Document:

d864565_ex4-4.htm

    Exhibit 4.4

      

      
        	 
      
	 
	
                 

                 

                 

                 

                CALPETRO
      TANKERS (BAHAMAS III) LIMITED

                 

                 

                and

                 

                 

                FRONT VOYAGER INC.

                 

              
	 
	 
	 
	 
      
	
                 

                BAREBOAT
      CHARTER

                 

              
	 
      
	
                 
      

                 

                 

                 

                 

              
	 
	 

      

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      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 

              	
                9

              

      

       

      
        	
                12.

              	
                Total
      Loss, Requisition for Title, Capture, Seizure 

              	
                11

              

      

       

      
        	
                13.

              	
                Requisition
      for Hire 

              	
                12

              

      

       

      
        	
                14.

              	
                Liens;
      Notice on Vessel 

              	
                13

              

      

       

      
        	
                15.

              	
                Salvage 

              	
                14

              

      

       

      
        	
                16.

              	
                General
      Average 

              	
                14

              

      

       

      
        	
                17.

              	
                Default;
      Remedies 

              	
                14

              

      

       

      
        	
                18.

              	
                Termination 

              	
                17

              

      

       

      
        	
                19.

              	
                Payments
      on Termination 

              	
                17

              

      

       

      
        	
                20.

              	
                Assignment
      and Sub Charter 

              	
                17

              

      

       

      
        	
                21.

              	
                Indemnity 

              	
                18

              

      

       

      
        	
                22.

              	
                [RESERVED] 

              	
                20

              

      

       

      
        	
                23.

              	
                General 

              	
                20

              

      

       

      
        	
                24.

              	
                Definitions 

              	
                23

              

      

       

      

      
        
           

        

        
          -i-

          
            

          

        

        
           

        

      

      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. CRAIN) (hereinafter called the “Vessel”), Official No. 9633, of
about 88,946 gross tons and 155,127 deadweight tons, built in 1992 in Rio De
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 prior 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 rate 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 TIE 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, (ii) 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 first 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.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      (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
shall 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):

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      
        	
                (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

              

      

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      
        	
                (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.

       

       

      
        
          
          

        

        
          -5-

          
            

          

        

        
          
          

        

      

       

      (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).

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      (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.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      (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.

       

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      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&I 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”

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

      
        	
                (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 gives 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:

       

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      
        	
                (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 reason 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 fulfillment 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.

       

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

       

       

      (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:

       

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

      
        	
                (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.

       

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      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.

              

      

       

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      
        	
                (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 may be 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 reason 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.

       

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

      (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.

       

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

      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.

       

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

      (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 other 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;

              

      

       

      
      

       

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

      
        	
                (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,
      repair, 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 b(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.

              

      

       

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

      
      

       

      (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.

       

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

      (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.

       

      
        
           

        

        
          -21-

          
            

          

        

        
           

        

      

       

      (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.

       

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

      (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.

       

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

      “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 dollars for a one month period
are offered to each of three reference banks in the London interbank market at
approximately 11:00 A.M., 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.

       

      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

      “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.

       

      
        
           

        

        
          -25-

          
            

          

        

        
           

        

      

      “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.

       

      
        
           

        

        
          -26-

          
            

          

        

        
           

        

      

      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
      Trøim

                Name:     
      Tor Olav Trøim

                Its:          
       President

              
	 
      
	 	
                FRONT
      VOYAGER INC.

              
	 	 
      
	 	
                By:           /s/ Tom E.
      Jebsen

                Name:     
      Tom E. Jebsen

                Its:          
       President & Director

              

      

      

      
        
           

        

        
          -27-

          
            

          

        

        
           

        

      

      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 Term 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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      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.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Schedule
2A

       

      
        	
                Period

              	 	 	 
	
                From

              	
                To

              	 	
                Amount

                (in
      millions)

              	 
	 
      	 
      	 	 	 
	
                4/1/06

              	
                3/31/07

              	 	$	12.744	 
	
                4/01/07

              	
                3/31/08

              	 	$	11.328	 
	
                4/01/08

              	
                3/31/09

              	 	$	9.912	 
	
                4/01/09

              	
                3/31/10

              	 	$	8.496	 
	
                4/01/10

              	
                3/31/11

              	 	$	7.080	 
	
                4/01/11

              	
                3/31/12

              	 	$	5.664	 
	
                4/01/12

              	
                3/31/13

              	 	$	4.248	 
	
                4/01/13

              	
                3/31/14

              	 	$	2.832	 
	
                4/01/14

              	
                3/31/15

              	 	$	1.416	 

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

      Exhibit
4.2

        

        
          	 
      
	 
	
                   

                   

                   

                   

                  CALIFORNIA
      PETROLEUM TRANSPORT CORPORATION

                   

                   

                  and

                   

                   

                  CALPETRO
      TANKERS (BAHAMAS III) LIMITED

                   

                
	 
	 
	 
	 
      
	
                   

                  ASSIGNMENT
      OF CHARTER

                   

                  Dated as of March 31, 2006

                   

                
	 
      
	
                   
      

                   

                   

                   

                   

                
	 
	 

        

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

      
      

       

      
      

       

      
        	 	 Page

      

       

      ARTICLE
I

      DEFINITIONS

       

      ARTICLE
II

      ASSIGNMENT

       

      
        	
                Section
      2.01

              	
                Security
      Interest 

              	
                1

              

      

       

      
        	
                Section
      2.02

              	
                Assignment 

              	
                1

              

      

       

      
        	
                Section
      2.03

              	
                Owner
      to Remain Liable 

              	
                2

              

      

       

      ARTICLE
III

      REPRESENTATIONS
AND WARRANTIES OF THE OWNER

       

      
        	
                Section
      3.01

              	
                Organization,
      Power and Status of the Owner 

              	
                2

              

      

       

      
        	
                Section
      3.02

              	
                Authorization;
      Enforceability; Execution and Delivery

              	
                2

              

      

       

      
        	
                Section
      3.03

              	
                No
      Conflicts; Laws and Consents; No Default 

              	
                3

              

      

       

      
        	
                Section
      3.04

              	
                Governmental
      Approvals 

              	
                3

              

      

       

      
        	
                Section
      3.05

              	
                Litigation 

              	
                3

              

      

       

      
        	
                Section
      3.06

              	
                No
      Prior Assignment 

              	
                3

              

      

       

      
        	
                Section
      3.07

              	
                The
      Charter 

              	
                3

              

      

       

      ARTICLE
IV

      COVENANTS
OF THE OWNER

       

      
        	
                Section
      4.01

              	
                Consent
      of Charterer 

              	
                3

              

      

       

      
        	
                Section
      4.02

              	
                Enforcement
      of Charter 

              	
                3

              

      

       

      
        	
                Section
      4.03

              	
                Amendment
      of Charter; Assignment of Charter 

              	
                4

              

      

       

      
        	
                Section
      4.04

              	
                Performance
      of Obligations 

              	
                4

              

      

       

      
        	
                Section
      4.05

              	
                Notices 

              	
                4

              

      

       

      
        	
                Section
      4.06

              	
                Further
      Assurances 

              	
                4

              

      

       

      
        	
                Section
      4.07

              	
                Lender
      as Attorney-in-Fact of Owner 

              	
                4

              

      

       

      ARTICLE
V

      MISCELLANEOUS
PROVISIONS

       

      
        	
                Section
      5.01

              	
                Amendment 

              	
                5

              

      

       

      
        	
                Section
      5.02

              	
                Severability 

              	
                5

              

      

       

      
        	
                Section
      5.03

              	
                Notices 

              	
                5

              

      

       

      
        	
                Section
      5.04

              	
                Consent
      to Jurisdiction 

              	
                5

              

      

       

      
        	
                Section
      5.05

              	
                Captions 

              	
                5

              

      

       

      
        
           

        

        
          -i-

          
            

          

        

        
           

        

      

      
        	
                Section
      5.06

              	
                Governing
      Law 

              	
                5

              

      

       

      
        	
                Section
      5.07

              	
                No
      Partnership 

              	
                6

              

      

       

      
        	
                Section
      5.08

              	
                Counterparts 

              	
                6

              

      

       

      
        	
                Section
      5.09

              	
                Survival 

              	
                6

              

      

       

      
        	
                Section
      5.10

              	
                Integration 

              	
                6

              

      

       

      
        	
                Section
      5.11

              	
                Reproduction
      of Documents 

              	
                6

              

      

       

      
        	
                Section
      5.12

              	
                Successors
      and Assigns; Assignment 

              	
                6

              

      

       

      
        	
                Section
      5.13

              	
                General
      Interpretive Principles 

              	
                6

              

      

       

      

      

      
        
           

        

        
          -ii-

          
            

          

        

        
           

        

      

      Assignment
of Charter, dated as of March 31, 2006 (the “Assignment”), between California
Petroleum Transport Corporation, a corporation organized under the laws of the
State of Delaware (the “Lender”) and CalPetro Tankers (Bahamas III) Limited, a
company organized under the laws of The Commonwealth of the Bahamas (the
“Owner”).

       

      PRELIMINARY
STATEMENT

       

      The
Owner has received from the Lender loans in the original aggregate principal
amount of $40,262,000.00 (the “Loans”) pursuant to the Term
Loan Agreement dated as of April 1, 1995 (the “Term Loan Agreement”) between the
Lender and the Owner, as borrower.

       

      The net
proceeds of the Loans were used by the Owner to acquire the m.t. Virgo Voyager
(ex-”WILLIAM E. CRAIN”) (the “Vessel”) from Chevron Transport Corporation (the
“Initial Charterer”). The Initial Charterer has re-delivered the Vessel to
Owner, and the Owner has entered into that certain Bareboat Charter dated March
__, 2006 (the “Charter”) between the Owner and Front Voyager Inc., as charterer
(the “Charterer”). As collateral security for its obligations under the Term
Loan Agreement, the Owner has heretofore assigned, pledged, mortgaged and
granted the Lender a security interest in, inter
alia, the Vessel, the Initial Charter and the earnings and insurances of
the Vessel, and is obligated to assign, pledge, mortgage and grant the Lender a
security interest in the Charter.

       

      NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and of other valuable consideration, receipt of which is hereby
acknowledged, the Owner and the Lender hereby agree as follows:

       

      ARTICLE
I

       

      DEFINITIONS

       

      Capitalized
terms used in this Assignment shall have the meanings assigned to such terms in
Schedule 1 to this Assignment, and the definitions of such terms shall be
equally applicable to both the singular and plural forms of such
terms.

       

      ARTICLE
II

       

      ASSIGNMENT

       

      Section
2.01  Security
Interest.  This Assignment is made and delivered as security for the
Term Obligations.

       

      Section
2.02  Assignment. In order to provide
for the payment of and as security for the Term Obligations the Owner has sold,
assigned, transferred, set over and granted a security interest and does hereby
sell, assign, transfer, set over and grant a security interest unto the Lender,
its successors and assigns, for its and their respective successors’ and
assigns’ own proper use and benefit, all of the Owner’s right, title and
interest in and to the Charter, including without limitation any moneys
whatsoever payable to the Owner under the Charter, together with the income and
proceeds thereof and all other rights and benefits whatsoever accruing to the
Owner under the Charter; provided, however, that the
Owner shall keep the Lender fully and effectively indemnified from and against
all actions, losses, claims, proceedings, costs, demands and liabilities which
may be suffered by the Lender under or by virtue of the Charter or this
Assignment.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Section
2.03  Owner to Remain
Liable. (a) Anything in this Assignment contained to the contrary
notwithstanding, the Owner shall remain liable under the Charter, and shall
observe, perform and fulfill all of the conditions and obligations to be
observed, performed and fulfilled by it thereunder, and the Lender shall have no
obligation or liability of any kind whatsoever thereunder or by reason of or
arising out of this Assignment, nor shall the Lender be under any liability
whatsoever in the event of any failure by the Owner to perform its obligations
thereunder or be required or obligated in any manner to observe, perform or
fulfill any of the conditions or obligations of the Owner thereunder or pursuant
thereto, or to make any payment or to make any inquiry as to the nature or
sufficiency of any payment received by it or the Owner thereunder, or to present
or file any claim, or to take any other action to collect or enforce the payment
of any amounts which may have been assigned to the Lender or to which the Lender
may be entitled hereunder at any time or times.

       

      (b) 
Any
and all rights assigned herein may be further assigned by the Lender, including,
without being limited to, assignments in connection with the enforcement of the
assignments made by this Assignment and any subsequent holder of this Assignment
shall succeed to and have all the rights and powers of the Lender under this
Assignment.

       

      ARTICLE
III

       

      REPRESENTATIONS
AND WARRANTIES OF THE OWNER

       

      The
Owner hereby represents and warrants to the Lender as follows:

       

      Section
3.01  Organization, Power and
Status of the Owner.  The Owner (a) is a corporation duly formed,
validly existing and in good standing under the laws of The Bahamas and (b) is
duly authorized, to the extent necessary, to do business in each jurisdiction
where the character of its properties or the nature of its activities makes such
qualification necessary. The Owner has all requisite corporate power and
authority to own and operate the property it purports to own and to carry on its
business as now being conducted and as proposed to be conducted in respect of
the Vessel.

       

      Section
3.02  Authorization;
Enforceability; Execution and Delivery.  (a) The Owner has all
necessary corporate power and authority to execute, deliver and perform under
this Assignment.

       

      (b)  All
action on the part of the Owner that is required for the authorization,
execution, delivery and performance of this Assignment has been duly and
effectively taken; and the execution, delivery and performance of this
Assignment does not require the approval or consent of any Person except for
such consents and approvals as have been obtained.

       

      (c)  This
Assignment has been duly executed and delivered by the Owner. This Assignment
constitutes the legal, valid and binding obligation of the Owner, enforceable
against it in accordance with the terms thereof.

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      Section
3.03  No Conflicts; Laws and
Consents; No Default.  (a)  Neither the execution, delivery and
performance of this Assignment nor the consummation of any of the transactions
contemplated hereby nor performance of or compliance with the terms and
conditions hereof (i) contravenes any Requirement of Law applicable to the Owner
or (ii) constitutes a default under any Security Document.

       

      (b)  The
Owner is in compliance with and not in default under any and all Requirements of
Law applicable to the Owner and all terms and provisions of this
Assignment.

       

      Section
3.04 
Governmental
Approvals.  All Governmental Approvals which are required to be
obtained in the name of the Owner in connection with the execution, delivery and
performance by the Owner of this Assignment have been obtained and are in
effect.

       

      Section
3.05  Litigation. 
There are no actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending against the Owner or, to the best of the
Owner’s knowledge, threatened against the Owner or pending or threatened against
any property or other assets or rights of the Owner with respect to this
Assignment.

       

      Section
3.06 
No Prior
Assignment.  The Owner has not assigned or pledged, and hereby
covenants that it will not assign or pledge, so long as this Assignment shall
remain in effect, the Charter or any part of the rights, titles and interests
hereby assigned, to anyone other than the Lender, or its successors or
assigns.

       

      Section
3.07 
The Charter. 
The Charter constitutes the legal, valid and binding obligation of the Charterer
and of the Owner as “Owners” thereunder and is in full force and effect in the
form of Exhibit “A” attached hereto; there are no amendments, additions, addenda
or modifications thereto; said Exhibit “A” represents the entirety of the
chartering and other arrangements referred to therein; and neither of the
parties thereto is in default thereunder.

       

      ARTICLE
IV

       

      COVENANTS
OF THE OWNER

       

      The
Owner hereby covenants and agrees that so long as any of the Term Obligations
remains outstanding:

       

      Section
4.01 
Consent of
Charterer.  On the Closing Date, the Owner shall deliver to the
Charterer a copy of this Assignment and shall procure the execution by the
Charterer of the Consents and Acknowledgment set out in Exhibit A hereto and
deliver said Consents and Acknowledgment to the Lender on the Closing
Date.

       

      Section
4.02  Enforcement of
Charter.  (a) The Owner will do or permit to be done each and every
act or thing which the Lender may from time to time require to be done for the
purpose of enforcing the Lender’s rights under the Charter and this
Assignment.

       

      (b) 
If an
Event of Default shall occur under the Term Loan Agreement, the Owner shall
cause all moneys hereby assigned or agreed to be assigned or arising from or in
connection with any of the rights, title, interest and benefits of the Owner
under the Charter shall be paid to the credit of JPMorgan Chase Bank, N.A., ABA
# 021000021 for credit to Acct. No. ###-##-####, Re: California Petroleum
Transport Corporation or to such other account as the Lender may from time to
time direct.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      (c)  The
Owner will not exercise any right or powers conferred on it by the Charter in
connection with any default or alleged default by the Charterer thereunder
(including without limitation the right of termination and substitution) unless
and until requested so to do by the Lender whereupon the Owner agrees that it
will do so provided always that the Lender shall not be responsible in any way
whatsoever in the event that the exercise of any right or power (including the
right of termination and substitution) be thereafter adjudged improper or to
constitute a repudiation of the Charter by the Owner.

       

      Section
4.03 
Amendment of Charter;
Assignment of Charter.  (a) The Owner will not, except with the
previous written consent of the Lender, agree to any variation of the Charter or
release the Charterer from any of its obligations thereunder or waive any breach
of the Charterer’s obligations thereunder or consent to any such act or omission
of the Charterer as would otherwise constitute such breach.

       

      (b)  The
Owner will not, except with the previous written consent of the Lender,
assign the Charter to any other Person.

       

      Section
4.04  Performance of
Obligations.  The Owner will perform its obligations under the
Charter and will use its best efforts to cause the Charterer to perform its
obligations under the Charter.

       

      Section
4.05  Notices.  The
Owner will send a copy of all notices received or given by it under the Charter
forthwith to the Lender.

       

      Section
4.06  Further
Assurances.  The Owner will at any time and from time to time, upon
the written request of the Lender, promptly and duly execute and deliver any and
all such further instruments and documents and take such action as the Lender
may deem desirable in order to obtain the full benefits of this Assignment and
of the rights and powers herein granted.

       

      Section
4.07  Lender
as Attorney-in-Fact of Owner. The Owner hereby constitutes the Lender,
and its successors and assigns, its true and lawful attorney-in-fact,
irrevocably, with full power in its own name, in the name of its agents or
nominees or in the name of the Owner or otherwise, to ask, require, demand,
receive, enforce and give acquittance for, any and all moneys and claims for
moneys due and to become due and payable under or arising out of the Charter, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which to the
Lender may seem to be necessary or advisable under this Assignment. Any action
or proceeding brought by the Lender pursuant to any of the provisions of this
Assignment or otherwise and any claim made by the Lender hereunder may be
compromised, withdrawn or otherwise dealt with by the Lender without any notice
to or approval of the Owner.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      ARTICLE
V

       

      MISCELLANEOUS
PROVISIONS

       

      Section
5.01  Amendment.  This
Assignment may be amended from time to time by written agreement signed by the
parties hereto.

       

      Section
5.02  Severability. 
If any provision of this Assignment is held to be in conflict with any
applicable statute or rule of law or is otherwise held to be unenforceable for
any reason whatsoever, such circumstances shall not have the effect of rendering
the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to any extent whatsoever. The invalidity
of any one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.

       

      Section
5.03 
Notices.  All
demands, notices and communications hereunder shall be in writing, personally
delivered or mailed by certified mail-return receipt requested, and shall be
deemed to have been duly given upon receipt (a) in the case of the Lender, at
the following address: c/o JH Management Corporation, Room 6/9, One
International Place, Boston, Massachusetts 02110-2624, (b) in the case of the
Owner, at the following address: c/o McKinney, Bancroft & Hughes, Mareva
House, 4 George Street, Nassau, Bahamas, or at other such address as shall be
designated by such party in a written notice to the other parties.

       

      Section
5.04 
Consent to
Jurisdiction.  Any legal suit, action or proceeding against the
Owner arising out of or relating to this Assignment, or any transaction
contemplated hereby, may be instituted in any federal or state court in The City
of New York, State of New York and the Owner hereby waives any objection which
it may now or hereafter have to the laying of venue of any such suit, action or
proceeding, and the Owner hereby irrevocably submits to the jurisdiction of any
such court in any such suit, action or proceeding. The Owner hereby irrevocably
appoints and designates CT Corporation System, having an address at 1633
Broadway, New York, New York, its true and lawful attorney-in-fact and duly
authorized agent for the limited purpose of accepting servicing of legal process
and the Owner agrees that service of process upon such party shall constitute
personal service of such process on such Person. The Owner shall maintain the
designation and appointment of such authorized agent until all amounts payable
under this Assignment shall have been paid in full. If such agent shall cease to
so act, the Owner shall immediately designate and appoint another such agent
satisfactory to the Lender and shall promptly deliver to the Lender evidence in
writing of such other agent’s acceptance of such appointment.

       

      Section
5.05 
Captions.  The
captions or headings in this Assignment are for convenience only and in no way
define, limit or describe the scope or intent of any provisions or sections of
this Assignment.

       

      Section
5.06  Governing Law. 
This Assignment shall be governed by and interpreted in accordance with the laws
of the State of New York, without giving effect to the principles of conflicts
of law.

       

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      Section
5.07 
No Partnership. 
Nothing herein contained shall be deemed or construed to create a partnership or
joint venture among the parties hereto and the services of each party shall be
rendered as an independent contractor and not as agent for any other
party.

       

      Section
5.08  Counterparts. 
This Assignment may be executed in any number of counterparts and by different
parties hereto on separate counterpart, each of which shall be deemed to be an
original. Such counterparts shall constitute one and the same
agreement.

       

      Section
5.09  Survival. The
representations, covenants and agreements contained in or made pursuant to this
Assignment in respect of either party hereto shall survive the execution and
delivery of this Assignment and shall continue in effect so long as such party’s
obligations hereunder remain outstanding.

       

      Section
5.10 
Integration. 
This Assignment and the Schedule and Exhibits hereto constitute the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements, understandings or
representations pertaining to the subject matter hereof, whether oral or
written. There are no warranties, representations or other agreements between
the parties in connection with the subject matter hereof except as specifically
set forth or incorporated herein.

       

      Section
5.11  Reproduction of
Documents.  This Assignment and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any electronic, digital, photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

       

      Section
5.12 
Successors and Assigns;
Assignment.  This Assignment shall be binding upon and inure to the
benefit of the Owner and the Lender and their respective successors and assigns.
The Owner shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender. The Lender, at
its sole option, shall have the right to assign this Assignment, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.

       

      Section
5.13 General Interpretive
Principles. For purposes of this Assignment except as otherwise expressly
provided or unless the context otherwise requires:

       

      (a) 
the
defined terms in this Assignment shall include the plural as well as the
singular, and the use of any gender herein shall be deemed to include any other
gender;

       

      (b)  accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles as in effect on the
date hereof;

       

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

      (c)  references
herein to “Articles”, “Sections”, “Subsections”, “paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, paragraphs and other subdivisions of this
Assignment;

       

      (d)  a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to paragraphs and other
subdivisions;

       

      (e)  the
words “herein”, “hereof”, “hereunder” and other words of similar import
refer to this Assignment as a
whole and not to any particular provision; and

       

      (f)  the
term “include” or “including” shall mean without limitation by reason
of
enumeration.

       

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Owner and the Lender have caused this Assignment to be duly
executed and delivered by their respective officers thereunto duly authorized
all as of the day and year first above written.

       

      
        	 	
                CALIFORNIA
      PETROLEUM TRANSPORT CORPORATION, as Lender

              
	 	 
      
	 	
                By:  /s/  Douglas
      Donaldson

                Name: 
      Douglas Donaldson

                Title:   
      Treasurer

              
	 	 
      
	 	
                CALPETRO
      TANKERS (BAHAMAS III) LIMITED,

                as
      Owner

              
	 	 
      
	 	
                By:  /s/ 
      Tor Olav
      Trøim

                Name: 
      Tor Olav Trøim

                Title:   
       President

              

      

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      Exhibit
A

      LETTER
OF ACKNOWLEDGMENT

      TO
ASSIGNMENT OF CHARTER

       

                      March __,
2006

       

      CALIFORNIA
PETROLEUM TRANSPORT

      CORPORATION,
as Lender

       

      J.P.
MORGAN TRUST COMPANY,

      NATIONAL
ASSOCIATION,

      as
Collateral Trustee

       

      Dear
Sirs:

       

      The
undersigned hereby consents to and acknowledges receipt of (i) a signed copy of
the Assignment of Charter (the “Assignment”), dated as of March 31, 2006,
between CalPetro Tankers (Bahamas III) Limited (the “Owner”) and California
Petroleum Transport Corporation (the “Lender”) as adequate notice of such
assignment to the Lender of the Charter (as defined in the Assignment) and of
all the right, title and interest of the Owner in, to and under the Charter and
(ii) a signed copy of the Collateral Assignment of Charter (the “Collateral
Assignment”), dated as of March 31, 2006, between the Lender and J.P. Morgan
Trust Company, National Association (the “Collateral Trustee”) as adequate
notice of such further assignment to the Collateral Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the
Charter.

       

      So
long as the Assignment remains effective, we hereby agree that (a) upon
notification to us of the occurrence of an Event of Default under the Term Loan
Agreement referred to in the Assignment, we shall pay any and all sums which we
are legally obligated to pay to the Owner or otherwise as stated in and
according to the Charter directly to the Collateral Trustee’s Account at
JPMorgan Chase Bank, N.A., ABA # 021000021 for credit to Acct. No. ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing and (b) with respect to each of the insurances, if any, obtained
pursuant to Clause 11 of the Charter, the Lender and the Collateral Trustee
shall, if possible, be named additional assureds.

       

      Payments
of moneys under the Charter may be adjusted, reduced or withheld only as
expressly provided therein. Payments to the Collateral Trustee shall not be
subject to any right of set-off or defense by way of counterclaim or otherwise
which the undersigned may have against the Owner or any entity substituted for
it other than under the Charter and all payment once made to you will be final,
and once paid we will not, for any reason whatsoever, seek to recover from the
Collateral Trustee any such payment made to the Collateral Trustee by virtue of
the Assignment, the Collateral Assignment or this Letter of
Consent.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      We
confirm that the terms of the Charter remain in full force and effect and
constitute the entire agreement between the parties thereto with respect to the
Vessel and that the Owner is not presently to our knowledge in breach of the
terms of the Charter. We further confirm that the terms of the Charter have not
been varied or modified and that the terms of the Charter will not after the
date hereof be varied or modified without the prior written consent of the
Collateral Trustee.

       

      We
confirm that we have received no prior notice of any assignment by the Owner of
any interest in the Charter.

       

      The
undersigned will not permit any amendment, modification, cancellation or other
alteration in the Charter, nor will it consent to or accept the substitution
thereunder of any party for the Owner without your prior written
consent.

       

      
        	 	
                FRONT
      VOYAGER INC., as Charterer

              
	 
      
	 	
                By:
      /s/ Tom E.
      Jebson         

                Name: Tom E.
      Jebson                                                               

                Title:   
      President & Director

              

      

       

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      OWNER’S
LETTER OF ACKNOWLEDGMENT

      TO
COLLATERAL ASSIGNMENT OF CHARTER

       

                  March 31,
2006

       

      J.P.
MORGAN TRUST COMPANY,

      NATIONAL
ASSOCIATION, as Collateral Trustee

       

       

      Dear
Sirs:

       

      The
undersigned hereby consents to and acknowledges receipt of a signed copy of the
Collateral Assignment of Charter (the “Assignment”), dated as of March 31, 2006,
between California Petroleum Transport Corporation (the “Issuer”) and yourselves
as adequate notice of such assignment to you of the Assignment of Charter (as
defined in the Assignment) and of all the right, title and interest of the
Issuer in, to and under the Assignment of Charter.

       

      So
long as the Assignment remains effective, we hereby agree that, upon your
notification to us of the occurrence of an Event of Default under the Term
Indenture referred to in the Assignment, we shall pay any and all sums which we
are legally obligated to pay to the Issuer or otherwise as stated in and
according to the Assignment of Charter directly to JPMorgan Chase Bank, NA., ABA
# 021000021 for credit to Acct. No. ###-##-####, regarding California Petroleum
Transport Corporation, or otherwise to such other account as you may at any time
or from time to time, designate by notice to us in writing.

       

      Payments
of moneys under the Assignment of Charter may be adjusted, reduced or withheld
only as expressly provided therein. Payments to you shall not be subject to any
right of set-off or defense by way of counterclaim or otherwise which the
undersigned may have against the Issuer or any entity substituted for it other
than under the Assignment of Charter and all payments once made to you will be
final, and once paid we will not, for any reason whatsoever, seek to recover any
such payment made to you by virtue of the Assignment or this Letter of
Consent.

       

      We
confirm that the terms of the Assignment of Charter remain in full force and
effect and constitute the entire agreement between the parties thereto with
respect to the Charter and that the Issuer is not presently to our knowledge in
breach of the terms of the Assignment of Charter. We further confirm that the
terms of the Assignment of Charter have not been varied or modified and that the
terms of the Assignment of Charter will not after the date hereof be varied or
modified without your prior written consent.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      We
confirm that we have received no prior notice of any assignment by the Issuer of
any interest in the Assignment of Charter.

       

      The
undersigned will not permit any amendment, modification, cancellation or other
alteration in the Assignment of Charter, nor will it consent to or accept the
substitution thereunder of any party for the Issuer without your prior written
consent.

       

      
        	 	
                CALPETRO
      TANKERS (BAHAMAS III) LIMITED, 

                as
      Owner

              
	 
      
	 	
                By:  /s/  Tor Olav
      Trøim

                Name: 
      Tor Olav Trøim

                Title:    
      President

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      CALPETRO
TANKERS (BAHAMAS III) LIMITED

       

       

      CERTIFICATE

       

       

      The
undersigned hereby certifies to J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,
as Collateral Trustee (the “Trustee”), that the Bareboat Charter dated as of
March 31, 2006 by and between CalPetro Tankers (Bahamas III) Limited, as Owner
(the “Company”), and Front Voyager Inc., as Charterer, constitutes an Acceptable
Replacement Charter as such term is defined and used in that certain Collateral
Trust Agreement dated as of April 5, 1995 by and among California Petroleum
Transport Corporation, CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited, CalPetro Tankers (IOM) Limited, the Company, and the
Trustee.

       

      IN WITNESS WHEREOF, the
Company has caused this Certificate to be executed on its behalf by the
undersigned on and as of the 31st day of March, 2006.

       

      
        	 	
                CALPETRO
      TANKERS (BAHAMAS III) LIMITED

              
	 
      
	 	
                By:  /s/  Tor Olav
      Trøim

                Name:  
      Tor Olav Trøim

                Title:     
      President

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Frontline
Ltd.

      Par
La Ville Place, 4th Floor

      14
Par La Ville Road

      Hamilton
HM JX  Bermuda

       

                                                 
March 31, 2006

       

      J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,

      as
Collateral Trustee

       

      CALPETRO
TANKERS (BAHAMAS III) LIMITED,

      as
Owner

       

      Re:           Notice of Acceptable
Replacement Charter

       

      Ladies
and Gentlemen:

       

      We
refer to the Management and Remarketing Agreement, dated as of April 1, 1995, as
amended (the “Management Agreement”), between the undersigned, as
manager (the “Manager”), and CalPetro Tankers (Bahamas III) Limited, as owner
(the “Owner”). Each capitalized term used but not otherwise defined herein has
the meaning ascribed thereto in the Management Agreement.

       

      We
hereby advise you pursuant to Section 3.05(b) of the Management Agreement that
an Acceptable Replacement Charter (in the form attached hereto, the “New
Charter”) is available in respect of the Vessel, to commence upon redelivery of
the Vessel by the Initial Charterer. We further advise you that we will receive
and promptly deliver to the Collateral Trustee a written confirmation from the
Rating Agencies that the terms and conditions of the New Charter will not result
in the withdrawal or reduction of their respective ratings on the Term Mortgage
Notes. We certify to you that, upon the Rating Agencies giving such
confirmation, the New Charter will constitute an Acceptable Replacement
Charter.

       

      
        	 	
                Very
      truly yours,

              
	 
      
	 	
                FRONTLINE
      LTD.

              
	 
      
	 	
                By:  /s/ Tom E.
      Jebsen

                           
      Tom
      E. Jebsen

                           
      Chief
      Financial Officer

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
1

       

      Defined
Terms Used in the Assignment

       

      “Assignment” or Assignment of
Charter” means the assignment
between the Owner and the Lender, as amended from time to time in accordance
with the terms thereof, pursuant to which the Owner assigns to the Lender all of
its right, title and interest in, to and under the Charter to secure its
obligations under the Loan Agreements.

       

      “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 Trustee’s principal offices
are located, are authorized or are obligated by law, executive order or
governmental decree to be closed.

       

      “Closing Date” means
March __, 2006.

       

      “Event of Default” means an
Event of Default under Section 6.01 of the Term Loan Agreement.

       

      “Front Voyager Inc.” means
Front Voyager Inc., a Liberian corporation.

       

      “Governmental Approval” means
any authorization, consent, approval, license, franchise, lease, ruling, permit,
tariff, rate, certification, exemption, filing or registration by or with any
Governmental Authority relating to the ownership of the Collateral or to the
execution, delivery or performance of the Loan Agreement or any Security
Document.

       

      “Governmental Authority”
means the federal government, any state or other political subdivision
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government and any other
governmental entity with authority over the Owner or operation of the
Vessels.

       

      “Charter” means with respect
to each Vessel, the Bareboat Charter, dated March 31, 2006, between the
Charterer and the Owner.

       

      “Charterer” means Front
Voyager Inc., a Liberian corporation.

       

      “Law” means any statute, law,
rule, regulation, ordinance, order, code, policy or rule of common law, now or
hereafter in effect, and any judicial or administrative interpretation thereof
by a Governmental Authority or otherwise, including any judicial or
administrative order, consent decree or judgment.

       

      “Lender” means California
Petroleum Transport Corporation, a corporation organized under the laws of the
State of Delaware.

       

      “Loans” means, collectively,
the Term Loan.

       

      “Loss Date” means the date
which is 90 days after the occurrence of a Total Loss of the
Vessel.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Mortgage” means, with
respect to the Vessel, the first preferred ship mortgages on the Vessel granted
by the Owner to the Lender, as amended from time to time in accordance with the
terms of such Mortgage.

       

      “Owner” means CalPetro Tankers (Bahamas III)
Limited, a company organized under the laws of The Commonwealth of the
Bahamas.

       

      “Payment Date” means each
April 1 and October 1, commencing April 1, 2006.

       

      “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.

       

      “Registration Jurisdiction”
means the jurisdiction in which the Vessel is or will be
registered.

       

      “Requirement of Law” means,
as to any Person, the certificate of incorporation and by laws or partnership
agreement or other organizational or governing documents of such Person, and,
any Law applicable to or binding upon such Person or any of its properties or to
which such Person or any of its properties is subject.

       

      “Security Documents” means
the Term Loan Agreement, the Mortgage, the Assignment of Charter, the Assignment
of Earnings and Insurances, the Assignment of Management Agreement, the
Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.

       

      “State” means any state of the United States of
America and, in addition, the District of Columbia.

       

      “Term Loan” shall have the
meaning assigned to such term in the Preliminary Statement of this
Assignment.

       

      “Term Loan Agreement” means
the Loan Agreement, dated as of April 1, 1995 between the Owner and the Lender
pursuant to which the Lender makes the Term Loan to the Owner.

       

      “Term Mortgage Notes” means
8.52 % First Preferred Mortgage Notes Due 2015 in the initial aggregate amount
of $117,900,000 issued by the Lender concurrently with the issuance of the
Serial Mortgage Notes.

       

      “Term Obligations” means the
payment, performance or obligations of any kind or nature whatsoever of the
Owner under and pursuant to the Term Loan Agreement, any Security Document and
any instrument, agreement or document referred to therein.

       

      “Trustee” means J.P. Morgan
Trust Company, National Association.

       

      “Vessel” shall have the
meaning assigned to such term in the Preliminary Statement of this
Assignment.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      CHARTERER’S
LETTER OF ACKNOWLEDGMENT

      TO
ASSIGNMENT OF CHARTER

       

                                  
March 31, 2006

       

      CALIFORNIA
PETROLEUM TRANSPORT

      CORPORATION,
as Lender

       

      J.P.
MORGAN TRUST COMPANY,

      NATIONAL
ASSOCIATION,

      as
Collateral Trustee

       

      Dear
Sirs:

       

      The
undersigned hereby consents to and acknowledges receipt of (i) a signed copy of
the Assignment of Charter (the “Assignment”), dated as of March 31, 2006,
between CalPetro Tankers (Bahamas III) Limited (the “Owner”) and California
Petroleum Transport Corporation (the “Lender”) as adequate notice of such
assignment to the Lender of the Charter (as defined in the Assignment) and of
all the right, title and interest of the Owner in, to and under the Charter and
(ii) a signed copy of the Collateral Assignment of Charter (the “Collateral
Assignment”), dated as of March 31, 2006, between the Lender and J.P. Morgan
Trust Company, National Association (the “Collateral Trustee”) as adequate
notice of such further assignment to the Collateral Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the
Charter.

       

      So
long as the Assignment remains effective, we hereby agree that (a) upon
notification to us of the occurrence of an Event of Default under the Term Loan
Agreement referred to in the Assignment, we shall pay any and all sums which we
are legally obligated to pay to the Owner or otherwise as stated in and
according to the Charter directly to the Collateral Trustee’s Account at
JPMorgan Chase Bank, N.A., ABA # 021000021 for credit to Acct. No. ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing and (b) with respect to each of the insurances, if any, obtained
pursuant to Clause 11 of the Charter, the Lender and the Collateral Trustee
shall, if possible, be named additional assureds.

       

      Payments
of moneys under the Charter may be adjusted, reduced or withheld only as
expressly provided therein. Payments to the Collateral Trustee shall not be
subject to any right of set-off or defense by way of counterclaim or otherwise
which the undersigned may have against the Owner or any entity substituted for
it other than under the Charter and all payment once made to you will be final,
and once paid we will not, for any reason whatsoever, seek to recover from the
Collateral Trustee any such payment made to the Collateral Trustee by virtue of
the Assignment, the Collateral Assignment or this Letter of
Consent.

       

      We
confirm that the terms of the Charter remain in full force and effect and
constitute the entire agreement between the parties thereto with respect to the
Vessel and that the Owner is not presently to our knowledge in breach of the
terms of the Charter. We further confirm that the terms of the Charter have not
been varied or modified and that the terms of the Charter will not after the
date hereof be varied or modified without the prior written consent of the
Collateral Trustee.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      We
confirm that we have received no prior notice of any assignment by the Owner of
any interest in the Charter.

       

      The
undersigned will not permit any amendment, modification, cancellation or other
alteration in the Charter, nor will it consent to or accept the substitution
thereunder of any party for the Owner without your prior written
consent.

       

      
        	 	
                FRONT
      VOYAGER INC., as Charterer

              
	 
      
	 	
                By:  /s/ Tom E.
      Jebsen

                Name: Tom
      E. Jebsen

                Title: President
      & Directord864565_ex4-5.htm

     

    Exhibit 4.5

      

      
        	 
      
	 
	
                 

                 

                 

                 

                CALIFORNIA
      PETROLEUM TRANSPORT CORPORATION

                 

                 

                and

                 

                 

                CALPETRO
      TANKERS (BAHAMAS III) LIMITED

                 

              
	 
	 
	 
	 
      
	
                 

                ASSIGNMENT
      OF CHARTER

                 

                Dated as of March 31, 2006

                 

              
	 
      
	
                 
      

                 

                 

                 

                 

              
	 
	 

      

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    
    

     

    
    

     

    
      	 	 Page

    

     

    ARTICLE
I

    DEFINITIONS

     

    ARTICLE
II

    ASSIGNMENT

     

    
      	
              Section
      2.01

            	
              Security
      Interest 

            	
              1

            

    

     

    
      	
              Section
      2.02

            	
              Assignment 

            	
              1

            

    

     

    
      	
              Section
      2.03

            	
              Owner
      to Remain Liable 

            	
              2

            

    

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES OF THE OWNER

     

    
      	
              Section
      3.01

            	
              Organization,
      Power and Status of the Owner 

            	
              2

            

    

     

    
      	
              Section
      3.02

            	
              Authorization;
      Enforceability; Execution and Delivery

            	
              2

            

    

     

    
      	
              Section
      3.03

            	
              No
      Conflicts; Laws and Consents; No Default 

            	
              3

            

    

     

    
      	
              Section
      3.04

            	
              Governmental
      Approvals 

            	
              3

            

    

     

    
      	
              Section
      3.05

            	
              Litigation 

            	
              3

            

    

     

    
      	
              Section
      3.06

            	
              No
      Prior Assignment 

            	
              3

            

    

     

    
      	
              Section
      3.07

            	
              The
      Charter 

            	
              3

            

    

     

    ARTICLE
IV

    COVENANTS
OF THE OWNER

     

    
      	
              Section
      4.01

            	
              Consent
      of Charterer 

            	
              3

            

    

     

    
      	
              Section
      4.02

            	
              Enforcement
      of Charter 

            	
              3

            

    

     

    
      	
              Section
      4.03

            	
              Amendment
      of Charter; Assignment of Charter 

            	
              4

            

    

     

    
      	
              Section
      4.04

            	
              Performance
      of Obligations 

            	
              4

            

    

     

    
      	
              Section
      4.05

            	
              Notices 

            	
              4

            

    

     

    
      	
              Section
      4.06

            	
              Further
      Assurances 

            	
              4

            

    

     

    
      	
              Section
      4.07

            	
              Lender
      as Attorney-in-Fact of Owner 

            	
              4

            

    

     

    ARTICLE
V

    MISCELLANEOUS
PROVISIONS

     

    
      	
              Section
      5.01

            	
              Amendment 

            	
              5

            

    

     

    
      	
              Section
      5.02

            	
              Severability 

            	
              5

            

    

     

    
      	
              Section
      5.03

            	
              Notices 

            	
              5

            

    

     

    
      	
              Section
      5.04

            	
              Consent
      to Jurisdiction 

            	
              5

            

    

     

    
      	
              Section
      5.05

            	
              Captions 

            	
              5

            

    

     

    
      
         

      

      
        -i-

        
          

        

      

      
         

      

    

    
      	
              Section
      5.06

            	
              Governing
      Law 

            	
              5

            

    

     

    
      	
              Section
      5.07

            	
              No
      Partnership 

            	
              6

            

    

     

    
      	
              Section
      5.08

            	
              Counterparts 

            	
              6

            

    

     

    
      	
              Section
      5.09

            	
              Survival 

            	
              6

            

    

     

    
      	
              Section
      5.10

            	
              Integration 

            	
              6

            

    

     

    
      	
              Section
      5.11

            	
              Reproduction
      of Documents 

            	
              6

            

    

     

    
      	
              Section
      5.12

            	
              Successors
      and Assigns; Assignment 

            	
              6

            

    

     

    
      	
              Section
      5.13

            	
              General
      Interpretive Principles 

            	
              6

            

    

     

    

    

    
      
         

      

      
        -ii-

        
          

        

      

      
         

      

    

    Assignment
of Charter, dated as of March 31, 2006 (the “Assignment”), between California
Petroleum Transport Corporation, a corporation organized under the laws of the
State of Delaware (the “Lender”) and CalPetro Tankers (Bahamas III) Limited, a
company organized under the laws of The Commonwealth of the Bahamas (the
“Owner”).

     

    PRELIMINARY
STATEMENT

     

    The
Owner has received from the Lender loans in the original aggregate principal
amount of $40,262,000.00 (the “Loans”) pursuant to the Term
Loan Agreement dated as of April 1, 1995 (the “Term Loan Agreement”) between the
Lender and the Owner, as borrower.

     

    The net
proceeds of the Loans were used by the Owner to acquire the m.t. Virgo Voyager
(ex-”WILLIAM E. CRAIN”) (the “Vessel”) from Chevron Transport Corporation (the
“Initial Charterer”). The Initial Charterer has re-delivered the Vessel to
Owner, and the Owner has entered into that certain Bareboat Charter dated March
__, 2006 (the “Charter”) between the Owner and Front Voyager Inc., as charterer
(the “Charterer”). As collateral security for its obligations under the Term
Loan Agreement, the Owner has heretofore assigned, pledged, mortgaged and
granted the Lender a security interest in, inter
alia, the Vessel, the Initial Charter and the earnings and insurances of
the Vessel, and is obligated to assign, pledge, mortgage and grant the Lender a
security interest in the Charter.

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and of other valuable consideration, receipt of which is hereby
acknowledged, the Owner and the Lender hereby agree as follows:

     

    ARTICLE
I

     

    DEFINITIONS

     

    Capitalized
terms used in this Assignment shall have the meanings assigned to such terms in
Schedule 1 to this Assignment, and the definitions of such terms shall be
equally applicable to both the singular and plural forms of such
terms.

     

    ARTICLE
II

     

    ASSIGNMENT

     

    Section
2.01  Security
Interest.  This Assignment is made and delivered as security for the
Term Obligations.

     

    Section
2.02  Assignment. In order to provide
for the payment of and as security for the Term Obligations the Owner has sold,
assigned, transferred, set over and granted a security interest and does hereby
sell, assign, transfer, set over and grant a security interest unto the Lender,
its successors and assigns, for its and their respective successors’ and
assigns’ own proper use and benefit, all of the Owner’s right, title and
interest in and to the Charter, including without limitation any moneys
whatsoever payable to the Owner under the Charter, together with the income and
proceeds thereof and all other rights and benefits whatsoever accruing to the
Owner under the Charter; provided, however, that the
Owner shall keep the Lender fully and effectively indemnified from and against
all actions, losses, claims, proceedings, costs, demands and liabilities which
may be suffered by the Lender under or by virtue of the Charter or this
Assignment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
2.03  Owner to Remain
Liable. (a) Anything in this Assignment contained to the contrary
notwithstanding, the Owner shall remain liable under the Charter, and shall
observe, perform and fulfill all of the conditions and obligations to be
observed, performed and fulfilled by it thereunder, and the Lender shall have no
obligation or liability of any kind whatsoever thereunder or by reason of or
arising out of this Assignment, nor shall the Lender be under any liability
whatsoever in the event of any failure by the Owner to perform its obligations
thereunder or be required or obligated in any manner to observe, perform or
fulfill any of the conditions or obligations of the Owner thereunder or pursuant
thereto, or to make any payment or to make any inquiry as to the nature or
sufficiency of any payment received by it or the Owner thereunder, or to present
or file any claim, or to take any other action to collect or enforce the payment
of any amounts which may have been assigned to the Lender or to which the Lender
may be entitled hereunder at any time or times.

     

    (b) 
Any
and all rights assigned herein may be further assigned by the Lender, including,
without being limited to, assignments in connection with the enforcement of the
assignments made by this Assignment and any subsequent holder of this Assignment
shall succeed to and have all the rights and powers of the Lender under this
Assignment.

     

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES OF THE OWNER

     

    The
Owner hereby represents and warrants to the Lender as follows:

     

    Section
3.01  Organization, Power and
Status of the Owner.  The Owner (a) is a corporation duly formed,
validly existing and in good standing under the laws of The Bahamas and (b) is
duly authorized, to the extent necessary, to do business in each jurisdiction
where the character of its properties or the nature of its activities makes such
qualification necessary. The Owner has all requisite corporate power and
authority to own and operate the property it purports to own and to carry on its
business as now being conducted and as proposed to be conducted in respect of
the Vessel.

     

    Section
3.02  Authorization;
Enforceability; Execution and Delivery.  (a) The Owner has all
necessary corporate power and authority to execute, deliver and perform under
this Assignment.

     

    (b)  All
action on the part of the Owner that is required for the authorization,
execution, delivery and performance of this Assignment has been duly and
effectively taken; and the execution, delivery and performance of this
Assignment does not require the approval or consent of any Person except for
such consents and approvals as have been obtained.

     

    (c)  This
Assignment has been duly executed and delivered by the Owner. This Assignment
constitutes the legal, valid and binding obligation of the Owner, enforceable
against it in accordance with the terms thereof.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    Section
3.03  No Conflicts; Laws and
Consents; No Default.  (a)  Neither the execution, delivery and
performance of this Assignment nor the consummation of any of the transactions
contemplated hereby nor performance of or compliance with the terms and
conditions hereof (i) contravenes any Requirement of Law applicable to the Owner
or (ii) constitutes a default under any Security Document.

     

    (b)  The
Owner is in compliance with and not in default under any and all Requirements of
Law applicable to the Owner and all terms and provisions of this
Assignment.

     

    Section
3.04 
Governmental
Approvals.  All Governmental Approvals which are required to be
obtained in the name of the Owner in connection with the execution, delivery and
performance by the Owner of this Assignment have been obtained and are in
effect.

     

    Section
3.05  Litigation. 
There are no actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending against the Owner or, to the best of the
Owner’s knowledge, threatened against the Owner or pending or threatened against
any property or other assets or rights of the Owner with respect to this
Assignment.

     

    Section
3.06 
No Prior
Assignment.  The Owner has not assigned or pledged, and hereby
covenants that it will not assign or pledge, so long as this Assignment shall
remain in effect, the Charter or any part of the rights, titles and interests
hereby assigned, to anyone other than the Lender, or its successors or
assigns.

     

    Section
3.07 
The Charter. 
The Charter constitutes the legal, valid and binding obligation of the Charterer
and of the Owner as “Owners” thereunder and is in full force and effect in the
form of Exhibit “A” attached hereto; there are no amendments, additions, addenda
or modifications thereto; said Exhibit “A” represents the entirety of the
chartering and other arrangements referred to therein; and neither of the
parties thereto is in default thereunder.

     

    ARTICLE
IV

     

    COVENANTS
OF THE OWNER

     

    The
Owner hereby covenants and agrees that so long as any of the Term Obligations
remains outstanding:

     

    Section
4.01 
Consent of
Charterer.  On the Closing Date, the Owner shall deliver to the
Charterer a copy of this Assignment and shall procure the execution by the
Charterer of the Consents and Acknowledgment set out in Exhibit A hereto and
deliver said Consents and Acknowledgment to the Lender on the Closing
Date.

     

    Section
4.02  Enforcement of
Charter.  (a) The Owner will do or permit to be done each and every
act or thing which the Lender may from time to time require to be done for the
purpose of enforcing the Lender’s rights under the Charter and this
Assignment.

     

    (b) 
If an
Event of Default shall occur under the Term Loan Agreement, the Owner shall
cause all moneys hereby assigned or agreed to be assigned or arising from or in
connection with any of the rights, title, interest and benefits of the Owner
under the Charter shall be paid to the credit of JPMorgan Chase Bank, N.A., ABA
# 021000021 for credit to Acct. No. ###-##-####, Re: California Petroleum
Transport Corporation or to such other account as the Lender may from time to
time direct.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (c)  The
Owner will not exercise any right or powers conferred on it by the Charter in
connection with any default or alleged default by the Charterer thereunder
(including without limitation the right of termination and substitution) unless
and until requested so to do by the Lender whereupon the Owner agrees that it
will do so provided always that the Lender shall not be responsible in any way
whatsoever in the event that the exercise of any right or power (including the
right of termination and substitution) be thereafter adjudged improper or to
constitute a repudiation of the Charter by the Owner.

     

    Section
4.03 
Amendment of Charter;
Assignment of Charter.  (a) The Owner will not, except with the
previous written consent of the Lender, agree to any variation of the Charter or
release the Charterer from any of its obligations thereunder or waive any breach
of the Charterer’s obligations thereunder or consent to any such act or omission
of the Charterer as would otherwise constitute such breach.

     

    (b)  The
Owner will not, except with the previous written consent of the Lender,
assign the Charter to any other Person.

     

    Section
4.04  Performance of
Obligations.  The Owner will perform its obligations under the
Charter and will use its best efforts to cause the Charterer to perform its
obligations under the Charter.

     

    Section
4.05  Notices.  The
Owner will send a copy of all notices received or given by it under the Charter
forthwith to the Lender.

     

    Section
4.06  Further
Assurances.  The Owner will at any time and from time to time, upon
the written request of the Lender, promptly and duly execute and deliver any and
all such further instruments and documents and take such action as the Lender
may deem desirable in order to obtain the full benefits of this Assignment and
of the rights and powers herein granted.

     

    Section
4.07  Lender
as Attorney-in-Fact of Owner. The Owner hereby constitutes the Lender,
and its successors and assigns, its true and lawful attorney-in-fact,
irrevocably, with full power in its own name, in the name of its agents or
nominees or in the name of the Owner or otherwise, to ask, require, demand,
receive, enforce and give acquittance for, any and all moneys and claims for
moneys due and to become due and payable under or arising out of the Charter, to
endorse any checks or other instruments or orders in connection therewith and to
file any claims or take any action or institute any proceedings which to the
Lender may seem to be necessary or advisable under this Assignment. Any action
or proceeding brought by the Lender pursuant to any of the provisions of this
Assignment or otherwise and any claim made by the Lender hereunder may be
compromised, withdrawn or otherwise dealt with by the Lender without any notice
to or approval of the Owner.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    ARTICLE
V

     

    MISCELLANEOUS
PROVISIONS

     

    Section
5.01  Amendment.  This
Assignment may be amended from time to time by written agreement signed by the
parties hereto.

     

    Section
5.02  Severability. 
If any provision of this Assignment is held to be in conflict with any
applicable statute or rule of law or is otherwise held to be unenforceable for
any reason whatsoever, such circumstances shall not have the effect of rendering
the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative, or unenforceable to any extent whatsoever. The invalidity
of any one or more phrases, sentences, clauses or Sections of this Assignment
contained, shall not affect the remaining portions of this Assignment, or any
part thereof.

     

    Section
5.03 
Notices.  All
demands, notices and communications hereunder shall be in writing, personally
delivered or mailed by certified mail-return receipt requested, and shall be
deemed to have been duly given upon receipt (a) in the case of the Lender, at
the following address: c/o JH Management Corporation, Room 6/9, One
International Place, Boston, Massachusetts 02110-2624, (b) in the case of the
Owner, at the following address: c/o McKinney, Bancroft & Hughes, Mareva
House, 4 George Street, Nassau, Bahamas, or at other such address as shall be
designated by such party in a written notice to the other parties.

     

    Section
5.04 
Consent to
Jurisdiction.  Any legal suit, action or proceeding against the
Owner arising out of or relating to this Assignment, or any transaction
contemplated hereby, may be instituted in any federal or state court in The City
of New York, State of New York and the Owner hereby waives any objection which
it may now or hereafter have to the laying of venue of any such suit, action or
proceeding, and the Owner hereby irrevocably submits to the jurisdiction of any
such court in any such suit, action or proceeding. The Owner hereby irrevocably
appoints and designates CT Corporation System, having an address at 1633
Broadway, New York, New York, its true and lawful attorney-in-fact and duly
authorized agent for the limited purpose of accepting servicing of legal process
and the Owner agrees that service of process upon such party shall constitute
personal service of such process on such Person. The Owner shall maintain the
designation and appointment of such authorized agent until all amounts payable
under this Assignment shall have been paid in full. If such agent shall cease to
so act, the Owner shall immediately designate and appoint another such agent
satisfactory to the Lender and shall promptly deliver to the Lender evidence in
writing of such other agent’s acceptance of such appointment.

     

    Section
5.05 
Captions.  The
captions or headings in this Assignment are for convenience only and in no way
define, limit or describe the scope or intent of any provisions or sections of
this Assignment.

     

    Section
5.06  Governing Law. 
This Assignment shall be governed by and interpreted in accordance with the laws
of the State of New York, without giving effect to the principles of conflicts
of law.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    Section
5.07 
No Partnership. 
Nothing herein contained shall be deemed or construed to create a partnership or
joint venture among the parties hereto and the services of each party shall be
rendered as an independent contractor and not as agent for any other
party.

     

    Section
5.08  Counterparts. 
This Assignment may be executed in any number of counterparts and by different
parties hereto on separate counterpart, each of which shall be deemed to be an
original. Such counterparts shall constitute one and the same
agreement.

     

    Section
5.09  Survival. The
representations, covenants and agreements contained in or made pursuant to this
Assignment in respect of either party hereto shall survive the execution and
delivery of this Assignment and shall continue in effect so long as such party’s
obligations hereunder remain outstanding.

     

    Section
5.10 
Integration. 
This Assignment and the Schedule and Exhibits hereto constitute the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements, understandings or
representations pertaining to the subject matter hereof, whether oral or
written. There are no warranties, representations or other agreements between
the parties in connection with the subject matter hereof except as specifically
set forth or incorporated herein.

     

    Section
5.11  Reproduction of
Documents.  This Assignment and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any electronic, digital, photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

     

    Section
5.12 
Successors and Assigns;
Assignment.  This Assignment shall be binding upon and inure to the
benefit of the Owner and the Lender and their respective successors and assigns.
The Owner shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lender. The Lender, at
its sole option, shall have the right to assign this Assignment, the Term Loan
Agreement, the Security Documents and any of its rights and interest hereunder
and thereunder.

     

    Section
5.13 General Interpretive
Principles. For purposes of this Assignment except as otherwise expressly
provided or unless the context otherwise requires:

     

    (a) 
the
defined terms in this Assignment shall include the plural as well as the
singular, and the use of any gender herein shall be deemed to include any other
gender;

     

    (b)  accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles as in effect on the
date hereof;

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    (c)  references
herein to “Articles”, “Sections”, “Subsections”, “paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, paragraphs and other subdivisions of this
Assignment;

     

    (d)  a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to paragraphs and other
subdivisions;

     

    (e)  the
words “herein”, “hereof”, “hereunder” and other words of similar import
refer to this Assignment as a
whole and not to any particular provision; and

     

    (f)  the
term “include” or “including” shall mean without limitation by reason
of
enumeration.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Owner and the Lender have caused this Assignment to be duly
executed and delivered by their respective officers thereunto duly authorized
all as of the day and year first above written.

     

    
      	 	
              CALIFORNIA
      PETROLEUM TRANSPORT CORPORATION, as Lender

            
	 	 
      
	 	
              By:  /s/  Douglas
      Donaldson

              Name: 
      Douglas Donaldson

              Title:   
      Treasurer

            
	 	 
      
	 	
              CALPETRO
      TANKERS (BAHAMAS III) LIMITED,

              as
      Owner

            
	 	 
      
	 	
              By:  /s/ 
      Tor Olav
      Trøim

              Name: 
      Tor Olav Trøim

              Title:   
       President

            

    

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    Exhibit
A

    LETTER
OF ACKNOWLEDGMENT

    TO
ASSIGNMENT OF CHARTER

     

                    March __,
2006

     

    CALIFORNIA
PETROLEUM TRANSPORT

    CORPORATION,
as Lender

     

    J.P.
MORGAN TRUST COMPANY,

    NATIONAL
ASSOCIATION,

    as
Collateral Trustee

     

    Dear
Sirs:

     

    The
undersigned hereby consents to and acknowledges receipt of (i) a signed copy of
the Assignment of Charter (the “Assignment”), dated as of March 31, 2006,
between CalPetro Tankers (Bahamas III) Limited (the “Owner”) and California
Petroleum Transport Corporation (the “Lender”) as adequate notice of such
assignment to the Lender of the Charter (as defined in the Assignment) and of
all the right, title and interest of the Owner in, to and under the Charter and
(ii) a signed copy of the Collateral Assignment of Charter (the “Collateral
Assignment”), dated as of March 31, 2006, between the Lender and J.P. Morgan
Trust Company, National Association (the “Collateral Trustee”) as adequate
notice of such further assignment to the Collateral Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the
Charter.

     

    So
long as the Assignment remains effective, we hereby agree that (a) upon
notification to us of the occurrence of an Event of Default under the Term Loan
Agreement referred to in the Assignment, we shall pay any and all sums which we
are legally obligated to pay to the Owner or otherwise as stated in and
according to the Charter directly to the Collateral Trustee’s Account at
JPMorgan Chase Bank, N.A., ABA # 021000021 for credit to Acct. No. ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing and (b) with respect to each of the insurances, if any, obtained
pursuant to Clause 11 of the Charter, the Lender and the Collateral Trustee
shall, if possible, be named additional assureds.

     

    Payments
of moneys under the Charter may be adjusted, reduced or withheld only as
expressly provided therein. Payments to the Collateral Trustee shall not be
subject to any right of set-off or defense by way of counterclaim or otherwise
which the undersigned may have against the Owner or any entity substituted for
it other than under the Charter and all payment once made to you will be final,
and once paid we will not, for any reason whatsoever, seek to recover from the
Collateral Trustee any such payment made to the Collateral Trustee by virtue of
the Assignment, the Collateral Assignment or this Letter of
Consent.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    We
confirm that the terms of the Charter remain in full force and effect and
constitute the entire agreement between the parties thereto with respect to the
Vessel and that the Owner is not presently to our knowledge in breach of the
terms of the Charter. We further confirm that the terms of the Charter have not
been varied or modified and that the terms of the Charter will not after the
date hereof be varied or modified without the prior written consent of the
Collateral Trustee.

     

    We
confirm that we have received no prior notice of any assignment by the Owner of
any interest in the Charter.

     

    The
undersigned will not permit any amendment, modification, cancellation or other
alteration in the Charter, nor will it consent to or accept the substitution
thereunder of any party for the Owner without your prior written
consent.

     

    
      	 	
              FRONT
      VOYAGER INC., as Charterer

            
	 
      
	 	
              By:
      /s/ Tom E.
      Jebson         

              Name: Tom E.
      Jebson                                                               

              Title:   
      President & Director

            

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    OWNER’S
LETTER OF ACKNOWLEDGMENT

    TO
COLLATERAL ASSIGNMENT OF CHARTER

     

                March 31,
2006

     

    J.P.
MORGAN TRUST COMPANY,

    NATIONAL
ASSOCIATION, as Collateral Trustee

     

     

    Dear
Sirs:

     

    The
undersigned hereby consents to and acknowledges receipt of a signed copy of the
Collateral Assignment of Charter (the “Assignment”), dated as of March 31, 2006,
between California Petroleum Transport Corporation (the “Issuer”) and yourselves
as adequate notice of such assignment to you of the Assignment of Charter (as
defined in the Assignment) and of all the right, title and interest of the
Issuer in, to and under the Assignment of Charter.

     

    So
long as the Assignment remains effective, we hereby agree that, upon your
notification to us of the occurrence of an Event of Default under the Term
Indenture referred to in the Assignment, we shall pay any and all sums which we
are legally obligated to pay to the Issuer or otherwise as stated in and
according to the Assignment of Charter directly to JPMorgan Chase Bank, NA., ABA
# 021000021 for credit to Acct. No. ###-##-####, regarding California Petroleum
Transport Corporation, or otherwise to such other account as you may at any time
or from time to time, designate by notice to us in writing.

     

    Payments
of moneys under the Assignment of Charter may be adjusted, reduced or withheld
only as expressly provided therein. Payments to you shall not be subject to any
right of set-off or defense by way of counterclaim or otherwise which the
undersigned may have against the Issuer or any entity substituted for it other
than under the Assignment of Charter and all payments once made to you will be
final, and once paid we will not, for any reason whatsoever, seek to recover any
such payment made to you by virtue of the Assignment or this Letter of
Consent.

     

    We
confirm that the terms of the Assignment of Charter remain in full force and
effect and constitute the entire agreement between the parties thereto with
respect to the Charter and that the Issuer is not presently to our knowledge in
breach of the terms of the Assignment of Charter. We further confirm that the
terms of the Assignment of Charter have not been varied or modified and that the
terms of the Assignment of Charter will not after the date hereof be varied or
modified without your prior written consent.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    We
confirm that we have received no prior notice of any assignment by the Issuer of
any interest in the Assignment of Charter.

     

    The
undersigned will not permit any amendment, modification, cancellation or other
alteration in the Assignment of Charter, nor will it consent to or accept the
substitution thereunder of any party for the Issuer without your prior written
consent.

     

    
      	 	
              CALPETRO
      TANKERS (BAHAMAS III) LIMITED, 

              as
      Owner

            
	 
      
	 	
              By:  /s/  Tor Olav
      Trøim

              Name: 
      Tor Olav Trøim

              Title:    
      President

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CALPETRO
TANKERS (BAHAMAS III) LIMITED

     

     

    CERTIFICATE

     

     

    The
undersigned hereby certifies to J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,
as Collateral Trustee (the “Trustee”), that the Bareboat Charter dated as of
March 31, 2006 by and between CalPetro Tankers (Bahamas III) Limited, as Owner
(the “Company”), and Front Voyager Inc., as Charterer, constitutes an Acceptable
Replacement Charter as such term is defined and used in that certain Collateral
Trust Agreement dated as of April 5, 1995 by and among California Petroleum
Transport Corporation, CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers
(Bahamas II) Limited, CalPetro Tankers (IOM) Limited, the Company, and the
Trustee.

     

    IN WITNESS WHEREOF, the
Company has caused this Certificate to be executed on its behalf by the
undersigned on and as of the 31st day of March, 2006.

     

    
      	 	
              CALPETRO
      TANKERS (BAHAMAS III) LIMITED

            
	 
      
	 	
              By:  /s/  Tor Olav
      Trøim

              Name:  
      Tor Olav Trøim

              Title:     
      President

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Frontline
Ltd.

    Par
La Ville Place, 4th Floor

    14
Par La Ville Road

    Hamilton
HM JX  Bermuda

     

                                               
March 31, 2006

     

    J.P.
MORGAN TRUST COMPANY, NATIONAL ASSOCIATION,

    as
Collateral Trustee

     

    CALPETRO
TANKERS (BAHAMAS III) LIMITED,

    as
Owner

     

    Re:           Notice of Acceptable
Replacement Charter

     

    Ladies
and Gentlemen:

     

    We
refer to the Management and Remarketing Agreement, dated as of April 1, 1995, as
amended (the “Management Agreement”), between the undersigned, as
manager (the “Manager”), and CalPetro Tankers (Bahamas III) Limited, as owner
(the “Owner”). Each capitalized term used but not otherwise defined herein has
the meaning ascribed thereto in the Management Agreement.

     

    We
hereby advise you pursuant to Section 3.05(b) of the Management Agreement that
an Acceptable Replacement Charter (in the form attached hereto, the “New
Charter”) is available in respect of the Vessel, to commence upon redelivery of
the Vessel by the Initial Charterer. We further advise you that we will receive
and promptly deliver to the Collateral Trustee a written confirmation from the
Rating Agencies that the terms and conditions of the New Charter will not result
in the withdrawal or reduction of their respective ratings on the Term Mortgage
Notes. We certify to you that, upon the Rating Agencies giving such
confirmation, the New Charter will constitute an Acceptable Replacement
Charter.

     

    
      	 	
              Very
      truly yours,

            
	 
      
	 	
              FRONTLINE
      LTD.

            
	 
      
	 	
              By:  /s/ Tom E.
      Jebsen

                         
      Tom
      E. Jebsen

                         
      Chief
      Financial Officer

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

    Defined
Terms Used in the Assignment

     

    “Assignment” or Assignment of
Charter” means the assignment
between the Owner and the Lender, as amended from time to time in accordance
with the terms thereof, pursuant to which the Owner assigns to the Lender all of
its right, title and interest in, to and under the Charter to secure its
obligations under the Loan Agreements.

     

    “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 Trustee’s principal offices
are located, are authorized or are obligated by law, executive order or
governmental decree to be closed.

     

    “Closing Date” means
March __, 2006.

     

    “Event of Default” means an
Event of Default under Section 6.01 of the Term Loan Agreement.

     

    “Front Voyager Inc.” means
Front Voyager Inc., a Liberian corporation.

     

    “Governmental Approval” means
any authorization, consent, approval, license, franchise, lease, ruling, permit,
tariff, rate, certification, exemption, filing or registration by or with any
Governmental Authority relating to the ownership of the Collateral or to the
execution, delivery or performance of the Loan Agreement or any Security
Document.

     

    “Governmental Authority”
means the federal government, any state or other political subdivision
thereof, and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government and any other
governmental entity with authority over the Owner or operation of the
Vessels.

     

    “Charter” means with respect
to each Vessel, the Bareboat Charter, dated March 31, 2006, between the
Charterer and the Owner.

     

    “Charterer” means Front
Voyager Inc., a Liberian corporation.

     

    “Law” means any statute, law,
rule, regulation, ordinance, order, code, policy or rule of common law, now or
hereafter in effect, and any judicial or administrative interpretation thereof
by a Governmental Authority or otherwise, including any judicial or
administrative order, consent decree or judgment.

     

    “Lender” means California
Petroleum Transport Corporation, a corporation organized under the laws of the
State of Delaware.

     

    “Loans” means, collectively,
the Term Loan.

     

    “Loss Date” means the date
which is 90 days after the occurrence of a Total Loss of the
Vessel.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Mortgage” means, with
respect to the Vessel, the first preferred ship mortgages on the Vessel granted
by the Owner to the Lender, as amended from time to time in accordance with the
terms of such Mortgage.

     

    “Owner” means CalPetro Tankers (Bahamas III)
Limited, a company organized under the laws of The Commonwealth of the
Bahamas.

     

    “Payment Date” means each
April 1 and October 1, commencing April 1, 2006.

     

    “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.

     

    “Registration Jurisdiction”
means the jurisdiction in which the Vessel is or will be
registered.

     

    “Requirement of Law” means,
as to any Person, the certificate of incorporation and by laws or partnership
agreement or other organizational or governing documents of such Person, and,
any Law applicable to or binding upon such Person or any of its properties or to
which such Person or any of its properties is subject.

     

    “Security Documents” means
the Term Loan Agreement, the Mortgage, the Assignment of Charter, the Assignment
of Earnings and Insurances, the Assignment of Management Agreement, the
Assignment of Purchase Agreement, the Issue of One Debenture,
collectively.

     

    “State” means any state of the United States of
America and, in addition, the District of Columbia.

     

    “Term Loan” shall have the
meaning assigned to such term in the Preliminary Statement of this
Assignment.

     

    “Term Loan Agreement” means
the Loan Agreement, dated as of April 1, 1995 between the Owner and the Lender
pursuant to which the Lender makes the Term Loan to the Owner.

     

    “Term Mortgage Notes” means
8.52 % First Preferred Mortgage Notes Due 2015 in the initial aggregate amount
of $117,900,000 issued by the Lender concurrently with the issuance of the
Serial Mortgage Notes.

     

    “Term Obligations” means the
payment, performance or obligations of any kind or nature whatsoever of the
Owner under and pursuant to the Term Loan Agreement, any Security Document and
any instrument, agreement or document referred to therein.

     

    “Trustee” means J.P. Morgan
Trust Company, National Association.

     

    “Vessel” shall have the
meaning assigned to such term in the Preliminary Statement of this
Assignment.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CHARTERER’S
LETTER OF ACKNOWLEDGMENT

    TO
ASSIGNMENT OF CHARTER

     

                                
March 31, 2006

     

    CALIFORNIA
PETROLEUM TRANSPORT

    CORPORATION,
as Lender

     

    J.P.
MORGAN TRUST COMPANY,

    NATIONAL
ASSOCIATION,

    as
Collateral Trustee

     

    Dear
Sirs:

     

    The
undersigned hereby consents to and acknowledges receipt of (i) a signed copy of
the Assignment of Charter (the “Assignment”), dated as of March 31, 2006,
between CalPetro Tankers (Bahamas III) Limited (the “Owner”) and California
Petroleum Transport Corporation (the “Lender”) as adequate notice of such
assignment to the Lender of the Charter (as defined in the Assignment) and of
all the right, title and interest of the Owner in, to and under the Charter and
(ii) a signed copy of the Collateral Assignment of Charter (the “Collateral
Assignment”), dated as of March 31, 2006, between the Lender and J.P. Morgan
Trust Company, National Association (the “Collateral Trustee”) as adequate
notice of such further assignment to the Collateral Trustee of the Charter and
all of the right, title and interest of the Lender in, to and under the
Charter.

     

    So
long as the Assignment remains effective, we hereby agree that (a) upon
notification to us of the occurrence of an Event of Default under the Term Loan
Agreement referred to in the Assignment, we shall pay any and all sums which we
are legally obligated to pay to the Owner or otherwise as stated in and
according to the Charter directly to the Collateral Trustee’s Account at
JPMorgan Chase Bank, N.A., ABA # 021000021 for credit to Acct. No. ###-##-####,
regarding California Petroleum Transport Corporation, or otherwise to such other
account as you may at an time or from time to time, designate by notice to us in
writing and (b) with respect to each of the insurances, if any, obtained
pursuant to Clause 11 of the Charter, the Lender and the Collateral Trustee
shall, if possible, be named additional assureds.

     

    Payments
of moneys under the Charter may be adjusted, reduced or withheld only as
expressly provided therein. Payments to the Collateral Trustee shall not be
subject to any right of set-off or defense by way of counterclaim or otherwise
which the undersigned may have against the Owner or any entity substituted for
it other than under the Charter and all payment once made to you will be final,
and once paid we will not, for any reason whatsoever, seek to recover from the
Collateral Trustee any such payment made to the Collateral Trustee by virtue of
the Assignment, the Collateral Assignment or this Letter of
Consent.

     

    We
confirm that the terms of the Charter remain in full force and effect and
constitute the entire agreement between the parties thereto with respect to the
Vessel and that the Owner is not presently to our knowledge in breach of the
terms of the Charter. We further confirm that the terms of the Charter have not
been varied or modified and that the terms of the Charter will not after the
date hereof be varied or modified without the prior written consent of the
Collateral Trustee.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    We
confirm that we have received no prior notice of any assignment by the Owner of
any interest in the Charter.

     

    The
undersigned will not permit any amendment, modification, cancellation or other
alteration in the Charter, nor will it consent to or accept the substitution
thereunder of any party for the Owner without your prior written
consent.

     

    
      	 	
              FRONT
      VOYAGER INC., as Charterer

            
	 
      
	 	
              By:  /s/ Tom E.
      Jebsen

              Name: Tom
      E. Jebsen

              Title: President
      & Director

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