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                     CALPETRO TANKERS (BAHAMAS III) LIMITED

                                       and

                               FRONT VOYAGER INC.








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                                BAREBOAT CHARTER
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                                TABLE OF CONTENTS

                                                                            Page

1.       Vessel to be Chartered .............................................  1
2.       Period of Charter ..................................................  1
3.       Time and Place of Delivery .........................................  1
4.       [Reserved] .........................................................  2
5        Use and Trade of Vessel ............................................  2
6.       Documentation and House Flag .......................................  3
7.       Maintenance and Operation ..........................................  3
8.       Redelivery and Status ................................ .............  6
9.       Use of Vessel and Payment of Hire ..................................  7
10.      Mortgage ...........................................................  8
11.      Insurance ..........................................................  8
12.      Total Loss, Requisition for Title Capture Seizure .................. 11
13.      Requisition for Hire ............................................... 12
14.      Liens; Notice on Vessel ............................................ 14
15.      Salvage ............................................................ 15
16.      General Average .................................................... 15
17.      Default; Remedies .................................................. 15
18.      Termination ........................................................ 16
19.      Payments on Termination ............................................ 17
20.      Assignment and Sub Charter.......................................... 17
21.      Indemnity .......................................................... 18
22.      [Reserved].......................................................... 20
23.      General ............................................................ 20
24.      Definitions ........................................................ 23

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                                BAREBOAT CHARTER

          THIS BAREBOAT  CHARTER  (hereinafter  called the "Charter") made as of
March  31,  2006  BY  and  BETWEEN   CalPetro   Tankers  (Bahamas  III)  Limited
(hereinafter  called  "Owners")  and  Front  Voyager  Inc.  (hereinafter  called
"Charterers").

          WITNESSETH AND IT IS HEREBY AGREED as follows:

          1. Vessel to be Chartered

          Owners hereby let and demise and Charterers hereby hire the m.t. VIRGO
VOYAGER (ex-WILLIAM E. CRA1N)  (hereinafter  called the "Vessel"),  Official No.
9633, of about 88,946 gross tons and 155,127  deadweight  tons, built in 1992 in
Rio Do Janeiro,  Brazil),  together  with all her engines,  boilers,  machinery,
masts, anchors, cables, rigging, tackle, apparel, furniture,  electronics, small
boats,  and all her other  appurtenances,  whether  aboard or  removed  from the
Vessel,  together with any and all additions,  improvements  and/or replacements
which may hereafter be made to, on or in the Vessel.

          2. Period of Charter

          (a)  This Charter shall be for a period commencing on the Commencement
Date and shall terminate on the second anniversary  thereof,  up to 30 days more
or less in Charterer's  option,  subject to the Charterer's  right to extend the
Charter  Period by up to seven (7) further  consecutive  periods  each of twelve
(12) months up to 30 days more or less in Charterer's option. Anything herein to
the contrary notwithstanding, the Charterer's right to extend the Charter period
as provided  herein is subject to the condition that or to the  commencement  of
such  extension  period,  the Vessel  has not  become an  actual,  constructive,
compromised or arranged total loss or been  requisitioned for title (but not for
hire) or seized or acquired by any government or governmental entity.

          (b)  Should  the  Vessel  be  upon  a  voyage   otherwise  than  under
requisition  for hire at the time when the charter of the Vessel  would (but for
the  provisions  of this clause) have  terminated,  the Charter  Period shall be
extended for such additional time as may be necessary for the completion of such
voyage.  The Charter Period shall also be extended for such  additional  time as
may be  necessary  to bring the Vessel to a port of  redelivery  as  hereinafter
provided  in Clause 8 hereof.  During  any such  extension,  hire  shall be paid
pro-rata on a daily basis  (assuming a 365-day  year) at the We in force  before
the commencement of such extension.

          3. Time and Place of Delivery

          (a) On the Commencement Date, Charterers shall unconditionally  accept
delivery  of the Vessel  under this  Charter "as is,  where is",  in  whatsoever
condition the Vessel may be at the time of such  delivery.  Such delivery  shall
take place at a location  mutually  agreed by the  parties  and is  referred  to
herein as "Delivery of the Vessel".  On Delivery of the Vessel, Charterers shall
execute and deliver to Owners a Certificate of Acceptance.

          (b) OWNERS MAKE NO REPRESENTATION,  WARRANTY OR GUARANTEE OF ANY KIND,
EXPRESS OR IMPLIED,  STATUTORY  OR  OTHERWISE,  AS TO THE TITLE,  SEAWORTHINESS,
CONDITION,  VALUE, EQUIPMENT DESIGN,  OPERATION,  MERCHANTABILITY OR FITNESS FOR
USE OF THE VESSEL FOR ANY  PARTICULAR  PURPOSE OR AS TO THE  ELIGIBILITY  OF THE
VESSEL  FOR ANY  PARTICULAR  TRADE  OR ANY  OTHER  REPRESENTATION,  WARRANTY  OR
GUARANTEE  WITH  RESPECT  TO THE  VESSEL  AND NONE  SHALL BE  IMPLIED  FROM THIS
CHARTER;  PROVIDED,  HOWEVER,  THAT  OWNERS  WARRANT  THAT OWNERS HAVE AND SHALL
RETAIN WHATEVER TITLE TO THE VESSEL THAT OWNERS RECEIVED FROM CHEVRON  TRANSPORT
CORPORATION   SUBJECT  ONLY  TO  THE  MORTGAGE,   THIS  CHARTER  AND  LIENS  AND
ENCUMBRANCES WHICH CHARTERERS ARE OBLIGATED TO DISCHARGE OR SATISFY.  CHARTERERS
HEREBY WAIVE AS AGAINST  OWNERS AND THE VESSEL,  ALL  REMEDIES,  WARRANTIES  NOT
EXPRESSED IN SUBCLAUSE (b) OF THIS CLAUSE 3 OR LIABILITIES,  EXPRESS OR IMPLIED,
ARISING  BY LAW OR  OTHERWISE  WITH  RESPECT  TO  OWNERS'  TITLE  THERETO OR THE
PHYSICAL  CONDITION  OF THE  VESSEL  AT  THE  TIME  OF  DELIVERY  TO  CHARTERERS
INCLUDING,  BUT NOT LIMITED TO (i) ANY IMPLIED  WARRANTY OF  MERCHANTABILITY  OR
FITNESS FOR A PARTICULAR PURPOSE,  (ii) ANY IMPLIED WARRANTY ARISING FROM COURSE
OF  PERFORMANCE,  COURSE OF  DEALING  OR USAGE OF TRADE,  (iii) ANY  OBLIGATION,
LIABILITY,  RIGHT,  CLAIM OR REMEDY FOUNDED IN STRICT LIABILITY IN TORT AND (iv)
ANY  OBLIGATION,  LIABILITY,  RIGHT,  CLAIM OR REMEDY  FOR LOSS OR DAMAGE TO THE
VESSEL.  The  acceptance  by  Charterers  of the Vessel under this Charter shall
constitute  conclusive proof, as between Owners and Charterers,  that the Vessel
is seaworthy,  and otherwise in the condition required by this Charter,  in good
working  order  and  repair  and  without  defect or  inherent  defect in title,
seaworthiness,  condition,  design, operation or fitness for use, whether or not
discoverable  by Charterers as of the date of such tender,  and generally in all
respects satisfactory to Charterers.

          (c)  Charterers  warrant that upon  Delivery of the Vessel to them the
Vessel shall be in Charterers' custody and under its control.

          4. (RESERVED)

          5. Use and Trade of Vessel

          (a)  Charterers  shall  have full use of the Vessel and may employ the
Vessel worldwide (within Institute  Warranty Limits) in the carriage of suitable
lawful  merchandise.  In no event  shall  Charterers  carry on board the  Vessel
nuclear fuels or radioactive products; provided, however, with the prior written
consent of Owners,  Charterers may carry on board the Vessel  radioisotopes used
or intended to be used for any industrial,  agricultural,  medical or scientific
purposes.

          (b) Charterers undertake not to employ the Vessel or suffer the Vessel
to be employed otherwise than in conformity with the terms of the instruments of
insurance  (including any warranties  expressed or implied therein) without fast
obtaining the consent to such  employment  from their  insurers,  protection and
indemnity  clubs and  underwriters  and complying with such  requirements  as to
extra premium or otherwise as the insurers may prescribe.

          (c)  Charterers  also undertake not to employ the Vessel or suffer her
employment in any trade or business which is forbidden by the law of any country
to which the Vessel may sail or is otherwise  illicit or in carrying  illicit or
prohibited goods.

          (d) As to those  trades in which the  Vessel is  employed,  Charterers
shall comply with any and all requirements regarding financial responsibility or
security  in  respect  of oil or  other  pollution  damage  as  required  by any
government,  any state or other  political  subdivision  thereof,  or any entity
exercising  executive,  legislative,   judicial,  regulatory  or  administrative
functions of or pertaining to government and any other governmental  entity with
authority over Owners or Charterers,  as the case may be, or ownership,  use and
operation  of the Vessel  (whether  or not such  requirement  has been  lawfully
imposed or not) to enable the Vessel,  without  penalty or charges,  lawfully to
enter, remain at, or leave any port, place,  territorial or contiguous waters of
any country, state or municipality in performance of this Charter without delay.
Charterers  shall  make and  maintain  all  arrangements  for  security  bond or
otherwise as may be necessary to satisfy such  requirements at Charterers'  sole
liability and expense and Charterers  shall indemnify Owners against any and all
losses,  damages,   claims,  expenses  or  liabilities  incurred  by  reason  of
Charterers failure to comply with this Clause 5(d).

          6. Documentation and House Flag

          (a) Charterers  agree that it shall,  throughout  the Charter  Period,
maintain  the  documentation  of the Vessel  under the laws of the  Registration
Jurisdiction at Owners' cost and expense;  provided,  however, in the event that
the  costs and  expenses  of  maintaining  such  documentation  are in excess of
$10,000 per annum, then Charterers shall either (i) pay all amounts in excess of
$10,000  per annum or (ii)  cooperate  with the Owner to change the  registry or
port  of  documentation  of the  Vessel.  Owners  agree  to do all  such  things
whatsoever  and  execute and deliver  all such  documents  whatsoever  to enable
Charterers  to  maintain  such  documentation.  Charterers  will not  change the
registry  or port of  documentation  of the  Vessel  without  the prior  written
consent of Owners which consent  shall not be  unreasonably  withheld,  or do or
suffer  or  permit  to be  done  anything  which  will  injuriously  affect  the
documentation  of  the  Vessel  as  a  vessel  documented  under  the  laws  and
regulations of the Registration Jurisdiction.  If Charterers change the registry
or port of documentation of the Vessel, Charterers shall, at time of redelivery,
if Owners so request and at Charterers' expense, change the registry and port of
documentation back to that of the Registration Jurisdiction.

          (b) Charterers all have the right to re-name the Vessel,  to paint the
Vessel in their own colors,  install and display  their funnel  insignia and fly
their own house flag.

          7. Maintenance and Operation

          (a) Except as  provided  in Clause 20,  the  Vessel  shall  during the
Charter Period be in the full  possession  and at the absolute  disposal for all
purposes  of  Charterers  and under  their  complete  control in every  respect.
Charterers  hereby covenant and agree with Owners that during the Charter Period
(and subject to the provisions of Clause 13):


          (i)  Charterers  will  at  their  expense  maintain  the  Vessel,  her
               machinery, cargo handling equipment,  boilers,  appurtenances and
               spare parts in a good state of repair and in efficient  operating
               condition in accordance with good commercial maintenance practice
               commensurate  with other vessels in Charterers'  fleet of similar
               size and trade, ordinary wear and tear excepted; and

          (ii) Charterers  will at their expense keep the Vessel with  unexpired
               classification in accordance with the highest classification of a
               classification  society  that is a  member  of the  International
               Association of Classification  Societies as shall previously have
               been approved by Owners) and other required certificates in force
               and shall make any  improvement or structural  changes or acquire
               any new equipment  necessary to comply with the  requirements  of
               such classification; and

          (iii) Charterers  shall be at liberty to fit any additional  equipment
               required for the services of Charterers,  beyond that on board at
               the  commencement  of  this  Charter,  such  work  to be  done at
               Charterers'  expense and on their time, and such equipment may be
               removed by Charterers at their cost and on their time at any time
               (provided,  however,  that such removal does not adversely affect
               the class or seaworthiness of the Vessel) prior to the expiration
               or any other  termination  of the  Charter.  The  Vessel is to be
               redelivered  to Owners in the same condition and class as that in
               which she is delivered by Owner,  ordinary wear and tear excepted
               and any additional  equipment that cannot be or is not so removed
               shall become the property of Owners; and

          (iv) Charterers  shall not  permit  the  Vessel to proceed to any port
               which is then subject to a prohibition  by the  government of the
               Registration  Jurisdiction or the national government of the port
               in question; and

          (v)  in the event of hostilities in any part of the world (whether war
               be  declared  or not)  Charterers  will not employ the Vessel nor
               suggest her  employment  in carrying any goods which are declared
               contraband  nor suffer her to enter or trade to any zone which is
               declared a War Zone by the War Risks Insurers  unless  Charterers
               have made  arrangements with the said insurers for the payment of
               such additional premiums as said insurers may require to maintain
               the  relevant  insurances  in force or in any zone in  respect of
               which the War Risks Insurers have withdrawn cover for the Vessel;
               and

          (vi) Charterers  will  not use the  Vessel  in any  manner  or for any
               purpose  excepted from any insurance policy or policies taken out
               in  compliance  with  Clause  11  hereof  or for the  purpose  of
               carriage  of  goods  of any  description  excepted  from the said
               insurance  policy  or  policies  and shall not do or permit to be
               done  anything  which could  reasonably be expected to invalidate
               any of the said insurance policy or policies; and

          (vii) Charterers  will not use the  Vessel  in any  manner  or for any
               purpose  or trade or  permit  or  suffer to be done any act which
               will  prejudice  Owners'  ownership  of the  Vessel  or any  part
               thereof.

          (b) During the Charter Period,  Charterers  shall at their own expense
or by their own procurement man, victual,  navigate,  operate,  supply, fuel and
repair the Vessel whenever required and shall, as between themselves and Owners,
be responsible for all charges and expenses of every kind and nature  whatsoever
incidental  to  their  use and  operation  of the  Vessel  under  this  Charter,
including  any foreign,  general,  municipal,  value added or other taxes except
that Charterers shall not be responsible for Owners'  documentation  costs under
clause 6(a) or for Owner Taxes. During the Charter Period, the master,  officers
and crew of the Vessel  shall be engaged and  employed by  Charterers  and shall
remain  Charterers'  servants,  navigating,  managing  and working the Vessel on
behalf of and at the risk of Charterers.

          (c) As  between  themselves  and  Owners,  Charterers  shall  also  be
responsible for any charges and expenses  incidental to the use and operation of
the Vessel while under  requisition  for hire,  during the Charter  Period.  The
foregoing  provision of this sub-clause shall be without prejudice to the rights
of Owners and Charterers against other parties in respect of any such charges or
expenses.  Charterers  shall,  subject to the prior  written  approval of Owners
(such approval not to be unreasonably  withheld),  be entitled to take action in
the name of Owners against other parties in respect of such charges or expenses.
If as a result of any such  action  any moneys  are  received  the same shall be
recovered by Charterers.

          (d)  Charterers  shall make no changes in the  structure of the Vessel
nor major changes in her machinery, appurtenances, spareparts or boilers without
in each instance first securing the written  approval of Owners,  which approval
shall  not be  unreasonably  withheld.  Provided  that if any such  changes  are
required to meet classification  society  requirements,  applicable  regulations
and/or any relevant laws Owners shall not withhold such approval and  Charterers
shall not be  obliged to  reinstate  the  Vessel to its  condition  prior to the
making of such changes.

          (e)  Charterers  shall  drydock  the  Vessel  and  clean and paint her
underwater parts in accordance with good commercial practice,  but not less than
as may be  required  by the  relevant  classification  society  as  provided  in
7(a)(ii) to maintain the Vessel's highest classification.

          (f) Owners (or such persons as they shall appoint or authorize)  shall
have the right at any time on reasonable notice, and in a manner which shall not
interfere with the Vessel's trading requirements to inspect or survey the Vessel
in order to ascertain the condition of the Vessel and to satisfy themselves that
the Vessel is being  properly  repaired and  maintained in  accordance  with the
provisions of this  Charter.  Inspection or survey in drydock shall be made only
when the Vessel is in drydock under the  provisions  of  sub-clause  (e) of this
Clause.  However,  Owners  shall  have the  right to  require  the  Vessel to be
drydocked  for  inspection,  if  Charterers  are not docking her at the required
classification  intervals.  The costs incurred in respect of such drydocking and
any inspection or survey made under this sub-clause  shall be paid by Charterers
to Owners.  All repairs as shall be shown to be required  by any  inspection  or
survey  shall be made at  Charterers'  expense and shall be  completed  within a
reasonable  period of time or such other  period as is specified by the relevant
classification society referred to in Clause 7(a)(ii).  Time taken in respect of
inspection,  survey or repairs shall form part of the Charter Period. Charterers
shall whenever  requested,  on reasonable  notice,  permit Owners to inspect the
Vessel's log books and furnish Owners promptly with full  information  regarding
any casualties or other damage to the Vessel.

          (g)  Owners  shall not be  liable  for any  expense  in  repairing  or
maintaining  the  Vessel or be liable to supply a vessel or any part  thereof in
lieu if the Vessel or any part thereof is lost, damaged, rendered unfit for use,
confiscated,  seized, requisitioned,  restrained or appropriated and the Charter
Hire   payable  in  respect  of  the  Vessel   shall   continue  to  be  payable
notwithstanding  loss or damage (not amounting to a Total Loss) to the Vessel or
any part  thereof  (and  notwithstanding  that the Vessel or any part thereof is
rendered unfit for use or is  requisitioned  for hire).  In the event of a Total
Loss the provisions of Clause 12 shall apply;

          (h)  Charterers  shall not have or be deemed to have any  authority to
pledge  Owners'  credit for any purpose,  including any  maintenance  overhauls,
replacements, repairs and modification of the Vessel.

          8. Redelivery and Status

          (a) Unless the Vessel  suffers a Total Loss,  Charterers  shall at the
end of the Charter Period  redeliver the Vessel to Owners at a safe and ice-free
port or a place  selected  by  Charterers  within the  Vessel's  trading  limits
(within 10 steaming  days from a recognized  loading area) or at such other safe
port as shall be agreed between the parties but  Charterers  shall not be deemed
to warrant  the safety of such port once  redelivery  has  occurred.  The Vessel
shall be redelivered to Owners free and clear of all mortgages,  liens,  claims,
charges and encumbrances  which Charterers are obligated to discharge or satisfy
and in the same or as good structure,  state and condition as those in which she
was  delivered,  ordinary wear and tear alone  excepted.  The time of redelivery
shall be the time when the Vessel is tendered for  redelivery  in class  without
outstanding  requirements  or  recommendations  to enable  the Vessel to proceed
without delay and free of cargo (other than slops).

          (b) At or about the time of  redelivery a survey  shall,  if Owners so
require,  be made to  determine  the  condition  and fitness of the Vessel,  her
machinery and equipment. In that event, Charterers and Owners shall each appoint
surveyors to be present at such survey and the surveyors present shall determine
and state  the  repairs  or work  necessary  to place the  Vessel at the date of
redelivery in the structure,  state and condition  required by sub-clause (a) of
this Clause.  In the event that the Vessel has been dry-docked  within 30 months
prior to  redelivery  and  Charterers  certify in writing to Owners that, to the
best of their  knowledge,  the  Vessel  has had no bottom  touching  since  such
dry-docking, such survey may be conducted while the Vessel is afloat. Owners may
require a diver's  survey of the Vessel.  Charterers  shall bear all expenses of
any such survey.  Charterers shall at their expense make all such repairs and do
all such work so found to be necessary  before  redelivery or at Owners'  option
shall  discharge  their  obligations  hereunder  by  payment  to Owners of a sum
sufficient to provide, at the prices current at the time of redelivery,  for the
work and  repairs  necessary  to place the Vessel in such  structure,  state and
condition. The Charter Period shall be extended until the completion of any such
repairs and work found to be necessary  or the payment of the amounts  described
in this Clause 8(b).

          (c) The  provisions of this Clause shall be subject to the  provisions
of sub-clause (b) of Clause 13 hereof where the Vessel is under  requisition for
hire at or until the end of the Charter Period.

          (d) An  inventory  of  consumable  stores on board the Vessel shall be
made by  Charterers  in  conjunction  with  Owners  on  delivery  and  again  on
redelivery of the Vessel. Charterers and Owners shall respectively take over and
pay for all bunkers,  lubricating oil, water and unbroached provisions,  paints,
oils, ropes and other consumable  stores remaining in the Vessel on delivery and
redelivery  at the market  prices  current at the port of delivery or redelivery
but Charterers  shall not be required to pay for lubricating oil in the Vessel's
system or for  stores  included  in the  Vessel's  specification  or for  stores
arranged and put on board by Charterers' at their own expense.

          (e) The Vessel upon redelivery shall have her survey cycles up to date
and class certificates  valid.  Notwithstanding the provisions of this Clause 8,
Charterers shall ensure that Vessel shall have been dry-docked  within 30 months
prior to redelivery.

          9. Use of Vessel and Payment of Hire

          (a) Charterers shall have the use of all equipment  (which  expression
includes  cabin,  crew and galley  equipment,  navigational  aids and  technical
equipment, furnishings,  furniture and fittings and spare and replacement parts)
that is the  property  of Owners on board at the time of Delivery of the Vessel;
and the same, or their  substantial  equivalent,  shall be returned to Owners on
redelivery in good order and condition,  ordinary wear and tear alone  excepted.
Charterers  shall from time to time during the Charter  Period  replace at their
expense  such items of  equipment  as shall be so damaged or worn as to be unfit
for use.  Such replaced  equipment  shall become part of the Vessel and title to
such replaced equipment shall vest in and the same shall belong to Owners.

          (b) Any hired  equipment  placed on the  Vessel by  Charterers  may be
removed by  Charterers  prior to the  expiration  of the Charter  Period.  If so
requested  by Owners,  Charterers  shall  assist in transfer of  equipment  hire
agreements to Owners or their nominee,  but Charterers  shall not be required to
guarantee  or  assume  any  other  liability  with  respect  to  a  transferee's
performance under said hire agreements.

          (c) During the Charter Period, the Charterer shall pay, without offset
or deduction,  whether or not Vessel is under  arrest,  Charter Hire for the use
and hire of the Vessel at the times and in the amounts  indicated  on Schedule 1
attached hereto and made a part hereof. Unless otherwise notified by Owners, all
payments  of Charter  Hire and other  amounts  payable by  Charterers  to Owners
hereunder  shall be made to an account  nominated  by Owners at  JPMorgan  Chase
Bank, N.A., ABA # 021000021 for credit to Acct. No. ###-##-####,  Re: California
Petroleum  Transport  Corporation  (or to such other  account as Owners may from
time to time  nominate)  and  shall  be made  by wire  transfer  of  immediately
available funds.

          (d) During any extension of the Charter Period, the rate of hire shall
be as set forth on Schedule I.

          (e) Time of payment shall be of the essence. If the date of payment is
a date upon which Owners' nominated bank is not open for business, payment shall
be made on the  first  preceding  Business  Day.  Payment  of sums due under the
provisions  of this Charter shall be made (by close of business New York Federal
Reserve  Bank) by wire  transfer to Owners'  nominated  bank and receipt of such
wire  transfer  by such  bank by 10:00  a.m.  New York  time on the due date for
payment (in accordance with all the provisions of this Charter) shall constitute
timely  payment by the payer of the amount  authorized by such cable or telex to
be paid even though the  payee's  account be not  credited  until after such due
date and the payer  shall not be liable  for any delays or errors  committed  by
such bank in processing payment  instructions  transmitted properly on behalf of
the Charterers.

          (f) If any payment of Charter  Hire  hereunder  shall not be paid when
due Owners  shall be entitled in  addition to call for  interest  thereon at the
rate of interest per annum equal to the Default Rate from and  including the due
date to the date of actual payment (after as well as before judgment) parts of a
day being treated as complete days and Charterers shall thereupon  forthwith pay
the same to Owners.

          10. Mortgage

          (a) Charterers  agree that the financing of the Vessel will be secured
by the  Charter on the  Vessel  and  assignments  of  Owners'  right,  title and
interest under, in and to this Charter.  Charterers  shall execute and deliver a
letter of  acknowledgment  and  consent  to  assignment  of  charter as shall be
requested by Owner.

          (b)  Charterers  agree  that  this  Charter  and  any  other  charters
permitted under Clause 20(a) hereof shall always be subordinated in all respects
to the Mortgage.

          (c) Owners agree that the Mortgage and any other mortgage  hereinafter
placed on the Vessel by Owners  will  contain a  provision  to the  effect  that
throughout  the  Charter  Period,  so long as no Event  of  Default  shall  have
occurred and be continuing and so long as Charterers  shall have performed their
obligations  hereunder,  Charterers  shall be entitled to quiet enjoyment of the
Vessel.

          11. Insurance

          (a)  Insurance  Obligations  - Charterer  shall,  at its own  expense,
provide and maintain the following  insurance and shall ensure that the value of
the  Vessel as  stated  in any  valued  policy  is equal to the  amount  insured
thereunder:

          (i)  hull and  machinery  insurance  for an  amount  not less than the
               Stipulated  Loss Value of the Vessel as per the Norwegian  Marine
               Insurance  Plan. Such insurance  shall include  navigation  limit
               adequate for the vessel's trade and exclude collision liability.

          (ii) protection  & indemnity  insurance  on a full entry basis with an
               International  Group P&I Club. Such insurance shall include,  but
               not be limited to,  coverage for injuries to or death of masters,
               mates and crew; full (4/4ths) collision liabilities and pollution
               liabilities  imposed by federal  and state laws.  Such  insurance
               shall be  unlimited  as per  International  Group P&L Club  rules
               except for pollution  liabilities  which shall be limited to $1.0
               billion or the maximum pollution limit offered by and through the
               P&I Clubs of the International Group.

          (iii) Hull  War  Risk  Insurance  for an  amount  not  less  than  the
               Stipulated  Loss Value of the Vessel as per the Norwegian  Marine
               Insurance Plan. Such insurance shall apply to all areas where the
               Vessel trades but be subject to the War Risks Trading  Warranties
               generally in use in the Hull War Risk Market.

          (b) Insurance Practice

          Charterers  have,  prior to the signing of this  Charter,  outlined to
Owners the insurance  arrangements  at present in force in relation to its fleet
(which  arrangements shall apply to the Vessel on and after the date of delivery
of the Vessel).  Owners hereby confirm their acceptance of such  arrangements as
complying  with  Charterers'  obligations  under the  preceding  sub-clause  (a)
(subject to adjustment thereof in the light of changes in market practice and in
accepted tanker practice).  Charterers  undertake not to alter such arrangements
in a manner that is in material breach of any other provision of this Charter or
otherwise  materially  adverse  to Owners  without  first  notifying  Owners and
obtaining their written approval, such approval not to be unreasonably withheld.

          (c) Loss payable and notice of Cancellation

          (i)  Unless Owners shall have given their prior written  consent,  all
               insurances  effected  pursuant to Clause 11(a)(i) and (iii) shall
               contain a loss payable and notice of  cancellation  clause in the
               following form:

               "LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE"

               (A)  Until  CalPetro  Tankers  (Bahamas  III) Limited  ("Owners")
                    shall have notified underwriters to the contrary:

                    (1)  all  recoveries  up  to  the   Stipulated   Loss  Value
                         hereunder in respect of a total loss or constructive or
                         compromised  or agreed or arranged  total loss shall be
                         paid  in  full  to  Owners  without  any  deduction  or
                         deductions whatsoever; and

                    (2)  all  other  recoveries  shall  be paid in full to Front
                         Voyager Inc. ("Charterers") or to its order without any
                         deduction or deductions whatsoever, and

                (B) Owners shall be advised:

                    (1)  if any  Hull  and  Machinery  insurer  cancels  or give
                         notice of  cancellation  of any  insurance  or entry at
                         least ten (10) days before such cancellation is to take
                         effect;  and

                    (2)  if any hull War Risks  insurer  cancels or gives notice
                         of  cancellation  of any  insurance  or  entry at least
                         seven  (7) days  before  such  cancellation  is to take
                         effect; and

                    (3)  of any default in the payment of any Hull and Machinery
                         premium or call or failure to renew any such  insurance
                         or entry  ten (10)  days  prior to the date of  renewal
                         thereof; and

                    (4)  of any default in the payment of any War Risks  premium
                         or call or failure  to renew any such  entry  seven (7)
                         days prior to the date of renewal thereof."


          (ii) Unless Owners shall have given their prior written  consent,  all
               insurance  and  entries  effected  pursuant  to Clause 11 (a)(ii)
               shall contain a loss payable and notice of cancellation clause in
               the following form:

               "LOSS PAYABLE AND NOTICE OF CANCELLATION CLAUSE

               At  the  request  of the  Owners  and  with  the  consent  of the
               Charterers,  the  protection  and indemnity  club managers may in
               their discretion, agree:

                    (A)  to pay Owners,  or to their  order,  any  recovery  the
                         Charterers  are  entitled to receive  from the funds of
                         the P&I  Club in  respect  of any  liability,  costs or
                         expenses  incurred  by the  Charterers  on  receipt  of
                         notice  from  the  Owners  that the  Charterers  are in
                         default under the Charter; and


                    (B)  to give the Owners ten (10) days' notice that insurance
                         in the P&I Club in  respect  of the Vessel is to cease;
                         and

                    (C)  to give the  Owners  ten (10)  days'  notice of the P&I
                         Club's   intention  to  cancel  the  insurance  of  the
                         Charterers  by mason of their  failure  to pay when due
                         and demanded any sum due from them to the P&I Club.

          (d) Information as to insurances

          Charterers   shall  give  Owners  and  its  insurance   advisers  such
information  as to the  insurances  taken  out or being  or to be  taken  out in
compliance with Charterers'  obligations under the foregoing  provisions of this
Clause or as to any other  matter  which may be relevant to such  insurances  as
Owners or their advisers may reasonably request.

          12. Total Loss, Requisition for Title. Capture. Seizure

          (a) If a Total Loss shall occur,  this Charter and the  obligation  of
Charterers to pay Charter Hire  hereunder  shall  continue and be payable as set
forth herein until  Charterers  have  complied  with this Clause 12.  Charterers
shall forthwith notify Owners of the facts and  circumstances of such Total Loss
and  Charterers  shall,  on the date  which is 90 days after the Total Loss (the
"Loss  Date"),  pay to Owners the amount  determined  pursuant to paragraph  (b)
below.  Charterers shall give Owners at least 15 days prior notice in writing of
the Loss Date. On the Loss Date, Charterers shall pay such amount to Owners, and
thereupon this Charter shall terminate and Charter Hire payable  hereunder shall
cease.

          (b) The  amount  payable on any such Loss Date shall be the sum of (i)
any deficiency  between (A) the Stipulated  Loss Value in relation to the period
in question  calculated by the  application  of Schedule 2 and (B) all insurance
proceeds  for  damage  to or  loss  of  the  Vessel  and  amounts  paid  by  any
governmental authority in connection with any requisition, seizure or forfeiture
actually  received in hand by Owners or the  Mortgagee  prior to or on such Loss
Date; and (ii) all Charter Hire accrued (on a daily basis) but unpaid  hereunder
to such Loss Date and any other sums due under any  provisions  of this Charter,
together with interest  thereon at the Default Rate from the date upon which any
such  Charter  Hire or  other  sums  was due  until  the  date  upon  which  the
calculations  are made for the  purposes of this Clause  which date shall be the
Loss Date. The foregoing  obligations  of Charterers  under this Clause 12 shall
apply  regardless of whether or not any moneys are payable under the  insurances
effected  in  compliance  with  Clause  11  hereof  in  respect  of the  Vessel,
regardless also of the amount payable  thereunder,  regardless also of the cause
of the Total Loss and, regardless of whether or not any of the said compensation
shall  be  payable.  This  Charter  shall  terminate  upon  the  fulfilhnent  by
Charterers of their obligations under this subclause.

          (c) If Charterers  shall have made a payment to Owners pursuant to the
foregoing  provisions  of  sub-clause  (b)  of  this  Clause  and  Owners  shall
subsequently  receive any insurance  monies or other  compensation  contemplated
under such  Clause  (b) the same  shall be  immediately  applied  first  towards
repayment  to  Charterers  of the amount of any such  payment and second (to the
extent  that the  further  insurance  monies or  compensation  shall  exceed the
amounts paid by Charterers and so repaid by Owners) to Charterers.

          (d)  Charterers  shall be liable for any loss of any part of or damage
to the Vessel (other than a Total Loss in which event the  foregoing  provisions
of this clause shall apply) during the Charter Period from whatsoever cause such
loss or  damage  may  arise,  unless  the same  shall  have  been  caused by the
negligence  or wilful act of Owners,  their  servants  or agents  (except  where
Charterers or their servants and agents are acting as agents of Owners).  In the
event of repairable  damage to the Vessel or any part thereof or loss of part of
the Vessel,  Owners shall, subject to their prior right to retain any sums which
may be due from  Charterers  to Owners  under the  terms of this  Charter,  make
payment to  Charterers  of moneys  received  under the  insurances  effected  in
compliance with Clause 11 upon Charterers  furnishing  evidence  satisfactory to
Owners that all such damage has been made good or repaired or repairs  have been
put in hand.

          (e) For the  purpose of this  Clause 12,  insurers  shall be deemed to
have  admitted a claim either on the date that they inform Owners that the claim
is  admitted  or upon the date that they make  payment to Owners  even though no
claim has ever been admitted.

          (f) Owners shall,  upon the request of  Charterers,  promptly  execute
such documents as may be required to enable  Charterers to abandon the Vessel to
insurers  and claim a  constructive  total loss  provided  that Owners  shall be
entitled by notice in writing to Charterers to require that the Vessel shall not
be abandoned  and that a partial loss only shall be claimed,  in which case this
Charter  shall  terminate as from the date of the event giving rise to such loss
and any  insurance  payments  in  respect of the  partial  loss shall be paid to
Owners.  Save as  aforesaid,  any moneys  payable by insurers for a partial loss
shall be paid to  Charterers  and Owners  shall,  at the  request and expense of
Charterers,  take or procure to be taken all such reasonable steps as Charterers
may require for the recovery of such moneys.

          13. Requisition for Hire

          (a) If the Vessel is  requisitioned  for hire by any  governmental  or
other  competent  authority  during the  Charter  Period,  then unless and until
following such  requisition  the Vessel becomes a Total Loss, this Charter shall
continue in full force and effect for the  remainder of the Charter  Period (and
Charterers  shall  be  fully   responsible  for  due  compliance  with  all  its
obligations  under (i) Clause 11 and (ii) the other  provisions of this Charter,
other than those which  Charterers are unable to comply with solely by virtue of
the aforesaid requisition for hire); provided, however, that if Charterers shall
duly comply with all of their  obligations under this Charter save as aforesaid,
Charterers  shall be  entitled  to all  requisition  hire  paid to  Owners or to
Charterers by such  governmental or other  competent  authority or by any person
acting by the  authority of the same on account of such  requisition  during the
Charter Period.

          (b) Should the  Vessel be under  requisition  for hire at or until the
end of the Charter Period:

               (i)  Charterers  shall,  if they are  prevented  by reason of the
                    requisition  from  redelivering  the Vessel under sub-clause
                    (a) of Clause 8 hereof, be relieved from their obligation so
                    to do, provided that if the party  requisitioning the Vessel
                    does not at the end of the period of  requisition  redeliver
                    the Vessel to Owners at such place as Owners shall  request,
                    Charterers  shall  upon the  written  request  of Owners use
                    their best  endeavors to redeliver  the Vessel in accordance
                    with sub-clause (a) of Clause 8;

               (ii) after such  release  Charterers  shall be given a reasonable
                    opportunity  of  removing  any  such   additional  or  hired
                    equipment  as is referred to in  sub-clause  (b) of Clause 9
                    hereof on the terms referred to in that sub-clause;

               (iii) notwithstanding   any  other  provision  of  this  Charter,
                    Charterers  shall be under no liability to Owners in respect
                    of the  structure,  state or condition of the Vessel insofar
                    as such  structure,  state or condition is due to the manner
                    in which she has been used or treated or to any events which
                    have occurred during the period of such requisition.

          14. Liens: Notice on Vessel

          (a) Charterers will not suffer,  nor permit to be continued,  any lien
or encumbrance  incurred by them or their agents, which might have priority over
the title and interest of Owners in the Vessel.  Charterers  shall indemnify and
hold Owners  harmless  against any lien of  whatsoever  nature  arising upon the
Vessel during the Charter  Period while she is under the control of  Charterers,
and  against  any claims  against  Owners  arising  out of or in relation to the
operation of the Vessel by  Charterers.  Should the Vessel be arrested by reason
of  claims  or liens  arising  out of her  operation  hereunder  by  Charterers,
Charterers  shall at their own expense take all reasonable  steps to secure that
within a reasonable  time the Vessel is released and at their own expense put up
bail to secure release of the Vessel.

          (b)  Charterers  will fasten to the Vessel in a conspicuous  place and
will keep so fastened during the Charter Period a notice reading as follows:

               "This  Vessel is the property of and is  registered  in
               the name of CalPetro Tankers (Bahamas III) Limited; she
               is under  charter  by demise to and  operated  by Front
               Voyager Inc. and neither  Charterers nor the Master nor
               any  servant  or  agent   thereof  has  any   authority
               whatsoever to contract on behalf of Owners or to pledge
               Owners'  credit or to involve  Owners in any  liability
               whatsoever"

or in such other form as Owners may reasonably require from time to time.

          15. Salvage

          All salvage and all proceeds from derelicts  shall be for  Charterers'
benefit and the cost of repairing  damage  occasioned  thereby shall be borne by
Charterers.

          16. General Average

          General Average,  including Owners' portion,  if any, shall be payable
by  Charterers.  General  Average,  if any,  shall be adjusted  according to the
York-Antwerp Rules 1974, as amended 1990, or any subsequent modification thereof
current at the time of the casualty.

          17. Default: Remedies

          (a) If during the term of this Charter.

               (i)  Charterers  shall make default for two Business  Days in any
                    payment in  respect  of Charter  Hire due under the terms of
                    this Charter.

               (ii) Charterers  shall fail for a period of thirty (30)  Business
                    Days  after  written   notice  thereof  has  been  given  to
                    Charterers  by  Owners to  perform  and  observe  any of the
                    covenants,  conditions,  agreements or  stipulations  on the
                    part of  Charterers  to be performed  or observed  contained
                    herein  (other  than  sub-clause  (a)(i)  and  (v)  of  this
                    Clause).

               (iii) Charterers  cease  doing  business  as a going  concern  or
                    generally cease to pay their debts as they become due or any
                    proceedings  under any  bankruptcy  or  insolvency  laws are
                    instituted against Charterers or if a receiver or trustee is
                    appointed  for  Charterers  or for any of  their  assets  or
                    properties, and such proceeding is not dismissed, vacated or
                    fully stayed within sixty (60) days.

               (iv) Charterers  shall  create or  suffer to exist any  mortgage,
                    charge,  pledge or other like encumbrance over the Vessel or
                    any part  thereof  not  created  or  caused  by Owners or by
                    persons  claiming by,  through or under Owners or shall have
                    abandoned  the Vessel.  The foregoing  provisions  shall not
                    apply to any notice of  abandonment  which  Charterer's  may
                    give to insurers under the provisions of Clause 12.

               (v)  Charterers  fail to comply with any of their  obligations as
                    to insurance contained in Clause 11.

               (vi) Charterers  shall within  thirty (30) days of any  scheduled
                    date of redelivery  hereunder fail to provide  adequate bail
                    or  security  when  required  so  to do in  respect  of  any
                    maritime  lien,  possessory  lien or statutory  right in rem
                    which maybe  acquired  over the Vessel not created or caused
                    by Owners or by persons claiming by, through or under Owners
                    in order to prevent the Vessel being arrested,  impounded or
                    seized or if any such  lien,  right or claim over the Vessel
                    is   exercised   by  the  arrest,   attachment,   detention,
                    impounding  or  seizure  of the  Vessel  under any  distress
                    execution or other process,  or any distress or execution is
                    levied  thereon,  and  Charterers  fail  to use  their  best
                    endeavors  to procure  the  release of the Vessel  therefrom
                    within thirty (30) days of any scheduled  date of redelivery
                    hereunder.

          THEN  AND  IN  ANY  SUCH  EVENT  Owners  may,  by  written  notice  to
Charterers,  declare  this Charter to be in default and Owners may:

          (a)  (i) Upon written demand,  cause Charterers at Charterers' expense
               to, and Charterers shall promptly,  redeliver the Vessel or cause
               the Vessel to be  redelivered,  with all  reasonable  dispatch to
               Owners and in the condition  required by the terms of Clause 8 as
               if the Vessel were being  redelivered  at the  expiration  of the
               Charter  Period,  and all  obligations  of Charterers  under said
               Clause 8 shall apply to such redelivery,  or (ii) Owners or their
               agent, at Owners' option,  without further notice, may, but shall
               be under no  obligation  to,  retake the Vessel  wherever  found,
               whether upon the high seas or in any port, harbor, or other place
               and irrespective of whether  Charterers,  any subcharterer or any
               other  Person may be in  possession  of the  Vessel,  all without
               prior  demand and without  legal  process,  and for that  purpose
               Owners  or their  agent may  enter  upon any dock,  pier or other
               premises where the Vessel may be and may take possession thereof,
               without  Owners or their agent  incurring  any liability by on of
               such retaking,  whether for the restoration of damage to property
               caused by such retaking or  otherwise.  The exercise by Owners of
               their  remedies  under  this  subparagraph  (a) shall be  without
               prejudice,  and in  addition,  to any of Owners'  other  remedies
               referred to below.

          (b)  Owners or their  agent may sell the  Vessel at public or  private
               sale,  with or without  notice to  Charterers,  advertisement  or
               publication,  as Owners may  determine,  or otherwise may dispose
               of, hold, use, operate,  charter (whether for a period greater or
               less than the balance of what would have been the Charter  Period
               in the absence of the  termination of  Charterers'  rights to the
               Vessel) to others or keep the Vessel idle,  all on such terms and
               conditions  and at such place or places as Owners  may  determine
               and all free and  clear of any  rights of  Charterers  and of any
               claim  of  Charterers  in  admiralty,  in  equity,  at  law or by
               statute, whether for loss or damage or otherwise, and without any
               duty to account to Charterers.

          (c)  Charterers  shall be liable for any and all Charter  Hire payable
               under this Charter before, during or after the exercise of any of
               the foregoing remedies and for all reasonable costs including all
               legal fees and any other costs and expenses  whatsoever  incurred
               by Owners by reason of the occurrence of any default or by reason
               of the  exercise  by Owners of any remedy  hereunder,  including,
               without limitation,  all costs and expenses incurred by Owners in
               connection  with  any  retaking  of  the  Vessel  and,  upon  the
               redelivery  or  retaking  of the Vessel in  accordance  with this
               Clause  17,  the  placing  of the  Vessel  in the  condition  and
               seaworthiness  required  by the  terms of  Clause  8  hereof  and
               including interest on overdue Charter Hire.

          (d)  Each and every  right,  power and remedy  herein  given to Owners
               shall be  cumulative  and  shall be in  addition  to every  other
               right, power and remedy herein given or now or hereafter existing
               at law,  in equity,  admiralty  or by statute  and each and every
               power and remedy whether  herein given or otherwise  existing may
               be exercised  from time to time and as often and in such order as
               may be  deemed  expedient  by  Owners,  and the  exercise  or the
               beginning of the exercise of any right, power or remedy shall not
               be  construed to be a waiver of the right to exercise at the same
               time or  thereafter  any  other  power  or  remedy.  No  delay or
               omission  of Owners to exercise  any right or power  vested in it
               hereunder  shall  impair such right or power or be construed as a
               waiver  of or as  acquiescence  in any  default  by  Owners or be
               deemed a waiver of any right arising out of any future default or
               of any past  default.  In the event  Owners at any time  agree to
               waive any such right or power,  such waiver shall be revocable by
               Owners at any time and the  right or power  shall  henceforth  be
               again  exercisable as though there had been no such waiver unless
               the Event of Default has been cured.  In the event  Owners  shall
               have  proceeded  to enforce  any right or pursue any power  under
               this Charter and such proceedings shall have been discontinued or
               abandoned for any reason, or shall have been determined adversely
               to  Owners,  then and in every  such case  Charterers  and Owners
               shall be restored to their former  positions and rights hereunder
               with respect to the property subject or intended to be subject to
               this Charter and all rights,  remedies and powers of Owners shall
               continue as if no such proceedings had been taken.

          (e)  The rights and powers of Owners and the obligations of Charterers
               under  this  Clause  17  shall  be  effective   and   enforceable
               regardless of the pendency of any  proceeding  which has or might
               have the effect of preventing Owners or Charterers from complying
               with the terms of this Charter.  No express or implied  waiver by
               Owners of any default  shall in any way be, or be construed to be
               a waiver of any further or subsequent default.

          18.  Termination

          In the event (a) a Total Loss shall have occurred and Charterers shall
have remitted to Owners the amounts  described in Clause 12(b) or (b) Charterers
shall  have  remitted  to Owners  the  amounts  described  in Clause  19,  then,
notwithstanding  anything to the contrary  contained  herein,  the Charter shall
continue with respect to Charterers' obligation to pay such amount to Owners and
shall  terminate  on (x) the date which is 367 days after the date on which such
amounts  have been  remitted  to Owners or the  Owners'  assignee  or (y) if (i)
Charterers   commence  a  voluntary  case  under  any   applicable   bankruptcy,
insolvency,  or other  similar law now or hereafter in effect,  (ii) a receiver,
liquidator,  assignee,  custodian,  trustee or  sequestrator  (or other  similar
official) is  appointed  for  Charterers  or for any  substantial  part of their
property,  (iii) Charterers generally fail to pay their debts as they become due
or (iv) Charterers make a general  assignment for the benefit of creditors,  the
expiration  of the  period  during  which  any  payment  made by or on behalf of
Charterers  may  be  avoided  under  any  applicable   bankruptcy,   insolvency,
creditors' rights or similar laws.

          19. Payments on Termination

          Whether or not Owners shall have exercised, or shall thereafter at any
time  exercise,  any options,  rights or remedies  under Clause 17, upon or as a
consequence  of a breach of contract by Charterers  amounting to  repudiation by
Charterers of this Charter,  Owners may immediately require Charterers to pay to
Owners,  and Charterers shall pay to Owners as liquidated  damages for loss of a
bargain  and  not as a  penalty,  an  amount  equal  to (i)  the  sum of (A) the
Stipulated  Loss Value in relation to the period in question  calculated  by the
application of Schedule 2, (B) all  outstanding  accrued and unpaid Charter Hire
and (C) any other  amounts due to Owners  under this  Charter on or prior to the
date of payment and (ii) interest  thereon (as well after as before judgment) at
the Default  Rate from the date such  amounts were payable to the actual date of
payment.

          Charterers  shall not be entitled  to any part of the net  proceeds of
the Vessel (if any) whether by way of rebate of Charter Hire or  otherwise.

          20. Assignment and Sub Charter

          (a)  Charterers  may  not  assign  all or  part of  their  rights  and
obligations  under this Charter nor may they charter the Vessel by demise to any
other entity without the prior written consent of Owners, such consent,  subject
always to the Vessel being  maintained  and insured to the same standards as are
adopted  by  Charterers  in  respect  of the  vessels  owned by them,  not to be
unreasonably  withheld;  provided,  however,  that  Charterers  may assign their
rights and  obligations  hereunder  to a  corporation  more than 50% of which is
owned,  directly or indirectly,  by Frontline Ltd. or Ship Finance International
Ltd.  so  long  as  Charterers  remain  responsible  as  principals  for the due
fulfillment  of this Charter and provide such  assurances of  responsibility  to
Owners as they may reasonably request.

          (b)  Charterers  may  otherwise  charter the Vessel  without the prior
consent of Owners provided that Charterers remain  responsible as principals (or
appoint  another  person to be  responsible  in their stead) for  navigating and
managing the Vessel  throughout the period of such charter and for defraying all
expenses in connection with the Vessel  throughout such period or  substantially
all such expenses or than those directly incidental to a particular voyage or to
the employment of the Vessel during that period.

          (c) Owners may not  transfer  or assign to any other  person or entity
all or part of its  rights or  obligations  under  this  Charter  (except to the
Lender  pursuant  to the  Assignment  of Charter  and the  reassignment  of this
Charter to the Collateral  Trustee under the Assignment of Assignment of Charter
(collectively,  the  Assignment  of Charter and the  Assignment of Assignment of
Charter  shall  be  referred  to as  the  "Security  Assignment"))  unless  such
transferee or assignee also assumes the  obligations of Owners under the related
Security  Documents and Charterers shall have given its prior written consent to
such  assignment  and  assumption,  which  consent  shall  not  be  unreasonably
withheld.  In addition,  any transfer of Owners' interest in this Charter (other
than the Security  Assignment) may only be effected by surrender of this Charter
and its reissuance by Charterers to such Owners' assignee or transferee.

          21. Indemnity

          (a)  Charterers  hereby  indemnify  Owners and shall keep Owners fully
indemnified  at all times whether  during the currency of this Charter or at any
time in respect of events arising during the currency of this Charter against:


          (i)  All costs and expenses of operating  and  maintaining  the Vessel
               and of operating,  maintaining  and replacing all parts including
               (but without  prejudice to the  generality of the  foregoing) all
               fuel, oil, port charges,  fees, taxes, levies, fines,  penalties,
               charges,  insurance  premiums,   victualing,   crew,  navigation,
               manning,  operating and freight  expenses and all other outgoings
               whatsoever  payable  by Owners or  Charterers  in  respect of the
               possession or operation of the Vessel or any part thereof, or the
               purchase,  ownership,   delivery,   chartering,   possession  and
               operation,  import to or export from any country, return, sale or
               disposition  of the Vessel or any part  thereof or upon the hire,
               receipts or earnings  arising  therefrom (other than Owners Taxes
               or  documentation  costs except as  otherwise  provided in Clause
               6(a)) which shall be promptly paid by Charterers;

          (ii) All liabilities, claims, proceedings (whether civil or criminal),
               penalties, fines or other sanctions,  judgments,  charges, taxes,
               impositions,  liens, salvage, general average, costs and expenses
               whatsoever which may at any time be made or claimed by Charterers
               or any employee,  servant,  agent or  sub-contractor,  passenger,
               owner,  shipper,  consignee  and  receiver  of goods or any third
               party  (including  governments or other  authorities) or by their
               respective  dependents  arising  directly  or  indirectly  in any
               manner out of the design, construction,  possession,  management,
               repair, certification, manning, provisioning, supply or servicing
               of the Vessel  (whether at sea or not) or the chartering  thereof
               hereunder whether such liability, claims, proceedings, penalties,
               fines, sanctions,  judgments, charges, taxes, impositions, liens,
               salvage, general average, cost or expenses may be attributable to
               any defect in the Vessel or the design, construction,  testing or
               use thereof or from any maintenance,  service, repay, overhaul or
               otherwise  and  regardless  of when or where the same shall arise
               and whether or not the Vessel or the relevant  part thereof is in
               the possession or control of Charterers  (other than Owners Taxes
               or  documentation  costs except as  otherwise  provided in Clause
               6(a)); and

          (iii) Charterers  accept  all  liability  for oil or  other  pollution
               damage resulting from  Charterers'  operation of the Vessel under
               this  Charter  and agree to  promptly  indemnify  and hold Owners
               harmless  from  and  against  any and  all  losses,  damages  and
               expenses  which  Owners may incur as a result of any oil or other
               pollution  damage  resulting  from  Charterers'  operation of the
               Vessel under this Charter, including, but not limited to, Owners'
               liability under the Oil Pollution Act of 1990, as amended, and/or
               the laws of any other jurisdiction relating to oil spills.

          (iv) Owners shall use good faith efforts to notify Charterers promptly
               of any tax for  which it may seek  indemnity.  Charterers  shall,
               subject to the prior  written  approval of Owners (such  approval
               not to be unreasonably  withheld),  be entitled to take action in
               the name of Owners at  Charterers'  expense  against  any  taxing
               authority  in  respect  of any taxes for  which  Charterers  have
               indemnified such Owners, and Owners agree to reasonably cooperate
               with Charterers in taking such action. If as a result of any such
               action any  moneys are  received  that are  attributable  to such
               indemnified  taxes  (including any interest  thereon paid by such
               taxing authority) the same shall be recovered by Charterers.

          (b)  Without  prejudice  to its  generality,  the  provisions  of this
sub-clause  shall extend to claims of persons  (including  governments  or other
bodies  whether  corporate or  otherwise)  who have suffered or allege that they
have suffered  loss,  damage or injury in connection  with any thing done or not
done by the Vessel,  including  in  connection  with any oil or other  substance
emanating or  threatening to emanate from the Vessel and shall extend to levies,
impositions,  calls, or contributions on or required to be made by Owners during
or in respect of the Charter Period.

          (c) If any obligation of Charterers under the foregoing  sub-clause or
under subclause (d) below shall not be discharged when due,  Charterers shall on
demand  forthwith pay to Owners not only the amount of such  obligation but also
interest  thereon at the Default  Rate from the date Owners paid the same to the
date of reimbursement by Charterers (after as well as before judgment)

          (d) In the event of the  Vessel  becoming  a wreck or  obstruction  to
navigation, Charterers shall indemnify Owners against all losses, costs, damages
and expenses  which Owners may in  consequence  thereof  incur  including  those
incurred in respect of the removal or  destruction  of the wreck or  obstruction
under statutory or other powers.

          22. (RESERVED)

          23. General

          (a) Charterers shall give to Owners all such information as Owners may
reasonably  request  with  regard  to the  performance  by  Charterers  of their
obligations hereunder.

          (b)  Charterers  shall  pay all  expenses  (including  legal and other
costs)  incurred  by Owners in  connection  with the  enforcement  of any rights
conferred  upon Owners by this Charter or in or incidental to any action brought
by Owners to recover any hire or other  payments due  hereunder or for breach of
any covenant, agreement, condition or stipulation herein contained or to recover
possession of the Vessel or any part thereof whether any such action proceeds to
judgment or not. Owners shall pay all expenses (including legal and other costs)
incurred  by  Charterers  in  connection  with  the  enforcement  of any  rights
conferred upon Charterers against Owners by this Charter.

          (c) No failure or delay on the part of Owners in exercising  any power
or right  hereunder  shall  operate as a waiver  thereof nor shall any single or
partial  exercise  of any such  right or power  preclude  any  other or  further
exercise of any such right or power.

          (d) This Charter shall not be varied in its terms by an oral agreement
or  representation  or otherwise  than by an  instrument in writing of even date
herewith or  subsequent  hereto  executed by all the parties  hereto or by their
duly authorized representatives.

          (e) If any  term or  provision  of  this  Charter  or the  application
thereof  to any  person  or  circumstance  shall to any  extent  be  invalid  or
unenforceable,  the  remainder  of this Charter or  application  of such term or
provision to persons or circumstances other than those as to which it is already
invalid  or  unenforceable  shall  not be  affected  thereby  and each  term and
provision  of this  Charter  shall be valid and be  enforceable  to the  fullest
extent permitted by law.

          (f) The title to the Clauses and sub-clauses of this Charter shall not
in any way affect the interpretation  thereof; the terms defined in this Charter
have the  meanings  assigned  to them in this  Charter and include the plural as
well as the  singular,  and the use of any  gender  herein  shall be  deemed  to
include the other gender.

          (g) Any  demand,  consent;  record,  election  or notice  required  or
permitted  to be  given  under  this  Charter  shall be in  writing  and sent by
recorded or registered  letter or telefax (and in the case of telefax  confirmed
by  recorded  or  registered   letter)  addressed  as  follows:

               (i)  If to Owners to:
                    c/o McKinney, Bancroft & Hughes
                    Mareva House
                    4 George Street
                    Nassau,  Bahamas
                    Fax No: (242) 328-2520
                    Attention:  Lourey Smith

               (ii) If to Charterers to:
                    c/o Front Voyager Inc.
                    c/o Frontline Management AS
                    Bryggegaten 3
                    0123 Oslo
                    Norway
                    Fax No. +47 23 11 40 44
                    Attention: Finance Department

or in case to such other person or address or addresses or telefax number as any
party may notify in writing to the other parties  hereto.  Any such notice shall
be deemed to have  reached  the  party to whom it is  addressed  (in the case of
notice  given by letter)  five (5) days after  despatch by first class  pre-paid
post  (airmail if from abroad) or (in the case of notice given by telefax)  when
confirmed by a correct  transmission report when despatched and for this purpose
confirmation by letter of notice given by telefax, shall be disregarded.

          (h) This Charter shall be governed by and  construed  and  performance
thereof shall be  determined  in accordance  with the federal laws of the United
States of America and the laws of New York. The obligations, rights and remedies
of the parties  hereunder  shall be  determined  in  accordance  with such laws,
without giving effect to principles of conflicts of law.

         (i) All matters of difference between the parties hereto (other than as
herein  expressly  provided  to the  contrary  and other  than in respect of any
action by Owners for  possession of the Vessel) shall be referred to arbitration
in New York by an arbitrator to be agreed  between  Owners and  Charterers or in
default of such  agreement  within 30 days to be nominated by the  President for
the time being of the Society of Maritime Arbitrators.

          (j) Where it is provided in this  Charter that in default of agreement
a matter is to be determined by an expert under this sub-clause,  the same shall
be determined by such person, firm, corporation or body as may be agreed between
Owners and  Charterers  (or in default of  agreement  as may be nominated by the
Chairman for the time being of the Baltic and Mercantile  Shipping Exchange) who
shall be deemed to act as expert and not as arbitrator  and whose  determination
shall be final and binding on the parties.

          (k) All payments (other than payments pursuant to Clauses 21(a)(i) and
21(a)(ii) and  documentation  costs for Owners' account pursuant to Clause 6(a))
made to Owners shall be made without  deduction for or on account of any present
or future taxes (including value added, turnover,  sales and use taxes), levies,
imposts, duties, deduction,  withholdings and other charges of whatsoever nature
(collectively,  "Charges")  unless  such  deduction  is required by law. If such
deduction  is  required  by law (i) the  sum  payable  by  Charterers  shall  be
increased as may be necessary  so that,  after making all required  withholdings
and deductions (including those applicable to additional sums payable under this
Clause 23(k)), Owners shall receive an amount equal to the sum that Owners would
have  received had no such  withholdings  and  deductions  been made and (ii) as
required  by  applicable  law  Charterers  shall  withhold  or deduct the amount
required  and pay such  amount  to the  relevant  taxing  or other  governmental
authority. If any Charges paid by Charterers are recoverable by Owners from such
taxing or other governmental authority, Charterers shall be entitled to the same
rights  provided in Clause  21(a)(iv).  Owners shall consult with Charterers and
use  reasonable  efforts to agree to a method of avoiding or minimizing any such
deduction that is not in breach of applicable law or governmental  regulation or
of any of the financing documents entered into with the Mortgagee and which will
leave the parties in substantially  the same  contractual  relation as is herein
contained.  Without  limiting the generality of the foregoing,  the Owners shall
take any  lawful  action  to the  extent  necessary  to  prevent  or  avoid  the
imposition of any taxes, including any withholding taxes with respect to Charter
Hire,  by any taxing  jurisdiction  (including  the  Registration  Jurisdiction,
except with  respect to any taxes  included in  documentation  costs for Owners'
account pursuant to Clause 6(a) hereof),  including changing its jurisdiction of
incorporation or residence;  provided however,  that it shall not be required to
take,  or fail to take,  any action (x) if in the opinion of counsel such act or
failure to act would violate  applicable law or (y) if in the reasonable opinion
of Owners the actions  necessary  to avoid or prevent  imposition  of such taxes
would be  unduly  burdensome.  For  purposes  of clause  (y) of the  immediately
preceding  sentence a  requirement  to change the  jurisdiction  of the  Owners'
incorporation or residence shall not be treated as unduly burdensome.

          (l) If any  provision of this Charter  shall be, or shall be rendered,
unenforceable  in whole or in part (which for the  purposes of this Clause shall
include being  contrary to an official code or order for the time being in force
to which either of the parties  hereto is required by law to have regard and the
contravention or the continued  contravention of which could be considered or be
made unlawful)  Owners and Charterers shall use their best endeavors to agree an
amendment or  amendments to the terms of this Charter which would result in this
Charter as so amended being fully  enforceable and achieving  substantially  the
same result  (both  financially  and  otherwise)  so far as concerns  Owners and
Charterers  as this Charter in its executed form would have achieved if the same
had been fully enforceable. If Owners and Charterers are unable to agree to such
an  amendment  or  amendments  then either  party may by notice  request that an
arbitrator be appointed  pursuant to the provisions to Clause 23(i) to determine
whether an amendment or amendments  which would achieve the result set out above
are  possible,  and he  shall be asked  to  specify  them and the  terms of this
Charter shall be amended accordingly.

          (m) The indemnities of Owners by Charterers  contained in this Charter
shall continue in full force and effect (in respect of events  occurring  during
the currency of this Charter)  notwithstanding the termination of the charter of
the Vessel,  the  repudiation by Charterers of this Charter or the expiration of
the charter period by effluxion of time or otherwise.


          (n)  Charterers  and Owners agree that for United  States tax purposes
this Charter is intended to be a financing arrangement and not a true lease, and
Charterers  and Owners  further agree to file their  respective  tax returns and
reports consistent with such intention. This Charter shall be in registered form
within the meaning of section 163(f) of the United States Internal  Revenue Code
of 1986, as amended, and Owners shall provide Charterers upon request, any forms
or reports  reasonably  requested  by  Charterers  to  evidence  such  position,
specifically  including  United States Internal  Revenue Service Form W-8 or any
successor form.

          24. Definitions

          "Assignment of Charter" means the Assignment of this Charter by Owners
as collateral for the Owners obligations to the Lender.

          "Assignment  of  Assignment of Charter"  means the  assignment of this
Charter by the Lender to the  Collateral  Trustee as security  for the  Lender's
obligations under the Indenture.

          "Business Day" means any day other than a Saturday,  a Sunday or a day
on which banking  institutions  in New York,  New York, or in the city and state
where the  Mortgagee's  principal  offices are located,  are  authorized  or are
obligated by law, executive order or governmental decree to be closed.

          "Certificate  of  Acceptance"   means  the  certificate   executed  by
Charterers on the  Commencement  Date indicating  Charterers'  acceptance of the
Vessel under this Charter.

          "Charter  Hire" means the charter hire payable by  Charterers  for the
use and  possession  of the Vessel  payable at the times and in the  amounts set
forth on Schedule 1 attached hereto and made a part hereof.

          "Charter Period" means the period of time from the  Commencement  Date
to the  expiration  or earlier  termination  of this  Charter,  pursuant  to the
provisions  hereof, and shall include any extension thereof pursuant to Clause 2
of this Charter.

          "Collateral  Trustee"  means  J.P.  Morgan  Trust  Company,   National
Association,  not in its  individual  capacity but solely as collateral  trustee
under the  Collateral  Trust  Agreement,  dated as of April 1,  1995,  among the
Lender, the Collateral Trustee and the Trustee.

          "Commencement  Date" means the date on which the Vessel is accepted by
Charterers under this Charter.

          "Compulsory   Acquisition"   means  requisition  for  title  or  other
compulsory  acquisition of the Vessel  (otherwise than by requisition for hire),
capture, seizure,  condemnation,  destruction,  detention or confiscation of the
Vessel by any  government or by persons acting or purporting to act on behalf of
any government or governmental authority.

          "Default  Rate"  means a rate per annum  equal to the sum of 1.50% and
LIBOR as of the commencement of such period; plus any and all penalties, if any,
payable under the second paragraph of Section 6 of the Investment  Agreement (as
defined in Schedule 2 hereto)  occurring as a result of  Charterers'  failure to
pay Charter Hire when due.

          "Event of Default"  means an event  described  in  sub-clauses  (a)(i)
through (a)(vi) of Clause 17.

          "Indenture" means the Indenture, dated as of April 1, 1995 between the
Lender and the Trustee pursuant to which the Term Mortgage Notes were issued.

          "Institute Warranty Limits" means the Institute  Warranties as defined
by the Institute of London Underwriters.

          "Lender" means  California  Petroleum  Transportation  Corporation,  a
corporation organized under the laws of the State of Delaware.

          "LIBOR"  means the rate  calculated  on the basis of the offered rates
for  deposits  in dollars  for a one-month  period  which  appear on the Reuters
Screen LIBO Page as of 11:00 A.M.,  London time,  on the date that is two London
Banking Days  preceding  the date of  calculation.  If at least two such offered
rates appear on the Reuters Screen LIBO Page,  LIBOR will be the arithmetic mean
of such offered rates (rounded to the nearest .0001  percentage  point).  If, at
any time of determination,  the Reuters Screen LIBO Page is not available, LIBOR
will be calculated as the average  (rounded  upward,  if necessary,  to the next
higher  1/16 of 1 %) of the  respective  ratio  per annum at which  deposits  in
dollar;  for a one month period are offered to each of three reference as in the
London  interbank  market at  approximately  11:00 AM., London time, on the date
that is two London  Banking  Days  preceding  the date of  calculation.  Each of
Charterers and Owners (or Owners' assignee) will select a reference bank and the
third  reference  bank will be  selected  by  Charterers  and Owners (or Owners'
assignee) together or, failing agreement,  by the previously  selected reference
banks together.

          "London  Banking  Day" means any day on which  dealings in deposits in
United States dollars are carried on in the London interbank market and on which
commercial  banks are open for domestic and  international  business  (including
dealings in United States dollar deposits) in London and New York.

          "Mortgage" means the Mortgage,  dated the date hereof,  between Owners
and the Mortgagee or any other mortgage  relating to the financing of the Vessel
by Owners.

          "Mortgagee"  means the Lender and any  successor  thereto or any other
mortgagee of the Vessel.

          "Owner Taxes" means any income,  franchise or equivalent tax,  imposed
upon or measured by the net income, stated capital or earned surplus of an Owner
by any  federal,  state,  local or other taxing  authority  of any  jurisdiction
worldwide,  or any tax  imposed  pursuant  to Section  887 of the United  States
Internal  Revenue  Code of 1986,  as amended,  or any taxes that result from the
willful  misconduct or gross  negligence  of an Owner or from the  inaccuracy or
breach of any representation,  warranty or covenant of an Owner contained in any
of  Clauses  6(a),  20,  21(a)(iv),  23(k) or 23(n)  of this  Charter  or in any
document  furnished in  connection  with such Clauses by an Owner,  or any taxes
that would not have been imposed but for the failure of any Owner (a) to provide
to Charterers  (for filing by Charterers with the taxing  jurisdiction  imposing
such taxes or retention in Charterers'  records) upon Charterers' timely request
such  certifications,  information,  documentation  or reports  concerning  such
Owner's identity, jurisdiction of incorporation or residency, or connection with
such taxing jurisdiction or (b) to promptly file upon Charterers' timely request
such  reports  or returns  (which  shall be  prepared  with  reasonable  care in
accordance with Charterers' written  instructions)  claiming (or availing itself
of) any  applicable  extensions or exemptions  (to the extent that timely notice
thereof is provided by Charterers);  provided that Owner Taxes shall not include
any such tax imposed on any amount that is (i) an indemnity or  reimbursement of
an Owner,  (ii) an operating or  maintenance  expense,  or (iii) a tax for which
Charterers are otherwise  liable under this Charter;  and provided  further that
Owner  Taxes  shall  not  include  any  such  tax  imposed  by  any   government
jurisdiction or taxing authority other than the United States Federal government
solely  as a  result  of the  location  of the  Vessel  or the  Vessel's  use by
Charterers.

          "Person" means an individual,  a partnership,  a corporation,  a joint
venture, an unincorporated association, a joint-stock company, a trust, or other
entity or a government or any agency or political subdivision thereof.

          "P&I Club" means a protection and indemnity association.

          "Registration Jurisdiction" means the Commonwealth of the Bahamas.

          "Security   Documents"  means  all  of  the  agreements  executed  and
delivered by Owners to the Lender as collateral security for Owners' obligations
to the Lenders.

          "Stipulated   Loss  Value"   means,   as  of  any  date,   the  amount
corresponding  to such date as  indicated  on  Schedule 2 hereto and made a part
hereof.

          "Term  Mortgage  Notes"  means  the  Lender's  8.52%  First  Preferred
Mortgage Notes Due 2015 in the initial aggregate amount of $117,900,000.

          "Total Loss" means either (a) actual or constructive or compromised or
arranged total loss of the Vessel,  (b) Compulsory  Acquisition of the Vessel or
(c) if so  declared by  Charterers  at any time and in their sole  discretion  a
requisition  for hire of the  Vessel  for a period in  excess  of 180 days.  Any
actual  loss of the  Vessel  shall be  deemed  to have  occurred  at 1200  hours
Greenwich  Mean Time (GMT) on the actual date on which the Vessel was lost or in
the event of the date of the loss being unknown then the actual total loss shall
be deemed to have  occurred at 1200 hours GMT on the day next  following the day
on which the Vessel was last heard of. A constructive total loss shall be deemed
to have  occurred at 1200 hours GMT on the  earliest of: 1) the date that notice
of abandonment of the Vessel is given to the insurers provided a claim for total
loss is  admitted  by the  insurers,  or 2) if the  insurers do not admit such a
claim, at the date and time GMT at which a total loss is  subsequently  adjudged
by a competent court of law or arbitration tribunal to have occurred,  or 3) the
date that a report is rendered by one or more  experts in marine  surveying  and
vessel  valuation  (said  experts to be appointed by Charterers at their expense
and  approved  by  Owners,  such  approval  not  to  be  unreasonably  withheld)
concluding that salvage,  repair and associated costs in restoring the Vessel to
the  condition  specified in Clause 7 exceed the  Vessel's  fair market value in
sound condition.

          "Trustee" means J.P. Morgan Trust Company,  National Association,  not
in its individual  capacity but solely as indenture  trustee under the Indenture
or any successor trustee thereunder.


<PAGE>


          IN WITNESS  WHEREOF the parties  have caused this Charter to be signed
the date and year first above written.

                                          CALPETRO TANKERS (BAHAMAS III) LIMITED



                                          By:  /s/ Tor Olav Troim
                                               ---------------------------------
                                          Name:  Tor Olav Troim
                                          Its:   President



                                          FRONT VOYAGER INC.



                                          By:  /s/ Tom E. Jebsen
                                               ---------------------------------
                                          Name:  Tom E. Jebsen
                                          Its:   President & Director

<PAGE>


                                   SCHEDULE 1


For the initial  two-year  Charter period,  Charter Hire shall be  US$5,050,000,
prepaid in full in advance on March 31, 2006.

On April 1, 2008, if the  Charterer  has not extended the Charter  period beyond
the initial  two-year  period  specified  in Section  2(a) of this  Charter (the
"Initial Period"), or on the date that this Charter shall be terminated,  if the
Charterer has extended such Charter period, the Charterer shall pay to the Owner
an  amount  that  provides  sufficient  funds  (after  giving  effect to (1) any
"gross-up"  of  charterhire  payments  hereunder as a result of any  withholding
taxes  thereon,  (2) the  receipt of the  Termination  Payment  and the  prepaid
charterhire in respect of the Initial Period and Additional  Amounts (as defined
below),  if any, and (3) all fees and expenses  incurred in connection  with the
recharter  of the Vessel) for the payment in full when due of (A) the  remaining
Allocated  Principal  Amount  of the Tenn  Mortgage  Notes  for the  Vessel  and
interest  thereon in  accordance  with the revised  schedule of sinking fund and
principal  payments  (the  "P&I  Schedule")  that  became  applicable  upon  the
termination of the Bareboat  Charter dated as of April 5, 1995 between Owner and
Chevron Transport  Corporation,  as charterer,  (B) the amount of Recurring Fees
and Taxes  for the  Vessel,  (C) the  amount of  Management  Fees and  Technical
Advisor's  Fees for such  Vessel,  (D) the  amount of fees and  expenses  of the
Indenture Trustee, Trustee Fees and Designated Representative's Fee allocable to
the Vessel and (E) an amount at least equal to 30% of the estimated amounts,  on
a per  annum  basis,  referred  to  in  clauses  (B),  (C)  and  (D)  above  for
miscellaneous or unexpected expenses.  Terms used in this paragraph that are not
defined herein shall have the meanings  assigned to such terms in the Collateral
Trust Agreement among California  Petroleum  Transport  Corporation,  the Owner,
certain other vessel owners and J.P. Morgan Trust Company, National Association,
as Collateral  Trustee.  Additionally,  if the Charter period shall be extended,
the Charterer  shall pay to the Owner,  on or prior to the  commencement of such
extension period, an amount ("Additional  Amount") equal to the lesser of (i) an
amount equal to the Allocated  Principal  Amount of the Term Mortgage  Notes for
the Vessel and interest  thereon  that shall become due and payable  during such
extension  period in accordance with the P&I Schedule,  and (ii) the amount that
provides  sufficient  funds  (after  giving  effect  to (1)  any  "gross-up"  of
charterhire payments hereunder as a result of any withholding taxes thereon, (2)
the receipt of the Termination Payment and the prepaid charterhire in respect of
the Initial Period and Additional  Amounts previously paid, if any, (3) all fees
and expenses incurred in connection with the recharter of the Vessel and (4) all
amounts paid in accordance  with the P&I Schedule  after April 1, 2006 under (i)
above for the payment in full when due of the remaining amounts reflected on the
P&I Schedule. Other as set forth in this paragraph, no other charterhire will be
payable in respect of an extension period.

<PAGE>

                         Schedule 2 to Bareboat Charter

Stipulated  Loss Value means, as of any date, the aggregate of (a) the Allocated
Principal  Amount  corresponding  to the period in which such date  occurred  as
indicated on Schedule 2A, and (b) any amounts  (other than Charter  Hire) due to
Owner  under  this  Charter  on or  prior  to  the  date  of  payment.