Exhibit 10.11


 


Execution Copy


 


ESCROW AGREEMENT


 


This Escrow
Agreement, dated as of December 18, 2003 (this “Agreement”), is by and among
Jefferies & Company, Inc. and Citigroup Global Markets Inc., as the initial
purchasers under the Purchase Agreement (together, the “Depositors”),
Wilmington Trust Company, a Delaware banking corporation, both in its capacity
as trustee under the Indenture (“Trustee”) and as Escrow Agent under this
Agreement (“Escrow Agent”), Ship Finance International Limited, a Bermuda exempted
company (the “Company”), and Frontline Ltd., a Bermuda exempted company
(“Frontline”).


 


RECITALS


 


WHEREAS,
this Agreement is being entered into in connection with (a) the Purchase
Agreement dated December 11, 2003, between the Company, Frontline and the
Depositors (the “Purchase Agreement”), and (b) the Indenture dated as of
December 18, 2003 (the “Indenture”), between the Trustee and the Company,
governing the Company’s 81/2% Senior Notes due 2013 (the
“Securities”); and


 


WHEREAS,
this Agreement is being entered into for the benefit of the holders from time
to time of the Securities; and


 


WHEREAS,
the Escrow Funds (as defined herein) will be released at the direction of
Trustee either to the Company upon satisfaction of the conditions specified
herein or to Trustee to fund a Special Mandatory Redemption of the Securities,
each as provided in Section 5 of this Agreement.


 


STATEMENT OF
AGREEMENT


 


NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:


 


1.                                       Definitions.


 


(a)                                  The
following terms have the following meanings when used in this Agreement.  Capitalized terms that are used but not
defined in this Agreement have the meanings set forth in the Indenture.


 


“Escrow Funds” means the net proceeds of the offering of the Securities
of $565,500,000, which will be deposited by the Depositors with Escrow Agent in
the Escrow Account (as defined below) under this Agreement, together with any
interest and other income thereon, all investments therefrom, and all proceeds
of the foregoing, all of which shall be credited to and carried in the Escrow
Account by the Escrow Agent, and such term shall also include all security
entitlements and financial assets carried in or credited to the Escrow Account
from time to time.


 


“Federal Book Entry Regulations” means (a) the federal regulations
contained in Subpart B (“Treasury/Reserve Automated Debt Entry System
(TRADES)”) governing


 


1

















 


book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D of
31 C.F.R. Part 357, 31 C.F.R. §357.2, §357.10 through §357.14 and §357.41 
through §357.44 and (b) to the extent substantially identical to the federal
regulations referred to in clause (a) above (as in effect from time to
time), the federal regulations governing other book-entry securities.


 


“New York UCC” means the Uniform Commercial Code as in effect from time
to time in the State of New York.


 


“Opinion of Counsel” means an opinion of Seward & Kissel LLP
substantially in the form of Exhibit B to this Agreement.


 


“Release Certificate” means an officers’ certificate substantially in
the form of Exhibit A to this Agreement, signed by two officers of the
Company (one of whom shall be the Chief Executive Officer or the President and
one of whom shall be the Chief Financial Officer or the Chief Accounting
Officer), the contents and delivery of which shall have been approved by a duly
adopted resolution of the Board of Directors of the Company, certifying to
Trustee as to the matters specified in Exhibit A.


 


“Special Mandatory Redemption” means the mandatory redemption of the
Securities contemplated by Section 5.9 of the Indenture.


 


(b)  Other terms that are defined in Article 8 or Article 9
of the New York UCC and/or the Federal Book Entry Regulations (including,
without limitation, as applicable, “securities account,” “securities
intermediary,” “security entitlement,” “financial asset,” “entitlement holder,”
“entitlement order” and “control”) have the same meaning when used herein
unless the context otherwise requires.


 


2.                                       Appointment
of and Acceptance by Escrow Agent. 
Trustee hereby appoints Escrow Agent to serve as escrow agent
hereunder.  Escrow Agent hereby accepts
such appointment and, upon receipt by wire transfer of the initial Escrow Funds
in accordance with Section 3 below, agrees to hold, invest and disburse
the Escrow Funds in accordance with this Agreement.  Escrow Agent undertakes to perform only such duties expressly set
forth herein and no implied duties or obligations shall be read into this
Agreement against Escrow Agent.  In
acting hereunder, Escrow Agent shall not be liable for any act done, or omitted
to be done, by it in the absence of gross negligence or willful misconduct.


 


3.                                       Creation
of Escrow Account.


 


(a)                                  On December 18, 2003,
the Depositors will transfer the sum of $565,500,000, by wire transfer of
immediately available funds, to the following account (the “Escrow Account”):


 


2

















 


	
   

  	
  Wilmington
  Trust Company, as Escrow Agent

  
	
   

  	
  for Ship Finance Limited Notes

  
	
   

  	
  ABA No.
  031100092

  
	
   

  	
  Account No.
  64626-0

  
	
   

  	
  Account
  Name:  Ship Finance International
  Limited 81/2 % Senior Notes

  
	
   

  	
  Attention:  Mary St. Amand

  



 


Escrow Agent hereby acknowledges and agrees
that it has established, on the books and records of its office in Wilmington,
Delaware, the Escrow Account in the name of the Trustee on behalf of the
holders of the Securities and that the Escrow Account is under the sole
dominion and control of the Trustee.


 


(b)                                 Notwithstanding
anything in this agreement to the contrary, the parties hereto hereby agree
that:


 


(i)                                     the
Escrow Account is and shall be maintained by Escrow Agent as a securities
account;


 


(ii)                                  Escrow
Agent shall be and at all times shall act as a securities intermediary in
maintaining the Escrow Account and shall by appropriate book entry credit to
the Escrow Account each financial asset to be held in or credited to the Escrow
Account pursuant to this Agreement;


 


(iii)                               the
Escrow Agent’s jurisdiction, as securities intermediary, for purposes of this
Agreement, the Escrow Account and Article 8 of the New York UCC is the State of
New York;


 


(iv)                              all
property in the Escrow Account from time to time, including cash, will be
treated by Escrow Agent as a financial asset;


 


(v)                                 the
entitlement holder with respect to the Escrow Account and each security
entitlement credited thereto or carried therein shall be the Trustee for the
benefit of the holders of the Securities;


 


(vi)                              any
financial asset in registered form or payable to or to the order of a person
and credited to Escrow Account shall be registered in the name of, payable to
or to the order or, or specially indorsed to, Trustee or carried in or credited
to another securities account in the name of Escrow Agent as securities
intermediary; and


 


(vii)                           Escrow
Agent shall not change the name or account number of the Escrow Account without
the prior written consent of the Trustee and shall not change the entitlement
holder.


 


(c)                                  Notwithstanding
anything in this agreement to the contrary, Escrow Agent agrees that it shall
comply with entitlement orders and instructions originated by the Trustee and
relating to the Escrow Account and all securities entitlements and financial


 


3

















 


assets carried in or credited to the Escrow Account, including any
entitlement order or instructions contemplated by Section 5,
without further consent by the Company, Frontline or any other person or entity
so long as this Agreement is in effect. 
Escrow Agent hereby represents that it has not, and it hereby agrees
that it will not, enter into any agreement or take any action which gives any
person or entity other than the Trustee control over the Escrow Account or any
security entitlement or financial asset carried therein or credited
thereto.  The parties hereto agree that
Trustee shall have exclusive control, and sole dominion and control, over the
Escrow Account and each security entitlement and financial asset carried
therein or credited thereto, and Escrow Agent shall not accept or comply with
instructions or entitlement orders given by any person other than Trustee.


 


(d)                                 The parties hereto
acknowledge that, until the release of the Escrow Funds to the Company in
accordance with the terms of this Agreement (subject to Trustee’s rights and
remedies set forth in Section 5), the Escrow Funds shall be held by
Trustee as entitlement holder of the Escrow Account for the benefit of the
holders of the Securities and do not constitute property or an asset of the
Company, and the Company shall have only a contingent right to receive payment
of the Escrow Funds at the direction of Trustee on the terms and subject to the
conditions set forth in this Agreement.


 


(e)                                  In the event that
Escrow Agent has or subsequently obtains by agreement, operation of law or
otherwise a security interest in the Escrow Account, or any financial asset
carried therein or credited thereto, or any securities entitlement with respect
thereto, Escrow Agent hereby agrees that such security interest shall be
subordinate to the security interest of Trustee.  Except as contemplated by Sections 8, 10 and 11 with respect to
the reimbursement of Escrow Agent’s indemnification, fees and expenses, the
financial assets or any securities entitlement with respect thereto standing to
the credit of the Escrow Account will not be subject to deduction, set-off,
banker’s lien or any other right in favor of any person or entity other than
Trustee.


 


(f)                                    There are no other
agreements entered into among the parties hereto with respect to the Escrow
Account.  Except as expressly set forth
in this Section 3, in the event of any conflict between this Section 3 or any
portion hereof, any other provision of this Agreement or any other agreement
now existing or hereafter entered into, the terms of this Section 3 shall
prevail.


 


4.                                       Recharacterization.  In the event this Agreement is ever
determined to constitute a security agreement or other pledge or security
arrangement, or if it is ever determined that the Company has any right, title
or interest in the Escrow Account or the Escrow Funds, the Company hereby
grants to Trustee a present and continuing first priority security interest in
the Escrow Account, the Escrow Funds and any proceeds therefrom (subject only
to Escrow Agent’s right of reimbursement of indemnification, fees and expenses
from the Escrow Funds, as contemplated by Sections 8, 10 and 11)
to secure the Company’s obligations under the Indenture (including without
limitation its obligation to pay the redemption price and premium and any
accrued and unpaid interest on the Securities to the redemption date with
respect to the Special Mandatory Redemption pursuant to Section 5.9 of the
Indenture).  The Company agrees that it
shall do, execute, acknowledge, deliver, record, file and register any and all
such acts, deeds,


 


4

















 


certificates, assurances,
agreements and other instruments (including without limitation security
agreements, collateral agreements, financing statements, and lien and pledge
instruments) as are in the opinion of Trustee reasonably necessary to give
effect to the foregoing sentence. 
Without limitation to the foregoing, the Company hereby authorizes
Trustee, without the signature of or further authorization or consent from the
Company, to file such financing statements in such jurisdictions as are in the
opinion of Trustee reasonably necessary to further perfect the security
interests granted herein.  Upon the
disbursement of the Escrow Funds in accordance with Section 5(a),
Trustee and the Company shall file such termination statements in such
jurisdictions as are in the opinion of the Company reasonably necessary to
terminate the security interests granted herein.


 


5.                                       Disbursement
of Escrow Funds.  Trustee and the
Company agree (solely as between themselves) that Trustee shall direct Escrow
Agent to disburse the Escrow Funds only in accordance with the following
provisions:


 


(a)                                  Completion of Fleet
Acquisition.  If, at or prior to
5:00 p.m., Eastern Time, on March 17, 2004 (the “Completion Deadline”),
the Company delivers to Trustee a Release Certificate and an Opinion of
Counsel, Trustee will direct Escrow Agent to disburse the Escrow Funds to the
Company according to the payment instructions contained in the Release
Certificate.


 


(b)                                 Special Mandatory
Redemption.  If (i) Trustee has not
received a Release Certificate and an Opinion of Counsel or (ii) Trustee has
not delivered a Default Instruction (as defined below), in each case at or
prior to the Completion Deadline, then Trustee will direct Escrow Agent to
disburse all the Escrow Funds directly to Trustee for use in completing the
Special Mandatory Redemption on or before 10:00 a.m., New York City time,
on the date fixed for the Special Mandatory Redemption specified in the notice
of such Special Mandatory Redemption given pursuant to Section 5.9 of the
Indenture.  The Company shall deliver to
Trustee and Escrow Agent a copy of such notice when it is mailed.


 


(c)                                  Event of Default
under the Indenture.  If, at any
time prior to the Completion Deadline, there is an Event of Default under the
Indenture, Trustee will direct Escrow Agent to disburse all the Escrow Funds
directly to Trustee for use in accordance with the Indenture (a “Default
Instruction”).


 


Notwithstanding the foregoing provisions of this Section 5, if
(i) Trustee has not received a Release Certificate and an Opinion of Counsel or
(ii) Trustee has not delivered a Default Instruction, in each case at or prior
to the Completion Deadline and if the provisions of Section 4 become
operative, Trustee shall have, and is hereby presently granted, in addition to
any other rights and remedies specified herein, all rights and remedies of a
secured party under the New York UCC. 
The foregoing provisions of this Section 5 are between Trustee
and the Company and shall in no way limit Escrow Agent’s obligation to follow
entitlement orders of Trustee with respect to the Escrow Account and any
security entitlements and financial assets carried therein or credited thereto,
without the consent of the Company, Frontline or any other person.


 


5

















 


6.                                       Frontline
Payment Obligation.  If the Escrow
Funds are disbursed to the Trustee in accordance with, or pursuant to
instructions or directions received under, Section 5(b) above, and the
amount of such Escrow Funds shall be insufficient to fully fund the redemption
price and premium and any accrued and unpaid interest on the Securities to the
redemption date with respect to the Special Mandatory Redemption pursuant to
Section 5.9 of the Indenture, then Frontline shall promptly provide to the
Trustee, for the benefit of the holders of the Securities, by wire transfer of immediately
available funds to the Escrow Account, cash in U.S. dollars in an amount that,
taken together with the Escrow Funds, shall be sufficient to fully fund the
redemption price and premium and any accrued and unpaid interest on the
Securities to the redemption date with respect to the Special Mandatory
Redemption.


 


7.                                       Investment
of Funds.


 


(a)                                  Escrow
Agent will hold in, and credit by appropriate book entry to, the Escrow Account
the initial deposit and all subsequent deposits to the Escrow Account, together
with all investments thereof and all interest accumulated thereon and proceeds
from the foregoing, upon the terms and conditions set forth in this Escrow
Agreement and shall not disburse funds from the Escrow Account except as
provided herein.  Trustee hereby directs
Escrow Agent to invest the funds in the Escrow Account initially in the Service
class shares of the U.S. Government Portfolio of the Wilmington Funds, a mutual
fund managed by Rodney Square Management Corporation, a subsidiary of Escrow Agent.  The parties acknowledge that (i) shares
in this mutual fund are not obligations of Wilmington Trust Company, are not
deposits and are not insured by the FDIC, (ii) Escrow Agent or its
affiliates are compensated by this mutual fund for services rendered in its
capacity as investment advisor, custodian and/or transfer agent,
(iii) Wilmington Trust Company, or its affiliates, are also compensated by
these mutual funds for providing shareholder services and (iv) such
compensation is both described in detail in the prospectus for the fund, and is
in addition to the compensation, if any, paid to Wilmington Trust Company in
its capacity as Escrow Agent hereunder.


 


(b)                                 Trustee
and the Company agree (solely as between themselves) that, unless and until an
Event of Default has occurred under the Indenture, the Company shall be
entitled to direct Trustee in writing to instruct Escrow Agent to invest the
funds in the Escrow Account in any other Cash Equivalent, and Trustee shall
instruct Escrow Agent accordingly.


 


(c)                                  Notwithstanding
anything to the contrary contained herein, the Company agrees that Trustee may,
even if no Event of Default has occurred under the Indenture, without notice to
any person, direct Escrow Agent to sell or liquidate any of the foregoing investments
at any time if the proceeds thereof are required for any release of funds
permitted or required hereunder, and Escrow Agent will not be liable or
responsible for any loss, cost or penalty resulting from any such sale or
liquidation.


 


(d)                                 The
provisions of Section 7(b) and Section 7(c) are between Trustee
and the Company and shall in no way limit Escrow Agent’s obligation to follow
entitlement orders of Trustee with respect to the Escrow Account and any
security entitlements and


 


6

















 


financial
assets carried therein or credited thereto, without the consent of the Company,
Frontline or any other person.


 


8.                                       Resignation
of Escrow Agent.  Escrow Agent may
resign from the performance of its duties hereunder at any time by giving ten
days’ prior written notice to Trustee and Frontline.  Such resignation will take effect upon the appointment of a
successor Escrow Agent as provided below. 
Upon any such notice of resignation, Frontline will appoint a successor
Escrow Agent hereunder, which shall be a commercial bank, trust company or
other financial institution with a combined capital and surplus in excess of
$500,000,000, and which shall have the legal capacity to act as, and which
shall act as, a securities intermediary hereunder.  On the acceptance in writing of any appointment as Escrow Agent
hereunder by a successor Escrow Agent, such successor Escrow Agent will succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Escrow Agent, and the retiring Escrow Agent will be discharged from
its duties and obligations under this Agreement, but will not be discharged
from any liability for actions taken as Escrow Agent hereunder prior to such
succession.  After any retiring Escrow
Agent’s resignation, the provisions of this Agreement will inure to its benefit
as to any actions taken or omitted to be taken by it while it was Escrow Agent
under this Agreement.  The retiring
Escrow Agent will transmit all records pertaining to the Escrow Funds and will
pay the Escrow Funds to the successor Escrow Agent, after making copies of such
records as the retiring Escrow Agent deems advisable.  In the event Frontline shall not have delivered to Escrow Agent a
written designation of a successor Escrow Agent within a thirty (30) day
period, together with the consent to such designation by the successor Escrow
Agent, the Escrow Agent may apply to a court of competent jurisdiction to
appoint a successor Escrow Agent, and the costs of obtaining such appointment
shall be reimbursable by Frontline and from the Escrow Funds.


 


9.                                       Liability
of Escrow Agent.


 


(a)                                  Escrow
Agent will have no liability or obligation with respect to the Escrow Funds
except for Escrow Agent’s willful misconduct or gross negligence, and Escrow
Agent will be fully protected in acting upon the directions of Trustee given in
accordance with this Agreement.  In no
event shall Escrow Agent be liable to the Company, Frontline or any other person
for acting on instructions or entitlement orders given by Trustee.  Escrow Agent’s sole responsibility will be
for the safekeeping, investment and disbursement of the Escrow Funds in
accordance with Trustee’s directions and the other terms of this Agreement.  Escrow Agent will have no implied duties or
obligations and will not be charged with knowledge or notice of any fact or
circumstance not specifically set forth herein.  Escrow Agent may rely upon any instrument, not only as to its due
execution, validity and effectiveness, but also as to the truth and accuracy of
any information contained therein, which Escrow Agent shall in good faith
believe to be genuine, to have been signed or presented by the person or
parties purporting to sign the same and to conform to the provisions of this
Agreement, and Escrow Agent may assume that any person purporting to give any
writing, notice, advice or instruction on behalf of Trustee in connection with
the provisions hereof has been duly authorized to do so.  In no event will Escrow Agent be liable for
incidental, indirect, special, consequential or punitive damages.  Escrow Agent will not be obligated to take
any legal action or commence any proceeding in connection with the Escrow
Funds, any account in which Escrow Funds are deposited or this Agreement, or to
appear


 


7

















 


in, prosecute
or defend any such legal action or proceeding. 
Escrow Agent may consult legal counsel selected by it in connection with
the construction of any of the provisions hereof or of any of its duties as
Escrow Agent and securities intermediary hereunder and will incur no liability
in acting in accordance with the opinion or instruction of such counsel.


 


(b)                                 Escrow
Agent is authorized, in its sole discretion, to comply with orders issued or
process entered by any court with respect to the Escrow Funds, without
determination by Escrow Agent of such court’s jurisdiction in the matter.  If any portion of the Escrow Funds is at any
time attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any of the Escrow
Funds shall be stayed or enjoined by any court order, or in case any order,
judgment or decree shall be made or entered by any court affecting the Escrow
Funds or any part thereof, then and in any such event, Escrow Agent is
authorized, in its sole discretion, to rely upon and comply with any such
order, writ, judgment or decree which it is advised by legal counsel selected
by it is binding upon it without the need for appeal or other action; and if
Escrow Agent complies with any such order, writ, judgment or decree, it will
not be liable to any of the parties hereto or to any other person or entity by
reason of such compliance even though such order, writ, judgment or decree may
be subsequently reversed, modified, annulled, set aside or vacated.


 


(c)                                  Escrow
Agent shall not be required to use its own funds in the performance of any of
its obligations or duties or the exercise of any of its rights or powers, and
shall not be required to take any action which, in Escrow Agent’s sole and
absolute judgment, could involve it in expense or liability unless furnished
with security and indemnity which it deems, in its sole and absolute
discretion, to be satisfactory.


 


(d)                                 Escrow
Agent shall be authorized (but not required) to seek confirmation of all funds
transfer instructions by telephone callback, and Escrow Agent may rely upon
such confirmation of anyone purporting to be the person designated in the
instructions.  The parties acknowledge
that such security procedure is commercially reasonable.  The Escrow Agent may, however, disburse any
funds in the Escrow Fund without any separate instructions, if such
disbursements are in accordance with the terms of this Escrow Agreement.


 


10.                                 Indemnification
of Escrow Agent.  From and at all
times after the date of this Agreement, Frontline  and the Company (together,
the “Indemnifying Parties”) shall, on a joint and several basis, to the fullest
extent permitted by law and to the extent provided in this Agreement, indemnify
and hold harmless each of Escrow Agent and Trustee and each of their respective
directors, officers, employees, attorneys, agents and affiliates (collectively,
the “Indemnified Parties”) against any and all actions, claims (whether or not
valid), losses, damages, liabilities, costs and expenses of any kind or nature
whatsoever (including without limitation reasonable attorneys’ fees, costs and
expenses) incurred by or asserted against any of the Indemnified Parties from and
after the date of this Agreement, whether direct, indirect or consequential
(collectively, “Damages”), as a result of or arising from or in any way
relating to any claim, demand, suit, action or proceeding (including any
inquiry or investigation) by any person, including without limitation Frontline
or the Company, whether threatened or initiated,


 


8

















 


asserting a claim for any legal
or equitable remedy against any person under any statute or regulation, including,
but not limited to, any federal or state securities laws, or under any common
law or equitable cause or otherwise, arising from or in connection with the
negotiation, preparation, execution, performance or failure of performance of
this Agreement or any transactions contemplated hereby, whether or not any such
Indemnified Party is a party to any such action, proceeding, suit or the target
of any such inquiry or investigation; provided, however, that no Indemnified
Party shall have the right to be indemnified hereunder for any liability
finally determined by a court of competent jurisdiction, subject to no further
appeal, to have resulted solely from the gross negligence or willful misconduct
of such Indemnified Party; provided further, however, that no
Indemnified Party shall have the right to be indemnified hereunder for any
Damages to the extent that such Damages are a result of, arise from or are
related to any act or omission by any Indemnified Party that causes Escrow
Agent not to be a securities intermediary under Article 8 of the New York UCC
for purposes of this Agreement, the Escrow Account and the Escrow Funds.  If any such action or claim shall be brought
or asserted against any Indemnified Party, such Indemnified Party shall
promptly notify the Indemnifying Parties in writing, and the Indemnifying
Parties shall assume the defense thereof, including the employment of counsel
reasonably acceptable to the Indemnified Party and the payment of all
expenses.  Such Indemnified Party shall,
in its sole discretion, have the right to employ separate counsel (who may be
selected by such Indemnified Party in its sole discretion) in any such action
and to participate in the defense thereof, and the fees and expenses of such
counsel shall be paid by such Indemnified Party, except that the Indemnifying
Parties shall be required to pay such fees and expenses if (a) the Indemnifying
Parties agree to pay such fees and expenses, (b) the Indemnifying Parties shall
fail to assume the defense of such action or proceeding, (c) either of the
Indemnifying Parties is the plaintiff in any such action or proceeding or (d)
the named or potential parties to any such action or proceeding (including any
potentially impleaded parties) include both such Indemnified Party and either
of the Indemnifying Parties, and such Indemnified Party shall have been advised
by counsel that there may be one or more legal defenses available to it which
are different from or additional to those available to the Indemnifying
Parties.  The Indemnifying Parties shall
be liable to pay fees and expenses of counsel pursuant to the preceding
sentence. All such fees and expenses payable by the Indemnifying Parties
pursuant to the foregoing sentence shall be paid from time to time as incurred,
both in advance of and after the final disposition of such action or
claim.  All of the foregoing losses,
damages, costs and expenses of the Indemnified Parties shall be payable by the
Indemnifying Parties upon demand by such Indemnified Party. 
If the Indemnifying Parties shall fail to pay such losses,
damages, costs and expenses within 10 days of such demand, such losses,
damages, costs and expenses shall be reimbursable from the Escrow Funds unless
such amounts shall not have been paid when the Escrow Funds are to be disbursed
in accordance with Section 5, in which case any such unpaid amounts
shall then be reimbursable from the Escrow Funds.  The obligations of the Indemnifying Parties under this Section 10
shall survive any termination of this Agreement, and any resignation of Escrow
Agent under this Agreement.


 


11.                                 Fees
and Expenses of Escrow Agent. 
Frontline shall pay to Escrow Agent compensation for its services
hereunder in accordance with the terms of a separate fee agreement between the
parties.  In the event Escrow Agent
renders any extraordinary services in connection with the Escrow Account at the
request of the parties, Escrow Agent shall be entitled to additional
compensation therefor to be agreed upon by Escrow Agent and Frontline.  In addition, Frontline shall reimburse
Escrow Agent for all of its reasonable out-of-pocket expenses incurred


 


9

















 


in its capacity as Escrow Agent
under this Agreement, including attorneys’ fees, travel expenses, telephone and
facsimile transmission costs, postage (including express mail and overnight
delivery charges), copying charges and the like.  All of the compensation and reimbursement obligations set forth
in this Section 11 shall be payable by Frontline upon demand by the
Escrow Agent.  If Frontline shall fail
to pay any portion of such compensation or out-of-pocket expenses within 10
days of demand by the Escrow Agent, such unpaid portion shall be reimbursable
from the Escrow Funds unless such amounts shall not have been paid when the
Escrow Funds are to be disbursed in accordance with Section 5, in which
case any such unpaid amounts shall then be reimbursable from the Escrow
Funds.  The obligations of Frontline
under this Section 11 shall survive any termination of this Agreement
and any resignation of Escrow Agent under this Agreement.


 


12.                                 Notice.  Unless otherwise provided herein, any
notice, request, consent, instruction or other document to be given hereunder
by any party hereto to another party hereto shall be in writing and will be
deemed given (a) when received if delivered personally or by courier; or
(b) on the date receipt is acknowledged if delivered by certified mail,
postage prepaid, return receipt requested or (c) on the day of
transmission if sent by facsimile transmission and receipt thereof is
confirmed, as follows:


 


	
  If to
  Trustee, addressed to:

  
	
   

  
	
  Wilmington Trust Company, as Trustee

  
	
  Rodney Square North

  
	
  1100 North Market Street

  
	
  Wilmington, Delaware 19890

  
	
  Attention:

  	
  Mary St.
  Amand

  
	
   

  	
  Assistant
  Vice President

  
	
  Facsimile: (302) 636-4145

  
	
   

  
	
  If to Escrow
  Agent, addressed to:

  
	
   

  
	
  Wilmington Trust Company,

  
	
  as Escrow Agent

  
	
  Rodney Square North

  
	
  1100 North Market Street

  
	
  Wilmington, Delaware 19890

  
	
  Attention:

  	
  Mary St.
  Amand

  
	
   

  	
  Assistant
  Vice President

  
	
  Facsimile: 
  (302) 636-4145

  
			



 


10

















 


	
  If to the
  Company, addressed to:

  
	
   

  
	
  Ship Finance International Limited

  
	
  Par-La-Ville Place

  
	
  14 Par-La-Ville Road

  
	
  Hamilton, Bermuda HM 08

  
	
  Attention: 
  Finance Department

  
	
  Facsimile: 
  +1 (441) 295-3494

  
	
   

  
	
  With a copy to:

  
	
   

  
	
  Seward &
  Kissel LLP

  
	
  One Battery
  Park Plaza

  
	
  New York,
  New York 10004

  
	
  Attention:  Gary Wolfe

  
	
  Facsimile:  (212) 480-8421

  
	
   

  
	
  If to Frontline, addressed to:

  
	
   

  
	
  Frontline
  Ltd.

  
	
  Par-La-Ville
  Place

  
	
  14
  Par-La-Ville Road

  
	
  Hamilton,
  Bermuda HM 08

  
	
  Attention: 
  Finance Department

  
	
  Facsimile:  +1 (441) 295-3494

  
	
   

  
	
  With a copy to:

  
	
   

  
	
  Seward &
  Kissel LLP

  
	
  One Battery
  Park Plaza

  
	
  New York,
  New York 10004

  
	
  Attention:  Gary Wolfe

  
	
  Facsimile:  (212) 480-8421

  



 


or to such other place and with
such other copies as any party hereto may designate as to itself by written
notice to the others in accordance with this Section 12.


 


13.                                 No
Third-Party Beneficiaries; Amendment or Waiver.  This Agreement is for the exclusive benefit of the parties hereto
and their respective successors hereunder, and shall not be deemed to give any
legal or equitable right, remedy, or claim, either express or implied, to any
other entity or person whatsoever.  This
Agreement may be changed, waived, discharged or terminated only by a writing
signed by each of the parties hereto; provided, that any amendment to Section 5
or Section 6 also will require the consent of Holders of all the
then outstanding Securities.  No delay
or omission by any party in exercising any right with respect to this Agreement
will operate as a waiver.  A waiver on
any one occasion will not be construed as a bar to, or waiver of, any right or
remedy on any future occasion.


 


11

















 


14.                                 Severability.  To the extent any provision of this
Agreement is prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.


 


15.                                 Governing
Law.  This Agreement shall be
interpreted, construed, enforced and administered in accordance with the laws
of the State of New York.  The Company
and Frontline hereby submit to the personal jurisdiction of and each agrees
that all proceedings relating hereto shall be brought in courts located within
the City and State of New York.  The
Company and Frontline hereby waive the right to trial by jury in any such
proceedings.  To the extent that in any
jurisdiction the Company or Frontline may be entitled to claim, for itself or
its assets, immunity from suit, execution, attachment (whether before or after
judgment) or other legal process, each hereby irrevocably agrees not to claim,
and hereby waives, such immunity.  The
Company and Frontline waive personal service of process and consent to service
of process by certified or registered mail, return receipt requested, directed
to them c/o Seward & Kissel LLP, One Battery Park Plaza, New York, New York
10004, the authorized agent of each of the Company and Frontline, and such
service shall be deemed completed 10 calendar days after the same is so mailed.


 


16.                                 Entire
Agreement.  Except as set forth in
the first sentence of Section 11, this Agreement constitutes the entire
agreement of the parties hereto relating to the matters contained herein,
superseding all prior contracts or agreements, whether oral or written,
relating to the matters contained herein.


 


17.                                 Binding
Effect.  All of the terms of this
Agreement, as amended from time to time, shall be binding upon, inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto.


 


18.                                 Execution
in Counterparts.  This Agreement may
be executed in two or more counterparts, which when so executed shall
constitute one and the same agreement or direction.


 


19.                                 Termination.  Upon the disbursement of all amounts in the
Escrow Funds under Section 5 of this Agreement, this Agreement will
terminate (other than Section 6 and Section 9 through Section
21) and Escrow Agent will have no further obligation or liability
whatsoever with respect to this Agreement or the Escrow Funds (provided,
however, that the termination of this Agreement shall not impair or affect any
rights or obligations of any party hereto arising hereunder prior to such
termination).


 


20.                                 Dealings.  Escrow Agent and any stockholder, director,
officer or employee of Escrow Agent may buy, sell, and deal in any of the
securities of the Company or Frontline and become pecuniarily interested in any
transaction in which the Company or Frontline may be interested, and contract
and lend money to the Company or Frontline and otherwise act as fully and
freely as though it were not Escrow Agent under this Agreement.  Nothing in this Agreement will preclude
Escrow Agent from acting in any other capacity for the Company, Frontline or
for any other entity.


 


12

















 


21.                                 No
Depositor Liability or Further Obligation. 
The Company, Frontline, Escrow Agent and Trustee acknowledge and agree
that depositing the Escrow Funds with Escrow Agent is the only obligation of
the Depositors under this Agreement. 
Frontline and the Company agree, on a joint and several basis, to hold
the Depositors harmless with respect to any claim, liability or cause of action
under this Agreement.


 


13

















 


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


 


	
   

  	
  DEPOSITORS

  
	
   

  	
   

  	
   

  
	
   

  	
  JEFFERIES
  & COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John W.
  Sinders Jr

  	
   

  
	
   

  	
  Name:

  	
  John W.
  Sinders Jr

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CITIGROUP
  GLOBAL MARKETS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark
  Rhodes

  	
   

  
	
   

  	
  Name:

  	
  Mark Rhodes

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President & Counsel

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON
  TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. McGinley

  	
   

  
	
   

  	
  Name:

  	
  James J. McGinley

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
  WILMINGTON
  TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James J. McGinley

  	
   

  
	
   

  	
  Name:

  	
  James J. McGinley

  	
   

  
	
   

  	
  Title:

  	
  Authorized Signer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
  SHIP FINANCE
  INTERNATIONAL LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kate
  Blankenship

  	
   

  
	
   

  	
  Name:

  	
  Kate
  Blankenship

  	
   

  
	
   

  	
  Title:

  	
  Director,
  Secretary and Attorny-in-Fact

  	
   

  
					



 


14

















 


	
   

  	
  FRONTLINE

  
	
   

  	
   

  	
   

  
	
   

  	
  FRONTLINE
  LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kate
  Blankenship

  	
   

  
	
   

  	
  Name:

  	
  KATE
  BLANKENSHIP

  	
   

  
	
   

  	
  Title:

  	
  DIRECTOR

  	
   

  



 


15

















 


EXHIBIT A


 


FORM
OF


SHIP
FINANCE INTERNATIONAL LIMITED


OFFICERS’
CERTIFICATE


 


This Officers’ Certificate is being delivered
to Trustee under Section 5(a) of the Escrow Agreement (the “Agreement”),
dated as of December 18, 2003, by and among Jefferies & Company, Inc. and
Citigroup Global Markets Inc., as Depositors, Wilmington Trust Company,  a
Delaware banking corporation, as trustee under the Indenture (“Trustee”) and as
escrow agent under the Agreement (“Escrow Agent”), Ship Finance International
Limited, a Bermuda exempted company (the “Company”), and Frontline Ltd., a
Bermuda exempted company (“Frontline”). 
This Officers’ Certificate is being delivered concurrently to
Trustee.  Capitalized terms that are
used but not defined herein have the meanings set forth in the Agreement.


 


The undersigned officers of the Company hereby certify that each of the
following statements is true and correct or will be true and correct
simultaneously with the release of the Escrow Funds contemplated hereby:


 


(1)                                  the
Company has completed the purchase, directly or indirectly, of at least 45 of
the Vessel Owning Subsidiaries (as defined in the Fleet Purchase Agreement
dated as of December 11, 2003 between the Company and Frontline (the “Fleet
Purchase Agreement”)) set forth in Schedule 3.19 to the Fleet Purchase
Agreement, as contemplated by the Fleet Purchase Agreement or, in the event
there was a Total Loss (as defined in the Indenture) of a Vessel (as defined in
the Fleet Purchase Agreement) prior to the acquisition by the Company of the
Vessel Owning Subsidiary that owns that Vessel, Frontline has either (a)
irrevocably transferred to the Company its right to receive all insurance
proceeds, damages, indemnities or other amounts it has received or may receive
in connection with such Total Loss or (b) substituted a vessel of similar age,
size and classification and the Company has completed the purchase of the
entity that owns such substituted vessel for a similar purchase price, in each
case in accordance with the terms of the Fleet Purchase Agreement in all
material respects;


 


(2)                                  the
Charter Ancillary Agreement (as defined in the Fleet Purchase Agreement) has
been duly authorized, executed and delivered by all parties thereto and is in
full force and effect;


 


(3)                                  Frontline
has complied with its obligations under the Charter Ancillary Agreement in all
material respects, including without limitation its obligation to capitalize
the Charterer (as defined in the Fleet Purchase Agreement) with at least U.S.
$250 million in cash in accordance with the terms thereof, and there are
no defaults thereunder that are continuing;


 


(4)                                  the
Charters and the Management Agreements (each as defined in the Fleet Purchase
Agreement) with respect to the Vessel Owning Subsidiaries that have been
acquired have been duly authorized, executed and delivered by all parties
thereto and are in full force and effect (subject to any exceptions expressly
contemplated by the


 


A-1

















 


Fleet Purchase Agreement), on substantially the terms described in the
Offering Circular for the offering of the Securities dated December 11,
2003 (the “Offering Circular”), and there are no defaults thereunder that are
continuing;


 


(5)                                  the
Frontline Performance Guarantee (as defined in the Fleet Purchase Agreement)
has been duly authorized, executed and delivered by all parties thereto and is
in full force and effect;


 


(6)                                  all
of the Restricted Subsidiaries (as defined in the Indenture) that have been
acquired by the Company have executed and delivered Subsidiary Guarantees (as
defined in the Indenture) in accordance with the Indenture, and such Subsidiary
Guarantees are in full force and effect; and


 


(7)                                  the
terms of the transactions entered into and the operations and assets and
liabilities acquired and assumed in connection with the foregoing conform in
all material respects to the descriptions thereof contained in the Offering
Circular, subject to any changes provided for, discussed or contemplated in the
Offering Circular.


 


The undersigned officers of the Company hereby further certify that (a)
the Company will use the Escrow Funds as described in the Offering Circular
under the caption “Use of Proceeds,” (b) no Default or Event of Default under
the Indenture has occurred and is continuing or will occur as a result of the
foregoing transactions and (c) attached to this Officers’ Certificate as Annex
I is a true and correct copy, certified by the Secretary or any Assistant
Secretary of the Company, of resolutions duly adopted unanimously by the Board
of Directors of the Company on
                        ,
2004, approving the contents and delivery of this Officers’ Certificate, which
resolutions have not since been amended or rescinded in any respect and remain
in full force and effect as of the date hereof.


 


In accordance
with Section 5(a) of the Agreement, Trustee is hereby instructed to direct
Escrow Agent to disburse immediately all Escrow Funds to the Company by wire
transfer of immediately available funds, to the following account:


 


[insert wire transfer instructions]


 


A-2

















 


IN WITNESS WHEREOF, the undersigned officers
have signed this Officers’ Certificate this
           day of
                                  ,
2004.


 


 


	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


A-3

















 


ANNEX I


TO OFFICERS’
CERTIFICATE


 


CERTIFIED RESOLUTIONS
OF BOARD OF DIRECTORS


 


A-4

















 


EXHIBIT B


 


FORM
OF OPINION OF SEWARD & KISSEL LLP


 


                          ,
2004


 


Wilmington Trust Company, as Trustee

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890


 


Re:                             Ship
Finance International Limited


 


Ladies and Gentlemen:


 


We have acted as special counsel to Ship Finance International Limited,
a Bermuda exempted company (the “Company”), Frontline Shipping Limited,
a Bermuda exempted company (the “Charterer”), Frontline Management
(Bermuda) Ltd., a Bermuda exempted company (“Frontline Management”),
Frontline Ltd., a Bermuda exempted company (“Frontline” and together
with the Company, the Charterer and Frontline Management, collectively, the “Frontline
Parties”) on matters of the laws of the State of New York and the laws of
the United States of America, in relation to, among other things, the Company’s
offering of an aggregate of up to $580,000,000 of Senior Notes due 2013 (the “Securities”),
and the negotiation, execution and delivery of the Transaction Documents (as
defined below) to which the Company and the other Frontline Parties are
parties.  We are delivering this opinion
pursuant to Section 5(a) of the Escrow Agreement (the “Escrow Agreement”),
dated as of December 18, 2003, by and among the Company, Frontline and
Wilmington Trust Company, as Escrow Agent (in such capacity, the “Escrow
Agent”).  Capitalized terms used
herein but not otherwise defined herein shall have the meanings ascribed
thereto in the Escrow Agreement unless the context otherwise requires.


 


In rendering this opinion, we have examined and relied on originals or
copies of the following:


 


(i)                                     the Company’s
Offering Circular, dated December 11, 2003, relating to the offering of the
Securities (the “Offering Circular”);


 


(ii)                                  the Indenture, dated
as of December 18, 2003, by and between the Company and Wilmington Trust
Company, as Trustee (the “Indenture”);


 


(iv)                              the guarantees by each of
the Subsidiaries under the Indenture (the “Guarantees”);


 


(v)                                 the Escrow Agreement;


 


B-1

















 


(vi)                              the Fleet Purchase
Agreement, dated as of December 11, 2003, by and between the Company and
Frontline (the “Fleet Purchase Agreement”);


 


(vii)                           the Charter Ancillary
Agreement (as defined in the Fleet Purchase Agreement);


 


(viii)                        the Charters (as defined in the
Fleet Purchase Agreement);


 


(ix)                                the Management
Agreements (as defined in the Fleet Purchase Agreement);


 


(x)                                   the Performance
Guarantee (as defined in the Fleet Purchase Agreement) (and together with the
Indenture, the Guarantees, the Escrow Agreement, the Fleet Purchase Agreement,
the Charter Ancillary Agreement, the Charters and the Management Agreements,
collectively, the “Transaction Documents”); and


 


(xi)                                the constitutive
documents of each Frontline Party.


 


We have also examined and relied, as to factual matters, upon
originals, or copies certified to our satisfaction, of such records, documents,
certificates of officers of the Frontline Parties and of public officials and
other instruments, and made such other inquiries, as, in our judgment, are
necessary or appropriate to enable us to render the opinion expressed below.  As to questions of fact material to this
opinion, we have, with your approval, where relevant facts were not
independently established, relied without investigation upon, among other
things, the representations made in the Transaction Documents and certificates
of officers of the Frontline Parties. 
Insofar as our opinions pertain to matters of Bermuda law, Bahamian law,
the law of the Isle of Man, Singapore law or English law, we have relied
exclusively and without independent investigation upon the opinions of various
local counsel to the Frontline Parties.


 


For the purpose of this opinion, we have further assumed:


 


(a)                                  the power, authority
and legal right of all parties to the Transaction Documents (other than the
Frontline Parties) to enter into and to perform their respective obligations
thereunder and that the Transaction Documents have been duly authorized,
executed and delivered by each of the parties thereto (other than the Frontline
Parties);


 


(b)                                 the genuineness of all
signatures on all documents and the completeness, and the conformity to
original documents, of all copies submitted to us;


 


(c)                                  due compliance of the
Transaction Documents with all matters of, and the validity and enforceability
thereof under, all such laws as govern or relate to them (other than the laws
of the jurisdictions as to which we are opining);


 


(d)                                 that each of the
parties to the Transaction Documents (other than the


 


B-2

















 


Frontline Parties) has complied with all legal requirements pertaining
to its status as such status relates to its rights to enforce the Transaction
Documents against any of the Frontline Parties; and


 


(e)                                  that any required
consents, licenses, permits, approvals, exemptions or authorizations of or by,
and any required registrations or filings with, any governmental authority or
regulatory body of any jurisdiction (other than the jurisdictions as to which
we are opining) in connection with the transactions contemplated by the
Transaction Documents have been duly obtained or made.


 


Based upon and subject to the foregoing and to the qualifications and
limitations expressed herein, we are of the opinion that:


 


1.                                       All
conditions necessary for the Company to complete the purchase of at least 45 of
the Vessel Owning Subsidiaries (as defined in the Fleet Purchase Agreement), as
contemplated by the Fleet Purchase Agreement, have been satisfied or waived
(other than the release of the Escrow Funds to the Company).  [In the event there was a Total Loss (as defined
in the Indenture) of a Vessel (as defined in the Fleet Purchase Agreement)
prior to the acquisition by the Company of the Vessel Owning Subsidiary that
owns that Vessel, Frontline has either (a) irrevocably transferred to the
Company its right to receive all insurance proceeds, damages, indemnities or
other amounts it has received or may receive in connection with such Total Loss
or (b) substituted a vessel of similar age, size and classification and the
Company has completed the purchase of the entity that owns such substituted
vessel for a similar purchase price, in each case in accordance with the terms
of the Fleet Purchase Agreement in all material respects.]


 


2.                                       The
Charter Ancillary Agreement (as defined in the Fleet Purchase Agreement) has
been duly authorized, executed and delivered by all parties thereto and is in
full force and effect.


 


3.                                       To
our knowledge (a) Frontline has complied with its obligations under the Charter
Ancillary Agreement in all material respects, including its obligation to
capitalize the Charterer (as defined in the Fleet Purchase Agreement) with at
least U.S. $250 million in cash in accordance with the terms thereof and
(b) there are no defaults thereunder that are continuing.


 


4.                                       The
Charters and the Management Agreements (each as defined in the Fleet Purchase
Agreement) with respect to the Vessel Owning Subsidiaries that have been
acquired have been duly authorized, executed and delivered by all parties
thereto and are in full force and effect (subject to any exceptions expressly
contemplated by the Fleet Purchase Agreement), on substantially the terms
described in the Offering Circular and, to our knowledge, there are no defaults
thereunder that are continuing.


 


5.                                       The
Frontline Performance Guarantee (as defined in the Fleet Purchase Agreement)
has been duly authorized, executed and delivered by Frontline and is in full
force and effect.


 


B-3

















 


6.                                       All
of the Restricted Subsidiaries (as defined in the Indenture) that have been
acquired by the Company have executed and delivered Subsidiary Guarantees (as
defined in the Indenture) in accordance with the Indenture, and such Subsidiary
Guarantees are in full force and effect.


 


The above opinions are subject to the following additional limitations,
qualifications and exceptions:


 


(a)                                  the enforceability of
the rights and remedies provided for in the Transaction Documents is subject to
bankruptcy, reorganization, insolvency, fraudulent conveyance, fraudulent
transfer, moratorium and other similar laws affecting generally the
enforceability of creditors’ rights from time to time in effect;


 


(b)                                 the enforceability of
the Transaction Documents may be limited by application of the principles of
good faith, fair dealing, commercial reasonableness, materiality and
unconscionability;


 


(c)                                  the enforceability of
the Transaction Documents is subject to general principles of equity with
respect to the enforceability of any of the remedies, covenants or other
provisions of the Transaction Documents and to the availability of specific performance
or injunctive relief or other equitable remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law;


 


(d)                                 any provision in the
Transaction Documents specifying that the provisions thereof may only be waived
in writing may not be enforceable to the extent that an oral agreement or
agreement implied by trade practice or course of conduct is created modifying
provisions of the Transaction Documents;


 


(e)                                  we express no opinion
as to the legality, validity, binding effect or enforceability of any
provisions of the Transaction Documents relating to indemnification,
contribution or exculpation (i) in connection with violations of any applicable
laws, statutory duties or public policy by the indemnified or exculpated party,
or (ii) in connection with willful, reckless or unlawful acts or gross
negligence of the indemnified or exculpated party or the party receiving
contribution, or (iii) under circumstances involving the negligence of the
indemnified or exculpated party or the party receiving contribution in which a
court might determine the provision to be unfair or insufficiently explicit;


 


(f)                                    we express no
opinion as to the legality, validity, binding effect or enforceability of any
provision of the Transaction Documents related to choice of governing law to
the extent that the legality, validity, binding effect or enforceability of any
such provision is to be determined by any court other than a court of the State
of New York or a federal district court sitting in the State of New York
applying the choice of law principles of the State of New York;


 


B-4

















 


(g)                                 with respect to the
submission to the jurisdiction of the United States District Courts contained
in the Transaction Documents, we note the limitations of 28 U.S.C. §1332 on
federal court jurisdiction in cases where diversity of citizenship is lacking,
and we also note that such submissions and the waivers contained in such
sections cannot supersede those courts’ discretion in determining whether to
transfer an action from one federal court to another under 28 U.S.C.§1404(a);
and


 


(h)                                 the opinions expressed
herein are given as of the date hereof, and we undertake no obligation to
supplement this letter if any applicable laws change after the date hereof or
if we become aware of any facts that might change the opinions expressed herein
after the date hereof or for any other reason.


 


Whenever we
have asserted above that a matter is “to our knowledge” or “known to us”, our
knowledge is limited to actual knowledge of those attorneys in our office who
have participated in the representation of the Frontline Parties.


 


This opinion
is limited to matters of law of the State of New York and the United States of
America.  We express no opinion with
respect to the law of any other jurisdiction.


 


The opinions
in this letter are rendered only to the Trustee with respect to the
above-referenced transaction.  The
opinions may not be relied upon for any other purpose, or relied upon by any
other person, firm or entity for any purpose.


 


	
   

  	
  Very truly yours,

  



 


B-5