Exhibit 10.5


 


	
   

  	
   

  	
   

  	
   

  	
  [LOGO]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Date of
  Agreement

  	
   

  	
  THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

  
	
   

  	
   

  	
  Jan .1, 2004

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  STANDARD SHIP MANAGEMENT AGREEMENT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  CODE NAME: “SHIPMAN 98”

  
	
   

  	
   

  	
   

  	
   

  	
  Part I

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Owners
  (name, place of registered office and law of registry) (Cl. 1)

  	
   

  	
  3.

  	
   

  	
  Managers
  (name, place of registered office and law of registry) (Cl. 1)

  
	
   

  	
   

  	
  Granite Shipping company Limited

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  	
   

  	
   

  	
   

  	
  Name

  
	
   

  	
   

  	
  Monrovia, Liberia

  	
   

  	
   

  	
   

  	
  Frontline Management (Bermuda) Ltd.

  
	
   

  	
   

  	
  Place of
  registered office

  	
   

  	
   

  	
   

  	
  Place of
  registered office

  
	
   

  	
   

  	
  Liberia

  	
   

  	
   

  	
   

  	
  Hamilton, Bermuda

  
	
   

  	
   

  	
  Law of
  registry

  	
   

  	
   

  	
   

  	
  Law of
  registry

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Bermuda

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Day and year
  of commencement of Agreement (Cl. 2)

  	
   

  	
   

  
	
   

  	
   

  	
  See Clauses 2 and 17

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Crew
  Management (state “yes” or “no” as agreed) (Cl. 3.1)

  Yes

  	
   

  	
  6.

  	
   

  	
  Technical
  Management (state “yes” or “no” as agreed) (Cl. 3.2)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Commercial
  Management (state “yes” or “no” as agreed) (Cl. 3.3)

  	
   

  	
  8.

  	
   

  	
  Insurance
  Arrangements (state “yes” or “no” as agreed) (Cl. 3.4)

  
	
   

  	
   

  	
  No

  	
   

  	
   

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Accounting
  Services (state “yes” or “no” as agreed) (Cl. 3.5)

  Yes

  	
   

  	
  10.

  	
   

  	
  Sale or
  purchase of the Vessel (state “yes” or “no” as agreed) (Cl. 3.6)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Provisions
  (state “yes” or “no” as agreed) (Cl. 3.7)

  	
   

  	
  12.

  	
   

  	
  Bunkering
  (state “yes” or “no” as agreed) (Cl. 3.8)

  
	
   

  	
   

  	
  Yes

  	
   

  	
   

  	
   

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Chartering
  Services Period (only to be filled in if “yes” stated in Box 7) (Cl. 3.3(i))

  	
   

  	
  14.

  	
   

  	
  Owners’
  Insurance (state alternative (i), (ii) or (iii) of Cl.
  6.3)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  6.3 (i), (ii) and (iii)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Annual
  Management Fee (state annual amount) (Cl. 8.1)

  	
   

  	
  16.

  	
   

  	
  Severance
  Costs (state maximum amount) (Cl. 8.4(ii))

  
	
   

  	
   

  	
  See Clause 21.1 and 21.2

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Day and year
  of termination of Agreement (Cl. 17)

  See Clause 17

  	
   

  	
  18.

  	
   

  	
  Law and
  Arbitration (state alternative 19.1, 19.2 or 19.3; if 19.3
  place of arbitration must be stated) (Cl. 19)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  19.1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Notices
  (state postal and cable address, telex and telefax number for serving notice
  and communication to the Owners) (Cl. 20)

  	
   

  	
  20.

  	
   

  	
  Notices
  (state postal and cable address, telex and telefax number for serving notice
  and communication to the Managers) (Cl. 20)

  
	
   

  	
   

  	
  c/o Ship Finance International Limited

  	
   

  	
   

  	
   

  	
  Par-La-ville Place

  
	
   

  	
   

  	
  Par-La-Ville Place

  	
   

  	
   

  	
   

  	
  14 Par-La-Ville Road

  
	
   

  	
   

  	
  14 Par-La-Ville Road

  	
   

  	
   

  	
   

  	
  Hamilton, Bermuda HM 08

  
	
   

  	
   

  	
  Hamilton, Bermuda HM 08

  	
   

  	
   

  	
   

  	
  Attention: Managing Director

  
	
   

  	
   

  	
  Attention: Managing Director

  	
   

  	
   

  	
   

  	
  Facsimile: +1 441 295 3494

  
	
   

  	
   

  	
  Facsimile: +1 441 295 3494

  	
   

  	
   

  	
   

  	
   

  
	
  It is
  mutually agreed between the party stated ins Box 2 and the party
  stated in Box 3 that this Agreement consisting of PART I and PART
  II as well as Annexes “A” (Details of Vessel), “B”
  (Detail of Crew), “C” (Budget) and “D” (Associated vessels)
  attached hereto, shall be performed subject to the conditions contained
  herein.  In the event of a conflict of
  conditions, the provisions of PART I and Annexes “A”,
  “B”, “C”and “D” shall prevail over those of PART
  II to the extent of such conflict but no further..

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature(s)
  (Owners)

  	
   

  	
  Signature(s)
  (Managers)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/
  [ILLEGIBLE] (POA)

  	
   

  	
  /s/
  [ILLEGIBLE] / (POA)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Approved by

  	
   

  	
   

  
	
   

  	
   

  	
  the Documentary Committee of The

  	
   

  	
  Approved  by

  
	
  Printed by BIMCO’s Idea

  	
   

  	
  Japan Shipping Exchange Inc., Tokyo

  	
   

  	
  the International Ship Managers’ Association (ISMA)

  
																



 


This document is a computer
generated SHIPMAN 98 form printed by authority of BIMCO.  Any insertion or deletion to the form must
be clearly visible.  In the event of any
modification made to the pre-printed text of this document which in not clearly
visible, the text of the original BIMCO approved document shall apply.  BIMCO assumes no responsibility for any
loss, damage or expense as a result of discrepancies between the original BIMCO
approved document and this computer generated document.


 

















 


 


ANNEX
“A” (DETAILS OF VESSEL OR VESSELS) TO

THE BALTIC AND INTERNATIONAL MARITIME COUNCIL (BIMCO)

STANDARD SHIP MANAGEMENT AGREEMENT - CODE NAME: “SHIPMAN 98”


 


 


Date of Agreement:


      ,
2004


Name of Vessel(s):


 


Particulars of Vessel(s):


See
description Annex 1


 

















 


ANNEX 1

DESCRIPTION OF VESSEL


 

















 


 


	
  Sent by::
  Wallem Shipmanagement, Inc.

  	
   

  	
  954 725 009;

  	
   

  	
  12/09/03
  3:15PM; JetFax #416;Page 17/28

  
	
  Received at:
  9h 41m, 12/9/2003

  	
   

  	
   

  	
   

  	
  FRONT
  GRANITE

  
	
   

  	
   

  	
   

  	
   

  	
  P 002

  
	
  12/09/03    14:29     FAX
  NO.:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [LOGO]

  	
   

  	
  KONGERIKET NORGE

  	
   

  	
   

  
	
   

  	
   

  	
  (NORWAY)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  INTERNASJONALT MALEBREY (1969)

  	
   

  	
   

  
	
   

  	
   

  	
  International Tonnage Certificate 1969

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [ILLEGIBLE]

  	
   

  	
   

  
									



 

















 


PART II


“SHIPMAN 98” Standard Ship Management
Agreement


 


1.              Definitions


 


In this
Agreement save where the context otherwise requires, the following words and
expressions shall have the meanings, hereby assigned to them.


 


“Owners” means the party identified in Box
2. 


 


“Managers” means the party identified in Box
3.


 


“Vessel” means the vessel or vessels details
of which are set out in Annnex “A” attached hereto.


 


“Crew” means the Master, officers and
ratings of the Vesselnumbers, rank and nationality specified in Annex “8”
attached hereto.


 


“Crew Support Costs” means all expenses of
a general nature which are not particularly referable to any individual vessel
for the time being managed by the Managers and which are incurred by the
Managers for the purpose of providing an efficient and economic management
service and, without prejudice to the generality of the foregoing, shall
include the cost of crew standby pay, training schemes for officers and
ratings, cadet training schemes, sick pay, study pay, recruitment and
interviews.


 


“Severance Costs” means the costs which the
employers are legally obliged to pay to or in respect of the Crew as a result
of the early termination of any employment contract for service on the Vessel.


 


“Crew Insurances” means insurances against
crew risks which shall include but not be limited to death, sickness,
repetriation, injury, shipwreck unemployment indemnity and loss of personal
effects.


 


“Management Services” means the services
specified in sub-clauses 3.1 to 3.8 as indicated affirmatively in Boxes 5
to 12.


 


“ISM Code” means the International
Management Code for the Safe Operation of Ships and for Pollution Prevention as
adopted by the International Maritime Organization (IMO) by resolution
A.741(18) or any subsequent amendment thereto.


 


“STCW 95”means the International Convention
on Standards of Training, Certification and Watchkeeping for Seafarers, 1978,
as amended in 1995 or any subsequent amendment thereto.


 


“Time Charter”
means the time charterparty between Owners as owners and Frontline Shipping
Limited (the “Time Charterers”) as charterers effective as of January 1, 2004.


 


“Charters
Ancilliary Agreement” means that certain agreement by and among, inter alia,
Ship Finance International Limited, Frontline Ltd., the Time Charterers, the
Owners and certain of Ship Finance International Limited’s other vessel-owning
subsidiaries with respect to, inter alia, theTime Charter.


 


“Agreement”
means Part I, Part II, including Rider Clauses 21 to 37, as well as Annex A.


 


2.              Appointment of
Managers


 


With effect
from the effective date of the Time Charter day and year stated in Box 4
and continuing unless and until terminated as provided herein, the
Owners herby appoint the Managers and the Managers hereby agree to act as the
Managers of the Vessel.


 


[FOR VESSELS
CURRENTLY UNDER BAREBOAT TO 3RD PARTIES, THIS AGREEMENT SHALL BECOME
EFFECTIVE FROM THE DATE OF ACTUAL PHYSICAL DELIVERY UNDER THE TIME CHARTER –
THIS CLAUSE WILL BE MODIFIED AS NECESSARY TO REFLECT SUCH STATUS]


 


3.              Basis of Agreement


 


Subject to the
terms and conditions herein provided, during the period of this Agreement, the
Managers shall carry out Management Services in respect of the Vessel as agents
for and on behalf of the Owners. The Managers shall have authority to take such
actions as they may from time to time in their absolute discretion consider to
be necessary to enable them to perform this Agreement in accordance with sound
ship management practice.


 


3.1 Crew Management


(only applicable if agreed according to Box
5)


 


The Managers
shall provide at their own cost suitably qualified Crew for the Vessel as
required by the Owners in accordance with the STCW 95 Requirements and the Time
Charter, provision of which includes but is not limited to the following
functions:


 


(i)             selecting
and engaging the Vessel’s Crew, including payroll arrangements, pension
administration, and insurances for the Crew other than those mentioned in Clause
6;


(ii)          ensuring
that the applicable requirements of the law of the flag of the Vessel are
satisfied in respect of manning levels, rank, qualification and certification
of the Crew and employment regulations including Crew’s tax, social insurance,
discipline and other requirements;


(iii)       ensuring
that all members of the Crew have passed a medical examination with a qualified
doctor certifying that they are fit for the duties for which they are engaged
and are in possession of valid medical certificates issued in accordance with
appropriate flag State requirements. In the absence of applicable flag State
requirements the medical certificate shall be dated not more than three months
prior to the respective Crew members leaving their country of domicile and
maintained for the duration of their service on board the Vessel;


(iv)      ensuring
that the Crew shall have a command of the English language of a sufficient
standard to enable them to perform their duties safely;


(v)         arranging
transportation of the Crew, including repatriation;


(vi)      training
of the Crew and supervising their efficiency;


(vii)   conducting
union negotiations;


(viii) operating the Managers’ drug and
alcohol policy unless otherwise agreed;


(ix)        ensuring
that any compliants from the Time Charterers with respect to the conduct of the
Crew are immediately investigated, communicating the results of such
investigation to the Time Charterers and if such complaints are well founded
ensuring that changes in the appointments are made without delay.


 


3.2       Technical Management


(only applicable if agreed according to Box
6)


 


Subject to the
limitations set forth in Clause 25.6. The Managers shall provide at their own
cost technical management which shall include the performance of each and all
of the Owners’ obligations to the Time Charaters in accordance with the terms
of the Time Charter and meeting all liabilities and obligations of the Owner
arising under the Time Charter to the Time charterers or any third party which
also includes, but is not limited to, the following functions:


 


(i)             provision
of competent personnel to supervise the Maintenance, and general efficiency
and, if necessary, restoration of the Vessel in accordance with the conditions
stipulated in Clause 1 and 2(a) of the Time Charter;


(ii)          arrangement
and supervision of dry dockings, repairs, alterations and the [ILLEGIBLE]
(including, if necessary, [ILLEGIBLE]) of the Vessel to the standards required by
of the Owners by class and provided that the Managers shall be
entitled to incur the necessary expenditure to ensure that the Vessel will
comply with the law of the flag of the Vessel and of the places where she
trades (including, if required, the provision of [ILLEGIBLE] certificates),
and all requirements and recommendations of the classification society;


(iii)       arrangement
of the supply of necessary stores, spares and lubricating oil;


(iv)      appointment
of surveyors and technical consultants as the Managers may consider from time
to time to be necessary;


(v)         development,
implementation and maintenance of a Safety Management System (SMS) in
accordance with the ISM Code (see sub-clauses 4.2  and 5.3).


(vi)      Functions
as per (iv) and (v) above to be effected after due consultation with Owners and
Time Charterers.


 


3.3       Commercial Management


(only applicable if agreed according to Box
7)


 

















 


PART II


“SHIPMAN 98” Standard Ship Management
Agreement


 


The Managers shall provide the commercial operation of the Vessel, as
required by the Owners, which includes, but is not limited to, the following
functions:


 


(i)    providing chartering
services in accordance with the Owners’ instructions which include, but are not
limited to, cooking and negotiating employment for the Vessel and the
conclusion (including the execution thereof) of charter parties or other
contracts relating to the employment of the Vessel.  If such a contract exceeds the period stated in Box 13,
consent thereto in writing shall first be obtained from the Owners.


(ii)   arranging of the proper
payment to Owners or their nominees of all hire and/or freight revenues or
other moneys of whatsoever nature to which Owners may be entitled arising out
of the employment of or otherwise in connection with the Vessel.


(iii)  providing voyage estimates
and accounts and calculating of hire, freights, demurrage and/or despatch
moneys due from or due to the charterers of the Vessel;


(iv)  issuing of voyage
instructions;


(v)   appointing agents;


(vi)  appointing stevedores;


(vii) arranging surveys associated
with the commercial operation of the Vessel.


 


3.4  Insurance
Arrangements


(only applicable if agreed according to Box
8)


 


The Managers
shall arrange at their own cost insurances in accordance with Clause 6, on such
terms and conditions as the Owners shall have instructed or agreed, in
particular regarding conditions, insured values, deductibles and franchises.


 


3.5  Accounting
Services


(only applicable if agreed according to Box
9)


 


The Managers
shall at their own cost:


(i)    establish an accounting system with respect
to the management, operation and maintenance of the Vessel (including
accounting for insurance costs, deductibles, claims and collections) which
meets the requirements of the Owners and provide regular accounting services,
supply regular reports and records,


(ii)          maintain
the records of all costs and expenditure incurred as well as data necessary or
proper for the settlement of accounts between the parties.


 


3.6  Sale
or Purchase of the Vessel


(only applicable if
agreed according to Box 10)


 


The Managers shall, in accordance with the Owners’ Instructions,
supervise the sale or purchase of the Vessel, including the performance of any
sale or purchase agreement, but not negotiation of the same.


 


3.7  Provisions
(only applicable if
agreed according to Box 11)


 


The Managers
shall at their own cost arrange for the supply of provisions.  The Owners acknowledge that all provisions,
stores, lubricating oil and other consumables on board on the date when this
Agreement takes effect are the property of the Managers.  Upon redelivery, the Owners shall pay the
Managers for all provisions on board at cost.


 


3.8  [ILLEGIBLE]
(Only
applicable if agreed according to Box 12)


 


The Managers shall arrange for the provision of bunkar fuel of the
quality specified by the Owners as required for the Vessel’s trade.


 


4.     Managers’
Obligations


 


4.1 The Managers
undertake to use their best endeavours to provide the agreed Management
Services as agents for and on behalf of the Owners.  In accordance with the terms of the Time
Charter and sound ship management practice and to protect and promote the
interests of the Owners in all matters relating to the provision of services
hereunder.


 


Provided,
however, that the Managers in the performance of their management
responsibilities under this Agreement shall be entitled to have regard to their
overall responsibility in relation to all vessels as may from time to time be
entrusted to their management and in particular, but without prejudice to the
generality of the foregoing, the Managers shall be entitled to allocate
available supplies, manpower and services in such manner as in the prevailing
circumstances the Managers in their absolute discretion consider to be fair and
reasonable.


 


4.2 Where the
Managers are providing Technical Management in accordance with sub-clause 3.2,
they shall procure that the requirements of the law of the flag of the Vessel
are satisfied and they shall in particular be deemed to be the “Company” as
defined by the ISM Code, assuming the responsibility for the operation of the Vessel
and taking over the duties and responsibilities imposed by the ISM Code when
applicable.


 


5.     Owners’
Obligations


 


5.1 The Owners shall
pay the Warranted Amounts referred to in Clause 21 all sums due to the
Managers punctually in accordance with the terms of this Agreement.


 


5.2 Where the
Managers are providing Technical Management in accordance with sub-clause 3.2,
the Owners shall:


(i)    procure that all officers
and ratings supplied by them or on their behalf comply with the requirements of
STCW 95;


(ii)   instruct such officers and ratings to obey
all reasonable orders of the Managers in connection with the operation of the
Managers’ safety management system.


 


5.3 Where the
Managers are not providing Technical Management in accordance with sub-clause 3.2,
the Owners shall procure that the requirements of the law of the flag of the
Vessel are satisfied and that they, or such other entity as may be appointed by
them and identified to the Managers, shall be deemed to be the “Company” as
defined by the ISM Code assuming the responsibility for the operation of the
Vessel and taking over the duties and responsibilities imposed by the ISM Code
when applicable.


 


6.     Insurance
Policies


 


The Owners
Managers shall procure, whether by instructing the Managers under sub-clause
3.4 or otherwise, that throughout the period of this Agreement including
during any off-hire time:


 


6.1 at the Owners’
Managers’ expense, the Vessel is insured for not less than her sound market
value or entered for her full gross tonnage, as the case may be for:


(i)             usual ?? and
machinery marine risks (including crew negligence) and excess liabilities
according to Norwegian or similar standard;


(ii)          protection and indemnity
risks (including pollution risks and Crew insurances) with a P & I Club that
is a member of the International Group of P&I Clubs; and


(iii)       war
risks (including protection and indemnity and crew risks) in accordance with
the best practice of prudent owners of vessels of a similar type to the Vessel,
with first class insurance companies, underwriters or associations (“the
Owners’ Insurances”);


 


6.2 all premiums and
calls on the Owners’ Insurances are paid promptly by their due date,


 


6.3 the Owners’
Insurances name the Managers Owners, the Time Charterers and the
Managers and, subject to underwriters’ agreement, any third party designated by
the Managers Owners, the Time Charterers and/or the Managers as a joint
assured, with full cover, with the Owners Managers obtaining cover in
respect of each of the insurances specified in sub-clause 6.1;


(i)             on
terms whereby the Managers and any such third party are liable in respect of
premiums or calls arising in connection with the Owners’ insurances; or


 

















 


PART II


“SHIPMAN 98” Standard Ship Management
Agreement


 


(ii)          if
reasonably obtainable, on terms such that neither the Mangers nor any such
third party shall be under any liability in respect of premiums or calls
arising in connection with the Owners’ Insurances; or


(iii)  on such other terms as may be agreed in
writing between the Manager and the Owners, but in all cases subject to the
terms and conditions that the Owners shall have agreed with the mortgages of
the Vessel.


Indicate alternative (i), (ii) or (iii) in Box
14, if Box 14 is left blank then (i) applies.


 


6.4 written
evidence is provided, to the reasonable satisfaction of the Managers Owners, of
their compliance with their obligations under Clause 6 within a
reasonable time of the commencement of the Agreement, and of each renewal date
and, if specifically requested, of each payment date of the Owners’
Insurances.


 


7.              Income Collected and
Expenses Paid on Behalf of Owners


 


7.1 All moneys collected by the Managers under the terms of this
Agreement (other than moneys payable by the Owners to the Managers) and ony
interest thereon shall be held to the credit of the Owners in a separate bank
account.


 


7.2 All expense incurred by the Managers under the terms of this
Agreement on behalf of the Owners (including expenses as provided in Clause 8
may be debited against the Owners in the account referred to under sub clause
7.1 but shall in any event remain payable by the Owners to the Managers on
demand.


 


8.              Management ChargeFee


 


8.1 The Owners
shall pay to the Managers for their services as Managers and for the provision
of all Management Services under this Agreement theon Warranted Amounts annual
management fee referenced in Clauses 21.1 and 21.2 as stated in Box 15
which shall be payable by equal monthly instalments in advance, the first
instalment being payable on the effective datecommencement of this
Agreement (see Clause 2 and Box 4) and subsequent instalments
being payable every month.


 


8.2 The
management chargefee shall be fixed and final for the entire duration of this
Agreement.  subject to an annual
review on the anniversary date of the Agreement and the proposed fee shall be
presented in the annual budget referred to in sub-clause 9.1.


 


8.3 The
Managers shall, at no extra cost to the Owners, provide their own office
accommodation, office staff, facilities and stationery.  Without limiting the generally of Clause
7 the Owners shall reimburse the Managers for postage and communication
expenses, traveling expenses, and other out of pocket expenses properly
incurred by the Managers in pursuance of the Management Services.


 


8.4 In the event of the appointment of the Managers being terminated by
the Owners or the Managers in accordance with the provisions of Clause 17
and 18 other than by reason of default by the Managers, or if the Vessel
is lost, sold or otherwise disposed of the “management fee” payable to the
Managers according to the provisions of sub-clause 8.1, shall continue
to be payable for a further period of three calendar months are from the
termination date.  In addition, provided
that the Managers provide Crew for the Vessel in accordance with sub-clause
3.1:


 


(i)             the
Owners shall continue to pay Crew Support Costs during the said further period
of three calendar months and 


(ii)          the
Owners shall pay on equitable proportion of any Severance Costs which may
materialize, not exceeding the amount stated in Box 16.


 


8.5 If the
Owners decide to lay-up the Vessel whilst this Agreement remains in force and
such lay-up lasts for more than three months, an appropriate reduction of
the management charge specified in this Clause 8 shall be made subject to (i)
adjustments to reflect any net increase in expenditure reasonably incurred or
any net saving which would be reasonably made by the Managers as a result of
such lay-up and (ii) the agreement of the Time Charterersfee for the period
exceeding three months until one month before the Vessels is again put into
service shall be mutually agreed between the parties.


 


8.6 Unless otherwise agreed in writing off discounts and commissions
obtained by the Managers in the course of the management of the Vessel shall be
credited to the Owners.


 


9.              Budgets and
Management of Funds


 


9.1 The Managers shall present to the Owners annually a budget for the
following twelve months in such form as the Owners require.  The budget for the first year hereof is set
out in Annex “C” hereto. 
Subsequent annual budgets shall be prepared by the Managers and
submitted to the Owners not less than three months before the anniversary date
of the commencement of this Agreement (see Clause ? and Box 4).


 


9.2 The Owners shall indicate to the Managers their acceptance and
approval of the annual budget within one month of presentation and in the
absence of any such indication the Managers shall be entitled to assume that
the Owners have accepted the proposed budget.


 


9.3 Following the agreement of the budget, the Managers shall prepare
and present to the Owners their estimate of the working capital requirement of
the Vessel and the Managers shall each month up-date this estimate.  Based thereon, the Managers shall each month
request the Owners in writing for the funds required to run the Vessel for the
ongoing month, including the payment of any occasional or extraordinary item of
expenditure, such as emergency repair costs, additional insurance premiums,
[ILLEGIBLE] or provisions.  Such funds
shall be received by the Managers within ten running days after the receipt by
the Owners of the Managers’ written request and shall be held to the credit of
the Owners in a separate bank account.


 


9.4 The Managers shall produce a comparison between budgeted and actual
income and expenditure of the Vessel in such form as required by the Owners
monthly or at such other intervals as mutually agreed.


 


9.5 Notwithstanding anything contained herein to the contrary, the
Managers shall in no circumstances be required to use of commit their own funds
to finance the provision of the Management Services.


 


10.       Managers’ Right to
Sub-Contract


 


The Managers
shall not have the right to sub-contract any of their obligations
hereunder, including those mentioned in sub-clause 3.1 and 4.2,
without the prior written consent of the Owners which shall not be unreasonably
withheld, in the event of such a sub-contract the Managers shall remain
fully liable for the due performance of their obligations under this Agreement.


 


11.       Responsibilities


 


11.1 Force Majeure - Neither the Owners nor the
Managers shall be under any liability for any failure to perform any of their
obligations hereunder by reason of any cause whatsoever of any nature of kind
beyond their reasonable control.


 


11.2 Liability to Owners —(i) Save as otherwise
provided for in the Rider Clauses and without prejudice Without prejudice to
sub-clause


 


11.1 and
Clause 27, the Managers shall be under no liability whatsoever to the Owners
for any loss, damage, delay or expense of whatsoever nature, whether direct or
indirect, (including but not limited to loss of profit arising out of or in
connection with detention of or delay to the Vessel ) and howsoever arising
that is outside of the 


 

















 


PART II


“SHIPMAN 98” Standard Ship Management
Agreement


 


scope in the course of performance of the
Management Services UNLESS same is proved to have resulted solely from the negligence,
gross negligence or wilful default of the Managers or their employees, or
agents or sub-contractors employed by them in connection with the Vessel, in
which case (save where loss, damage, delay or expense has resulted from the
Managers’ personal act or omission committed with the intent to cause same or
recklessly and with knowledge that such loss, damage, delay or expense would
probably result) the Managers’ liability for each incident or series of
incidents giving rise to a claim or claims shall never exceed a total of ten
times the annual management fee payable hereunder.


 


(ii)
Notwithstanding anything that may appear to the contrary in this Agreement, the
Managers shall not be liable for any of the actions of the Crew, even if such
actions are negligent, grossly negligent or wilful, except only to the extent
that they are shown to have resulted from a failure by the Managers to
discharge their obligations under sub-clause 3.1, in which case their
liability shall be limited in accordance with the terms of this Clause 11.


 


11.3  Indemnity - To
the extent that they are caused by any act or omission of the Owners Except
to the extent and solely for the amount therein set out that the Managers would
be liable under sub clause 11.2, the Owners hereby undertake to keep
the Managers and their employees, agents and sub-contractors indemnified and to
hold them harmless against all actions, proceedings, claims, demands or
liabilities whatsoever or howsoever arising which may be brought against them
or incurred or suffered by them arising out of or in connection with the
performance of the Agreement, and against and in respect of all costs, losses,
damages and expenses (including legal costs and expenses on a full indemnity
basis) which the Managers may suffer or incur (either directly or indirectly)
in the course of the performance of this Agreement.


 


11.4  “Himalaya” - It
is hereby expressly agreed that no employee or agent of the Managers (including
every sub-contractor from time to time employed by the Managers) shall in any
circumstances whatsoever be under any liability whatsoever to the Owners for any
loss, damage or delay of whatsoever kind arising or resulting directly or
indirectly from any act, neglect or default on his part while acting in the
course of or in connection with his employment and, without prejudice to the
generality of the foregoing provisions in this Clause 11, every
exemption, limitation, condition and liberty herein contained and every right,
exemption from liability, defence and immunity of whatsoever nature applicable
to the Managers or to which the Managers are entitled hereunder shall also be
available and shall extend to protect every such employee or agent of the
Managers acting as aforesaid and for the purpose of all the foregoing
provisions of this Clause 11 the Managers are or shall be deemed
to be acting as agent or trustee on behalf of and for the benefit of all
persons who are or might be their servants or agents from time to time
(including sub-contractors as aforesaid) and all such persons shall to this
extent be or be deemed to be parties to this Agreement.


 


12.  Documentation


 


Where the
Managers are providing Technical Management in accordance with sub-clause 3.2
and/or Crew Management in accordance with sub-clause 3.1, they shall
make available, upon Owners’ request, all documentation and records related to
the Safety Management System (SMS) and/or the Crew which the Owners need in
order to demonstrate compliance with the ISM Code and STCW 95 or to defend a
claim against a third party.


 


13.  General
Administration


 


13.1         The Managers shall at
their own cost handle and settle all claims arising out of the Management
Services hereunder and keep the Owners informed regarding any incident of which
the Managers become aware which gives or may give rise to claims or disputes
involving third parties.


 


13.2         The Managers shall,
as instructed by the Owners, bring or defend actions, suits or proceedings in
connection with matters entrusted to the Managers according to this Agreement.


 


13.3         The Managers shall
also have power to obtain legal or technical or other outside expert advice in
relation to the handling and settlement of claims and disputes or all other
matters affecting the interests of the Owners in respect of the Vessel.


 


13.4         The Owners shall
arrange for the provision of any necessary guarantee bond or other security.


 


13.5         Any costs reasonably
incurred by the Managers in carrying out their obligations according to Clause
13 shall be reimbursed by the Owners.


 


14.  Auditing


 


The Managers
shall at their own cost at all times maintain and keep true and correct
accounts in compliance with Clause 3.5(i) above and shall make the same
available for inspection and auditing by the Owners at such times as may be
mutually agreed.  On the termination,
for whatever reasons, of this Agreement, the Managers shall release to the
Owners, if so requested, the originals where possible, or otherwise certified
copies, of all such accounts and all documents specifically relating to the
Vessel and her operation.


 


15.  Inspection
of Vessel


 


The Owners and
the Time Charterers shall have the right at any time after giving reasonable
notice to the Managers to inspect the Vessel at their own expense for any
reason they consider necessary.


 


16.  Compliance
with Laws and Regulations


 


The Managers
will not do or permit to be done anything which might cause any breach or
infringement of the laws and regulations of the Vessels [ILLEGIBLE] or of the
places where she trades.


 


17.  Duration
of the Agreement


 


This Agreement
shall come into effect on the day and year stated in Box 4 and shall
continue, subject to Clause 24, until December 31, 2014. the date
stated in Box 17.


Thereafter it shall continue until terminated by other party giving to
the other notice in writing, in which event the Agreement shall terminate upon
the expiration of a period of two months from the date upon which such notice
was given.


 


18.  Termination



 


18.1 Owners’
default


(i)             The
Managers shall be entitled to terminate the Agreement with immediate effect by
notice in writing if any moneys payable by the Owners under this Agreement and/or
the owners of any associated vessel, details of which are listed in Annex “D”,
shall not have been received in the Managers’ nominated account within ten
running days of receipt by the Owners of the Managers written request or if the
Vessel is repossessed by the Mortgagees.


(ii)          If
the Owners:


(a)          fail
to meet their obligations under sub-clauses 5.2  and 5.3 of
this Agreement for any reason within their control, or


(b)         proceed
with the employment of or continue to employ the Vessel in the carriage of
contraband, blockade running, or in an unlawful trade, or on a voyage which in
the reasonable opinion of the Managers is unduly hazardous or improper, or


(c )       default
in any obligation that (i) has not been


 

















 


PART II


“SHIPMAN 98” Standard Ship Management
Agreement


 


specifically
delegated to the Managers hereunder as part of the Management Services and (ii)
results in or is substantially likely to result in the arrest and/or detention
of the Vessel, the Managers may give notice of the default to the Owners,
requiring them to remedy it as soon as practically possible.  In the event that the Owners fail to remedy
it within 30 days after a  reasonable time to the satisfaction of
written notice to the Owners from the Managers, the Managers shall be entitled
to terminate the Agreement with immediate effect by notice in writing.


 


18.2  Managers’ Default


 


If the
Managers fail to meet their obligations under Clauses 3 and 4 of
this Agreement for any reason within the control of the Managers, the Owners
may give notice to the Managers of the default, requiring them to remedy it as
soon as practically possible.  In the
event that the Managers fail to remedy it within 30 days after written notice
to the Managers from a reasonable time to the satisfaction of the
Owners, the Owners shall be entitled to terminate the Agreement with immediate
effect by notice in writing without prejudice to any rights of Owners at such
time.


 


18.3  Extraordinary Termination


 


This Agreement
shall be deemed to be terminated in the case of the sale of the Vessel or if
the Vessel becomes a total loss or is declared as a constructive or compromised
or arranged total loss or is requisitioned.


 


18.4  For the purpose of sub-clause 18.3
hereof


 


(i)             the
date upon which the Vessel is to be treated as having been sold or otherwise
disposed of shall be the date on which the Owners cease to be registered as
Owners of the Vessel;


(ii)          the
Vessel shall not be deemed to be lost unless either she has become an actual
total loss or agreement has been reached with her underwriters in respect of
her constructive, compromised or arranged total loss or if such agreement with
her underwriters is not reached it is adjudged by a competent tribunal that a
constructive loss of the Vessel has occurred;


(iii)       any
sale, assignment, transfer, conveyance or disposition of the shares of the
Owner, directly or indirectly through intermediate holding companies, by its
sole shareholder, Ship Finance International Limited, to any third party not
controlled by Ship Finance International Limited shall be deemed a sale of the
Vessel;


 


18.5 This Agreement
shall terminate forthwith in the event of an order being made or resolution
passed for the winding up, dissolution, liquidation or bankruptcy of either
party (otherwise than for the purpose of reconstruction or amalgamation) or if
a receiver is appointed, or if it suspends payment, ceases to carry on business
or makes any special arrangement or composition with its creditors.


 


18.6  The termination of this Agreement shall be
without prejudice to all rights accrued due between the parties prior to the
date of termination.


 


19.  Law
and Arbitration


 


19.1  This Agreement shall be governed by and
construed in accordance with English law and any dispute arising out of or in
connection with this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or
re-enactment thereof save to the extent necessary to give effect to the
provisions of this Clause.


 


The arbitration shall be conducted in accordance with the London
Maritime Arbitrators Association (LMAA) Terms current at the time when the
arbitration proceedings are commenced.


 


The reference shall be to three arbitrators; one to be appointed by
each of the parties hereto and the third by the two so chosen; their decision
or that of any two of them shall be final. 
A party wishing to refer a dispute to arbitration shall appoint its
arbitrator and send notice of such appointment in writing to the other party
requiring the other party to appoint its own arbitrator within 14 calendar days
of that notice and stating that it will appoint its arbitrator as sole
arbitrator unless the other party appoints its own arbitrator and gives notice
that it has done so within the 14 days specified.  If the other party does not appoint its own arbitrator and give
notice that it has done so within the 14 days specified, the party referring a
dispute to arbitration may, without the requirement of any further prior notice
to the other party, appoint its arbitrator as sole arbitrator and shall advise
the other party accordingly.  The award
of a sole arbitrator shall be binding on both parties as if he had been
appointed by agreement.


 


Nothing herein shall prevent the parties agreeing in writing to vary
these provisions to provide for the appointment of a sole arbitrator.


 


In cases where neither the claim nor any counterclaim exceeds the sum
of USD50,000 (or such other sum as the parties may agree) the arbitration shall
be conducted in accordance with the LMAA Small Claims Procedure current at the
time when the arbitration proceedings are commenced.


 


19.2  This
Agreement shall be governed by and construed in accordance with Title
[ILLEGIBLE] of the United States Code and the Maritime Law of the United States
and any dispute arising out of or in connection with this Agreement shall be
referred to three persons at New York, one to be appointed by each of the
parties hereto, and the third by the two so chosen, their decision or that of
any two of them shall be final, and for the purposes of enforcing any award,
judgement may be entered on an award by any court of competent
jurisdiction.  The proceedings shall be
conducted in accordance with the rules of the Society of Maritime Arbitrators,
Inc.


 


In cases where neither the claim nor any counterclaim exceeds the sum
of USD50,000 (or such other sum as the parties may agree) the arbitration shall
be conducted in accordance with the Shortened Arbitration Procedure of the
Society of Maritime Arbitrators, Inc. current of the time when the arbitration
proceedings are commenced.


 


19.3  This Agreement shall be governed by and
construed in accordance with the laws of the place mutually agreed by the
parties and any dispute arising out of or in connection with this Agreement
shall be referred to arbitration at a mutually agreed place, subject to the
procedures applicable there.


 


19.4  If
Box18 in Part I is not appropriately filled in, sub-clause 1[ILLEGIBLE].1
of this Clause shall apply.


 


Note: 19.1,  19.2 and 19.3
are alternatives indicate alternative agreed in Box 18.


 


20.  Notices


 


20.1  Any notice to be given by either party to
the other party shall be in writing and may be sent by fax, telex, registered
or recorded mail or by personal service.


 


20.2  The address of the Parties for service of
such communication shall be as stated in Boxes 19 and 20,
respectively.


 

















 


Management Agreement
Rider Clauses


 


“[VESSEL NAME]”FRONT
GRANITE”


 


21.                               Management
Charge


 


21.1                            The
Owners shall fund the Managers as provided hereinafter:


 


i.                                          The Managers
warrant to the Owners that the operating costs of the Vessel in performing the
Time Charter do not exceed the Warranted Amounts as stated in Clause 21.2. The
Owners shall remit to the Managers funds for the operating costs of the Vessel
by monthly advance payments in an amount equal to the aggregate Warranted
Amounts for the relevant period.  With
respect to the Managers’ services to be provided under this Agreement in
connection with the Vessel, including the obligations of the Owners which the
Managers have specifically undertaken to perform under the Time Charter
pursuant to Clause 24, the Manager agrees to be liable for the cost of all such
services, provided that with respect to environmental liabilities, the Managers
shall not be liable for any amounts in excess of applicable protection and
indemnity association coverage.


 


ii.                                       Owners shall
fund the Managers 365 days per year (366 days per leap year) in accordance with
the Warranted Amounts.


 


21.2                           Warranted
Amounts


 


The Warranted Amounts, referred to in Clause 21.1 (i) including but not
limited to insurance premiums, annual taxes and registration fees and
dry-docking reserves are as follows:


 


	
  Year

  	
   

  	
  Warranted
  Amount per day in US$

  	
   

  
	
  2004

  	
   

  	
  6,500

  	
   

  
	
  2005

  	
   

  	
  6,500

  	
   

  
	
  2006

  	
   

  	
  6,500

  	
   

  
	
  2007

  	
   

  	
  6,500

  	
   

  
	
  2008

  	
   

  	
  6,500

  	
   

  
	
  2009

  	
   

  	
  6,500

  	
   

  
	
  2010

  	
   

  	
  6,500

  	
   

  
	
  2011

  	
   

  	
  6,500

  	
   

  
	
  2012

  	
   

  	
  6,500

  	
   

  
	
  2013

  	
   

  	
  6,500

  	
   

  
	
  2014

  	
   

  	
  6,500

  	
   

  
	
  2015

  	
   

  	
  6,500

  	
   

  



 


1

















 


The Owners warrant that they will remit
promptly but under no circumstances later than within four (4) banking days
after the scheduled payment of any Charter hire under the Time Charter the
aggregate of the Warranted Amounts to the Managers for the relevant period.


 


 


22.                               Drug
and Alcohol Policy


 


The Managers shall have a policy on drug and alcohol abuse (“Policy”)
applicable to the Vessel which meets or exceeds the standards in the Oil
International Marine Forum Guidelines for the control of Drug and Alcohol
onboard Ship, as may be amended from time to time.


 


 


23.                               Financial
Responsibility in Respect of Pollution Clause


 


23.1.                       The Managers warrant that
throughout the currency of this Agreement they will provide the Vessel with all
trading certificates.


 


23.2                          Notwithstanding anything
whether printed or typed herein to the contrary, the Owners shall not be required
to establish or maintain financial security or responsibility in respect of oil
or other pollution damage to enable the Vessel lawfully to enter, remain or
leave any port, place, territorial or contiguous waters of any country, state,
territory in performance of the Time Charter.


 


2

















 


24.                               Acknowledgement
of Time Charter


 


The Managers have read and are
familiar with the terms of the Time Charter, and acknowledge that the Owners’
ability to perform under the Time Charter is dependent on the Managers’ due
performance of their obligations hereunder. 
Accordingly, the Managers undertake to perform as part of its Management
Services the duties and obligations of the Owners under the Time Charter as if
such duties and obligations were specifically set forth herein as duties and
obligations of the Managers.


 


The Managers further undertake
(without limitation to the generality of the foregoing) to meet each and all of
the Owner’s liabilities and obligations under the Time Charter in accordance
with the terms, conditions and requirements of the Time Charter including:
delivery of the Vessel; maintenance of the Vessel; payment of insurance
premiums and calls; payment of insurance deductibles; the discharging of liens
and third party claims on the Vessel; payment for provisions, wages and stores
etc.; carrying out repairs; ensuring proper storage; drydocking the Vessel;
meeting the cost of salvage expenses; meeting any claims from cargo owners;
and, releasing the Vessel from arrest.


 


In the event that the Time
Charter is terminated for any reason, either party may terminate this Agreement
upon notice to the other.


 


 


25.                               Eligibility
Clause


 


25.1                         The
Managers warrant that the Vessel will be at all times and in all respects
eligible under applicable conventions, laws, regulations, rules, ordinances,
decrees and international conventions. The Owners have the right at any time to
audit the Mangers’ office system in this respect. The Managers warrant that the
Vessel at all times will have onboard for inspection by the appropriate
authorities, all certificates including trading certificates, records,
compliance letters, contingency plans including SOPEP and other documents
required for its service, including but not limited to the US Coast Guard
Certificate of Financial Responsibility and certificates, records and other
documentation required by US Oil Pollution Act of 1990.


 


25.2                          The Managers warrant that the
Vessel does, and will fully comply with all applicable conventions, laws,
regulations and ordinances of any international, national states or


 


3

















 


local government entity having jurisdiction
including but not limited to the US Federal Water Pollution Control Act as
amended, the International Convention for the Prevention of Pollution from
Ships (MARPOL 1973) as amended together with 1978 Protocol and 1984 (SOLAS
1974) as amended together with 1978 Protocol and 1981/1983 amendment thereto,
IMO Regulations.


 


25.3                         The
Managers shall make available, upon the Owners’ request, all documentation and
records related to the Safety Management System (SMS) and/or crew which the
Owners need in order to demonstrate compliance with ISM Code and STCW 95 or to
defend a claim against a third party.


 


25.4                         The
Managers are furthermore to ensure that:


 


i.                  the Vessel is inspected semi-annually
by the Managers’ technical superintendent who physically verifies the condition
of the Vessel, the planned maintenance programmes performance, and reviews the
Vessel’s maintenance planning for the next six months, and


 


ii.               the Vessel’s maintenance is monitored
through analysis of planned maintenance records, requisitions and reports, and


 


The Managers shall indemnify the Owners for
any delays, losses, expenses or damages arising as a result of failure to
comply with this Clause at the agreed Time Charter hire rate.


 


25.5                          The Managers will exercise
due diligence in making the Vessel seaworthy and maintaining her in that
condition during the entire period of this Agreement.


 


25.6                          Nothing in this Clause 25 or
in this Agreement shall be construed so as to impose an obligation on the
Managers to convert any non-double hull vessel into a double hull vessel.


 


4

















 


26.                              VRP
Requirement Clause


 


The Managers warrant that


 


i.                  the Vessel will have whenever
necessary an approved response plan for the Vessel (“VRP”) which meets in full
the requirements of any environmental legislation that has been enacted and any
regulations issued pursuant thereto in any jurisdiction where the Vessel is to
call (including, without limitation O.P.A. 1990, the governmental regulations
issued thereunder and any change, rule or regulation in substitution of, or
supplementary to, such regulations) (collectively “VRP Requirements”), and


 


ii.               the VRP shall be approved and the Vessel
operated in compliance therewith, when and as required by the VRP Requirements,
and


 


iii.            the Manager and the Vessel fully meet all
VRP Requirements.


 


27.                               Managers’
Responsibility for Off-Hire


 


The Managers agree to indemnify the Owners
for any days of off-hire (pursuant to Clause 21 of the Time Charter and Clause
6.1 of the Charter Ancillary Agreement) or reduced hire (pursuant to Clause 24
of the Time Charter) with respect to the Vessel under the Time Charter such
that in any given calendar year (or leap year) the Owners shall have received
from the Time Charterers and the Managers, on a combined basis, a total of 360
(or 361) days of charter hire at the rate applicable to such Vessel pursuant to
Clause 44 of the Time Charter or Section 3.1 of the Charter Ancillary
Agreement, as the case may be; provided, however, that any
amounts paid by the Managers in respect of off-hire or reduced hire under this
Clause 27 shall be in accordance with the applicable rate set forth in Clause
44 of the Time Charter such that even if the Time Charterers defer payments of
charter hire pursuant to Article III of the Charter Ancillary Agreement
the Managers shall reimburse for off-hire (pursuant to Clause 21 of the Time
Charter and Clause 6.1 of the Charter Ancillary Agreement) or reduced hire
(pursuant to Clause 24 of the Time Charter) at the rate set forth in Clause 44
of the Time Charter rather than the deferred rate; provided,


 


5

















 


further, that
nothing in this Clause 27 shall be construed so as to impose an obligation on
the Managers to indemnify the Owners for the payment of charter hire by the
Time Charterers under the Time Charter other than off-hire (pursuant to Clause
21 of the Time Charter and Clause 6.1 of the Charter Ancillary Agreement) or
reduced hire (pursuant to Clause 24 of the Time Charter).


 


28.                               SCAC
Code Clause


 


The Managers warrant that, in accordance with
19 CFR 4.7a and 178.2 as amended, it has a Standard Carrier Alpha Code (SCAC)
which will prefix a Bill of Lading serial number and forms the “Unique
Identifier” to be entered on all Bills of Lading, cargo manifest, cargo
declaration and other cargo documents relating to carriage of goods to the
United States as may be provided for hereunder. The Managers shall indemnify
the Owners for any losses or delays due to the failure to comply with the
foregoing.


 


29.                               Communications


 


All communications under this agreement shall be in the English
language.


 


31.                              O.C.I.M.F.
Clause


 


Managers shall ensure that the Vessel fully
complies and will so remain throughout the period of this Agreement with OCIMF
Standards and Recommendations for Oil Tankers, 1981 International Safety Guide
for Oil Tankers and Terminals, Standards for Oil Tankers Manifold Associated
Equipment (latest editions), Ship to Ship Transfer Guide (Petroleum) (latest
edition) and Recommendation for Equipment Employed in the mooring of the ship
at single point moorings (latest editions) and any amendment thereto.


 


32.                              Assignment
Clause


 


The Owners may assign all of their rights
this Agreement to any mortgagee of the Vessel on the following conditions: (i)
all of the vessel-owning subsidiaries of Ship Finance International Limited
that are party to the Charter Ancillary Agreement shall have similarly assigned
or agreed to assign their rights and obligations under the management
agreements with the Managers to which each is a party and (ii) such assignment
shall not otherwise prejudice the rights of the Managers to terminate this


 


6

















 


Agreement in the event that the Time Charter
is cancelled in accordance with Clause 24. 
Upon satisfaction of the conditions set forth above, Managers hereby agree
to enter into an acknowledgement of such assignment in such form as such
mortgagee may reasonably require.


 


33.                              Flag
Clause


 


The Managers shall have the right to have
title of the Vessel registered in another jurisdiction identified on the United
Nation’s White List, as may be amended from time to time, at any time at the
Managers’ cost and expense (including any higher operating costs incurred
thereby).  A change of flag shall be
subject to the consent of the Owners which shall be withheld only if any mortgagees
with a security interest in the Vessel withhold consent.


 


34.                              Third
party rights


 


Except as may be otherwise agreed in writing by the parties with any
third party, a person who is not a party to this Agreement may not enforce, or
otherwise have the benefit of, any provisions of this Agreement under The
Contracts (Rights of Third Parties) Act 1999, and, without limitation, no
consent of any such person shall be required for the rescission or amendment of
this Agreement, but this does not affect any right or remedy of a third party
which exists or is available apart from that Act.


 


35.                              Owners’
right to bareboat charter the Vessel; Suspension of Agreement


 


Owners’ shall have the right to bareboat charter the Vessel to an
unrelated third party if so requested by the Time Charterer under the Time
Charter.  In the event that the Owners
enter into a bareboat charter (the “Bareboat Charter”) with an unrelated third
party with respect to the Vessel, the obligations of the both the Owners and
the Managers under this Agreement shall be suspended until such time as the
Vessel has been redelivered pursuant to the terms of the Bareboat Charter. The
Managers and Owners hereby agree that the obligations of both the Owners and
the Managers under this Agreement shall be automatically reinstated at such
time as the Vessel has been redelivered under the Bareboat Charter.  For the avoidance of doubt, during such time
as any Bareboat Charter is in effect, the Owners shall not be required to


 


7

















 


pay to the Managers the Warranted Amounts set forth in Clause 21 and
the Managers shall not be required to provide any services with respect to the
Vessel.


 


36.                              Indemnification


 


The Managers hereby indemnify the Owners
against the consequences of any failure by the Managers to comply with the
requirements of this Agreement and related documentation including (without
limitation) any claims made by the Time Charterer against the Owners resulting
from a failure of the Managers to perform their obligations under this
Agreement; provided that Managers’ indemnification for
environmental matters shall not extend beyond the protection and indemnity
coverage with respect to the Vessel required hereunder.


 


The Managers also agree to indemnify the
Owners against the consequences of any insurer with respect to the Vessel
failing to pay out any claim in full; provided that the Managers’
indemnification for environmental matters shall not extend beyond the
protection and indemnity coverage with respect to the Vessel required hereunder.


 


37.                              Changes/Improvements
Necessary for the Operation of the Vessel or Imposed by Legislation or Class


 


37.1.                      In the event
any improvement, structural change or the installation of new equipment is
imposed by compulsory legislation and/or class rules, Manager shall at their
own cost effect such improvement, changes or installation, except to the extent
the Time Charterers elect to do so in accordance with the terms of the Time
Charter.


 


37.2                         In the
event any improvement, structural change or the installation of new equipment
is deemed necessary by the Managers for the continued operation of the Vessel,
Managers shall have the right at their own cost to effect such improvement,
changes or installation, with the Owners’ consent which shall not be
unreasonably withheld.


 


37.3                         The
Owners have to be notified in writing in advance by the Managers about any
changes and/or improvements as per Clauses 37.1 and 37.2.


 


37.4                           Any
change, improvement or installation made pursuant to this Clause 37 shall
become the property of the owners.


 


8

















 


37.5                           Nothing
in this Clause 37 or in this Agreement shall be construed so as to impose an
obligation on the Managers to convert any non-double hull vessel into a double
hull vessel.


 


9

















 


ANNEX
A




DESCRIPTION
OF VESSEL


 


10