Payor must also provide the Holders with notice of the intended redemption at
least 30 days and no more than 60 days before the applicable redemption date.
The redemption price will equal the principal amount of the Securities plus
accrued and unpaid interest thereon, if any, to the applicable Redemption Date
and Additional Amounts, if any, then due and which otherwise would be payable.


 


Section 5.2                                      Applicability
of Article.  Redemption of
Securities at the election of the Company or otherwise, as permitted or
required by any provision of this Indenture, shall be made in accordance with
such provision and this Article.


 


Section 5.3                                      Election
to Redeem; Notice to Trustee.  The
election of the Company to redeem any Securities pursuant to Section 5.1
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, not later than the earlier of the
date that is 45 days prior to the Redemption Date fixed by the Company or the date
on which notice is given to the Holders (except as provided in Section 5.5
or unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities to be
redeemed and shall deliver to the Trustee such documentation and records as
shall enable the Trustee to select the Securities to be redeemed pursuant to Section
5.4.


 


Section 5.4                                      Selection
by Trustee of Securities to Be Redeemed. 
If less than all the Securities are to be redeemed at any time pursuant
to an optional redemption, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee,
from the outstanding Securities not previously called for redemption, in compliance
with the requirements of the principal securities exchange, if any, on which
such Securities are listed, or, if such Securities are not so listed, on a pro
rata basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; provided, however, that no such
partial redemption shall reduce the portion of the principal amount of a
Security not redeemed to less than $1,000.


 


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The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.


 


For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be
redeemed.


 


Section 5.5                                      Notice
of Redemption.  Notice of redemption
shall be given in the manner provided for in Section 11.2 not less than
30 nor more than 60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed. The Trustee shall give notice of redemption in the
Company’s name and at the Company’s expense; provided, however,
that the Company shall deliver to the Trustee, at least five Business Days
prior to the date of giving such notice, an Officers’ Certificate requesting
that the Trustee give such notice at the Company’s expense and setting forth
the information to be stated in such notice as provided in the following items.


 


All notices of redemption shall state:


 


(1)                                  the
Redemption Date,


 


(2)                                  the
redemption price (or, if the redemption price is not then determinable, the
basis for its determination) and the amount of accrued interest to the
Redemption Date payable as provided in Section 5.7, if any,


 


(3)                                  if
less than all outstanding Securities are to be redeemed, the identification of
the particular Securities (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Securities to be redeemed and the aggregate
principal amount of Securities to be outstanding after such partial redemption,


 


(4)                                  in
case any Definitive Security is to be redeemed in part only, the notice which
relates to such Security shall state that on and after the Redemption Date, upon
surrender of such Security, the Holder will receive, without charge, a new
Security or Securities of authorized denominations for the principal amount
thereof remaining unredeemed,


 


(5)                                  that
on the Redemption Date the redemption price (and accrued interest, if any, to
the Redemption Date payable as provided in Section 5.7) will become due
and payable upon each such Security, or the portion thereof, to be redeemed,
and, unless the Company defaults in making the redemption payment, that
interest on Securities called for redemption (or the portion thereof) will
cease to accrue on and after said date,


 


(6)                                  the
place or places where Definitive Securities are to be surrendered for payment
of the redemption price and accrued interest, if any,


 


(7)                                  the
name and address of the Paying Agent,


 


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(8)                                  that
Definitive Securities called for redemption must be surrendered to the Paying
Agent to collect the redemption price,


 


(9)                                  the
CUSIP and ISIN numbers, and that no representation is made as to the accuracy
or correctness of the CUSIP or ISIN numbers, if any, listed in such notice or
printed on the Securities, and


 


(10)                            the
provision of the Indenture pursuant to which the Securities are to be redeemed.


 


Section 5.6                                      Deposit
of Redemption Price.  Prior to 10:00
a.m. (New York City time) on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.4)
an amount of money sufficient to pay the redemption price of, and accrued
interest on, all the Securities which are to be redeemed on that date.


 


Section 5.7                                      Securities
Payable on Redemption Date.  Notice
of redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the redemption price
therein specified (together with accrued interest, if any, to the Redemption
Date), and from and after such date (unless the Company shall default in the
payment of the redemption price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
redemption price, together with accrued interest, if any, to the Redemption
Date, except that if a Redemption Date is on or after an interest record date
and on or before the related interest payment date, then accrued and unpaid
interest, if any, will be paid to the Person in whose name the Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders whose Securities will be subject to
redemption by the Company.


 


If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Securities.


 


Section 5.8                                      Securities
Redeemed in Part.  Any Definitive
Security which is to be redeemed only in part (pursuant to the provisions of
this Article) shall be surrendered at the office or agency of the Company
maintained for such purpose pursuant to Section 3.14 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder’s attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Security at the expense of the
Company, a new Definitive Security or Securities, of any authorized
denomination as requested by such Holder, in an aggregate principal amount
equal to and in exchange for the unredeemed portion of the principal of the
Security so surrendered, provided, that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.


 


Section 5.9                                      Special
Mandatory Redemption.  Following the
occurrence of the Special Mandatory Redemption Trigger, the Company shall
redeem the Securities as a whole,


 


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upon notice as provided in this
Section 5.9, at a redemption price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest thereon
to the Redemption Date.  Notwithstanding
Section 5.5, the Company shall give notice of such mandatory redemption
within ten days of the occurrence of the Special Mandatory Redemption Trigger
by first-class mail mailed not less than 30 or more than 45 days prior to the
Redemption Date to each Holder of Securities at its registered address and to
the Escrow Agent, stating:


 


(1)                                  that
the Special Mandatory Redemption Trigger has occurred;


 


(2)                                  the
Redemption Date;


 


(3)                                  the
redemption price;


 


(4)                                  that
on the Redemption Date the redemption price will become due and payable upon
each Security to be redeemed and that interest thereon will cease to accrue on
and after such date; and


 


(5)                                  the
place or places where each Security is to be surrendered for payment of the
redemption price.


 


Upon receipt
of the Escrow Funds pursuant to Section 5(b) of the Escrow Agreement, the
Paying Agent or the Trustee (as the case may be) shall use all such Escrow
Funds along with additional funds provided by Frontline in accordance with the
Escrow Agreement to pay the redemption price and accrued interest due on the
Redemption Date, provided that the foregoing shall not relieve the Company of
its obligations with respect to such redemption.


 


ARTICLE
VI

Defaults and
Remedies


 


Section 6.1                                      Events
of Default.  Each of the following
is an “Event
of Default”:


 


(1)                                  default
in any payment of interest or additional interest (as required by a
Registration Rights Agreement) on any Security when due, continued for 30 days;


 


(2)                                  default
in the payment of principal of or premium, if any, on any Security when due at
its Stated Maturity, upon optional redemption, upon required redemption or
repurchase, upon declaration or otherwise;


 


(3)                                  failure
by the Company or any Subsidiary Guarantor to comply with its obligations under
Article IV or Section 10.2;


 


(4)                                  failure
by the Company to comply with any of its obligations under Sections 3.2
through 3.22 (inclusive) (in each case, other than a failure to purchase
Securities which will constitute an Event of Default under clause (2) above and
other than a failure to comply with Section 4.1 or Section 10.2
which is covered by clause (3)) for 30 days after notice from the Trustee or
the Holders of at least 25% in principal amount of the outstanding Securities;


 


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(5)                                  failure
by the Company to comply with its other agreements contained in this Indenture
for 60 days after notice from the Trustee or the Holders of at least 25% in
principal amount of the outstanding Securities;


 


(6)                                  default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which
is Guaranteed by the Company or any of its Restricted Subsidiaries), other than
Indebtedness owed to the Company or a Restricted Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after the Issue Date, which
default:


 


(a)                                  is
caused by a failure to pay principal of, or interest or premium, if any, on the
stated maturity of such Indebtedness (“payment default”); or


 


(b)                                 results
in the acceleration of such Indebtedness prior to its maturity;


 


and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a payment default or the maturity of
which has been so accelerated, aggregates $15.0 million or more;


 


(7)                                  (a)
the Company or any Significant Subsidiary or a group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated financial
statements for the Company and its Restricted Subsidiaries), would constitute a
Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:


 


(i)                                     commences
a voluntary case or proceeding;


 


(ii)                                  consents
to the entry of judgment, decree or order for relief against it in an
involuntary case or proceeding;


 


(iii)                               consents
to the appointment of a Custodian of it or for any substantial part of its
property;


 


(iv)                              makes
a general assignment for the benefit of its creditors;


 


(v)                                 consents
to or acquiesces in the institution of a bankruptcy or an insolvency proceeding
against it; or


 


(vi)                              takes
any corporate action to authorize or effect any of the foregoing; or


 


(b)                                 a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:


 


(i)                                     is
for relief against the Company or any Significant Subsidiary or a group of
Restricted Subsidiaries that, taken together (as of the latest audited


 


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consolidated financial statements for the
Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary in an involuntary case;


 


(ii)                                  appoints
a Custodian of the Company or any Significant Subsidiary or a group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary or for any substantial
part of its property; or


 


(iii)                               orders
the winding up or liquidation of the Company or any Significant Subsidiary or a
group of Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary;


 


(8)                                  failure
by the Company or any Restricted Subsidiary to pay final judgments aggregating
in excess of $15.0 million (net of any amounts that a reputable and
creditworthy insurance company has acknowledged liability for in writing),
which judgments are not paid, discharged or stayed for a period of 60 days;


 


(9)                                  any
Subsidiary Guarantee ceases to be in full force and effect (except as
contemplated by the terms of this Indenture) or is declared null and void in a
judicial proceeding or any Subsidiary Guarantor denies or disaffirms its
obligations under this Indenture or its Subsidiary Guarantee; or


 


(10)                            prior
to the completion of a Successful Public Listing, the failure by Charterer,
Frontline or Frontline Management to comply for 30 days after notice from
the Trustee or the Holders of at least 25% in principal amount of the
outstanding Securities with any of its obligations under the Material
Agreements.


 


Section 6.2                                      Acceleration.  If an Event of Default (other than an Event
of Default described in clause (7) of Section 6.1) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the outstanding Securities by notice to the Company
and the Trustee, may, and the Trustee at the request of such Holders shall,
declare the principal of, premium, if any, and accrued and unpaid interest, if
any, on all the Securities to be due and payable. Upon such a declaration, such
principal, premium and accrued and unpaid interest will be due and payable
immediately. In the event of a declaration of acceleration of the Securities
because an Event of Default described in clause (6) of Section 6.1 has
occurred and is continuing, the declaration of acceleration of the Securities
shall be automatically annulled if the event of default or payment default
triggering such Event of Default pursuant to clause (6) of Section 6.1
shall be remedied or cured by the Company or a Restricted Subsidiary of the
Company or waived by the holders of the relevant Indebtedness within 20 days
after the declaration of acceleration with respect thereto and if (1) the
annulment of the acceleration of the Securities would not conflict with any
judgment or decree of a court of competent jurisdiction and (2) all existing
Events of Default, except nonpayment of principal, premium or interest on the
Securities that became due solely because of the acceleration of the
Securities, have been cured or waived. If an Event of Default described in
clause (7) of Section 6.1 above occurs and is continuing, the principal
of, premium, if any, and accrued and unpaid


 


74

















 


interest on all the Securities
will become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders.


 


Section 6.3                                      Other
Remedies.  If an Event of Default
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of principal of (or premium, if any) or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.


 


The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.


 


Section 6.4                                      Waiver
of Past Defaults.  The Holders of a
majority in principal amount of the outstanding Securities by notice to the
Trustee may (a) waive, by their consent (including, without limitation consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Securities), an existing Default or Event of Default and its consequences
except (i) a Default or Event of Default in the payment of the principal of, or
premium, if any, or interest on a Security or (ii) a Default or Event of
Default in respect of a provision that under Section 9.2 cannot be
amended without the consent of each Securityholder affected and (b) rescind any
such acceleration with respect to the Securities and its consequences if (1)
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (2) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Securities
that have become due solely by such declaration of acceleration, have been
cured or waived. When a Default or Event of Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or Event of
Default or impair any consequent right.


 


Section 6.5                                      Control
by Majority.  The Holders of a
majority in principal amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Sections 7.1 and 7.2, that the Trustee
determines is unduly prejudicial to the rights of other Securityholders or
would involve the Trustee in personal liability; provided, however,
that the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.


 


Section 6.6                                      Limitation
on Suits.  Subject to Section 6.7,
a Securityholder may not pursue any remedy with respect to this Indenture or
the Securities unless:


 


(1)                                  such
Holder has previously given to the Trustee written notice stating that an Event
of Default is continuing;


 


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(2)                                  Holders
of at least 25% in principal amount of the outstanding Securities make
requested in writing that the Trustee pursue the remedy;


 


(3)                                  such
Holders have offered to the Trustee reasonable security or indemnity against
any loss, liability or expense;


 


(4)                                  the
Trustee has not complied with such request within 60 days after receipt of the
request and the offer of security or indemnity; and


 


(5)                                  the
Holders of a majority in principal amount of the outstanding Securities have
not given the Trustee a direction that, in the opinion of the Trustee, is
inconsistent with such request within such 60-day period.


 


A Securityholder may not use this Indenture to
prejudice the rights of another Securityholder or to obtain a preference or
priority over another Securityholder.


 


Section 6.7                                      Rights
of Holders to Receive Payment. 
Notwithstanding any other provision of this Indenture (including,
without limitation, Section 6.6), the right of any Holder to
receive payment of principal of, premium (if any) or interest on the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.


 


Section 6.8                                      Collection
Suit by Trustee.  If an Event of
Default specified in clause (1) or (2) of Section 6.1 occurs and is
continuing, the Trustee may recover judgment in its own name and as Trustee of
an express trust against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent lawful) and the
amounts provided for in Section 7.7.


 


Section 6.9                                      Trustee
May File Proofs of Claim.  The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the Company,
its Subsidiaries or its or their respective creditors or properties and, unless
prohibited by law or applicable regulations, may vote on behalf of the Holders
in any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.


 


Section 6.10                                Priorities.  If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:


 


FIRST: to the Trustee for amounts due under Section
7.7;


 


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SECOND: to Securityholders for amounts due and unpaid
on the Securities for principal, premium, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Securities for principal and interest, respectively; and


 


THIRD: to the Company.


 


The Trustee may fix a record date and payment date for
any payment to Securityholders pursuant to this Section. At least 15 days
before such record date, the Company shall mail to each Securityholder and the
Trustee a notice that states the record date, the payment date and amount to be
paid.


 


Section 6.11                                Undertaking
for Costs.  In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees, against any
party litigant in the suit, having due regard to the merits and good faith of
the claims or defenses made by the party litigant. This Section does not apply
to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to
Section 6.7 or a suit by Holders of more than 10% in outstanding principal
amount of the Securities.


 


Section 6.12                                Additional
Payments.  In the case of any Event
of Default occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have had to pay if the Company
then had elected to redeem the Securities pursuant to the optional redemption
provisions of this Indenture or was required to repurchase the Securities, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the Securities.


 


ARTICLE
VII

Trustee


 


Section 7.1                                      Duties
of Trustee.   (a)  If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such Person’s own affairs; provided that if an Event of Default
occurs and is continuing, the Trustee will be under no obligation to exercise
the rights or powers under this Indenture at the request or direction of any of
the holders unless such holders have offered to the Trustee reasonable
indemnity or security against loss, liability or expense.


 


(b)                                 Except during the
continuance of an Event of Default:


 


(1)                                  the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and


 


(2)                                  in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein,


 


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upon
certificates, opinions or orders furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such certificates
or opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine such certificates and
opinions to determine whether or not they conform on their face to the
requirements of this Indenture (but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein).


 


(c)                                  The Trustee may not
be relieved from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that:


 


(1)                                   this
paragraph does not limit the effect of paragraph (b) of this Section;


 


(2)                                   the
Trustee shall not be liable for any error of judgment made in good faith by a
Trust Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and


 


(3)                                   the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section
6.5.


 


(d)                                 Every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section.


 


(e)                                  The Trustee shall not
be liable for interest on any money received by it except as the Trustee may
agree in writing with the Company.


 


(f)                                    Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.


 


(g)                                 No provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have
reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.


 


(h)                                 Every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section and to the provisions of the TIA.


 


(i)                                     Unless otherwise
specifically provided in this Indenture, any demand, request, direction or
notice from the Company shall be sufficient if signed by an Officer of the
Company.


 


(j)                                     The Trustee shall
be under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Holders unless such
Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to it against the costs, expenses (including reasonable attorneys’
fees and expenses) and liabilities that might be incurred by it in compliance
with such request or direction.


 


Section 7.2                                      Rights
of Trustee.  Subject to Section 7.1:


 


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(a)                                  The
Trustee may conclusively rely on any document (whether in its original or
facsimile form) reasonably believed by it to be genuine and to have been signed
or presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.


 


(b)                                 Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on an Officers’
Certificate or Opinion of Counsel.


 


(c)                                  The
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.


 


(d)                                 The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers, unless
the Trustee’s conduct constitutes willful misconduct or negligence.


 


(e)                                  The
Trustee may consult with counsel of its selection, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.


 


Section 7.3                                      Individual
Rights of Trustee.  The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.


 


Section 7.4                                      Trustee’s
Disclaimer.  The Trustee shall not
be responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company’s use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee’s certificate of authentication.


 


Section 7.5                                      Notice
of Defaults.  If a Default or Event
of Default occurs and is continuing and if a Trust Officer has actual knowledge
thereof, the Trustee shall mail to each Securityholder notice of the Default or
Event of Default within 30 days after it occurs. Except in the case of a
Default or Event of Default in payment of principal of, premium (if any), or
interest on any Security (including payments pursuant to the optional
redemption or required repurchase provisions of such Security, if any), the
Trustee may withhold the notice if and so long a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.


 


Section 7.6                                      Reports
by Trustee to Holders.  As promptly
as practicable after each May 15 beginning with the May 15 following the date
of this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b).
The Trustee shall also transmit by mail all reports required by TIA § 313(c).


 


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A copy of each report at the time of its mailing to
Securityholders shall be filed with each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any
delisting thereof.


 


Section 7.7                                      Compensation
and Indemnity.  The Company shall
pay to the Trustee from time to time reasonable compensation for its acceptance
of this Indenture and services hereunder as the Company and the Trustee shall
from time to time agree in writing. The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
costs of preparing and reviewing reports, certificates and other documents,
costs of preparation and mailing of notices to Securityholders, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee’s agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability, damages, claims or expense (including
reasonable attorneys’ fees and expenses) incurred by it without negligence or
willful misconduct on its part in connection with the administration of this
trust and the performance of its duties hereunder, including the costs and
expenses of enforcing this Indenture (including this Section 7.7)
and of defending itself against any claims (whether asserted by any Securityholder,
the Company or otherwise). The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall provide reasonable cooperation at
the Company’s expense in the defense. The Trustee may have separate counsel and
the Company shall pay the fees and expenses of such counsel provided that the
Company shall not be required to pay such fees and expenses if it assumes the
Trustee’s defense, and, in the reasonable judgment of outside counsel to the
Trustee, there is no conflict of interest between the Company and the Trustee
in connection with such defense. The Company shall not be under any obligation
to pay for any written settlement without its consent, which consent shall not
be unreasonably delayed, conditioned or withheld. The Company need not
reimburse any expense or indemnify against any loss, liability or expense incurred
by the Trustee through the Trustee’s own willful misconduct or negligence.


 


To secure the Company’s payment obligations in this
Section, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee other than money or property held in
trust to pay principal of and interest on particular Securities.


 


The Company’s payment obligations pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in clause (7) of Section
6.1 with respect to the Company, the expenses are intended to constitute
expenses of administration under any Bankruptcy Law.


 


Section 7.8                                      Replacement
of Trustee.  The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:


 


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(1)                                  the
Trustee fails to comply with Section 7.10;


 


(2)                                  the
Trustee is adjudged bankrupt or insolvent;


 


(3)                                  a
receiver or other public officer takes charge of the Trustee or its property;
or


 


(4)                                  the
Trustee otherwise becomes incapable of acting.


 


If the Trustee resigns or is removed by the Company or
by the Holders of a majority in principal amount of the Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of the Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.


 


A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture.  The successor
Trustee shall mail a notice of its succession to Securityholders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.7.


 


If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring Trustee or
the Holders of at least 10% in principal amount of the Securities may petition,
at the Company’s expense, any court of competent jurisdiction for the
appointment of a successor Trustee.


 


If the Trustee fails to comply with Section 7.10,
unless the Trustee’s duty to resign is stayed as provided in Section 310(b) of
the TIA, any Securityholder who has been a bona fide Holder of a Security for
at least six months may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.


 


Notwithstanding the replacement of the Trustee
pursuant to this Section, the Company’s obligations under Section 7.7
shall continue for the benefit of the retiring Trustee.


 


Section 7.9                                      Successor
Trustee by Merger.  If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee Person without any further
act shall be the successor Trustee.


 


In case at the time such successor or successors by
merger, conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture, any of the Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of
the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Indenture
provided that the certificate of the Trustee shall have.


 


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Section 7.10                                Eligibility;
Disqualification.  The Trustee shall
at all times satisfy the requirements of TIA § 310(a). The Trustee shall have a
combined capital and surplus of at least $100.0 million as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA § 310(b); provided, however, that there shall be excluded from the
operation of TIA § 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA § 310(b)(1) are met.


 


Section 7.11                                Preferential
Collection of Claims Against Company.  The Trustee
shall comply with TIA § 311(a), excluding any creditor relationship listed in
TIA § 311(b). A Trustee who has resigned or been removed shall be subject to
TIA § 311(a) to the extent indicated.


 


ARTICLE VIII

Discharge
of Indenture; Defeasance


 


Section 8.1                                      Discharge
of Liability on Securities; Defeasance.  (a) Subject to
Section 8.1(c), when (i)(x) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section
2.9) for cancellation or (y) all outstanding Securities not theretofore
delivered to the Trustee for cancellation have become due and payable, whether
at Stated Maturity or upon redemption or will become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption pursuant to
Article V hereof and the Company or any Subsidiary Guarantor irrevocably
deposits or causes to be deposited with the Trustee as trust funds in trust
solely for the benefit of the Holders money in U.S. dollars, U.S. Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation for principal, premium, if any, and accrued interest to the
date of Stated Maturity or redemption; (ii) no Default or Event of Default
shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit will not result in a breach
or violation of, or constitute a default under, any other material instrument
to which the Company or any Subsidiary Guarantor is a party or by which the
Company or any Guarantor is bound; (iii) the Company or any Subsidiary
Guarantor has paid or caused to be paid all sums payable under this Indenture
and the Securities; and (iv) the Company has delivered irrevocable instructions
to the Trustee under this Indenture to apply the deposited money toward the
payment of such Securities at Stated Maturity or the Redemption Date, as the
case may be, then the Trustee shall acknowledge satisfaction and discharge of
this Indenture on demand of the Company (accompanied by an Officers’
Certificate and an Opinion of Counsel stating that all conditions precedent
specified herein relating to the satisfaction and discharge of this Indenture
have been complied with) and at the cost and expense of the Company.


 


(b)                                 Subject to Sections
8.1(c) and 8.2, the Company at any time may terminate (i) all its
obligations under the Securities and this Indenture (“legal defeasance option”),
and after giving effect to such legal defeasance, any omission to comply with
such obligations shall no longer constitute a Default or Event of Default or
(ii) its obligations under Sections 3.2 (other than paragraph (4)
thereof), 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.21,
3.22 and clause (3) of 4.1 and the Company may omit to comply with and
shall have no liability in respect


 


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of any term, condition or limitation set forth in any such covenant or
clause, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or clause or by reason of any reference in any such
covenant or clause to any other provision herein or in any other document and
such omission to comply with such covenants shall no longer constitute a
Default or an Event of Default under Sections 6.1(3) and 6.1(4) and the
operation of Sections 6.1(6), 6.1(7) (but only with respect to a
Significant Subsidiary or group of Restricted Subsidiaries that would
constitute a Significant Subsidiary), 6.1(8), 6.1(9) and 6.1(10), and
the events specified in such Sections shall no longer constitute an Event of
Default (clause (ii) being referred to as the “covenant defeasance option”),
but except as specified above, the remainder of this Indenture and the
Securities shall be unaffected thereby. The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.


 


If the Company exercises its legal defeasance option,
payment of the Securities may not be accelerated because of an Event of
Default.  If the Company exercises its
covenant defeasance option, payment of the Securities may not be accelerated
because of an Event of Default specified in Section 6.1(4) (as such Section
relates to Sections 3.2 (other than paragraph (4) thereof), 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.21 and 3.22), 6.1(5),
6.1(6), 6.1(7) (but only with respect to a Significant Subsidiary or group
of Restricted Subsidiaries that would constitute a Significant Subsidiary), 6.1(8),  6.1(9) or 6.1(10) or because of the
failure of the Company to comply with clause (3) of Section 4.1.


 


Upon satisfaction of the conditions set forth herein
and upon request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.


 


If the Company exercises either its legal or covenant
defeasance option, the Subsidiary Guarantees in effect at such time will
terminate.


 


(c)                                  Notwithstanding the
provisions of Sections 8.1(a) and(b), the Company’s obligations in Sections
2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 3.1, 3.2(4), 3.14, 3.15, 3.16, 3.17,
3.18, 3.19, 3.20, 6.7, 7.7, 7.8 and in this Article 8 shall survive until
the Securities have been paid in full. Thereafter, the Company’s obligations in
Sections 7.7, 8.4 and 8.5 shall survive.


 


Section 8.2                                      Conditions
to Defeasance.  The Company may
exercise its legal defeasance option or its covenant defeasance option only if:


 


(1)                                  the
Company irrevocably deposits in trust with the Trustee for the benefit of the
Holders money in U.S. dollars or U.S. Government Securities or a combination
thereof for the payment of principal, premium, if any, and interest on the
Securities to maturity or redemption, as the case may be;


 


(2)                                  the
Company delivers to the Trustee a certificate from a nationally recognized firm
of independent accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on the deposited U.S.
Government Securities plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the Securities to
maturity;


 


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(3)                                  no
Default or Event of Default shall have occurred and be continuing on the date
of such deposit or, with respect to certain bankruptcy or insolvency Events of
Default, on the 91st day after such date of deposit;


 


(4)                                  such
legal defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;


 


(5)                                  the
Company shall have delivered to the Trustee an Opinion of Counsel (subject to
customary assumptions and exclusions) to the effect that (A) the Securities and
(B) assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and that no Holder of the
Securities is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
right generally;


 


(6)                                  the
Company delivers to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) to the effect that the trust resulting from the
deposit does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;


 


(7)                                  in
the case of the legal defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel (subject to customary assumptions and
exclusions) in the United States stating that (i) the Company has received
from, or there has been published by, the Internal Revenue Service a ruling, or
(ii) since the date of this Indenture there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Securityholders will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
legal defeasance had not occurred;


 


(8)                                  in
the case of the covenant defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel (subject to customary assumptions and
exclusions) in the United States to the effect that the Securityholders will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit and covenant defeasance and will be subject to federal income
tax on the same amount, in the same manner and at the same times as would have
been the case if such deposit and covenant defeasance had not occurred; and


 


(9)                                  the
Company delivers to the Trustee an Officers’ Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and
discharge of the Securities and this Indenture as contemplated by this Article
VIII have been complied with.


 


Section 8.3                                      Application
of Trust Money.  The Trustee shall hold in trust money or
U.S. Government Securities deposited with it pursuant to this Article VIII. It
shall apply the deposited money and the money from U.S. Government Securities
through the Paying Agent and in accordance with this Indenture to the payment
of principal of and interest on the Securities.


 


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Section 8.4                                      Repayment
to Company.  The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any excess money, U.S. Government
Securities or securities held by them upon payment of all the obligations under
this Indenture.


 


Subject to any applicable abandoned property law, the
Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal of or premium or interest on the
Securities that remains unclaimed for two years, and, thereafter,
Securityholders entitled to the money must look to the Company for payment as
general creditors.


 


Section 8.5                                      Indemnity
for U.S. Government Securities.  The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Securities or the
principal and interest received on such U.S. Government Securities.


 


Section 8.6                                      Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Securities in accordance with this Article
VIII by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the obligations of the Company under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Securities in accordance with this Article VIII; provided, however,
that, if the Company has made any payment on any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or
U.S. Government Securities held by the Trustee or Paying Agent.


 


ARTICLE
IX

Amendments


 


Section 9.1                                      Without
Consent of Holders.  The Company,
the Subsidiary Guarantors and the Trustee may amend this Indenture or the
Securities without notice to or consent of any Securityholder:


 


(1)                                  to
cure any ambiguity, omission, defect or inconsistency;


 


(2)                                  to
comply with Article IV in respect of the assumption by a Successor Company of
an obligation of the Company under this Indenture;


 


(3)                                  to
provide for uncertificated Securities in addition to or in place of
certificated Securities (provided that the uncertificated Securities are issued
in registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Securities are described in Section 163(f) (2) (B)
of the Code);


 


(4)                                  to
add additional Subsidiary Guarantors or confirm and evidence the release of a
Subsidiary Guarantee in accordance with this Indenture; provided, however,
that the designation is in accord with the applicable provisions of this
Indenture;


 


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(5)                                  to
secure the Securities or the Subsidiary Guarantees;


 


(6)                                  to
add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company;


 


(7)                                  to
make any change that does not adversely affect the rights of any
Securityholder;


 


(8)                                  to
comply with any requirement of the SEC in connection with qualifying, or
maintaining the qualification of this Indenture under the Trust Indenture Act;
or


 


(9)                                  provide
for a successor Trustee under this Indenture.


 


After an amendment under this Section becomes effective,
the Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section.


 


Section 9.2                                      With
Consent of Holders.  The Company,
the Subsidiary Guarantors and the Trustee may amend this Indenture or the
Securities without notice to any Securityholder but with the written consent of
the Holders of at least a majority in principal amount of the Securities then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Securities).
However, without the consent of each Securityholder affected, an amendment may
not:


 


(1)                                  reduce
the principal amount of Securities whose Holders must consent to an amendment;


 


(2)                                  reduce
the stated rate of or extend the stated time for payment of interest on any
Security;


 


(3)                                  reduce
the principal of or extend the Stated Maturity of any Security;


 


(4)                                  reduce
the premium payable upon the redemption or repurchase of any Security or change
the time at which any Security may be redeemed or repurchased as described
under Article V, Section 3.9, Section 3.7 or any similar provision,
whether through an amendment or waiver of provisions in the covenants,
definitions or otherwise;


 


(5)                                  make
any Security payable in currency other than that stated in the Security;


 


(6)                                  impair
the right of any Holder to receive payment of, premium, if any, principal of
and interest on such Holder’s Securities on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with respect to such
Holder’s Securities;


 


(7)                                  modify
the Subsidiary Guarantees in any manner adverse to the Holders of the
Securities; or


 


(8)                                  make
any change in this Section 9.2 or in Section 6.4.


 


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It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent approves the substance
thereof. A consent to any amendment or waiver under this Indenture by any
Holder of the Securities given in connection with a tender of such Holder’s
Securities will not be rendered invalid by such tender.


 


After an amendment under this Section becomes
effective, the Company shall mail to Securityholders a notice briefly
describing such amendment. The failure to give such notice to all
Securityholders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section.


 


Section 9.3                                      Compliance
with Trust Indenture Act.  Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.


 


Section 9.4                                      Revocation
and Effect of Consents and Waivers.  A consent to
an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder’s Security, even if notation
of the consent or waiver is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent or waiver as to such Holder’s
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.1 or 9.2 as
applicable.


 


The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Securityholders entitled to give
their consent or take any other action described above or required or permitted
to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall
become valid or effective more than 120 days after such record date.


 


Section 9.5                                      Notation
on or Exchange of Securities.  If an
amendment changes the terms of a Security, the Trustee may require the Holder
of the Security to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security regarding the changed terms and return it
to the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make
the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.


 


Section 9.6                                      Trustee
To Sign Amendments.  The Trustee
shall sign any amendment authorized pursuant to this Article IX if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Sections 7.1
and 7.2) shall be fully protected in


 


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relying upon an Officers’
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.


 


ARTICLE
X

Subsidiary
Guarantees


 


Section 10.1                                Subsidiary
Guarantees.  Each Subsidiary Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely
as surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and the Trustee the full and punctual payment when
due, whether at Stated Maturity, by acceleration, by redemption or otherwise,
of the principal of, premium, if any, and interest on the Securities and all
other monetary obligations of the Company under this Indenture (all the
foregoing being hereinafter collectively called the “Obligations”). Each
Subsidiary Guarantor further agrees (to the extent permitted by law) that the
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from it, and that it will remain bound under this Article X
notwithstanding any extension or renewal of any Obligation.


 


Each Subsidiary Guarantor waives presentation to,
demand of payment from and protest to the Company of any of the Obligations and
also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Obligations. The obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Holder to assert any claim or demand or to enforce any right or remedy
against the Company or any other person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations
or any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor; or (f) any change in the ownership of
the Company.


 


Each Subsidiary Guarantor further agrees that its
Subsidiary Guarantee herein constitutes a Guarantee of payment when due (and
not a Guarantee of collection) and waives any right to require that any resort
be had by any Holder to any security held for payment of the Obligations.


 


Except as expressly set forth in Sections 8.1(b)
and 10.2, the obligations of each Subsidiary Guarantor hereunder shall not
be subject to any reduction, limitation, impairment or termination for any
reason (other than payment of the Obligations in full), including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Obligations
or otherwise. Without limiting the generality of the foregoing, the obligations
of each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand
or to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of any
Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.


 


88

















 


Each Subsidiary Guarantor further agrees that its
Subsidiary Guarantee herein shall continue to be effective or be reinstated, as
the case may be, if at any time payment, or any part thereof, of principal of
or interest on any of the Obligations is rescinded or must otherwise be
restored by any Holder upon the bankruptcy or reorganization of the Company or
otherwise.


 


In furtherance of the foregoing and not in limitation
of any other right which any Holder has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay any
of the Obligations when and as the same shall become due, whether at maturity,
by acceleration, by redemption or otherwise, each Subsidiary Guarantor hereby
promises to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of
(i) the unpaid amount of such Obligations then due and owing and (ii) accrued
and unpaid interest on such Obligations then due and owing (but only to the
extent not prohibited by law).


 


Each Subsidiary Guarantor further agrees that, as
between such Subsidiary Guarantor, on the one hand, and the Holders, on the
other hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in this Indenture for the purposes of its Subsidiary
Guarantee herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby
and (y) in the event of any such declaration of acceleration of such
Obligations, such Obligations (whether or not due and payable) shall forthwith
become due and payable by the Subsidiary Guarantor for the purposes of this
Subsidiary Guarantee.


 


Each Subsidiary Guarantor also agrees to pay any and
all reasonable costs and expenses (including reasonable attorneys’ fees)
incurred by the Trustee or the Holders in enforcing any rights under this
Section.


 


Section 10.2                                Limitation
on Liability; Termination, Release and Discharge.


 


(a)                                  The
obligations of each Subsidiary Guarantor hereunder will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor (including, without limitation, any
guarantees under the Credit Facilities) and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to its contribution obligations
under this Indenture, result in the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law.


 


(b)                                 Each
Subsidiary Guarantor may consolidate with or merge into or sell its assets to
the Company or another Subsidiary Guarantor without limitation. Subject to
Article III and Article IV, each Subsidiary Guarantor may consolidate with or
merge into or sell all or substantially all its assets to a corporation,
partnership or trust other than the Company or another Subsidiary Guarantor
(whether or not affiliated with the Subsidiary Guarantor), except that if the
surviving Person of any such merger or consolidation is a Subsidiary of the
Company but not a Subsidiary Guarantor, such merger, consolidation or sale
shall not be permitted unless (i) the Person formed by or surviving any such
consolidation or merger assumes all the obligations of such Subsidiary
Guarantor pursuant to a supplemental indenture in form and substance


 


89

















 


reasonably satisfactory to the Trustee in
respect of the Securities, this Indenture and the Subsidiary Guarantee; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists; and (iii) the Company delivers to the Trustee an Officers’
Certificate and an Opinion of Counsel addressed to the Trustee with respect to
the foregoing matters. Upon the sale or disposition of a Subsidiary Guarantor
(by merger, consolidation, the sale of its Capital Stock or the sale of all or
substantially all of its assets (other than by a vessel charter made in the
ordinary course of business)) and whether or not the Subsidiary Guarantor is
the surviving Person in such transaction to a Person (whether or not an
Affiliate of the Subsidiary Guarantor) which is not the Company or a Restricted
Subsidiary of the Company, which sale or disposition is otherwise in compliance
with this Indenture (including, without limitation, Sections 3.4, 3.7 and
3.10), such Subsidiary Guarantor will be deemed released from all its
obligations under this Indenture and its Subsidiary Guarantee and such
Subsidiary Guarantee will terminate; provided, however, that any such
termination will occur only to the extent that all obligations of such
Subsidiary Guarantor under the Credit Facilities, related documentation and any
other agreements relating to any other Indebtedness of the Company or its
Restricted Subsidiaries will also terminate upon such release, sale or
transfer.


 


(c)                                  A
Subsidiary Guarantor will be deemed released and relieved of its obligations
under this Indenture and its Subsidiary Guarantee without any further action
required on the part of the Company or such Subsidiary Guarantor upon (i) the
designation of such Subsidiary Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture or (ii) if the Company exercises
either its legal or covenant defeasance option in accordance with Article VIII.


 


Section 10.3                                Right
of Contribution.  Each Subsidiary Guarantor hereby agrees that
to the extent that any Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made on the obligations under the Subsidiary
Guarantees, such Subsidiary Guarantor shall be entitled to seek and receive
contribution from and against the Company or any other Subsidiary Guarantor who
has not paid its proportionate share of such payment, so long as the exercise
of such right does not impair the rights of Holders under the Subsidiary
Guarantees.  The provisions of this Section
10.3 shall in no respect limit the obligations and liabilities of each
Subsidiary Guarantor to the Trustee and the Holders and each Subsidiary
Guarantor shall remain liable to the Trustee and the Holders for the full
amount guaranteed by such Subsidiary Guarantor hereunder.


 


Section 10.4                                No
Subrogation.  Notwithstanding any payment or payments made
by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be
entitled to be subrogated to any of the rights of the Trustee or any Holder
against the Company or any other Subsidiary Guarantor or any collateral
security or guarantee or right of offset held by the Trustee or any Holder for
the payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any
other Subsidiary Guarantor in respect of payments made by such Subsidiary
Guarantor hereunder, until all amounts owing to the Trustee and the Holders by
the Company on account of the Obligations are paid in full. If any amount shall
be paid to any Subsidiary Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Subsidiary Guarantor in trust for the Trustee and
the Holders, segregated from other funds of such Subsidiary Guarantor, and
shall, forthwith upon receipt by such Subsidiary Guarantor, be


 


90

















 


turned over to the Trustee in
the exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Obligations.


 


ARTICLE
XI

Miscellaneous


 


Section 11.1                                Trust
Indenture Act Controls.  If any
provision of this Indenture limits, qualifies or conflicts with another
provision which is required to be included in an indenture qualified under the
TIA, the provision required by the TIA shall control. Each Subsidiary Guarantor
in addition to performing its obligations under its Subsidiary Guarantee shall
perform such other obligations as may be imposed upon it with respect to this
Indenture under the TIA.


 


Section 11.2                                Notices.  Any notice or communication shall be in
writing in the English language and delivered in person or mailed by
first-class mail addressed as follows:


 


if to the Company:


 


Ship Finance International Limited


Par-la-Ville Place, 14 Par-la-Ville Road,


Hamilton, HM 08, Bermuda


Attention:  Chief Financial
Officer


 


with a copy to:


 


Seward & Kissel LLP


One Battery Park Plaza


New York, New York 10004


Attention:  Gary J. Wolfe


Robert E.
Lustrin; or


 


if to the Trustee:


 


Wilmington Trust Company


Rodney Square North


1100 North Market Street


Wilmington, Delaware 19890-0001


Attention: Corporate Trust Administration


 


The Company, any
Subsidiary or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.


 


Any notice or communication mailed to a registered
Securityholder shall be mailed to the Securityholder at the Securityholder’s
address as it appears on the registration books of the Registrar and shall be
sufficiently given if so mailed within the time prescribed.


 


91

















 


Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.


 


Section 11.3                                Communication
by Holders with other Holders. 
Securityholders may communicate pursuant to TIA § 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA § 312(c).


 


Section 11.4                                Certificate
and Opinion as to Conditions Precedent.  Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:


 


(1)                                  an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with; and


 


(2)                                  an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent
have been complied with.


 


Section 11.5                                Statements
Required in Certificate or Opinion.  Each certificate
or opinion with respect to compliance with a covenant or condition provided for
in this Indenture shall include:


 


(1)                                  a
statement that the individual making such certificate or opinion has read such
covenant or condition;


 


(2)                                  a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;


 


(3)                                  a
statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with; and


 


(4)                                  a
statement as to whether or not, in the opinion of such individual, such
covenant or condition has been complied with.


 


In giving such Opinion of Counsel, counsel may rely as
to factual matters on an Officers’ Certificate or on certificates of public
officials.


 


Section 11.6                                When
Securities Disregarded.  In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Affiliate of the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.


 


92

















 


Section 11.7                                Rules
by Trustee, Paying Agent and Registrar.  The Trustee
may make reasonable rules for action by, or a meeting of, Securityholders. The
Registrar and the Paying Agent may make reasonable rules for their functions.


 


Section 11.8                                Legal
Holidays.  A “Legal Holiday” is a Saturday, a Sunday or
other day on which commercial banking institutions are authorized or required
to be closed in New York City, New York, Wilmington, Delaware or Oslo, Norway.
If a payment date is a Legal Holiday, payment shall be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period. If a regular record date is a Legal Holiday, the record
date shall not be affected.


 


Section 11.9                                GOVERNING
LAW.  THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.


 


Section 11.10                          No Recourse Against Others.  An incorporator, director, officer, employee,
partner, member, manager, stockholder or controlling person, as such, of the
Company or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities, this Indenture or the
Subsidiary Guarantees or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.


 


Section 11.11                          Successors. 
All agreements of the Company in this Indenture and the
Securities shall bind its respective successors. All agreements of the Trustee
in this Indenture shall bind its successors.


 


Section 11.12                          Multiple Originals.  The parties may sign any number of copies of
this Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to prove this
Indenture.


 


Section 11.13                          Qualification of Indenture.  The Company shall qualify this Indenture
under the TIA in accordance with the terms and conditions of the Registration
Rights Agreement and shall pay all reasonable costs and expenses (including
attorneys’ fees and expenses for the Company, the Trustee and the Holders)
incurred in connection therewith, including, but not limited to, costs and
expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive
from the Company any such Officers’ Certificates or other documentation as it
may reasonably request in connection with any such qualification of this
Indenture under the TIA.


 


Section 11.14                          Table of Contents; Headings.  The table of contents, cross-reference sheet
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not intended to be considered a part
hereof and shall not modify or restrict any of the terms or provisions hereof.


 


Section 11.15                          Submission to Jurisdiction;
Service of Process.  The Company and each Subsidiary Guarantor hereby
irrevocably submit to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any competent New


 


93

















 


York State Court sitting in the
Borough of Manhattan in New York City for purposes of all legal proceedings
arising out of or relating to this Indenture, the Securities or the Subsidiary
Guarantees, or the transactions contemplated hereby or thereby.  The Company and each Subsidiary Guarantor
irrevocably waive, to the fullest extent permitted by law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.  Each of the Company and each Subsidiary Guarantor hereby
irrevocably designates and appoints Seward & Kissel, LLP (“SK”)
as such Person’s authorized agent to receive and forward on its behalf service
of any and all process which may be served in any such suit, action or
proceeding in any such court and agrees that service of process in accordance
with applicable law upon SK (or any successor) at its office at One Battery
Park Plaza, New York, New York 10004 (or such other address in the Borough of
Manhattan, the City of New York, as the Company may designate by written notice
to the other parties hereto) and written notice of such service to the Company,
mailed or delivered to the Seward & Kissel, One Battery Park Plaza, New
York, New York 10004, shall be deemed in every respect effective service of
process upon the Company and, if applicable, such Subsidiary Guarantor in any
such suit, action or proceeding and shall be taken and held to be valid
personal service upon the Company.  Such
designation and appointment shall be irrevocable.  Nothing in this Section 11.15 shall affect the right of
any party hereto to service process in any manner permitted by law or limit the
right of any party hereto to bring proceeding against the Company or any
Subsidiary Guarantor in the courts of any jurisdiction or jurisdictions.  The Company and each Subsidiary Guarantor
further agree to take any and all action, including the execution and filing of
any and all such documents and instruments, as may be necessary to continue
such designation and appointment of SK in full force and effect so long as this
Indenture or any of the Securities shall be outstanding; provided that the
Company may and shall (to the extent SK ceases to be able to be served on the
basis contemplated herein), by written notice to the Trustee, designate such
additional or alternative agent for service of process under this Section
11.15 that (a) maintains an office located in the Borough of Manhattan, The
City of New York in the State of New York, (b) is either (i) counsel for the
Company or (ii) a corporate service company which acts as agent for service of
process for other Persons in the ordinary course of its business and (c) agrees
to act as agent for service of process in accordance with this Section 11.15.  Such notice shall identify the name of such
agent for process and the address of such agent for process in the Borough of
Manhattan, The City of New York, State of New York.  Upon the request of any Holder, the Trustee shall deliver such
information to such Holder.  To the
extent that the Company or any Subsidiary Guarantor has or hereafter may
acquire any immunity from jurisdiction or any court or from any legal process
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution, execution or otherwise) with respect to itself or its
property, the Company and each Subsidiary Guarantor hereby irrevocably waive
such immunity in respect of its obligations under this Indenture, the
Securities and the Subsidiary Guarantees, as applicable, to the extent
permitted by law.


 


Section 11.16                          Indemnification for Foreign
Currency Judgments.  The obligations of the Company or any Subsidiary
Guarantor to any Holder of Securities or the Trustee shall, notwithstanding any
judgment in a currency (the “Judgment Currency”) other than United
States dollars (the “Agreement Currency”), be discharged only
to the extent that on the first Business Day following receipt by such Holder
of Securities or the Trustee, as the case may be, of any amount in the Judgment
Currency, such Holder of Securities or the Trustee may in accordance


 


94

















 


with normal banking procedures
purchase the Agreement Currency with the Judgment Currency in New York, New
York.  If the amount of the Agreement
Currency that could be so purchased is less than the amount originally to be
paid to such Holder of Securities or the Trustee, as the case may be, in the
Agreement Currency, the Company and each Subsidiary Guarantor agrees, as a
separate obligation and notwithstanding such judgment, to pay to such Holder of
Securities or the Trustee, as the case may be, the difference, and if the amount
of the Agreement Currency that could be so purchased exceeds the amount
originally to be paid to such Holder of Securities or the Trustee, as the case
may be, such Holder of Securities or the Trustee, as the case may be, agrees to
pay to or for the account of the Company such excess, provided that such Holder
of Securities or the Trustee, as the case may be, shall not have any obligation
to pay any such excess as long as a default by the Company or any Subsidiary
Guarantor in its obligations in respect of its obligations to pay when due any
principal of, or interest, premium, if any, liquidated damages, if any, or
Additional Amounts, if any, on the Securities, or any other amounts due under
this Indenture or the Subsidiary Guarantees has occurred and is continuing, in
which case such excess may be applied by such Holder of Securities or the
Trustee, as the case may be, to such payment obligations.


 


(2)                                  The
provisions of this Section 11.16 shall apply irrespective of any
indulgence granted to the Company or any Subsidiary Guarantor from time to time
and shall continue in full force and effect notwithstanding any payment by or
on behalf of the Company or any Subsidiary Guarantor, and any amount due from
the Company under this Section 11.16 will be due as a separate payment
and shall not be affected by any judgment obtained or claims made for any other
sums due under or in respect of this Indenture.


 


Section 11.17                          Severability.  In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.


 


95

















 


IN WITNESS WHEREOF, the
parties have caused this Indenture to be duly executed as of the date first
written above.


 


	
   

  	
  Very truly yours,

  	 

	
   

  	
   

  	 

	
   

  	
  SHIP FINANCE INTERNATIONAL LIMITED

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ Kate Blankenship

  	 

	
   

  	
  Name:

  	
  Kate Blankenship

  	 

	
   

  	
  Title:

  	
  Director, Secretary and Attorney-In-Fact

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  WILMINGTON TRUST COMPANY

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ James J. McGintey

  	 

	
   

  	
    Name:

  	
  James J.
  McGintey

  	 

	
   

  	
    Title:

  	
  Authorized
  Signer

  
								



 

















 


SCHEDULE I


 


AGREEMENTS


 


The Material Agreements (as defined in this
Indenture), the Fleet Purchase Agreement (as defined in this Indenture) and
each of the agreements contemplated in accordance with the Fleet Purchase
Agreement are excluded from the provisions of Section 3.8(a) to the extent set
forth in Section 3.8(b).


 

















 


EXHIBIT A


 


[FORM OF FACE
OF UNREGISTERED NOTE]


 


THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.


 


THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT),
(B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
ACT, OR (C) IT IS AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT, AND (2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF
THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
“QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PURCHASERS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR
(F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRUSTEE’S,
OR TRANSFER AGENT’S, AS APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D), (E), OR (F) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER AGENT.


 


BY ITS ACQUISITION OF THIS SECURITY THE HOLDER THEREOF WILL BE DEEMED
TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) NO PORTION OF THE ASSETS
USED BY SUCH HOLDER TO ACQUIRE AND HOLD THIS SECURITY CONSTITUTES THE ASSETS OF
AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF PLANS, INDIVIDUAL
RETIREMENT ACCOUNTS OR OTHER ARRANGEMENTS THAT ARE SUBJECT TO SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR PROVISIONS UNDER
ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE
SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, “SIMILAR LAWS”),
OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS”
OF SUCH PLANS, ACCOUNTS OR ARRANGEMENTS, OR (II) THE PURCHASE AND HOLDING
OF THIS SECURITY WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER
ANY APPLICABLE SIMILAR LAWS.


 


A-1

















 


[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK,
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THIS
INDENTURE REFERRED TO ON THE REVERSE HEREOF.]


 


	
  No. [   ]

  	
  Principal Amount U.S. $[      ]

  
	
   

  	
   

  
	
   

  	
  CUSIP NO.

  



 


SHIP FINANCE
INTERNATIONAL LIMITED


 


81⁄2% Senior
Note due 2013


 


Ship Finance International Limited, a Bermuda exempted
company, promises to pay to [        ],
or registered assigns, the principal sum of
[                             ]
U.S. Dollars, on             ,
2013.


 


Interest Payment Dates: June 15 and December 15


 


Record Dates: June 1 and December 1 preceding each
interest payment date


 


Additional provisions of this Security are set forth
on the other side of this Security.


 


	
   

  	
  SHIP FINANCE INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  



 


 


	
  TRUSTEE’S CERTIFICATE OF AUTHENTICATION

  	
   

  
	
   

  	
   

  
	
  WILMINGTON TRUST COMPANY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  
						



 


[FORM OF
REVERSE SIDE OF UNREGISTERED NOTE]


 


A-2

















 


81⁄2% Senior
Notes due 2013


 


(1)                                  Interest


 


Ship Finance International Limited, an exempted
Bermuda company (such company, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above, plus any Additional Interest specified in the Registration Rights
Agreement or Additional Amounts described in the Indenture.


 


The Company will pay interest semiannually on June 15
and December 15 of each year commencing June 15, 2004. Interest on the
Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from December 18,
2003. The Company shall pay interest on overdue principal or premium, if any (plus
interest on such interest to the extent lawful), at the rate borne by the
Securities to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.


 


(2)                                  Method
of Payment


 


By no later than 10:00 a.m. (New York City time) on
the date on which any principal of or premium or interest on any Security is
due and payable, the Company shall irrevocably deposit with the Trustee or the
Paying Agent money sufficient to pay such principal, premium, if any, and/or
interest. The Company will pay interest (except Defaulted Interest) to the
Persons who are registered Holders of Securities at the close of business on
the June 1 or December 1 next preceding the interest payment date even if
Securities are cancelled, repurchased or redeemed after the record date and on
or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by the transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will
make all payments in respect of a Definitive Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on the
Securities may also be made, in the case of a Holder of a least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 15 days immediately
preceding the relevant due date for payment (or such other date as the Trustee
may accept in its discretion).


 


(3)                                  Paying
Agent and Registrar


 


Initially, Wilmington Trust Company (the “Trustee”),
will act as Trustee, Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its Restricted Subsidiaries may act as
Paying Agent, Registrar or co-registrar.


 


A-3

















 


(4)                                  Indenture


 


The Company issued the Securities under an Indenture
dated as of December 18, 2003 (as it may be amended or supplemented from time
to time in accordance with the terms thereof, the “Indenture”), between the
Company and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of
the Indenture (the “Act”). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the
Act for a statement of those terms.


 


The aggregate principal amount of Securities that may
be authenticated and delivered under the Indenture is unlimited. This Security
is one of the 81⁄2% Senior Notes due 2013 referred to in the Indenture. The
Securities include (i) $580,000,000 aggregate principal amount of the Company’s
81⁄2% Senior Notes due 2013 issued under the Indenture on December 18, 2003
(herein called “Initial Securities”), (ii) if and when issued, additional 81⁄2%
Senior Notes due 2013 of the Company that may be issued from time to time under
the Indenture subsequent to December 18, 2003 (herein called “Additional
Securities”) and (iii) if and when issued, the Company’s 81⁄2% Senior Notes due
2013 that may be issued from time to time under the Indenture in exchange for
Initial Securities or Additional Securities in an offer registered under the
Securities Act as provided in the applicable Registration Rights Agreement. The
Initial Securities, Additional Securities and Exchange Securities are treated
as a single class of securities under the Indenture.


 


To guarantee the due and punctual payment of the
principal, premium, if any, and interest on the Securities and all other
amounts payable by the Company under the Indenture and the Securities when and
as the same shall be due and payable, whether at Stated Maturity, by
acceleration or otherwise, according to the terms of the Securities and the
Indenture, the Subsidiary Guarantors unconditionally guarantee, jointly and
severally, such obligations on a senior basis pursuant to the terms of the
Indenture.


 


(5)                                  Optional
and Mandatory Redemption


 


The Securities are subject to both optional and
mandatory redemption, either as a whole or in some cases in part, at the times,
under the circumstances and at the redemption prices described in Article Five
of the Indenture.


 


(6)                                  Repurchase
Provisions


 


(a)                                  Upon
a Change of Control any Holder of Securities will have the right to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) as provided in, and subject to the terms
of, the Indenture.


 


(b)                                 In
the event of an Asset Disposition that requires the purchase of Securities
pursuant to Section 3.7(b) of the Indenture, the Company will be
required to apply such Excess


 


A-4

















 


Proceeds to the repayment
of the Securities and any Pari Passu Notes in accordance with the procedures
set forth in Section 3.7 of the Indenture.


 


(7)                                  Denominations;
Transfer; Exchange


 


The Securities are in registered form without coupons
in denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture.


 


(8)                                  Persons
Deemed Owners


 


The registered Holder of this Security may be treated
as the owner of it for all purposes.


 


(9)                                  Amendment,
Waiver


 


The Indenture or the Securities may be amended, and certain
defaults may be waived, each as provided in the Indenture.


 


(10)                            Trustee
Dealings with the Company


 


Subject to certain limitations set forth in the
Indenture, the Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.


 


(11)                            No
Recourse Against Others


 


An incorporator, director, officer, employee, partner,
member, manager, stockholder or controlling person, as such, of each of the
Company, or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities, the Indenture or any
Subsidiary Guarantees or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.


 


(12)                            Authentication


 


This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent acting on its behalf)
manually signs the certificate of authentication on the other side of this
Security.


 


(13)                            Abbreviations


 


Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entirety), JT TEN


 


A-5

















 


(= joint tenants with
rights of survivorship and not as tenants in common), CUST (= custodian) and
U/G/M/A (= Uniform Gift to Minors Act).


 


(14)                            CUSIP
and ISIN Numbers


 


Pursuant to a recommendation promulgated by the Committee
on Uniform Security Identification Procedures, the Company has caused CUSIP and
ISIN numbers to be printed on the Securities and has directed the Trustee to
use CUSIP and ISIN numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any notice of redemption
and reliance may be placed only on the other identification numbers placed
thereon.


 


(15)                            Governing
Law


 


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


 


(16)                            Additional
Information


 


The Company will furnish to any Securityholder upon
written request and without charge to the Securityholder a copy of the
Indenture.  Requests may be made to:


 


Ship Finance International Limited


Par-la-Ville Place, 14 Par-la-Ville Road,


Hamilton, HM 08, Bermuda


Attention: Chief Financial Officer


 


A-6

















 


ASSIGNMENT
FORM


 


	
   

  	
  To assign this Security,
  fill in the form below:

  
	
   

  	
   

  
	
   

  	
  I or we assign and
  transfer this Security to

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip code)

  
	
   

  
	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. No.)

  
	
   

  
	
  and irrevocably
  appoint                                       agent
  to transfer this Security on the books of the Company. The agent may
  substitute another to act for him.

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
  (Signature must be guaranteed)

  
	
   

  
	
   

  	
   

  
	
  Sign exactly as your name appears on the other side of this Security.

  
									



 


The signature(s) should
be guaranteed by an eligible guarantor institution (banks, stockbrokers,
savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


 


In connection with any transfer or exchange of any of
the Securities evidenced by this certificate occurring prior to the date that
is two years after the later of the date of original issuance of such
Securities and the last date, if any, on which such Securities were owned by
the Company or any Affiliate of the Company, the undersigned confirms that such
Securities are being:


 


CHECK ONE BOX BELOW:


 


1 ý                           acquired
for the undersigned’s own account, without transfer; or


 


2 ý                           transferred
to the Company; or


 


3 ý                           transferred
pursuant to and in compliance with Rule 144A under the Securities Act of 1933,
as amended (the “Securities Act”); or


 


4 ý                           transferred
pursuant to an effective registration statement under the Securities Act; or


 


A-7

















 


5 ý                           transferred
pursuant to and in compliance with Regulation S under the Securities Act; or


 


6 ý                           transferred
to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act), that has furnished to the Trustee a
signed letter containing certain representations and agreements (the form of
which letter appears as Section 2.7 of the Indenture); or


 


7 ý                           transferred
pursuant to another available exemption from the registration requirements of
the Securities Act of 1933.


 


Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering
any such transfer of the Securities, in their sole discretion, such legal
opinions, certifications and other information as the Trustee or the Company
may reasonably request to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.


 


 


	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature
  must be guaranteed)

  	
   

  
	
   

  	
  Signature

  
			



 


The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.


 


TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.


 


The undersigned represents and warrants that it is
purchasing this Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such account
is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.


 


	
   

  	
   

  
	
  Dated:

  



 


A-8

















 


[TO BE
ATTACHED TO GLOBAL SECURITIES]


 


SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY


 


The following increases or decreases in this Global
Security have been made:


 


	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Amount of

  increase in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Principal

  Amount of

  this Global

  Security

  following such

  decrease or

  increase

  	
   

  	
  Signature
  of

  authorized

  signatory of

  Trustee or

  Securities

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-9

















 


OPTION OF
HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Security purchased
by the Company pursuant to Section 3.7 or 3.9 of the Indenture, check
either box:


 


	
  ý 

  	
   

  	
  ý

  
	
  3.7

  	
   

  	
  3.9

  



 


If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 3.7 or 3.9 of the
Indenture, state the amount in principal amount (must be integral multiple of
$1,000): $


 


	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the other side of the Security)

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature must be guaranteed)

  
								



 


The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program),
pursuant to S.E.C. Rule 17Ad-15.


 


A-10

















 


EXHIBIT B


 


[FORM OF FACE
OF REGISTERED NOTE]


 


[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK,
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED
TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THIS
INDENTURE REFERRED TO ON THE REVERSE HEREOF.]


 


	
  No.  [   ]

  	
  Principal Amount  U.S.
  $[      ]

  
	
   

  	
   

  
	
   

  	
  CUSIP NO.

  



 


SHIP FINANCE
INTERNATIONAL LIMITED


 


81⁄2% Senior
Note due 2013


 


Ship Finance International Limited, an exempted
Bermuda company, promises to pay to
[        ], or registered assigns, the
principal sum of
[           ] Dollars,
on           , 2013.


 


Interest Payment Dates: June 15 and December 15


 


Record Dates: June 1 and December 1 preceding each
interest payment date


 


Additional provisions of this Security are set forth
on the other side of this Security.


 


B-1

















 


	
   

  	
  SHIP FINANCE INTERNATIONAL

  LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  



 


TRUSTEE’S CERTIFICATE OF

AUTHENTICATION


 


WILMINGTON TRUST COMPANY


as Trustee, certifies


that this is one of


the Securities referred


to in the Indenture.


 


	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
  Date:

  	
   

  
						



 


B-2

















 


[FORM OF
REVERSE SIDE OF REGISTERED NOTE]


 


81⁄2% Senior
Notes due 2013


 


(1)                                  Interest


 


Ship Finance International Limited, an exempted
Bermuda company (such company, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the “Company”), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above, plus any Additional Interest specified in the Registration Rights
Agreement or Additional Amounts described in the Indenture.


 


The Company will pay interest semiannually on June 15
and December 15 of each year commencing June 15, 2004. Interest on the
Securities will accrue from the most recent date to which interest has been
paid on the Securities or, if no interest has been paid, from December 18,
2003. The Company shall pay interest on overdue principal or premium, if any (plus
interest on such interest to the extent lawful), at the rate borne by the
Securities to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.


 


(2)                                  Method
of Payment


 


By no later than 10:00 a.m. (New York City time) on
the date on which any principal of or premium or interest on any Security is
due and payable, the Company shall irrevocably deposit with the Trustee or the
Paying Agent money sufficient to pay such principal, premium, if any, and/or
interest. The Company will pay interest (except Defaulted Interest) to the
Persons who are registered Holders of Securities at the close of business on
the June 1 or December 1 next preceding the interest payment date even if
Securities are cancelled, repurchased or redeemed after the record date and on
or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of
Securities represented by a Global Security (including principal, premium, if
any, and interest) will be made by the transfer of immediately available funds
to the accounts specified by The Depository Trust Company. The Company will
make all payments in respect of a Definitive Security (including principal,
premium, if any, and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on the
Securities may also be made, in the case of a Holder of a least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect designating such account no later than 15 days
immediately preceding the relevant due date for payment (or such other date as
the Trustee may accept in its discretion).


 


(3)                                  Paying
Agent and Registrar


 


Initially, Wilmington Trust Company (the “Trustee”),
will act as Trustee, Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or


 


B-3

















 


co-registrar without
notice to any Securityholder. The Company or any of its Restricted Subsidiaries
may act as Paying Agent, Registrar or co-registrar.


 


(4)                                  Indenture


 


The Company issued the Securities under an Indenture
dated as of December 18, 2003 (as it may be amended or supplemented from time
to time in accordance with the terms thereof, the “Indenture”), between the
Company and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date of
the Indenture (the “Act”). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the
Act for a statement of those terms.


 


The aggregate principal amount of securities that may
be authenticated and delivered under the Indenture is unlimited. This Security
is one of the 81⁄2% Senior Notes due 2013 referred to in the Indenture. The
Securities include (i) $580,000,000 aggregate principal amount of the Company’s
81⁄2% Senior Notes due 2013 issued under the Indenture on December 18, 2003
(herein called “Initial Securities”), (ii) if and when issued, additional 81⁄2%
Senior Notes due 2013 of the Company that may be issued from time to time under
the Indenture subsequent to December 18, 2003 (herein called “Additional
Securities”) and (iii) if and when issued, the Company’s 81⁄2% Senior Notes due
2013 that may be issued from time to time under the Indenture in exchange for
Initial Securities or Additional Securities in an offer registered under the
Securities Act as provided in the applicable Registration Rights Agreement. The
Initial Securities, Additional Securities and Exchange Securities are treated
as a single class of securities under the Indenture.


 


To guarantee the due and punctual payment of the
principal, premium, if any, and interest on the Securities and all other
amounts payable by the Company under the Indenture and the Securities when and
as the same shall be due and payable, whether at Stated Maturity, by
acceleration or otherwise, according to the terms of the Securities and the
Indenture, the Subsidiary Guarantors unconditionally guarantee, jointly and
severally, such obligations on a senior basis pursuant to the terms of the
Indenture.


 


(5)                                  Optional
and Mandatory Redemption


 


The Securities are subject to both optional and
mandatory redemption, either as a whole or in some cases in part, at the times,
under the circumstances and at the redemption prices described in Article Five
of the Indenture.


 


(6)                                  Repurchase
Provisions


 


(a)                                  Upon
a Change of Control any Holder of Securities will have the right to cause the
Company to repurchase all or any part of the Securities of such Holder at a
purchase price in cash equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date) as provided in, and subject to the terms
of, the Indenture.


 


B-4

















 


(b)                                 In
the event of an Asset Disposition that requires the purchase of Securities
pursuant to Section 3.7(b) of the Indenture, the Company will be
required to apply such Excess Proceeds to the repayment of the Securities and
any Pari Passu Notes in accordance with the procedures set forth in Section
3.7 of the Indenture.


 


(7)                                  Denominations;
Transfer; Exchange


 


The Securities are in registered form without coupons
in denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture.


 


(8)                                  Persons
Deemed Owners


 


The registered Holder of this Security may be treated
as the owner of it for all purposes.


 


(9)                                  Amendment,
Waiver


 


The Indenture or the Securities may be amended, and
certain defaults may be waived, each as provided in the Indenture.


 


(10)                            Trustee
Dealings with the Company


 


Subject to certain limitations set forth in the
Indenture, the Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with and collect obligations owed to it by the Company or its Affiliates and
may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.


 


(11)                            No
Recourse Against Others


 


An incorporator, director, officer, employee, partner,
member, manager, stockholder or controlling person, as such, of each of the
Company, or any Subsidiary Guarantor shall not have any liability for any
obligations of the Company under the Securities, the Indenture or any
Subsidiary Guarantees or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.


 


(12)                            Authentication


 


This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent acting on its behalf)
manually signs the certificate of authentication on the other side of this
Security.


 


B-5

















 


(13)                            Abbreviations


 


Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entirety), JT TEN (= joint tenants with rights of
survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (=
Uniform Gift to Minors Act).


 


(14)                            CUSIP
and ISIN Numbers


 


Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures the Company has caused
CUSIP and ISIN numbers to be printed on the Securities and has directed the
Trustee to use CUSIP and ISIN numbers in notices of redemption as a convenience
to Securityholders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.


 


(15)                            Governing
Law


 


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


 


(16)                            Additional
Information


 


The Company will furnish to any Securityholder upon
written request and without charge to the Securityholder a copy of the
Indenture.  Requests may be made to:


 


Ship Finance International Limited


Par-la-Ville Place, 14 Par-la-Ville Road,


Hamilton, HM 08, Bermuda


Attention: Chief Financial Officer


 


B-6

















 


ASSIGNMENT
FORM


 


	
   

  	
  To assign this
  Security, fill in the form below:

  
	
   

  	
   

  
	
   

  	
  I or we assign and
  transfer this Security to

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip code)

  
	
   

  
	
   

  
	
  (Insert assignee’s soc. sec. or tax I.D. No.)

  
	
   

  
	
  and irrevocably
  appoint                                         agent
  to transfer this Security on the books of the Company. The agent may
  substitute another to act for him.

  
	
   

  
	
  Date:

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
  (Signature must be guaranteed)

  
	
   

  
	
   

  	
   

  
									



Sign exactly as your name
appears on the other side of this Security.


 


The signature(s) should be
guaranteed by an eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


 


B-7

















 


[TO BE
ATTACHED TO GLOBAL SECURITIES]


 


SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY


 


The following increases or decreases in this Global
Security have been made:


 


	
  Date of

  Exchange

  	
   

  	
  Amount of

  decrease in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Amount of

  increase in

  Principal Amount

  of this Global

  Security

  	
   

  	
  Principal

  Amount of

  this Global

  Security

  following such

  decrease or

  increase

  	
   

  	
  Signature
  of

  authorized

  signatory of

  Trustee or

  Securities

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


B-8

















 


OPTION OF
HOLDER TO ELECT PURCHASE


 


If you want to elect to have this Security purchased
by the Company pursuant to Section 3.7 or 3.9 of the Indenture, check
either box:


 


	
  ý 

  	
   

  	
  ý

  
	
  3.7

  	
   

  	
  3.9

  



 


If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 3.7 or 3.9 of the
Indenture, state the amount in principal amount (must be integral multiple of
$1,000): $


 


	
  Date:

  	
   

  	
   

  	
  Your Signature

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Sign exactly as your name appears on the other side of the Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
	
   

  	
  (Signature must be guaranteed)

  	
   

  
							



 


The signature(s) should be
guaranteed by an eligible guarantor institution (banks, stockbrokers, savings
and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C. Rule 17Ad-15.


 


B-9

















 


EXHIBIT C


 


FORM OF SUPPLEMENTAL INDENTURE


 


This Supplemental Indenture, dated as
of                            (this
“Supplemental Indenture”), among [name of future Subsidiary Guarantor] (the “Guarantor”),
Ship Finance International Limited, a Bermuda exempted company, (together with
its successors and assigns, the “Company”), each other then existing Subsidiary
Guarantor under the Indenture referred to below, and Wilmington Trust Company,
a Delaware banking corporation, as Trustee under the Indenture referred to
below.


 


W I T N E S S E T H:


 


WHEREAS, the Company, the Subsidiary Guarantors and
the Trustee have heretofore executed and delivered an Indenture, dated as of
         , 2003 (as amended,
supplemented, waived or otherwise modified, the “Indenture”), providing for the
initial issuance of an aggregate principal amount of $580,000,000 of 81⁄2% Senior
Notes due 2013 of the Company (the “Securities”);


 


WHEREAS, Section 3.12 of the Indenture provides
that unless such Subsidiary has previously issued a Subsidiary Guarantee which
is then in full force and effect, the Company is required to cause each
Restricted Subsidiary created or acquired by the Company or one or more of its
Restricted Subsidiaries to execute and deliver to the Trustee a Supplemental
Indenture pursuant to which such Subsidiary will unconditionally Guarantee, on
a joint and several basis with the other Subsidiary Guarantors, the full and
prompt payment of the principal of, premium, if any, and interest on the
Securities on a senior basis; and


 


WHEREAS, pursuant to Section 9.1 of the
Indenture, the Trustee, the Company and the other Subsidiary Guarantors are
authorized to execute and deliver this Supplemental Indenture to amend the
Indenture, without the consent of any Securityholder;


 


NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor, the Company, the other Subsidiary Guarantors and
the Trustee mutually covenant and agree for the equal and ratable benefit of
the Holders of the Securities as follows:


 


ARTICLE I


 


Definitions


 


SECTION 1.1                          Defined Terms.  As used in this Supplemental Indenture,
terms defined in the Indenture or in the preamble or recital hereto are used
herein as therein defined. The words “herein,” “hereof” and “hereby” and other
words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.


 


C-1

















 


ARTICLE II


 


Agreement to be Bound; Subsidiary Guarantee


 


SECTION 2.1                          Agreement to be Bound.  The Guarantor hereby becomes a party to the
Indenture as a Subsidiary Guarantor and as such will have all of the rights and
be subject to all of the obligations and agreements of a Subsidiary Guarantor
under the Indenture. The Guarantor agrees to be bound by all of the provisions
of the Indenture applicable to a Subsidiary Guarantor and to perform all of the
obligations and agreements of a Subsidiary Guarantor under the Indenture.


 


SECTION 2.2                          Guarantee.  The Guarantor hereby fully, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety,
jointly and severally with each other Subsidiary Guarantor, to each Holder of
the Securities and the Trustee, the full and punctual payment when due, whether
at maturity, by acceleration, by redemption or otherwise, of the Obligations
pursuant to Article X of the Indenture on a senior basis.


 


ARTICLE III


 


Miscellaneous


 


SECTION 3.1                          Notices.  All notices and other communications to the
Guarantor shall be given as provided in the Indenture to the Guarantor, at its
address set forth below, with a copy to the Company as provided in the
Indenture for notices to the Company.


 


SECTION 3.2                          Parties.  Nothing expressed or mentioned herein is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of this Supplemental Indenture or the Indenture or any
provision herein or therein contained.


 


SECTION 3.3                          Governing Law.  This Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York.


 


SECTION 3.4                          Severability Clause.  In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and such provision shall be ineffective only to the extent
of such invalidity, illegality or unenforceability.


 


SECTION 3.5                          Ratification of Indenture;
Supplemental Indenture Part of Indenture. 
Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture.


 


C-2

















 


SECTION 3.6                          Counterparts.  The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.


 


SECTION 3.7                          Headings.  The headings of the Articles and the
Sections in this Supplemental Indenture are for convenience of reference only
and shall not be deemed to alter or affect the meaning or interpretation of any
provisions hereof.


 


C-3

















 


IN WITNESS WHEREOF, the parties hereto have caused
this Supplemental Indenture to be duly executed as of the date first above
written.


 


 


	
   

  	
  [SUBSIDIARY GUARANTOR],

  
	
   

  	
  as a Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY, as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SHIP FINANCE INTERNATIONAL LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [EXISTING SUBSIDIARY GUARANTORS

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:]

  



 


C-4