-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 DglT3B4x8xdEVzvyHnf1zvobW9Kh8z0IqWwkgiEjwxD5uvV9yKCUvCj9kJ4yqhfZ
 K5/z7WZeRbidnq1dwnwOtA==

<SEC-DOCUMENT>0000945234-03-000028.txt : 20030212
<SEC-HEADER>0000945234-03-000028.hdr.sgml : 20030212
<ACCEPTANCE-DATETIME>20030211205950
ACCESSION NUMBER:		0000945234-03-000028
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		13
CONFORMED PERIOD OF REPORT:	20030212
FILED AS OF DATE:		20030212

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEEKAY SHIPPING CORP
		CENTRAL INDEX KEY:			0000911971
		STANDARD INDUSTRIAL CLASSIFICATION:	DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			C5
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12874
		FILM NUMBER:		03551464

	BUSINESS ADDRESS:	
		STREET 1:		TK HOUSE, BAYSIDE EXECUTIVE PARK
		STREET 2:		WEST BAY ST & BLAKE RD, PO BOX AP-59213
		CITY:			NASSAU BAHAMAS
		STATE:			C5
		ZIP:			00000
		BUSINESS PHONE:		8093228020

	MAIL ADDRESS:	
		STREET 1:		1 BENTALL CENTRE,STE 1400,505 BURRARD ST
		STREET 2:		VANCOUVER, BRITISH COLUMBIA
		CITY:			CANADA V7X 1M5
		STATE:			A6
		ZIP:			00000

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VIKING STAR SHIPPING INC
		DATE OF NAME CHANGE:	19930914
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>o08866e6vk.txt
<DESCRIPTION>FORM 6-K
<TEXT>
<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 6-K
                        Report of Foreign Private Issuer
                      Pursuant to Rule 13a-16 or 15d-16 of
                       the Securities Exchange Act of 1934

                        Date of report: February 12, 2003

                           TEEKAY SHIPPING CORPORATION
             (Exact name of Registrant as specified in its charter)

                                    TK House
                             Bayside Executive Park
                          West Bay Street & Blake Road
                       P.O. Box AP-59213, Nassau, Bahamas
                     (Address of principal executive office)

     [Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.]

                         Form 20-F   X   Form 40- F
                                    ---              ---

     [Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.]

                                  Yes     No  X
                                      ---    ---

     [If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b):82-________ ]




<PAGE>


Item 1 - Information Contained in this Form 6-K Report

The following documents are filed with reference to and hereby incorporated by
reference into the Registration Statement on Form F-3 (Registration No.
333-102594) of Teekay Shipping Corporation, filed with the Securities and
Exchange Commission on January 17, 2003.


4.1      Form of Supplemental Indenture No. 1 between Teekay Shipping
         Corporation and The Bank of New York, as trustee.

4.2      Form of Purchase Contract Agreement between Teekay Shipping Corporation
         and The Bank of New York, as purchase contract agent.

4.3      Form of Pledge Agreement between Teekay Shipping Corporation and The
         Bank of New York, as collateral agent.

4.4      Form of Remarketing Agreement between Teekay Shipping Corporation and
         Morgan Stanley & Co. Incorporated.

4.5      Form of Underwriting Agreement Between Teekay Shipping Corporation,
         Morgan Stanley & Co. Incorporated and Salmon Smith Barney.


8.1      Opinion of Perkins Coie LLP, regarding certain U.S. tax matters.

8.2      Opinion of Seward and Kissel, LLP, regarding certain U.S. tax matters.

8.3      Opinion of Watson, Farley & Williams, regarding Marshall Islands tax
         matters.

8.4      Opinion of Graham, Thompson & Co., regarding Bahamian tax matters.

8.5      Opinion of Appleby Spurling & Kempe, regarding Bermudian tax matters.

8.6      Opinion of Thommessen Krefting Greve Lund, regarding Norwegian tax
         matters.

23.1     Consent of Perkins Coie, LLP (contained in Exhibit 8.1).

23.2     Consent of Seward and Kissel, LLP (contained in Exhibit 8.2).

23.3     Consent of Watson, Farley & Williams (contained in Exhibit 8.3).

23.4     Consent of Graham, Thompson & Co. (contained in Exhibit 8.4).

23.5     Consent of Appleby Spurling & Kempe (contained in Exhibit 8.5).

23.6     Consent of Thommessen Krefting Greve Lund (contained in Exhibit 8.6).

23.7     Consent of Deloitte & Touche.



<PAGE>



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                     TEEKAY SHIPPING CORPORATION

Date:     February 12, 2003


                                     By:      /s/ Arthur Bensler
                                         -----------------------------------
                                     Bame:    Arthur Bensler
                                     Nitle:   Assistant Corporate Secretary
                                              and General Counsel





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>3
<FILENAME>o08866exv4w1.txt
<DESCRIPTION>SUPPLEMENTAL INDENTURE # 1
<TEXT>
<PAGE>

                                                                     Exhibit 4.1

================================================================================






                           TEEKAY SHIPPING CORPORATION

                                    as Issuer

                                       and

                              THE BANK OF NEW YORK

                                   as Trustee


                              ---------------------


                          Supplemental Indenture No. 1

                              ---------------------


                        Dated as of February ____ , 2003









================================================================================

<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>               <C>                                                      <C>

                                   ARTICLE ONE
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101.      Relation to Base Indenture.................................1

Section 102.      Definition of Terms........................................2


                                   ARTICLE TWO
                    GENERAL TERMS AND CONDITIONS OF THE NOTES

Section 201.      Designation and Principal Amount...........................5

Section 202.      Maturity...................................................5

Section 203.      Form, Payment and Appointment..............................5

Section 204.      Global Notes...............................................6

Section 205.      Interest...................................................6

Section 206.      Extension Of Interest Payment Period.......................7

Section 207.      Subordination..............................................8

Section 208.      No Defeasance..............................................8

Section 209.      No Sinking Fund............................................9


                                  ARTICLE THREE
                                  FORM OF NOTE

Section 301.      Form Of Note...............................................9


                                  ARTICLE FOUR
                             ORIGINAL ISSUE OF NOTES

Section 401.      Original Issue Of Notes....................................9


                                  ARTICLE FIVE
                             ORIGINAL ISSUE DISCOUNT

Section 501.      Original Issue Discount....................................9
</TABLE>


                                       i

<PAGE>


<TABLE>
<S>               <C>                                                      <C>

                                  ARTICLE SIX
                                  REMARKETING

Section 601.      Remarketing Procedures.....................................9

Section 602.      Remarketing...............................................10

Section 603.      Reset Rate................................................11

Section 604.      Failed Remarketing........................................11

Section 605.      Put Right.................................................11

Section 606.      Additional Event of Default...............................12


                                 ARTICLE SEVEN
                                 TAX TREATMENT

Section 701.      Tax Treatment.............................................12

Section 702.      Additional Amounts........................................13


                                 ARTICLE EIGHT
                                 MISCELLANEOUS

Section 801.      Ratification Of Base Indenture............................15

Section 802.      Trustee Not Responsible For Recitals......................15

Section 803.      New York Law To Govern....................................15

Section 804.      Separability..............................................15

Section 805.      Counterparts..............................................15

Exhibit A - Form of Note
Exhibit B - Pledge Agreement
Exhibit C - Purchase Agreement
Exhibit D - Remarketing Agreement
</TABLE>


                                       ii

<PAGE>



         THIS SUPPLEMENTAL INDENTURE No. 1 (this "Supplemental Indenture No.
1"), dated as of February [___], 2003, is between TEEKAY SHIPPING CORPORATION, a
Marshall Islands corporation (the "Company"), and THE BANK OF NEW YORK, a New
York banking corporation, as Trustee (the "Trustee").

                             RECITALS OF THE COMPANY

         WHEREAS, the Company has concurrently herewith executed and delivered
to the Trustee a Subordinated Indenture dated as of February [___], 2003 (the
"Base Indenture", and together with this Supplemental Indenture No. 1, the
"Indenture"), providing for the issuance from time to time of series of the
Company's Securities (as defined in the Base Indenture);

         WHEREAS, Section 901 of the Base Indenture provides for the Company and
the Trustee to enter into an indenture supplemental to the Base Indenture to
establish the form or terms of Securities of any series as permitted by Sections
201 or 301 of the Base Indenture;

         WHEREAS, pursuant to Section 301 of the Base Indenture, the Company
wishes to provide for the issuance of a new series of Securities to be known as
its [___]% Notes due [_____] (the "Notes"), the form of such Notes and the
terms, provisions and conditions thereof to be set forth as provided in this
Supplemental Indenture No. 1; and

         WHEREAS, the Company has requested that the Trustee execute and deliver
this Supplemental Indenture No. 1, and all requirements necessary to make this
Supplemental Indenture No. 1 a valid, binding and enforceable instrument in
accordance with its terms, and to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee, the valid, binding and
enforceable obligations of the Company, have been done and performed, and the
execution and delivery of this Supplemental Indenture No. 1 has been duly
authorized in all respects;

         NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE NO. 1 WITNESSETH:

         In consideration of the covenants and agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:

                                  ARTICLE ONE
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         Section 101. Relation to Base Indenture.

         This Supplemental Indenture No. 1 constitutes an integral part of the
Base Indenture.


                                       1

<PAGE>

         Section 102. Definition of Terms.

         For all purposes of this Supplemental Indenture No. 1:

         (a) Capitalized terms used herein without definition shall have the
meanings specified in the Base Indenture, or, if not defined in the Base
Indenture, in the Pledge Agreement, the Purchase Contract Agreement or the
Remarketing Agreement, as the case may be;

         (b) a term defined anywhere in this Supplemental Indenture No. 1 has
the same meaning throughout;

         (c) the singular includes the plural and vice versa;

         (d) headings are for convenience of reference only and do not affect
interpretation;

         (e) the following terms have the meanings given to them in this Section
102(e):

         "Additional Amounts" shall have the meaning set forth in Section
702(a).

         "Base Indenture" has the meaning set forth in the recitals to this
Supplemental Indenture No. 1.

         "Beneficial Owner" shall have the meaning specified in the Purchase
Contract Agreement.

         "Business Day" shall have the meaning specified in the Purchase
Contract Agreement.

         "Collateral Account" shall have the meaning specified in the Pledge
Agreement.

         "Collateral Agent" shall have the meaning specified in the Pledge
Agreement.

         "Company" means Teekay Shipping Corporation, a Marshall Islands
Corporation.

         "Compounded Interest" shall have the meaning set forth in Section
206(a).

         "Corporate Units" shall have the meaning specified in the Purchase
Contract Agreement.

         "Coupon Rate" shall have the meaning set forth in Section 205(a).

         "Custodial Agent" shall have the meaning specified in the Purchase
Contract Agreement.

         "Deferred Interest" shall have the meaning set forth in Section 206(a).


                                       2

<PAGE>

         "Depositary" means a clearing agency registered under Section 17A of
the Securities Exchange Act of 1934, as amended, that is designated to act as
Depositary for the Corporate Units pursuant to the Purchase Contract Agreement.

         "Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.

         "Extension Period" shall have the meaning set forth in Section 206(a).

         "Excluded Additional Amounts" shall have the meaning set forth in
Section 702(a).

         "Failed Remarketing" shall have the meaning specified in the Purchase
Contract Agreement.

         "Global Notes" shall have the meaning set forth in Section 204.

         "Holders" shall have the meaning specified in the Purchase Contract
Agreement.

         "Indenture" shall have the meaning set forth in the recitals to this
Supplemental Indenture No. 1.

         "Interest Payment Date" shall have the meaning set forth in Section
205(b).

         "Maturity Date" shall have the meaning specified in Section 202.

         "Notes" has the meaning set forth in the recitals to this Supplemental
Indenture No. 1.

         "Pledge Agreement" means the Pledge Agreement, dated as of the date of
this Supplemental Indenture No. 1 among the Company, The Bank of New York, as
Collateral Agent, Custodial Agent and Securities Intermediary, and The Bank of
New York, as Purchase Contract Agent and attorney-in-fact for the Holders of the
Purchase Contracts, as amended from time to time.

         "Purchase Contract" shall have the meaning specified in the Purchase
Contract Agreement.

         "Purchase Contract Agent" shall have the meaning specified in the
Purchase Contract Agreement.

         "Purchase Contract Agreement" means the Purchase Contract Agreement,
dated as of the date of this Supplemental Indenture No. 1, between the Company
and The Bank of New York, as Purchase Contract Agent, as amended from time to
time.

         "Purchase Contract Settlement Date" means February 16, 2006.

         "Put Price" shall have the meaning set forth in Section 605.


                                       3

<PAGE>

         "Put Right" shall have the meaning set forth in Section 605.

         "Quotation Agent" means any primary U.S. government securities dealer
selected by the Company.

         "Record Date" means, with respect to any Interest Payment Date for the
Notes, the first Business Day of the calendar month in which such Interest
Payment Date falls; provided that the Company may, at its option, select any
other day as the Record Date for any Interest Payment Date so long as such
Record Date selected is more than one Business Day but less than 60 Business
Days prior to such Interest Payment Date.

         "Remarketed Notes" shall have the meaning specified in the Remarketing
Agreement.

         "Remarketing" shall have the meaning specified in the Remarketing
Agreement.

         "Remarketing Agent" means Morgan Stanley & Co. Incorporated, or any
successor thereto or replacement Remarketing Agent appointed by the Company
pursuant to the Remarketing Agreement.

         "Remarketing Agreement" means the Remarketing Agreement, dated as of
the date of this Supplemental Indenture No. 1, among the Company, Morgan Stanley
& Co. Incorporated, as Remarketing Agent, and The Bank of New York, as Purchase
Contract Agent, as amended from time to time.

         "Remarketing Date" shall have the meaning specified in the Remarketing
Agreement.

         "Remarketing Fee" shall have the meaning specified in the Remarketing
Agreement.

         "Remarketing Price" shall have the meaning set forth in Section 602.

         "Reset Effective Date" means the date three Business Days following the
date of a Successful Remarketing pursuant to which the Coupon Rate is reset to
the Reset Rate.

         "Reset Rate" means the interest rate per annum on the Notes determined
by the Remarketing Agent as the rate necessary to remarket the Remarketed Notes
at a price per Remarketed Note such that the aggregate price for the Remarketed
Notes is equal to approximately 100.25% (but not less than 100%, net of any
Remarketing Fee and any other fees and expenses) of their aggregate principal
amount; provided that if there are no Corporate Units outstanding and none of
the Holders elect to have Separate Notes held by them remarketed, or in the case
of a Failed Remarketing, the interest rate payable on the Notes will not be
reset and the interest rate payable on the Notes shall continue to be the Coupon
Rate; provided, further, that in no event shall the Reset Rate exceed the
maximum rate, if any, permitted by applicable law.

         "Securities Intermediary" shall have the meaning specified in the
Pledge Agreement.


                                       4

<PAGE>

         "Security Register" shall have the meaning specified in the Purchase
Contract Agreement.

         "Separate Notes" means Notes that are no longer a component of
Corporate Units.

         "Successful Remarketing" shall have the meaning specified in the
Purchase Contract Agreement.

         "Taxes" shall have the meaning set forth in Section 702(a).

         "Taxing Jurisdictions" shall have the meaning set forth in Section
702(a).

         "Treasury Units" shall have the meaning specified in the Purchase
Contract Agreement.

         "Trustee" means The Bank of New York, a New York banking corporation.

                                  ARTICLE TWO
                    GENERAL TERMS AND CONDITIONS OF THE NOTES

         Section 201. Designation and Principal Amount.

         There is hereby authorized a series of Securities designated as [____]%
Notes due May 18, 2006 limited in aggregate principal amount to $125,000,000 (or
up to $143,750,000 to the extent that the underwriters' over-allotment option is
exercised in full). The Notes may be issued from time to time upon written order
of the Company for the authentication and delivery of Notes pursuant to Section
303 of the Base Indenture.

         Section 202. Maturity.

         The date upon which the Notes shall become due and payable at final
maturity, together with any accrued and unpaid interest, is May 18, 2006 (the
"Maturity Date").

         Section 203. Form, Payment and Appointment.

         (a) Except as provided in Section 204, the Notes shall be issued in
fully registered, certificated form, bearing identical terms. Principal of and
interest on the Notes will be payable, the transfer of such Notes will be
registrable, and such Notes will be exchangeable for Notes of a like aggregate
principal amount bearing identical terms and provisions, at the office or agency
of the Company maintained for such purpose in the Borough of Manhattan, The City
of New York, which shall initially be the Corporate Trust Office of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register or by wire transfer to an account appropriately designated by
the Holder entitled to payment.

         (b) No service charge shall be made for any registration of transfer or
exchange of the Notes, but the Company may require payment from the Holder of a
sum


                                       5

<PAGE>

sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith.

         (c) The Security Registrar and Paying Agent for the Notes shall
initially be the Trustee.

         (d) The Notes shall be issuable in denominations of $25 and integral
multiples of $25 in excess thereof.

         Section 204. Global Notes.

         Notes that are no longer components of the related Corporate Units (as
defined in the Purchase Contract Agreement) and are released from the Collateral
Account will be issued in permanent global form (a "Global Note"), and if issued
as one or more Global Notes, the Depositary shall be The Depository Trust
Company or such other depositary as any officer of the Company may from time to
time designate. Upon the creation of Treasury Units or the recreation of
Corporate Units, an appropriate annotation shall be made on the Schedule of
Increases or Decreases on the Global Notes held by the Depositary. Unless and
until such Global Note is exchanged for Notes in certificated form, Global Notes
may be transferred, in whole but not in part, and any payments on the Notes
shall be made, only to the Depositary or a nominee of the Depositary, or to a
successor Depositary selected or approved by the Company or to a nominee of such
successor Depositary.

         Section 205. Interest.

         (a) The Notes will bear interest initially at the rate of [___]% per
year (the "Coupon Rate") from the original date of issuance through and
including the earlier of (i) the Maturity Date and (ii) the day immediately
preceding the Reset Effective Date. In the event of a Successful Remarketing of
the Notes, the Coupon Rate may be reset by the Remarketing Agent at the
appropriate Reset Rate with effect from the Reset Effective Date, as set forth
in Section 603. If the Coupon Rate is so reset, the Notes will bear interest at
the Reset Rate from the Reset Effective Date until the principal thereof and
interest thereon is paid or duly made available for payment and shall bear
interest, to the extent permitted by law, compounded quarterly, on any overdue
principal and payment of interest at the Coupon Rate through and including the
day immediately preceding the Reset Effective Date and at the Reset Rate
thereafter.

         (b) Subject to Section 206, interest on the Notes shall be payable
quarterly in arrears on February 16, May 16, August 16 and November 16 of each
year (each, an "Interest Payment Date"), commencing May 16, 2003, to the Person
in whose name such Note, or any predecessor Note, is registered at the close of
business on the Record Date for such Interest Payment Date; provided, however,
that May 16, 2006 shall not be an Interest Payment Date and the Interest Payment
Date immediately following February 16, 2006 shall be May 18, 2006. Interest on
the Notes shall accrue from February ___, 2003.

         (c) The amount of interest payable for any full quarterly period will
be computed on the basis of a 360-day year consisting of twelve 30-day months.
The amount of interest payable for any period shorter than a full quarterly
period for which interest is computed


                                       6

<PAGE>

will be computed on the basis of a 30-day month and, for any period less than a
month, on the basis of the actual number of days elapsed per 30-day month. In
the event that any scheduled Interest Payment Date falls on a day that is not a
Business Day, then payment of interest payable on such Interest Payment Date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next calendar year, then such payment will be made on the
preceding Business Day.

         Section 206. Extension Of Interest Payment Period.

         (a) The Company shall have the right at any time and from time to time,
so long as no Event of Default with respect to the Notes has occurred and is
continuing, to defer payments of interest by extending the interest payment
period of the Notes to any subsequent Interest Payment Date, but not beyond
February 16, 2006 (an "Extension Period"). Prior to the expiration of any
Extension Period, the Company may further extend such Extension Period to any
subsequent Interest Payment Date, but not beyond February 16, 2006. During any
Extension Period, including as the same may be extended as provided in the
preceding sentence, no interest shall be due and payable. To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to this Section
206, will accrue additional interest at the rate of [____]% per annum to but
excluding the date of payment, compounded quarterly for each quarter of such
Extension Period ("Compounded Interest"). At the end of each Extension Period,
including as the same may be extended as provided above, the Company shall pay
all interest accrued and unpaid on the Notes and Compounded Interest (together,
"Deferred Interest") that shall be payable to the Person in whose name such
Note, or any predecessor Note, is registered at the close of business on the
Record Date for such Interest Payment Date. Upon termination of any Extension
Period and the payment of all Deferred Interest then due, the Company may
commence a new Extension Period, provided that such Extension Period, together
with all extensions thereof, may not extend beyond February 16, 2006. No
interest shall be due and payable during an Extension Period except at the end
thereof, except that prior to the end of such Extension Period, the Company, at
its option, may prepay on any Interest Payment Date all or any portion of the
Deferred Interest accrued during the then elapsed portion of such Extension
Period.

         (b) The Company shall give written notice to the Trustee (and the
Trustee shall give notice thereof to Holders of Notes) of its election to extend
any interest payment period, the expected length of any such Extension Period
and any extension of any Extension Period, at least five Business Days before
the earlier of (1) the Record Date for the Interest Payment Date on which
interest would have been payable except for the election to begin or extend the
Extension Period, or (2) the date the Trustee is required to give notice to any
securities exchange or to Holders of Notes of such Record Date or such Interest
Payment Date.

         (c) The Company shall give written notice to the Trustee (and the
Trustee shall give notice thereof to Holders of Notes) of the end of an
Extension Period or its election to pay any portion of the Deferred Interest on
an Interest Payment Date prior to the end of an Extension Period, at least five
Business Days before the earlier of (1) the Record Date, (2) the Interest
Payment Date on which interest would have been payable except for the election
to


                                       7

<PAGE>

begin or extend such Extension Period or (3) the date the Trustee is required to
give notice to any securities exchange or to Holders of Notes of such Record
Date or such Interest Payment Date.

         (d) In addition to the covenants contained in Article Ten of the Base
Indenture, the Company covenants and agrees for the benefit of the Holders of
Notes that, during the continuance of any Extension Period, the Company shall
not:

                   (1) declare or pay dividends on, make other distributions
     with respect to, or redeem, purchase or acquire, or make a liquidation
     payment with respect to, any shares of the Company's capital stock;

                   (2) permit any Subsidiary of the Company to declare or pay
     dividends on, make other distributions with respect to, or redeem, purchase
     or acquire, or make a liquidation payment with respect to, any shares of
     the Company's or such Subsidiary's capital stock; provided that the
     foregoing will not restrict any Subsidiary of the Company from declaring or
     paying such dividends, or making such distributions, to the Company or any
     other Subsidiary of the Company;


                   (3) make any payment of principal, interest or premium, if
     any, or repay, repurchase or redeem any security that ranks pari passu with
     the Notes; or

                   (4) make any payment of principal, interest or premium, if
     any, on or repay, repurchase or redeem any debt securities that rank
     subordinate in right of payment to the Notes or make any guarantee payments
     with respect to any guarantee by the Company of the Indebtedness of any
     Subsidiary of the Company if such guarantee ranks subordinate in right of
     payment to the Notes.

         Section 207. Subordination.

         (a) Subject to Subsection (b) of this Section, the provisions of
Article Sixteen of the Base Indenture shall initially apply to the Notes.

         (b) Notwithstanding Section 207(a), from and after February 16, 2006,
unless an Event of Default set forth in Sections 501(5) or (6) of the Base
Indenture shall have occurred and be continuing (without regard, in the case of
Section 501(5), to the period of continuance referred to therein), (1) the
provisions of Article Sixteen of the Base Indenture shall no longer apply to the
Notes, (2) the Notes shall rank equally in right of payment to all of the
then-existing and future unsubordinated Indebtedness of the Company and (3) the
Notes shall be considered Senior Indebtedness pursuant to the definition thereof
in the Base Indenture and for the purposes of the application of Article Sixteen
of the Base Indenture to any Securities, other than the Notes, issued pursuant
to the Base Indenture.

         Section 208. No Defeasance.

         The provisions of Article Fourteen of the Base Indenture shall not
apply to the Notes.


                                       8

<PAGE>

         Section 209. No Sinking Fund.

         The provisions of Article Twelve of the Base Indenture shall not apply
to the Notes.

                                 ARTICLE THREE
                                  FORM OF NOTE

         Section 301. Form Of Note.

         The Notes and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms attached as Exhibit A
hereto, with such changes therein as the officers of the Company executing the
Notes (by manual or facsimile signature) may approve, such approval to be
conclusively evidenced by their execution thereof.

                                  ARTICLE FOUR
                             ORIGINAL ISSUE OF NOTES

         Section 401. Original Issue Of Notes.

         Notes in the aggregate principal amount of up to $125,000,000 (or up to
$143,750,000 to the extent that the underwriters' over-allotment option is
exercised in full) may from time to time, upon execution of this Supplemental
Indenture No. 1, be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and deliver said
Notes to or upon the written order of the Company pursuant to Section 303 of the
Base Indenture without any further action by the Company (other than as required
by the Base Indenture).

                                  ARTICLE FIVE
                             ORIGINAL ISSUE DISCOUNT

         Section 501. Original Issue Discount.

         If the Company defers payments of interest pursuant to Section 206, the
Company shall file with the Trustee promptly at the end of each calendar year
(i) a written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on Notes that are Outstanding as of the
end of the year and (ii) such other specific information relating to such
original issue discount as may then be relevant under the United States Internal
Revenue Code of 1986, as amended from time to time.

                                  ARTICLE SIX
                                   REMARKETING

         Section 601. Remarketing Procedures.

         (a) The Company shall engage the Remarketing Agent pursuant to the
Remarketing Agreement for the Remarketing of the Notes. The Company will
request, not later than seven nor more than fifteen calendar days prior to the
Remarketing Date, that the


                                       9

<PAGE>

Depositary or its nominee notify the Beneficial Owners holding Separate Notes,
Corporate Units and Treasury Units of the procedures to be followed in the
Remarketing.


         (b) Each Holder of Separate Notes may elect to have Separate Notes held
by such Holder remarketed in the Remarketing. A Holder making such an election
must, pursuant to the Pledge Agreement, notify the Custodial Agent and deliver
such Separate Notes to the Custodial Agent prior to 5:00 P.M. (New York City
time) on or prior to the fifth Business Day immediately preceding the
Remarketing Date (but no earlier than the Interest Payment Date immediately
preceding the Remarketing Date). Any such notice and delivery may not be
conditioned upon the level at which the Reset Rate is established in the
Remarketing. Any such notice and delivery may be withdrawn prior to 5:00 P.M.
(New York City time) on the fifth Business Day immediately preceding the
Remarketing Date in accordance with the provisions set forth in the Pledge
Agreement. Any such notice and delivery not withdrawn by such time will be
irrevocable with respect to the Remarketing. Pursuant to Section 5.07(c) of the
Pledge Agreement, promptly after 5:00 P.M., New York City time, on the Business
Day immediately preceding the Remarketing Date, the Custodial Agent, based on
the notices and deliveries received by it prior to such time, shall notify the
Remarketing Agent of the principal amount of Separate Notes to be tendered for
Remarketing. Under Section 5.02 of the Purchase Contract Agreement, Notes that
are components of Corporate Units will be deemed tendered for Remarketing and
will be remarketed in accordance with the terms of the Remarketing Agreement.

         (c) The right of each Holder of Remarketed Notes to have such Notes
remarketed and sold on the Remarketing Date shall be limited to the extent that
(1) the Remarketing Agent conducts a Remarketing pursuant to the terms of the
Remarketing Agreement, (2) the Remarketing Agent is able to find a purchaser or
purchasers for Remarketed Notes at the Remarketing Price and (3) the purchaser
or purchasers deliver the purchase price therefor to the Remarketing Agent as
and when required.

         (d) Neither the Trustee, the Company nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment upon tender of Notes for
Remarketing.

         Section 602. Remarketing.

         On the Remarketing Date, the Remarketing Agent shall, pursuant and
subject to the terms of the Remarketing Agreement use its reasonable efforts to
remarket the Remarketed Notes at a price (the "Remarketing Price") equal to
approximately 100.25% (or, if the Remarketing Agent is unable to remarket the
Remarketed Notes at such price, at a price below 100.25% in the discretion of
the Remarketing Agent, but in no event less than 100%, net of any Remarketing
Fee and any other fees and expenses) of the aggregate principal amount of the
Remarketed Notes. It is understood and agreed that the Remarketing will be
considered successful if the resulting proceeds are at least 100% (net of any
Remarketing Fee and any other fees and expenses) of the aggregate principal
amount of the Remarketed Notes.


                                       10

<PAGE>

         Section 603. Reset Rate.

         (a) In connection with the Remarketing, the Remarketing Agent shall
determine the Reset Rate (rounded to the nearest one-thousandth (0.001) of one
percent per annum) that the Remarketed Notes should bear in order to have an
aggregate market value equal to the Remarketing Price and that in the sole
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Notes at the Remarketing Price in the Remarketing.

         (b) Anything herein to the contrary notwithstanding, the Reset Rate
shall in no event exceed the maximum rate permitted by applicable law and the
Remarketing Agent shall have no obligation to determine whether there is any
limitation under applicable law on the Reset Rate or, if there is any such
limitation, the maximum permissible Reset Rate on the Notes and shall rely
solely upon written notice from the Company (which the Company agrees to provide
prior to the eighth Business Day before the Remarketing Date) as to whether or
not there is any such limitation and, if so, the maximum permissible Reset Rate.

         (c) In the event of a Failed Remarketing or if no Notes are included in
Corporate Units and none of the Holders of the Separate Notes elect to have
their Notes remarketed in the Remarketing, the applicable interest rate on the
Notes will not be reset and will continue to be the Coupon Rate.

         (d) In the event of a Successful Remarketing, the Coupon Rate shall be
reset to the Reset Rate as determined by the Remarketing Agent under the
Remarketing Agreement. The Company shall cause a notice of the Reset Rate to be
published in an Authorized Newspaper in The City of New York, which is expected
to be The Wall Street Journal.

         Section 604. Failed Remarketing.

         (a) If, by 4:00 p.m. (New York City time) on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Remarketed Notes at the
Remarketing Price pursuant to the terms and conditions of the Remarketing
Agreement, a Failed Remarketing shall be deemed to have occurred, and the
Remarketing Agent shall advise, by telephone, the Depositary, the Purchase
Contract Agent and the Company, and return any Remarketed Notes that may be held
to it to the Collateral Agent or the Custodial Agent, as the case may be.

         (b) The Company shall cause a notice of such Failed Remarketing to be
published in an Authorized Newspaper in The City of New York, which is expected
to be The Wall Street Journal.

         Section 605. Put Right.

         (a) If there has not been a Successful Remarketing prior to the
Purchase Contract Settlement Date, all Holders of Notes will, subject to this
Section, have the right (the "Put Right") to require the Company to purchase
their Notes, on the Purchase Contract Settlement Date, at a price per Note equal
to $25 plus accrued and unpaid interest to but excluding the Purchase Contract
Settlement Date (the "Put Price").


                                       11

<PAGE>
 (b) The Put Right of Holders of Notes that are part of Corporate Units will be
deemed automatically exercised at 11:00 a.m., New York City time, on the second
Business Day immediately preceding the Purchase Contract Settlement Date, unless
such Holders (1) prior to 11:00 a.m., New York City time, on the second Business
Day immediately preceding the Purchase Contract Settlement Date, provide written
notice to the Purchase Contract Agent of their intention to settle the related
Purchase Contract with separate cash, and (2) on or prior to 11:00 a.m. on the
Business Day immediately preceding the Purchase Contract Settlement Date,
deliver to the Securities Intermediary for deposit in the Collateral Account the
amount necessary to settle the related Purchase Contract, in each case pursuant
to and in accordance with the Purchase Contract Agreement. Unless a Holder of a
Corporate Unit has settled the related Purchase Contract with separate cash on
or prior to the Purchase Contract Settlement Date, the Company, on the Purchase
Contract Settlement Date, shall cause the Put Price to be deposited in the
Collateral Account and the Collateral Agent shall cause the Securities
Intermediary to remit the Purchase Price for the shares of Common Stock to be
issued under the related Purchase Contract from a portion of the proceeds of the
Put Right to the Company in full satisfaction of such Holder's obligations under
the related Purchase Contract. Any remaining amount of the Put Price following
satisfaction of the related Purchase Contract will be paid to such Holder of a
Corporate Unit. If the Company shall fail to pay the Put Price on the Purchase
Contract Settlement Date in accordance with the foregoing, the Company shall be
deemed to have netted its obligation to pay the Put Price against the obligation
of a Holder of a Note that is a component of a Corporate Unit to pay the
Purchase Price under the related Purchase Contract on the Purchase Contract
Settlement Date.

         (c) The Put Right of a Holder of a Separate Note shall only be
exercisable upon delivery of a notice to the Trustee by such Holder on or prior
to the second Business Day prior to the Purchase Contract Settlement Date. On or
prior to the Purchase Contract Settlement Date, the Company shall deposit with
the Trustee immediately available funds in an amount sufficient to pay, on the
Purchase Contract Settlement Date, the aggregate Put Price of all Separate Notes
with respect to which a Holder has exercised a Put Right. In exchange for any
Separate Notes surrendered pursuant to the Put Right, the Trustee shall then
distribute such amount to the Holders of such Separate Notes.

         Section 606. Additional Event of Default.

         In addition to the events listed as Events of Default in Section 501 of
the Base Indenture, it shall be an additional Event of Default with respect to
the Notes, if the Company defaults in the payment of the Put Price with respect
to any Note following the exercise of the Put Right by any Holder in accordance
with Section 605, other than where the Put Price is deemed netted against the
Purchase Price under the Purchase Contract pursuant to the last sentence of
Section 605(b).

                                 ARTICLE SEVEN
                                  TAX TREATMENT

         Section 701. Tax Treatment.

         The Company agrees, and by acceptance of the Notes, each Holder of
Notes will be deemed to have agreed (1) for United States federal, state and
local income and franchise tax purposes to treat the acquisition of a Corporate
Unit as the acquisition of the Note and the Purchase Contract constituting the
Corporate Units and (2) to treat the Notes as indebtedness for United States
federal, state and local income and franchise tax purposes.


                                       12

<PAGE>

         Section 702. Additional Amounts.

         (a) All payments made by the Company under or with respect to the Notes
(including interest payments payable on the Notes) shall be made free and clear
of and without withholding or deduction for or an account of any present or
future tax, duty, levy, impost, assessment or other governmental charge
(hereinafter "Taxes") imposed or levied by or on behalf of the Republic of the
Marshall Islands or any jurisdiction from or through which payment on the Notes
is made, or any jurisdiction in which any successor to the Company is organized
or is engaged in business for tax purposes, or any political subdivision
thereof, or by any authority or agency therein or thereof having power to tax (a
"Taxing Jurisdiction"), unless the Company is required to withhold or deduct
Taxes by law or by the interpretation or administration thereof. If the Company
is so required to withhold or deduct any amount of interest for or on account of
Taxes from any payment made under or with respect to the Notes, the Company
shall pay such additional amounts of interest ("Additional Amounts") as may be
necessary so that the net amount received by each Holder (including Additional
Amounts) after such withholding or deduction will not be less than the amount
the Holder would have received if such Taxes had not been withheld or deducted;
provided that the Company shall not pay Additional Amounts in connection with
any Taxes that are imposed due to any of the following ("Excluded Additional
Amounts"):

          (1)  the Holder or beneficial owner of the Notes has some connection
               with the Taxing Jurisdiction other than merely holding the Notes
               or receiving payments on the Notes (such as citizenship,
               nationality, residence, domicile, or existence of a business, a
               permanent establishment, a dependent agent, a place of business
               or a place of management present or deemed present within the
               Taxing Jurisdiction);

          (2)  any tax imposed on, or measured by net income;

          (3)  the Holder or beneficial owner of the Notes fails to comply with
               any certification, identification or other reporting requirements
               concerning its nationality, residence, identity or connection
               with the Taxing Jurisdiction, if (A) such compliance is required
               by applicable law, regulation, administrative practice or treaty
               as a precondition to exemption from all or a part of the Tax, (B)
               the Holder or beneficial owner of the Notes is able to comply
               with such requirements without undue hardship and (C) at least 30
               calendar days prior to the first payment date with respect to
               which such requirements under the applicable law, regulation,
               administrative practice or treaty shall apply, the Company shall
               have notified such Holder that such Holder will be required to
               comply with such requirements;

          (4)  the Holder of the Notes fails to present (where presentation is
               required) its Notes within 30 calendar days after the Company has
               made available to the Holder a payment, provided that the Company
               shall pay Additional Amounts which a Holder would


                                       13

<PAGE>

               have been entitled to had the Notes owned by such Holder been
               present on any day (including the last day) within such 30-day
               period;

          (5)  any estate, inheritance, gift, value added, use or sales taxes or
               any similar Taxes;

          (6)  where any Additional Amounts are imposed on a payment on the
               Notes to an individual and are required to be made pursuant to
               any European Union Directive on the taxation of saving
               implementing the conclusions of the ECOFIN Council meeting of
               November 26-27, 2000 or any law implementing or complying with,
               or introduced in order to conform, to such Directive; or

          (7)  where the Holder or beneficial owner of the Notes could avoid any
               Additional Amounts by requesting that a payment on the Notes be
               made by, or presenting the relevant Notes for payment to, another
               paying agent located in a Member State of the European Union.

         (b) The Company shall also (1) make such withholding or deduction and
(2) remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Company shall furnish to the Holders of the
Notes, within 30 days after the date the payment of any Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by the
Company.

         (c) The Company shall indemnify and hold harmless each Holder of the
Notes for the amount (other than Excluded Additional Amounts) of (1) any Taxes
not withheld or deducted by us and levied or imposed by a Taxing Jurisdiction
and paid by such Holder as a result of payments made under or with respect to
the Notes, (2) any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, and (3) any Taxes imposed by a Taxing
Jurisdiction with respect to any reimbursement under clause (1) or (2) of this
Section.

         (d) At least 30 days prior to each date on which any payment under or
with respect to the Notes is due and payable, if the Company is aware that it
will be obligated to pay Additional Amounts with respect to such payment, the
Company shall deliver to the Trustee an officers' certificate stating the fact
that such Additional Amounts will be payable, the amounts so payable and such
other information necessary to enable the Trustee to pay such Additional Amounts
to Holders on the payment date. Whenever in the Indenture there is mentioned, in
any context, the payment of any amount payable under or with respect to any
Notes, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.

         (e) The Company shall pay any stamp, administrative, court,
documentary, excise or property taxes arising in a Taxing Jurisdiction in
connection with the Additional Amounts and shall indemnify the Holders of the
Notes for any such taxes paid by the Holders of the Notes.


                                       14

<PAGE>

                                 ARTICLE EIGHT
                                  MISCELLANEOUS

         Section 801. Ratification Of Base Indenture.

         The Base Indenture, as supplemented by this Supplemental Indenture No.
1, is in all respects ratified and confirmed, and this Supplemental Indenture
No. 1 shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.

         Section 802. Trustee Not Responsible For Recitals.

         The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture No. 1.

         Section 803. New York Law To Govern.

         THIS SUPPLEMENTAL INDENTURE NO. 1 AND EACH NOTE SHALL BE DEEMED TO BE
CONTRACTS MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         Section 804. Separability.

         In case any one or more of the provisions contained in this
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, then, to the extent permitted
by law, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Supplemental Indenture No. 1 or of the Notes, but this
Supplemental Indenture No. 1 and the Notes shall be construed as if such invalid
or illegal or unenforceable provision had never been contained herein or
therein.

         Section 805. Counterparts.

         This Supplemental Indenture No.1 may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.


                                       15

<PAGE>


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
No. 1 to be duly executed, as of the day and year first written above.


                                           TEEKAY SHIPPING CORPORATION


                                           By _________________________________
                                               Name:
                                               Title:






                                           THE BANK OF NEW YORK, as Trustee


                                           By _________________________________
                                               Name:
                                               Title:








                                       16

<PAGE>

                                                                       EXHIBIT A

                           [SENIOR SUBORDINATED NOTE]

[IF THIS NOTE IS TO BE A GLOBAL NOTE, INSERT:]

         THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS
NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                           TEEKAY SHIPPING CORPORATION

                         [____]% Notes due May 18, 2006

                             CUSIP: [______________]

                 No. ______________               $_____________

         TEEKAY SHIPPING CORPORATION, a Marshall Islands corporation
(hereinafter called the "Company", which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to___________, or registered assigns, the principal sum as set
forth in the Schedule of Increases or Decreases In Note attached hereto, which
amount shall not exceed _________, on May 18, 2006 (such date is hereinafter
referred to as the "Maturity Date"), and to pay interest thereon from February
___, 2003 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, subject to the right to defer interest as
provided in the Indenture hereinafter referred to, quarterly in arrears on
February 16, May 16, August 16 and November 16 (each, an "Interest Payment
Date") of each year, commencing May 16, 2003, provided, however, that May 16,
2006 shall not be an Interest Payment Date and the Interest Payment Date
immediately following February 16, 2006 shall be May 18, 2006, at the rate of
[___]% per annum through and including the day immediately preceding the Reset
Effective Date, if any, and thereafter at the Reset Rate, if any, on the basis
of a 360-day year consisting of twelve 30-day months, until the principal


                                      A-1
<PAGE>

hereof is paid or duly provided for or made available for payment, and (to the
extent that the payment of such interest shall be legally enforceable) to pay
interest, compounded quarterly, at the rate of [___]% per annum on any overdue
principal and payment of interest through and including the day immediately
preceding the Reset Effective Date, if any, and thereafter at the Reset Rate, if
any. The Reset Rate, if any, shall be established pursuant to the terms of the
Indenture and the Remarketing Agreement. The amount of interest payable for any
period shorter than a full quarterly period for which interest is computed will
be computed on the basis of a 30-day month and, for any period less than a
month, on the basis of the actual number of days elapsed per 30-day month. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on the Record Date for such Interest Payment Date.


         Payment of the principal of and interest on this Note will be made at
the office or agency of the Company maintained for that purpose in The City of
New York, which shall initially be the Corporate Trust Office of the Trustee, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the Holder at such address as shall appear in the Security Register or by wire
transfer to an account appropriately designated by the Holder entitled to
payment.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:  ______________________

                                             TEEKAY SHIPPING CORPORATION


                                             By:_______________________________
                                                 Name:
                                                 Title:

Attest:
By:___________________________
    Name:
    Title:




                                      A-2
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION
     This is one of the Notes referred to in the within mentioned Indenture.


Dated:  _____________


THE BANK OF NEW YORK, as Trustee


By: _____________________________
       Authorized Signatory


<PAGE>

                             FORM OF REVERSE OF NOTE

         This Note is one of a duly authorized issue of securities of the
Company (herein called the "Notes"), issued and to be issued in one or more
series under a Subordinated Indenture (the "Base Indenture"), dated as of
February [_], 2003, between the Company and The Bank of New York, as Trustee
(herein called the "Trustee", which term includes any successor trustee), as
amended and supplemented by Supplemental Indenture No. 1, dated as of February
[_], 2003, between the Company and the Trustee (the "Supplemental Indenture No.
1", and together with the Base Indenture, the "Indenture"), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. This Note is one of the series designated on the
face hereof, limited in aggregate principal amount to $125,000,000 (or up to
$143,750,000 to the extent that the underwriters' over-allotment option is
exercised).

         All terms used in this Note that are defined in the Indenture shall
have the meaning assigned to them in the Indenture.

         Subject to the terms and conditions of Section 206 of the Supplemental
Indenture No. 1, the Company shall have the right at any time and from time to
time, so long as no Event of Default with respect to the Notes has occurred and
is continuing, to defer payments of interest by extending the interest payment
period of the Notes to any subsequent Interest Payment Date, but not beyond
February 16, 2006 (an "Extension Period"). Prior to the expiration of any
Extension Period, the Company may further extend such Extension Period to any
subsequent Interest Payment Date, but not beyond February 16, 2006. During any
Extension Period, including as the same may be extended as provided in the
preceding sentence, no interest shall be due and payable. To the extent
permitted by applicable law, interest, the payment of which has been deferred
because of the extension of the interest payment period pursuant to Section 206
of the Supplemental Indenture No. 1, will accrue additional interest at the rate
of [___]% per annum to but excluding the date of payment, compounded quarterly
for each quarter of such Extension Period ("Compounded Interest"). At the end of
each Extension Period, including as the same may be extended as provided above,
the Company shall pay all interest accrued and unpaid on the Notes and
Compounded Interest (together, "Deferred Interest") that shall be payable to the
Person in whose name such Note, or any predecessor Note, is registered at the
close of business on the Record Date for such Interest Payment Date. Upon
termination of any Extension Period and the payment of all Deferred Interest
then due, the Company may commence a new Extension Period, provided that such
Extension Period, together with all extensions thereof, may not extend beyond
February 16, 2006. No interest shall be due and payable during an Extension
Period except at the end thereof, except that prior to the end of such Extension
Period, the Company, at its option, may prepay on any Interest Payment Date all
or any portion of the Deferred Interest accrued during the then elapsed portion
of such Extension Period.

         The indebtedness evidenced by this Note is initially, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Note is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Note by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
actions as may


                                      R-1

<PAGE>

be necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the acceptance of
the subordination provisions contained herein and in the Indenture by each
Holder of Senior Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such Holder upon said provisions.

         Subject to the terms and conditions of the Indenture, from and after
February 16, 2006, unless an Event of Default set forth in Sections 501(5) or
(6) of the Base Indenture shall have occurred and be continuing (without regard,
in the case of Section 501(5) to the period of continuance referred to therein),
(1) the subordination provisions set forth in Article Sixteen of the Base
Indenture shall no longer apply to this Note, (2) the indebtedness represented
by this Note shall rank equally in right of payment to all of the then-existing
and future unsubordinated Indebtedness of the Company and (3) the indebtedness
represented by this Note shall be considered Senior Indebtedness pursuant to the
definition thereof in the Base Indenture and for the purposes of the application
of Article Sixteen of the Base Indenture to any Securities other than the Notes
issued pursuant to the Base Indenture.

         If there has not been a Successful Remarketing prior to the Purchase
Contract Settlement Date, the Holders of the Notes will have the right, and may
be obligated, to require the Company to purchase the Notes on the Purchase
Contract Settlement Date, all as more fully described in the Supplemental
Indenture No.1. Pursuant and subject to Section 702 in the Supplemental
Indenture No.1, if the Company is required to withhold or deduct any amount of
interest for or on account of Taxes from any payment made under or with respect
to the Notes, the Company shall pay the Additional Amounts on the Notes.

         The Notes are not entitled to the benefit of any sinking fund and will
not be subject to defeasance or covenant defeasance.

         If an Event of Default with respect to Notes of this series shall occur
and be continuing, the principal of the Notes of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Notes at any time by the Company
and the Trustee with the consent of the Holders of a majority in principal
amount of the Notes at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest, subject to the
interest period extension


                                      R-2

<PAGE>

provisions of the Indenture, on this Note at the times, place and rate, and in
the coin or currency, herein prescribed.

         As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Company in any place where the principal of and interest on this Note are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

         The Notes of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Notes of
this series are exchangeable for a like aggregate principal amount of Notes of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         The Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         The Company agrees, and by acceptance of the Notes, each Holder of
Notes will be deemed to have agreed (1) for United States federal, state and
local income and franchise tax purposes to treat the acquisition of a Corporate
Unit as the acquisition of the Note and the Purchase Contract constituting the
Corporate Unit and (2) to treat the Notes as indebtedness for United States
federal, state and local income and franchise tax purposes.

         THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK.


                                      R-3

<PAGE>


                                   ASSIGNMENT


FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:

______________________________________________________________________________

______________________________________________________________________________

(Insert assignee's social security or tax identification number)

______________________________________________________________________________

______________________________________________________________________________

(Insert address and zip code of assignee)

and irrevocably appoints

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him or her.

Date: _____________

                                   Signature:

                                   __________________________________


                                   Signature Guarantee:

                                   __________________________________


       (Sign exactly as your name appears on the other side of this Note)


<PAGE>


                               SIGNATURE GUARANTEE

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

By: ______________________________
     Name:
     Title:



                                   ________________________________
                                   as Trustee


                                   By: ____________________________
                                        Name:
                                        Title:



Attest:


By: _______________________________
     Name:
     Title:


<PAGE>


                   SCHEDULE OF INCREASES OR DECREASES IN NOTE

The initial principal amount of this Note is $_________. The following increases
or decreases in a part of this Note have been made:

<TABLE>
<S>             <C>                          <C>                           <C>                            <C>
- ----------------------------------------------------------------------------------------------------------------------------------
|              |     AMOUNT OF DECREASE     |    AMOUNT OF INCREASE IN    |   PRINCIPAL AMOUNT OF THIS   |     SIGNATURE OF      |
|              |    IN PRINCIPAL AMOUNT     |     PRINCIPAL AMOUNT OF     |      NOTE FOLLOWING SUCH     |  AUTHORIZED OFFICER   |
|   DATE       |       OF THIS NOTE         |         THIS NOTE           |     DECREASE (OR INCREASE)   |      OF TRUSTEE       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
|--------------|----------------------------|-----------------------------|------------------------------|-----------------------|
|              |                            |                             |                              |                       |
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>4
<FILENAME>o08866exv4w2.txt
<DESCRIPTION>PURCHASE CONTRACT AGREEMENT
<TEXT>
<PAGE>
                                                                     Exhibit 4.2
================================================================================





                           TEEKAY SHIPPING CORPORATION


                                       and


                              THE BANK OF NEW YORK,


                           as Purchase Contract Agent



                         ------------------------------


                           PURCHASE CONTRACT AGREEMENT


                         ------------------------------



                         Dated as of February __, 2003





================================================================================

<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                     <C>
                                          ARTICLE I
                 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01     Definitions..............................................................1
SECTION 1.02     Compliance Certificates and Opinions.....................................10
SECTION 1.03     Form of Documents Delivered to Purchase Contract Agent...................11
SECTION 1.04     Acts of Holders; Record Dates............................................11
SECTION 1.05     Notices..................................................................12
SECTION 1.06     Notice to Holders; Waiver................................................13
SECTION 1.07     Effect of Headings and Table of Contents.................................14
SECTION 1.08     Successors and Assigns...................................................14
SECTION 1.09     Separability Clause......................................................14
SECTION 1.10     Benefits of Agreement....................................................14
SECTION 1.11     Governing Law............................................................14
SECTION 1.12     Legal Holidays...........................................................14
SECTION 1.13     Counterparts.............................................................15
SECTION 1.14     Inspection of Agreement..................................................15
SECTION 1.15     Appointment of Financial Institution as Agent for the Company............15
SECTION 1.16     No Waiver................................................................15

                                         ARTICLE II
                                     CERTIFICATE FORMS

SECTION 2.01     Forms of Certificates Generally..........................................15
SECTION 2.02     Form of Purchase Contract Agent's Certificate of Authentication..........16

                                         ARTICLE III
                                          THE UNITS

SECTION 3.01     Amount; Form and Denominations...........................................16
SECTION 3.02     Rights and Obligations Evidenced by the Certificates.....................17
SECTION 3.03     Execution, Authentication, Delivery and Dating...........................17
SECTION 3.04     Temporary Certificates...................................................18
SECTION 3.05     Registration; Registration of Transfer and Exchange......................19
SECTION 3.06     Book-Entry Interests.....................................................20
SECTION 3.07     Notices to Holders.......................................................21
SECTION 3.08     Appointment of Successor Depositary......................................21
SECTION 3.09     Definitive Certificates..................................................21
SECTION 3.10     Mutilated, Destroyed, Lost and Stolen Certificates.......................21
SECTION 3.11     Persons Deemed Owners....................................................23
SECTION 3.12     Cancellation.............................................................23
SECTION 3.13     Creation of Treasury Units by Substitution of Treasury Securities........23
SECTION 3.14     Recreation of Corporate Units............................................25
SECTION 3.15     Transfer of Collateral upon Occurrence of Termination Event..............26
SECTION 3.16     No Consent to Assumption.................................................27
</TABLE>


                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
                                         ARTICLE IV
                                         THE NOTES

SECTION 4.01     Interest Payments; Rights to Interest Payments Preserved.................27
SECTION 4.02     Notice and Voting........................................................28

                                         ARTICLE V
                                 THE PURCHASE CONTRACTS

SECTION 5.01     Purchase of Shares of Common Stock.......................................28
SECTION 5.02     Remarketing; Payment of Purchase Price...................................31
SECTION 5.03     Issuance of Shares of Common Stock.......................................35
SECTION 5.04     Adjustment of Settlement Rate............................................36
SECTION 5.05     Notice of Adjustments and Certain Other Events...........................44
SECTION 5.06     Termination Event; Notice................................................45
SECTION 5.07     Early Settlement.........................................................45
SECTION 5.08     Intentionally Omitted....................................................47
SECTION 5.09     No Fractional Shares.....................................................47
SECTION 5.10     Charges and Taxes........................................................48
SECTION 5.11     Contract Adjustment Payments.............................................48
SECTION 5.12     Deferral of Contract Adjustment Payments.................................53
SECTION 5.13     Additional Amounts.......................................................55

                                        ARTICLE VI
                                         REMEDIES

SECTION 6.01     Unconditional Right of Holders to Receive Contract Adjustment
                 Payments and to Purchase Shares of Common Stock..........................57
SECTION 6.02     Restoration of Rights and Remedies.......................................57
SECTION 6.03     Rights and Remedies Cumulative...........................................57
SECTION 6.04     Delay or Omission Not Waiver.............................................57
SECTION 6.05     Undertaking for Costs....................................................57
SECTION 6.06     Waiver of Stay or Extension Laws.........................................58

                                       ARTICLE VII
                               THE PURCHASE CONTRACT AGENT

SECTION 7.01     Certain Duties and Responsibilities......................................58
SECTION 7.02     Notice of Default........................................................59
SECTION 7.03     Certain Rights of Purchase Contract Agent................................59
SECTION 7.04     Not Responsible for Recitals or Issuance of Units........................61
SECTION 7.05     May Hold Units...........................................................61
SECTION 7.06     Money Held in Custody....................................................61
SECTION 7.07     Compensation and Reimbursement...........................................61
SECTION 7.08     Corporate Purchase Contract Agent Required; Eligibility..................62
SECTION 7.09     Resignation and Removal; Appointment of Successor........................62
SECTION 7.10     Acceptance of Appointment by Successor...................................63
SECTION 7.11     Merger, Conversion, Consolidation or Succession to Business..............64
SECTION 7.12     Preservation of Information; Communications to Holders...................64
SECTION 7.13     No Obligations of Purchase Contract Agent................................65
</TABLE>


                                       ii
<PAGE>
<TABLE>
<CAPTION>
                                                                                         Page
                                                                                         ----
<S>                                                                                      <C>
SECTION 7.14     Tax Compliance...........................................................65

                                         ARTICLE VIII
                                  SUPPLEMENTAL AGREEMENTS

SECTION 8.01     Supplemental Agreements Without Consent of Holders.......................66
SECTION 8.02     Supplemental Agreements with Consent of Holders..........................66
SECTION 8.03     Execution of Supplemental Agreements.....................................67
SECTION 8.04     Effect of Supplemental Agreements........................................67
SECTION 8.05     Reference to Supplemental Agreements.....................................67

                                        ARTICLE IX
                  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 9.01     Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property
                 Except under Certain Conditions..........................................68
SECTION 9.02     Rights and Duties of Successor Person....................................68

                                        ARTICLE X
                                        COVENANTS

SECTION 10.01    Performance under Purchase Contracts.....................................69
SECTION 10.02    Maintenance of Office or Agency..........................................69
SECTION 10.03    Company to Reserve Common Stock..........................................70
SECTION 10.04    Covenants as to Common Stock.............................................70
SECTION 10.05    ERISA....................................................................70
SECTION 10.06    Tax Treatment............................................................70

EXHIBITS

Exhibit A - Form of Corporate Units Certificate
Exhibit B - Form of Treasury Units Certificate
Exhibit C - Instruction to Purchase Contract Agent
Exhibit D - Notice from Purchase Contract Agent to Holders
Exhibit E - Notice to Settle by Separate Cash
Exhibit F - Notice from Purchase Contract Agent to Collateral Agent
</TABLE>


                                      iii


<PAGE>
         PURCHASE CONTRACT AGREEMENT, dated as of February __, 2003, between
TEEKAY SHIPPING CORPORATION, a corporation duly incorporated and existing under
the laws of the Republic of The Marshall Islands (the "Company"), and THE BANK
OF NEW YORK, a banking corporation with trust powers, duly organized and
existing under the laws of the State of New York, acting as purchase contract
agent for the Holders of Units (as defined herein) from time to time (the
"Purchase Contract Agent").

                                    RECITALS

         The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.

         All things necessary to make the Purchase Contracts (as defined
herein), when the Certificates (as defined herein) are executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent, as provided in this Agreement, the valid obligations of
the Company, and to constitute these presents a valid agreement of the Company,
in accordance with its terms, have been done. For and in consideration of the
premises and the purchase of the Units by the Holders thereof, it is mutually
agreed as follows:

                                   ARTICLE I
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

            SECTION 1.01 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

            (a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;

            (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;

            (c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision; and

            (d) the following terms have the meanings given to them in this
Section 1.01(d):

         "Act" has the meaning, with respect to any Holder, set forth in Section
1.04.

         "Additional Amounts" has the meaning set forth in Section 5.13.

         "Adjusted Applicable Market Value" has the meaning set forth in Section
5.01.

<PAGE>

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

         "Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.

         "Applicable Market Value" has the meaning set forth in Section 5.01.

         "Applicants" has the meaning set forth in Section 7.12(b).

         "Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.

         "Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).

         "Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board authorized to act for it in respect
thereof.

         "Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Corporate Secretary or an
Assistant Secretary of the Company, to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification
and delivered to the Purchase Contract Agent.

         "Book-Entry Interest" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.06.

         "Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions or trust companies in New York City, New York are
authorized or required by applicable law, regulation or executive order to
remain closed or a day on which the Indenture Trustee or the Collateral Agent is
closed for business; provided that for purposes of Section 1.12(b) only, the
term "Business Day" shall also be deemed to exclude any day on which DTC is
closed.

         "Cash Merger" has the meaning set forth in Section 5.04(b)(2).

         "Cash Merger Early Settlement" has the meaning set forth in Section
5.04(b)(2).

         "Cash Merger Early Settlement Amount" has the meaning set forth in
Section 5.04(b)(2).


                                       2
<PAGE>

         "Cash Merger Early Settlement Date" has the meaning set forth in
Section 5.04(b)(2).

         "Cash Settlement" has the meaning set forth in Section 5.02(b)(i).

         "Certificate" means a Corporate Units Certificate or a Treasury Units
Certificate.

         "Closing Price" has the meaning set forth in Section 5.01(a).

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Collateral" has the meaning set forth in Section 1.01(c) of the Pledge
Agreement.

         "Collateral Account" has the meaning set forth in Section 1.01(c) of
the Pledge Agreement.

         "Collateral Agent" means The Bank of New York, a banking corporation
with trust powers, duly organized and existing under the laws of the State of
New York, as Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person
who is then the Collateral Agent thereunder.

         "Collateral Substitution" means (i) with respect to a Corporate Unit,
the substitution for the Pledged Note included in such Corporate Unit by
Treasury Securities in an aggregate principal amount at maturity equal to the
aggregate principal amount of such Pledged Note, or (ii) with respect to a
Treasury Unit, the substitution for the Pledged Treasury Securities included in
such Treasury Unit by Notes in an aggregate principal amount equal to the
aggregate principal amount at stated maturity of the Pledged Treasury
Securities.

         "Common Stock" means the common stock, par value $0.001 per share, of
the Company.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.

         "Constituent Person" has the meaning set forth in Section 5.04(b).

         "Contract Adjustment Payments" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract, at a rate per
year of [____]% of the Stated Amount per Purchase Contract.

         "Corporate Trust Office" means the office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street, New York, New York, 10286, Phone: (212) 815-5915, Fax: (212)
815-5802/03, Attn: Corporate Trust Office.

         "Corporate Unit" means the collective rights and obligations of a
Holder of a Corporate Units Certificate in respect of the Notes, subject to the
Pledge thereof, and the related Purchase Contract.


                                       3
<PAGE>

         "Corporate Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.

         "Current Market Price" has the meaning set forth in Section 5.04(a)(8).

         "Custodial Agent" means The Bank of New York, a banking corporation
with trust powers, duly organized and existing under the laws of the State of
New York, as Custodial Agent under the Pledge Agreement until a successor
Custodial Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "Custodial Agent" shall mean the Person who
is then the Custodial Agent thereunder.

         "Deferred Contract Adjustment Payments" has the meaning provided in
Section 5.12.

         "Depositary" means a clearing agency registered under Section 17A of
the Exchange Act that is designated to act as Depositary for the Units as
contemplated by Sections 3.06 and 3.08.

         "Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.

         "DTC" means The Depository Trust Company.

         "Early Settlement" has the meaning set forth in Section 5.07.

         "Early Settlement Amount" has the meaning set forth in Section 5.07.

         "Early Settlement Date" has the meaning set forth in Section 5.07.

         "Early Settlement Rate" has the meaning set forth in Section 5.07.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

         "Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.

         "Excluded Additional Amounts" has the meaning set forth in Section
5.13.

         "Expiration Date" has the meaning set forth in Section 1.04(e).

         "Expiration Time" has the meaning set forth in Section 5.04(a)(6).

         "Extension Period" has the meaning set forth in Section 5.12(a).

         "Failed Remarketing" has the meaning set forth in Section 5.02(c).

         "Global Certificate" means a Certificate that evidences all or part of
the Units and is registered in the name of the Depositary or a nominee thereof.


                                       4
<PAGE>
         "Holder" means, with respect to a Unit, the Person in whose name the
Unit evidenced by a Certificate is registered in the Security Register;
provided, however, that solely for the purpose of determining whether the
Holders of the requisite number of Units have voted on any matter (and not for
any other purpose hereunder), if the Unit remains in the form of one or more
Global Certificates and if the Depositary that is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Units are credited on the record
date, the term "Holder" shall mean such Depositary Participant acting at the
direction of the Beneficial Owners.

         "Indenture" means the Indenture, dated as of February __, 2003, between
the Company and the Indenture Trustee (including any provisions of the TIA that
are deemed incorporated therein), as supplemented by Supplemental Indenture No.
1 dated as of the date hereof, pursuant to which the Notes will be issued.

         "Indenture Trustee" means The Bank of New York, as trustee under the
Indenture, or any successor thereto.

         "Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by (i) either its Chief Executive Officer, its
President or one of its Vice Presidents, and (ii) either its Chief Financial
Officer, Vice President-Finance, Treasurer, Assistant Treasurer, Corporate
Secretary or one of its Assistant Corporate Secretaries, and delivered to the
Purchase Contract Agent.

         "Non-Electing Share" has the meaning set forth in Section 5.04(b).

         "Notes" means the series of notes designated the [___]% Notes due May
18, 2006 to be issued by the Company under the Indenture.

         "NYSE" has the meaning set forth in Section 5.01.

         "Officers' Certificate" means a certificate signed by (i) either the
Company's Chairman, the President, the Chief Executive Officer, the Chief
Financial Officer, any Vice President, and (ii) either the Company's Treasurer,
Controller, an Assistant Treasurer, the Assistant Controller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Purchase Contract
Agent.
         "Opinion Of Counsel" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee or other counsel of the
Company).

         "Outstanding Units" means, with respect to any Unit and as of the date
of determination, all Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:

                  (i) if a Termination Event has occurred, (x) Corporate Units
         for which the underlying Notes have been theretofore deposited with the
         Purchase Contract Agent in trust for the Holders of such Corporate
         Units and (y) Treasury Units for which the underlying Treasury
         Securities have been theretofore deposited with the Purchase Contract
         Agent in trust for the Holders of such Treasury Units;


                                       5
<PAGE>

                  (ii) Units evidenced by Certificates theretofore cancelled by
         the Purchase Contract Agent or delivered to the Purchase Contract Agent
         for cancellation or deemed cancelled pursuant to the provisions of this
         Agreement; and

                  (iii) Units evidenced by Certificates in exchange for or in
         lieu of which other Certificates have been authenticated, executed on
         behalf of the Holder and delivered pursuant to this Agreement, other
         than any such Certificate in respect of which there shall have been
         presented to the Purchase Contract Agent proof satisfactory to it that
         such Certificate is held by a bona fide purchaser in whose hands the
         Units evidenced by such Certificate are valid obligations of the
         Company;

provided, however, that in determining whether the Holders of the requisite
number of the Units have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Units owned by the Company or any Affiliate
of the Company shall be disregarded and deemed not to be Outstanding Units,
except that, in determining whether the Purchase Contract Agent shall be
authorized and protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Units so owned that have been pledged in good faith may
be regarded as Outstanding Units if the pledgee establishes to the satisfaction
of the Purchase Contract Agent the pledgee's right so to act with respect to
such Units and that the pledgee is not the Company or any Affiliate of the
Company.

         "Payment Date" means each February 16, May 16, August 16 and November
16 of each year, commencing May 16, 2003.

         "Permitted Investments" has the meaning set forth in Section 1.01(c) of
the Pledge Agreement.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.

         "Plan" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the Code or
any entity whose assets are considered assets of any such plan.

         "Pledge" means the pledge under the Pledge Agreement of the Notes or
the Treasury Securities constituting a part of the Units.

         "Pledge Agreement" means the Pledge Agreement, dated as of February __,
2003, among the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time of the Units, as amended
from time to time.

         "Pledged Notes" has the meaning set forth in Section 1.01(c) of the
Pledge Agreement.


                                       6
<PAGE>
         "Pledged Treasury Securities" has the meaning set forth in Section
1.01(c) of the Pledge Agreement.

         "Predecessor Corporate Units Certificate" of any particular Corporate
Units Certificate means every previous Corporate Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Corporate Units evidenced thereby; and, for the purposes of this
definition, any Corporate Units Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate Units Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate Units Certificate.

         "Proceeds" has the meaning set forth in Section 1.01(c) of the Pledge
Agreement.

         "Prospectus" means the prospectus relating to the delivery of shares of
any securities in connection with an Early Settlement pursuant to Section 5.07
or a Cash Merger Early Settlement of Purchase Contracts pursuant to Section
5.04(b)(2), in the form in which first filed, or transmitted for filing, with
the Securities and Exchange Commission after the effective date of the
Registration Statement pursuant to Rule 424(b) under the Securities Act,
including the documents incorporated by reference therein as of the date of such
Prospectus.

         "Purchase Contract" means, with respect to any Unit, the contract
forming a part of such Unit and obligating the Company to (i) sell, and the
Holder of such Unit to purchase, shares of Common Stock and (ii) pay the Holder
thereof Contract Adjustment Payments, in each case on the terms and subject to
the conditions set forth in Article Five hereof.

         "Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Purchase Contract Agent" shall
mean such Person or any subsequent successor who is appointed pursuant to this
Agreement.

         "Purchase Contract Settlement Date" means February 16, 2006.

         "Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.03.

         "Purchase Price" has the meaning set forth in Section 5.01.

         "Purchased Shares" has the meaning set forth in Section 5.04(a)(6)(ii).

         "Put Right" has the meaning set forth in Section 705 of the
Supplemental Indenture No. 1.

         "Record Date" for any distribution and Contract Adjustment Payment
payable on any Payment Date means, as to any Global Certificate or any other
Certificate, the first day of the month in which the relevant Payment Date
falls.

         "Reference Price" has the meaning set forth in Section 5.01(a)(ii).

                                       7
<PAGE>

         "Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of any securities in connection with an Early Settlement on the Early
Settlement Date or a Cash Merger Early Settlement of Purchase Contracts on the
Cash Merger Early Settlement Date under Section 5.04(b)(2), including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in such registration statement, and any post-effective amendments
thereto.

         "Remarketing" means the remarketing of the Notes by the Remarketing
Agent pursuant to the Remarketing Agreement.

         "Remarketing Agent" means Morgan Stanley & Co. Incorporated, or any
successor remarketing agent appointed by the Company pursuant to the Remarketing
Agreement.

         "Remarketing Agreement" means the Remarketing Agreement, dated as of
February __, 2003, among the Company, the Remarketing Agent and the Purchase
Contract Agent, as amended from time to time.

         "Remarketing Date" means the third Business Day immediately preceding
the Purchase Contract Settlement Date.

         "Remarketing Fee" has the meaning set forth in Section 5.02(a)(i).

         "Reorganization Event" has the meaning set forth in Section 5.04(b).

         "Reset Rate" has the meaning set forth in Section 102(e) of the
Supplemental Indenture No. 1.

         "Responsible Officer" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer this Purchase Contract Agreement.

         "Rights" has the meaning set forth in Section 5.04(a)(11).

         "Rights Agreement" has the meaning set forth in Section 5.04(a)(11).

         "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.

         "Securities Intermediary" means The Bank of New York, a banking
corporation with trust powers, duly organized and existing under the laws of the
State of New York, as Securities Intermediary under the Pledge Agreement until a
successor Securities Intermediary shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "Securities
Intermediary" shall mean such successor or any subsequent successor who is
appointed pursuant to the Pledge Agreement.

         "Security Register" and "Security Registrar" have the respective
meanings set forth in Section 3.05(a).

                                       8
<PAGE>
         "Senior Indebtedness" has the meaning set forth in Section 101(c) of
the Indenture.

         "Separate Notes" means Notes that are no longer a component of
Corporate Units.

         "Settlement Rate" has the meaning set forth in Section 5.01(a).

         "Stated Amount" means $25.00.

         "Successful Remarketing" has the meaning set forth in Section
5.02(a)(i).

         "Supplemental Indenture No. 1" means the Supplemental Indenture No. 1
dated as of the date hereof between the Company and the Indenture Trustee.

         "Taxes" has the meaning set forth in Section 5.13.

         "Taxing Jurisdiction" has the meaning set forth in Section 5.13.

         "Termination Date" means the date, if any, on which a Termination Event
occurs.

         "Termination Event" means the occurrence of any of the following
events:

                  (i) at any time on or prior to the Purchase Contract
         Settlement Date, a judgment, decree or court order shall have been
         entered granting relief under the Bankruptcy Code, adjudicating the
         Company to be insolvent, or approving as properly filed a petition
         seeking reorganization or liquidation of the Company or any other
         similar applicable Federal or state law and if such judgment, decree or
         order shall have been entered more than 60 days prior to the Purchase
         Contract Settlement Date, such decree or order shall have continued
         undischarged and unstayed for a period of 60 days;

                  (ii) at any time on or prior to the Purchase Contract
         Settlement Date, a judgment, decree or court order for the appointment
         of a receiver or liquidator or trustee or assignee in bankruptcy or
         insolvency of the Company or of its property, or for the termination or
         liquidation of its affairs, shall have been entered and if such
         judgment, decree or order shall have been entered more than 60 days
         prior to the Purchase Contract Settlement Date, such judgment, decree
         or order shall have continued undischarged and unstayed for a period of
         60 days; or

                  (iii) at any time on or prior to the Purchase Contract
         Settlement Date, the Company shall file a petition for relief under the
         Bankruptcy Code, or shall consent to the filing of a bankruptcy
         proceeding against it, or shall file a petition or answer or consent
         seeking reorganization or liquidation under the Bankruptcy Code or any
         other similar applicable Federal or State law, or shall consent to the
         filing of any such petition, or shall consent to the appointment of a
         receiver or liquidator or trustee or assignee in bankruptcy or
         insolvency of it or of its property, or shall make an assignment for
         the benefit of creditors, or shall admit in writing its inability to
         pay its debts generally as they become due.

         "Threshold Appreciation Price" has the meaning set forth in Section
5.01(a)(i).

                                       9
<PAGE>


         "TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.

         "Trading Day" has the meaning set forth in Section 5.01.

         "Treasury Securities" means zero-coupon U.S. treasury securities that
mature on February 15, 2006 (CUSIP No. 912803AJ2).

         "Treasury Unit" means, following the substitution of Treasury
Securities for Pledged Notes as collateral to secure a Holder's obligations
under the Purchase Contract, the collective rights and obligations of a Holder
of a Treasury Units Certificate in respect of such Treasury Securities, subject
to the Pledge thereof, and the related Purchase Contract.

         "Treasury Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Unit specified
on such certificate.

         "Underwriters" means the underwriters identified in Schedule II to the
Underwriting Agreement.

         "Underwriting Agreement" means the Underwriting Agreement, dated
February __, 2003, among the Company and the Underwriters.

         "Unit" means a Corporate Unit or a Treasury Unit, as the case may be.

         "Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."

            SECTION 1.02 Compliance Certificates and Opinions. Except as
otherwise expressly provided by this Agreement, upon any application or request
by the Company to the Purchase Contract Agent to take any action in accordance
with any provision of this Agreement, the Company shall furnish to the Purchase
Contract Agent an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Purchase Contract Agent, an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than the Officers'
Certificate provided for in Section 10.05) shall include:

                  (i) a statement that each individual signing such certificate
         or opinion has read such covenant or condition and the definitions
         herein relating thereto;


                                       10
<PAGE>
                  (ii) a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

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

                  (iv) a statement as to whether, in the opinion of each such
         individual, such condition or covenant has been complied with.

            SECTION 1.03 Form of Documents Delivered to Purchase Contract Agent.

            (a) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

            (b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which its certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.

            (c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.

            SECTION 1.04 Acts of Holders; Record Dates.

            (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Purchase Contract Agent and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.01) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.


                                       11
<PAGE>

            (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.

            (c) The ownership of Units shall be proved by the Security Register.

            (d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Unit shall bind every future Holder of
the same Unit and the Holder of every Certificate evidencing such Unit issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.

            (e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Units entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Units. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate Units and the Outstanding Treasury Units,
as the case may be, on such record date, and no other Holders, shall be entitled
to take the relevant action with respect to the Corporate Units or the Treasury
Units, as the case may be, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken prior to or on the applicable Expiration Date by Holders of the requisite
number of Outstanding Units on such record date. Nothing contained in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and be of no effect), and nothing
contained in this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding Units on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Purchase Contract Agent in writing and to each Holder of Units in
the manner set forth in Section 1.06.

         With respect to any record date set pursuant to this Section 1.04(e),
the Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided that
no such change shall be effective unless notice of the proposed new Expiration
Date is given to the Purchase Contract Agent in writing, and to each Holder of
Units in the manner set forth in Section 1.06, prior to or on the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.

            SECTION 1.05 Notices. Any notice or communication is duly given if
in writing and delivered in person or mailed by first-class mail (registered or
certified, return receipt requested), telecopier (with receipt confirmed) or
overnight air courier guaranteeing next

                                       12
<PAGE>
day delivery, to the others' address; provided that notice shall be deemed given
to the Purchase Contract Agent only upon receipt thereof:

                  (a)  If to the Purchase Contract Agent:

                       The Bank of New York
                       101 Barclay Street
                       New York, New York 10286
                       Fax: (212) 815-5802/03
                       Attn: Corporate Trust Division

                  (b)  If to the Company:

                       Teekay Shipping Corporation
                       550 Burrard Street
                       Suite 2200, Bentall 5
                       Vancouver, British Columbia,
                       Canada
                       V6C 2K2
                       Fax: (604) 844-6600
                       Attention: General Counsel

                  (c)  If to the Collateral Agent:

                       The Bank of New York
                       101 Barclay Street
                       New York, New York 10286
                       Fax: (212) 815-5802/03
                       Attn: Corporate Trust Division

                  (d)  If to the Indenture Trustee:

                       The Bank of New York
                       101 Barclay Street
                       New York, New York 10286
                       Fax: (212) 815-5802/03
                       Attn: Corporate Trust Division

         The Purchase Contract Agent shall send to the Indenture Trustee at the
telecopier number set forth above a copy of any notices in the form of Exhibits
C, D, E or F it sends or receives.

            SECTION 1.06 Notice to Holders; Waiver.

            (a) Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by

                                       13
<PAGE>
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Purchase Contract Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.

            (b) In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.

            SECTION 1.07 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.

            SECTION 1.08 Successors and Assigns. All covenants and agreements in
this Agreement by the Company and the Purchase Contract Agent shall bind their
respective successors and assigns, whether so expressed or not.

            SECTION 1.09 Separability Clause. In case any provision in this
Agreement or in the Units shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.

            SECTION 1.10 Benefits of Agreement. Nothing contained in this
Agreement or in the Units, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder and, to the extent
provided hereby, the Holders, any benefits or any legal or equitable right,
remedy or claim under this Agreement. The Holders from time to time shall be
beneficiaries of this Agreement and shall be bound by all of the terms and
conditions hereof and of the Units evidenced by their Certificates by their
acceptance of delivery of such Certificates.

            SECTION 1.11 Governing Law. This Agreement and the Units shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law provisions thereof.

            SECTION 1.12 Legal Holidays.

            (a) In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Units), Contract
Adjustment Payments or other distributions shall not be paid on such date, but
Contract Adjustment Payments or such other distributions shall be paid on the
next succeeding Business Day, unless such Business Day is in the next succeeding
calendar year, in which case such Contract Adjustment Payments or other
distributions shall be paid on the immediately preceding Business Day, in each
case with the same force and effect as if made on such scheduled Payment Date;


                                       14
<PAGE>
provided that no interest shall accrue or be payable by the Company to any
Holder in respect of such payment or distribution for the period from and after
any such scheduled Payment Date.

            (b) In any case where the Purchase Contract Settlement Date or any
Early Settlement Date or Cash Merger Early Settlement Date shall not be a
Business Day (notwithstanding any other provision of this Agreement or the
Units), Purchase Contracts shall not be performed and Early Settlement and Cash
Merger Early Settlement shall not be effected on such date, but Purchase
Contracts shall be performed or Early Settlement or Cash Merger Early Settlement
shall be effected, as applicable, on the next succeeding Business Day with the
same force and effect as if made on such Purchase Contract Settlement Date,
Early Settlement Date or Cash Merger Early Settlement Date, as applicable.

            SECTION 1.13 Counterparts. This Agreement, any supplements,
amendments, waivers or any other agreements called for in this Agreement may be
executed in any number of counterparts by the parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.

            SECTION 1.14 Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times during normal business hours at the
Corporate Trust Office for inspection by any Holder or Beneficial Owner.

            SECTION 1.15 Appointment of Financial Institution as Agent for the
Company. The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.

            SECTION 1.16 No Waiver. No failure on the part of the Company, the
Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or
any of their respective agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Company, the Collateral Agent, the Securities Intermediary or any of their
respective agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

                                   ARTICLE II
                                CERTIFICATE FORMS

            SECTION 2.01 Forms of Certificates Generally.

            (a) The Certificates (including the form of Purchase Contract
forming part of each Unit evidenced thereby) shall be in substantially the form
set forth in Exhibit A hereto (in the case of Certificates evidencing Corporate
Units) or Exhibit B hereto (in the case of Certificates evidencing Treasury
Units), with such letters, numbers or other marks of

                                       15
<PAGE>
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Units are listed or any depositary therefor, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.

            (b) The definitive Certificates shall be produced in any manner as
determined by the officers of the Company executing the Units evidenced by such
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.

            (c) Every Global Certificate authenticated, executed on behalf of
the Holders and delivered hereunder shall bear a legend in substantially the
following form:

            THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.

            UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

            SECTION 2.02 Form of Purchase Contract Agent's Certificate of
Authentication. The form of the Purchase Contract Agent's certificate of
authentication of the Units shall be in substantially the form set forth on the
form of the applicable Certificates.

                                  ARTICLE III
                                    THE UNITS

            SECTION 3.01 Amount; Form and Denominations. The aggregate number of
Units evidenced by Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to 5,000,000 (or 5,750,000 if the
over-allotment option granted to the Underwriters pursuant to the Underwriting
Agreement is exercised in full), except for Certificates authenticated, executed
and delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Sections 3.04, 3.05, 3.09, 3.10, 3.13, 3.14, 5.07
or 8.05.


                                       16
<PAGE>
         The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.

            SECTION 3.02 Rights and Obligations Evidenced by the Certificates.
(a) Each Corporate Units Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing (1) the
ownership by the Holder thereof of a beneficial interest in a Note, subject to
the Pledge of such Note by such Holder pursuant to the Pledge Agreement, and (2)
the rights and obligations of the Holder thereof and the Company under one
Purchase Contract. The Purchase Contract Agent is hereby authorized, as
attorney-in-fact for, and on behalf of, the Holder of each Corporate Unit, to
pledge, pursuant to the Pledge Agreement, the Note forming a part of such
Corporate Unit, to the Collateral Agent for the benefit of the Company, and to
grant to the Collateral Agent, for the benefit of the Company, a security
interest in the right, title and interest of such Holder in such Note to secure
the obligation of the Holder under each Purchase Contract to purchase shares of
Common Stock.

            (b) Upon the formation of a Treasury Unit pursuant to Section 3.13,
each Treasury Unit Certificate shall evidence the number of Treasury Units
specified therein, with each such Treasury Unit representing (1) the ownership
by the Holder thereof of a 1/40th undivided beneficial interest in a Treasury
Security with a principal amount equal to $1,000, subject to the Pledge of such
interest by such Holder pursuant to the Pledge Agreement, and (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.
The Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and
on behalf of, the Holder of each Treasury Unit, to pledge, pursuant to the
Pledge Agreement, such Holder's interest in the Treasury Security forming a part
of such Treasury Unit to the Collateral Agent, for the benefit of the Company,
and to grant to the Collateral Agent, for the benefit of the Company, a security
interest in the right, title and interest of such Holder in such Treasury
Security to secure the obligation of the Holder under each Purchase Contract to
purchase shares of Common Stock.

            (c) Prior to the purchase of shares of Common Stock under each
Purchase Contract, such Purchase Contracts shall not entitle the Holder of a
Unit to any of the rights of a holder of shares of Common Stock, including,
without limitation, the right to vote or receive any dividends or other payments
or to consent or to receive notice as a shareholder in respect of the meetings
of shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.

            SECTION 3.03 Execution, Authentication, Delivery and Dating. (a)
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution
and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.

            (b) The Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its President, its Chief
Financial Officer, its

                                       17
<PAGE>
Treasurer or one of its Vice Presidents. The signature of any of these officers
on the Certificates may be manual or facsimile.

            (c) Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates.

            (d) No Purchase Contract evidenced by a Certificate shall be valid
until such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contracts evidenced by such
Certificate.

            (e) Each Certificate shall be dated the date of its authentication.

            (f) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized officer of the Purchase Contract Agent by
manual signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.

            SECTION 3.04 Temporary Certificates. (a) Pending the preparation of
definitive Certificates, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units or Treasury Units, as the case
may be, are listed, or as may, consistently herewith, be determined by the
officers of the Company executing such Certificates, as evidenced by their
execution of the Certificates.

            (b) If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Units as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Units evidenced thereby as
definitive Certificates.

                                       18
<PAGE>
            SECTION 3.05 Registration; Registration of Transfer and Exchange.
(a) The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "Security Registrar"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing Corporate Units and Treasury Units.

            (b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the designated transferee or transferees, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of any authorized denominations, like tenor, and evidencing a like
number of Corporate Units or Treasury Units, as the case may be.

            (c) At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a like number
of Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.

            (d) All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number of
Corporate Units or Treasury Units, as the case may be, and be entitled to the
same benefits and subject to the same obligations under this Agreement as the
Corporate Units or Treasury Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.

            (e) Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Purchase Contract Agent) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.

            (f) No service charge shall be made for any registration of transfer
or exchange of a Certificate, but the Company and the Purchase Contract Agent
may require payment from the Holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Certificates, other than any exchanges
pursuant to Sections 3.04, 3.06, 3.09 and 8.05 not involving any transfer.

            (g) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall not be obligated to authenticate, execute on
behalf of the Holder and deliver any Certificate in exchange for any other
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earliest to
occur of any Early Settlement Date with respect to such Certificate, any Cash
Merger Early Settlement Date with

                                       19
<PAGE>
respect to such Certificate, the Purchase Contract Settlement Date or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Purchase
Contract Agent shall:

                  (i) if the Purchase Contract Settlement Date (including upon
         any Cash Settlement) or an Early Settlement Date or a Cash Merger Early
         Settlement Date with respect to such other Certificate has occurred,
         deliver the shares of Common Stock issuable in respect of the Purchase
         Contracts forming a part of the Units evidenced by such other
         Certificate; or

                  (ii) if a Termination Event shall have occurred prior to the
         Purchase Contract Settlement Date, transfer the Notes or the Treasury
         Securities evidenced thereby, in each case subject to the applicable
         conditions and in accordance with the applicable provisions of Section
         3.15 and Article Five hereof.

            SECTION 3.06 Book-Entry Interests. (a) The Certificates, on original
issuance, will be issued in the form of one or more fully registered Global
Certificates, to be delivered to the Depositary or its custodian by, or on
behalf of, the Company. The Company hereby designates DTC as the initial
Depositary. Such Global Certificates shall initially be registered on the books
and records of the Company in the name of Cede & Co., the nominee of the
Depositary, and no Beneficial Owner will receive a definitive Certificate
representing such Beneficial Owner's interest in such Global Certificate, except
as provided in Section 3.09. The Purchase Contract Agent shall enter into an
agreement with the Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to Beneficial Owners
pursuant to Section 3.09:

                  (i) the provisions of this Section 3.06 shall be in full force
         and effect;

                  (ii) the Company shall be entitled to deal with the Depositary
         for all purposes of this Agreement (including, without limitation,
         making Contract Adjustment Payments and receiving approvals, votes or
         consents hereunder) as the Holder of the Units and the sole holder of
         the Global Certificates and shall have no obligation to the Beneficial
         Owners;

                  (iii) to the extent that the provisions of this Section 3.06
         conflict with any other provisions of this Agreement, the provisions of
         this Section 3.06 shall control; and

                  (iv) the rights of the Beneficial Owners shall be exercised
         only through the Depositary and shall be limited to those established
         by law and agreements between such Beneficial Owners and the Depositary
         or the Depositary Participants.

            (b) Transfers of securities evidenced by Global Certificates shall
be made through the facilities of the Depositary, and any cancellation of, or
increase or decrease in the number of, such securities (including the creation
of Treasury Units and the recreation of Corporate Units pursuant to Sections
3.13 and 3.14 respectively) shall be accomplished by making appropriate
annotations on the Schedule of Increases and Decreases for such Global
Certificate.

                                       20
<PAGE>
            SECTION 3.07 Notices to Holders. Whenever a notice or other
communication to the Holders is required to be given under this Agreement, the
Company or the Company's agent shall give such notices and communications to the
Holders and, with respect to any Units registered in the name of the Depositary
or the nominee of the Depositary, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.

            SECTION 3.08 Appointment of Successor Depositary. If the Depositary
elects to discontinue its services as securities depositary with respect to the
Units, the Company may, in its sole discretion, appoint a successor Depositary
with respect to the Units.

            SECTION 3.09 Definitive Certificates.


         If:

                  (i) the Depositary notifies the Company that it is unwilling
         or unable to continue its services as securities depositary with
         respect to the Units and no successor Depositary has been appointed
         pursuant to Section 3.08 within 90 days after such notice; or

                  (ii) the Depositary ceases to be a "clearing agency"
         registered under Section 17A of the Exchange Act when the Depositary is
         required to be so registered to act as the Depositary and so notifies
         the Company, and no successor Depositary has been appointed pursuant to
         Section 3.08 within 90 days after such notice; or

                  (iii) the Company determines in its sole discretion that the
         Global Certificates shall be exchangeable for definitive Certificates,

then (x) definitive Certificates shall be prepared by the Company with respect
to such Units and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Units by the Depositary,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Depositary. The Company and the Purchase Contract Agent
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be authorized and protected in relying on, such
instructions. Each definitive Certificate so delivered shall evidence Units of
the same kind and tenor as the Global Certificate so surrendered in respect
thereof.

            SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates. (a)
If any mutilated Certificate is surrendered to the Purchase Contract Agent, the
Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, a new Certificate, evidencing the same number of
Corporate Units or Treasury Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.

            (b) If there shall be delivered to the Company and the Purchase
Contract Agent (i) evidence to their satisfaction of the destruction, loss or
theft of any Certificate, and (ii) such security or indemnity as may be required
by them to hold each of them and any agent of


                                       21
<PAGE>
any of them harmless, then, in the absence of notice to the Company or the
Purchase Contract Agent that such Certificate has been acquired by a bona fide
purchaser, the Company shall execute and deliver to the Purchase Contract Agent,
and the Purchase Contract Agent shall authenticate, execute on behalf of the
Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.

            (c) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall not be obligated to authenticate, execute on
behalf of the Holder, and deliver to the Holder, a Certificate on or after the
Business Day immediately preceding the earliest of any Early Settlement Date
with respect to such lost or mutilated Certificate, any Cash Merger Early
Settlement Date with respect to such lost or mutilated Certificate, the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Purchase Contract Agent shall:

                  (i) if the Purchase Contract Settlement Date or Early
         Settlement Date or Cash Merger Early Settlement Date with respect to
         such lost, stolen, destroyed or mutilated Certificate has occurred,
         deliver the shares of Common Stock issuable in respect of the Purchase
         Contracts forming a part of the Units evidenced by such Certificate; or

                  (ii) if a Cash Settlement with respect to such lost or
         mutilated Certificate or if a Termination Event shall have occurred
         prior to the Purchase Contract Settlement Date, transfer the Notes or
         the Treasury Securities evidenced thereby, in each case subject to the
         applicable conditions and in accordance with the applicable provisions
         of Section 3.15 and Article Five hereof.

            (d) Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other fees and expenses (including, without
limitation, the fees and expenses of the Purchase Contract Agent) connected
therewith.

            (e) Every new Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder in respect of
the Units evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Units evidenced thereby) shall be at any time enforceable
by anyone, and shall be entitled to all the benefits and be subject to all the
obligations of this Agreement equally and proportionately with any and all other
Certificates delivered hereunder.

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


                                       22
<PAGE>
            SECTION 3.11 Persons Deemed Owners. (a) Prior to due presentment of
a Certificate for registration of transfer, the Company and the Purchase
Contract Agent, and any agent of the Company or the Purchase Contract Agent, may
treat the Person in whose name such Certificate is registered as the owner of
the Units evidenced thereby for purposes of (subject to any applicable record
date) any payment or distribution on the Notes, payment of Contract Adjustment
Payments and performance of the Purchase Contracts and for all other purposes
whatsoever in connection with such Units, whether or not such payment,
distribution, or performance shall be overdue and notwithstanding any notice to
the contrary, and neither the Company nor the Purchase Contract Agent, nor any
agent of the Company or the Purchase Contract Agent, shall be affected by notice
to the contrary.

            (b) Notwithstanding the foregoing, with respect to any Global
Certificate, nothing contained herein shall prevent the Company, the Purchase
Contract Agent or any agent of the Company or the Purchase Contract Agent, from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary (or its nominee), as a Holder, with respect to such
Global Certificate, or impair, as between such Depositary and the related
Beneficial Owner, the operation of customary practices governing the exercise of
rights of the Depositary (or its nominee) as Holder of such Global Certificate.
None of the Company, the Purchase Contract Agent or any agent of the Company or
the Purchase Contract Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Certificate or maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

            SECTION 3.12 Cancellation. (a) All Certificates surrendered (i) for
delivery of shares of Common Stock on or after the Purchase Contract Settlement
Date, (ii) upon the transfer of Notes, or for delivery of the Treasury
Securities, after the occurrence of a Termination Event or pursuant to a Cash
Settlement, an Early Settlement or a Cash Merger Early Settlement, or (iii) upon
the registration of transfer or exchange of a Unit, or a Collateral Substitution
or the recreation of Corporate Units shall, if surrendered to any Person other
than the Purchase Contract Agent, be delivered to the Purchase Contract Agent
along with appropriate written instructions regarding the cancellation thereof
and, if not already cancelled, shall be promptly cancelled by it. The Company
may at any time deliver to the Purchase Contract Agent for cancellation any
Certificates previously authenticated, executed and delivered hereunder which
the Company may have acquired in any manner whatsoever, and all Certificates so
delivered shall, upon an Issuer Order, be promptly cancelled by the Purchase
Contract Agent. No Certificates shall be authenticated, executed on behalf of
the Holder and delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly permitted by this
Agreement. All cancelled Certificates held by the Purchase Contract Agent shall
be disposed of in accordance with its customary practices.

            (b) If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or with appropriate written instructions regarding the
cancellation thereof.

            SECTION 3.13 Creation of Treasury Units by Substitution of Treasury
Securities. (a) Subject to the conditions set forth in this Agreement, a Holder
may, at any time


                                       23
<PAGE>
from and after the date of this Agreement and prior to 5:00 p.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, effect a Collateral Substitution and separate the Notes from
the related Purchase Contracts in respect of such Holder's Corporate Units by
substituting for such Notes, Treasury Securities in an aggregate principal
amount at maturity equal to the aggregate principal amount of such Notes;
provided that Holders may make Collateral Substitutions only in integral
multiples of 40 Corporate Units. To effect such substitution, the Holder must:

                  (1) deposit with the Securities Intermediary Treasury
         Securities having an aggregate principal amount at maturity equal to
         the aggregate principal amount of the Notes comprising part of such
         Corporate Units, which shall be purchased in the open market at the
         Holder's expense unless otherwise owned by such Holder; and

                  (2) transfer the related Corporate Units to the Purchase
         Contract Agent accompanied by a notice to the Purchase Contract Agent,
         substantially in the form of Exhibit C hereto, (i) stating that the
         Holder has deposited the relevant amount of Treasury Securities to the
         Securities Intermediary and (ii) requesting that the Purchase Contract
         Agent instruct the Collateral Agent to release the Notes underlying
         such Corporate Units, whereupon the Purchase Contract Agent shall
         promptly provide an instruction to such effect to the Collateral Agent,
         substantially in the form of Exhibit A to the Pledge Agreement.

            (b) Upon receipt of the Treasury Securities described in clause (1)
above and the instruction described in clause (2) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Notes from the Pledge, free and clear
of the Company's security interest therein, and the transfer of such Notes to
the Purchase Contract Agent on behalf of the Holder. Upon receipt of such Notes,
the Purchase Contract Agent shall promptly:

                  (i) cancel the related Corporate Units;

                  (ii) transfer the Notes to the Holder (such Notes shall be
         tradeable as a separate security, independent of the resulting Treasury
         Units); and

                  (iii) authenticate, execute on behalf of such Holder and
         deliver a Treasury Units Certificate executed by the Company in
         accordance with Section 3.03 evidencing the same number of Purchase
         Contracts as were evidenced by the cancelled Corporate Units. Holders
         who elect to separate the Notes from the related Purchase Contracts and
         to substitute Treasury Securities for such Notes shall be responsible
         for any fees or expenses (including, without limitation, fees and
         expenses payable to the Collateral Agent for its services as Collateral
         Agent) in respect of the substitution, and neither the Company nor the
         Purchase Contract Agent shall be responsible for any such fees or
         expenses.

            (c) In the event a Holder making a Collateral Substitution pursuant
to this Section 3.13 fails to effect a book-entry transfer of the Corporate
Units or fails to deliver

                                       24
<PAGE>
Corporate Units Certificates to the Purchase Contract Agent after depositing
Treasury Securities with the Collateral Agent, any distributions on the Notes
shall be held in the name of the Purchase Contract Agent or its nominee in trust
for the benefit of such Holder, until such Corporate Units are so transferred or
the Corporate Units Certificate is so delivered, as the case may be, or, such
Holder provides evidence satisfactory to the Company and the Purchase Contract
Agent that such Corporate Units Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Purchase Contract Agent
and the Company.

            (d) Except as described in Section 5.02 or in this Section 3.13 or
in connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Corporate Unit remains in effect, such Corporate Units shall not be
separable into their constituent parts, and the rights and obligations of the
Holder in respect of the Notes and the Purchase Contract comprising such
Corporate Units may be acquired, and may be transferred and exchanged, only as a
Corporate Unit.

            SECTION 3.14 Recreation of Corporate Units. (a) Subject to the
conditions set forth in this Agreement, a Holder of Treasury Units may recreate
Corporate Units at any time on or prior to 5:00 p.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date;
provided that Holders of Treasury Units may only recreate Corporate Units in
integral multiples of 40 Treasury Units. To recreate Corporate Units, the Holder
must:

                  (1) transfer to the Securities Intermediary Notes having an
         aggregate principal amount equal to the aggregate principal amount at
         stated maturity of the Treasury Securities comprising part of the
         Treasury Units, which shall be purchased in the open market at the
         Holder's expense unless otherwise owned by the Holder; and

                  (2) transfer the related Treasury Units to the Purchase
         Contract Agent accompanied by a notice to the Purchase Contract Agent,
         substantially in the form of Exhibit C hereto, (i) stating that the
         Holder has transferred the relevant amount of Notes to the Securities
         Intermediary and (ii) requesting that the Purchase Contract Agent
         instruct the Collateral Agent to release the Treasury Securities
         underlying such Treasury Units, whereupon the Purchase Contract Agent
         shall promptly provide an instruction to such effect to the Collateral
         Agent, substantially in the form of Exhibit C to the Pledge Agreement.

            (b) Upon receipt of the Notes described in clause (1) above and the
instruction described in clause (2) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer thereof to the Purchase Contract
Agent on behalf of the Holder. Upon receipt of such Treasury Securities, the
Purchase Contract Agent shall promptly:

                  (i) cancel the related Treasury Units;

                                       25
<PAGE>
                  (ii) transfer the Treasury Securities to the Holder; and

                  (iii) authenticate, execute on behalf of such Holder and
         deliver a Corporate Unit Certificate executed by the Company in
         accordance with Section 3.03 evidencing the same number of Purchase
         Contracts as were evidenced by the cancelled Treasury Units.

            (c) Holders who elect to recreate Corporate Units shall be
responsible for any fees or expenses (including, without limitation, fees and
expenses payable to the Collateral Agent for its services as Collateral Agent)
in respect of the recreation, and neither the Company nor the Purchase Contract
Agent shall be responsible for any such fees or expenses.

         Except as provided in Section 5.02 or in this Section 3.14 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Treasury Unit remains in effect, such Treasury Unit shall not be
separable into its constituent parts and the rights and obligations of the
Holder of such Treasury Unit in respect of the 1/40th of a Treasury Security and
the Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged, only as a Treasury Unit.

            SECTION 3.15 Transfer of Collateral upon Occurrence of Termination
Event. (a) Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Notes or the Treasury Securities, as the case may
be, underlying the Corporate Units and the Treasury Units, as the case may be,
pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent shall
request transfer instructions with respect to such Notes or Treasury Securities,
as the case may be, from each Holder by written request, substantially in the
form of Exhibit D hereto, mailed to such Holder at its address as it appears in
the Security Register.

            (b) Upon book-entry transfer of the Corporate Units or the Treasury
Units or delivery of a Corporate Units Certificate or Treasury Units Certificate
to the Purchase Contract Agent with such transfer instructions from such Holder,
the Purchase Contract Agent shall transfer the Notes or Treasury Securities, as
the case may be, underlying such Corporate Units or Treasury Units, as the case
may be, to such Holder by book-entry transfer, or other appropriate procedures,
in accordance with such instructions. In the event a Holder of Corporate Units
or Treasury Units fails to effect such transfer or delivery, the Notes or
Treasury Securities, as the case may be, underlying such Corporate Units or
Treasury Units, as the case may be, and any distributions thereon, shall be held
in the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until the earlier to occur of:

                  (i) the transfer of such Corporate Units or Treasury Units,
         the surrender of the Corporate Units Certificate or Treasury Units
         Certificate or the receipt by the Company and the Purchase Contract
         Agent from such Holder of satisfactory evidence that such Corporate
         Units Certificate or Treasury Units Certificate has been destroyed,
         lost or stolen, together with any indemnity that may be required by the
         Purchase Contract Agent and the Company; and

                                       26
<PAGE>
                  (ii) the expiration of the time period specified in the
         abandoned property laws of the state in which the Purchase Contract
         Agent holds such property.

            SECTION 3.16 No Consent to Assumption. Each Holder of a Unit, by
acceptance thereof, shall be deemed expressly to have withheld any consent to
the assumption under Section 365 of the Bankruptcy Code or otherwise, of the
Purchase Contract by the Company or its trustee, receiver, liquidator or a
person or entity performing similar functions in the event that the Company
becomes the debtor under the Bankruptcy Code or subject to other similar state
or Federal law providing for reorganization or liquidation.



                                   ARTICLE IV
                                    THE NOTES

            SECTION 4.01 Interest Payments; Rights to Interest Payments
Preserved. (a) Any payment on any Note which is paid on any Payment Date shall,
subject to receipt thereof by the Purchase Contract Agent from the Collateral
Agent as provided by the terms of the Pledge Agreement, be paid to the Person in
whose name the Corporate Units Certificate (or one or more Predecessor Corporate
Units Certificates) of which such Note forms a part is registered at the close
of business on the Record Date for such Payment Date.

            (b) Each Corporate Units Certificate evidencing Notes delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Corporate Units Certificate shall carry the right to receive
accrued and unpaid interest or distributions, and to accrue future interest or
distributions, which were carried by the Notes.

            (c) In the case of any Corporate Unit with respect to which (A) Cash
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.02 hereof, (B) Early Settlement of the underlying Purchase Contract is
properly effected pursuant to Section 5.07 hereof, (C) Cash Merger Early
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.04(b)(2) hereof, or (D) a Collateral Substitution is properly effected
pursuant to Section 3.13, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, interest on the Notes
underlying such Corporate Unit otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement, Early
Settlement, Cash Merger Early Settlement or Collateral Substitution, and such
payment or distributions shall, subject to receipt thereof by the Purchase
Contract Agent, be payable to the Person in whose name the Corporate Units
Certificate (or one or more Predecessor Corporate Units Certificates) was
registered at the close of business on the Record Date.

            (d) Except as otherwise expressly provided in the immediately
preceding paragraph, in the case of any Corporate Units with respect to which
Cash Settlement, Early Settlement or Cash Merger Early Settlement of the
underlying Purchase Contract is properly effected, or with respect to which a
Collateral Substitution has been effected, payments on the related Notes that
would otherwise be payable or made after the Purchase Contract Settlement Date,
Early Settlement Date, Cash Merger Early Settlement Date or the date of the
Collateral Substitution, as the case may be, shall not be payable hereunder to
the Holder of such Corporate Units; provided, however, that to the extent that
such Holder continues to hold Separate Notes

                                       27
<PAGE>
that formerly comprised a part of such Holder's Corporate Units, such Holder
shall be entitled to receive interest on such Separate Notes.

            SECTION 4.02 Notice and Voting. (a) Under the terms of the Pledge
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Notes, but only to the
extent instructed in writing by the Holders as described below. Upon receipt of
notice of any meeting at which holders of Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of Corporate Units a notice:

                  (i) containing such information as is contained in the notice
         or solicitation;

                  (ii) stating that each Holder on the record date set by the
         Purchase Contract Agent therefor (which, to the extent possible, shall
         be the same date as the record date for determining the holders of
         Notes, as the case may be, entitled to vote) shall be entitled to
         instruct the Purchase Contract Agent as to the exercise of the voting
         rights pertaining to such Notes underlying their Corporate Units; and

                  (iii) stating the manner in which such instructions may be
         given.

            (b) Upon the written request of the Holders of Corporate Units on
such record date received by the Purchase Contract Agent at least six days prior
to such meeting, the Purchase Contract Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Notes, as the case may be, as
to which any particular voting instructions are received. In the absence of
specific instructions from the Holder of a Corporate Unit, the Purchase Contract
Agent shall abstain from voting the Notes underlying such Corporate Unit. The
Company hereby agrees, if applicable, to solicit Holders of Corporate Units to
timely instruct the Purchase Contract Agent in order to enable the Purchase
Contract Agent to vote such Notes.

                                   ARTICLE V
                             THE PURCHASE CONTRACTS

            SECTION 5.01 Purchase of Shares of Common Stock.

            (a) Each Purchase Contract shall obligate the Holder of the related
Units to purchase, and the Company to sell, on the Purchase Contract Settlement
Date at a price equal to the Stated Amount (the "Purchase Price"), a number of
newly issued shares of Common Stock (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "Settlement Rate" is equal to:

                  (i) if the Adjusted Applicable Market Value (as defined below)
         is greater than or equal to $[______] (the "Threshold Appreciation
         Price"), [_____] shares of Common Stock per Purchase Contract;


                                       28
<PAGE>
                  (ii) if the Adjusted Applicable Market Value is less than the
         Threshold Appreciation Price but greater than $[____] (the "Reference
         Price"), the number of shares of Common Stock per Purchase Contact
         having a value equal to the Stated Amount divided by the Adjusted
         Applicable Market Value;

                  (iii) if the Adjusted Applicable Market Value is less than or
         equal to the Reference Price, [____] shares of Common Stock per
         Purchase Contract;

in each case subject to adjustment as provided in Section 5.04 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).

         The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.

         The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a), the Applicable Market Value, and (ii) at
the time of and after any adjustment of the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a), the
Applicable Market Value multiplied by a fraction of which the numerator shall be
the Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) and the denominator
shall be the Settlement Rate immediately prior to such adjustment; provided,
however, that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5), (6), (7) and (10) of Section 5.04(a) during the period taken
into consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.

         The "Closing Price" per share of Common Stock on any date of
determination means:

                  (i) the closing sale price as of the close of the principal
         trading session (or, if no closing price is reported, the last reported
         sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
         on such date;

                  (ii) if the Common Stock is not listed for trading on the NYSE
         on any such date, the closing sale price (or, if no closing price is
         reported, the last reported sale price) per share as reported in the
         composite transactions for the principal United States national or
         regional securities exchange on which the Common Stock is so listed;

                  (iii) if the Common Stock is not so listed on a United States
         national or regional securities exchange, the last closing sale price
         per share as reported by the Nasdaq National Market, Inc.;

                  (iv) if the Common Stock is not so reported by the Nasdaq
         National Market, Inc., the last quoted bid price for the Common Stock
         in the over-the-counter market as reported by the National Quotation
         Bureau or similar organization; or


                                       29
<PAGE>
                  (v) if the bid price referred to in clause (iv) is not
         available, the market value of Common Stock on such date as determined
         by a nationally recognized independent investment banking firm retained
         by the Company for purposes of determining the Closing Price.

         A "Trading Day" means a day on which the Common Stock (1) is not
         suspended from trading on any national or regional securities exchange
         or association or over-the-counter market at the close of business and
         (2) has traded at least once on the national or regional securities
         exchange or association or over-the-counter market that is the primary
         market for the trading of the Common Stock.

            (b) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance of such Unit, irrevocably:

                  (i) authorizes the Purchase Contract Agent to enter into and
         perform the related Purchase Contract on its behalf as its
         attorney-in-fact (including, without limitation, the execution of
         Certificates on behalf of such Holder);

                  (ii) agrees to be bound by the terms and provisions thereof;

                  (iii) covenants and agrees to perform its obligations under
         such Purchase Contract for so long as such Holder remains a Holder of a
         Corporate Unit or a Treasury Unit;

                  (iv) consents to the provisions hereof;

                  (v) authorizes the Purchase Contract Agent to enter into and
         perform this Agreement and the Pledge Agreement on its behalf and in
         its name as its attorney-in-fact; and

                  (vi) consents to, and agrees to be bound by, the Pledge of
         such Holder's right, title and interest in and to the Collateral
         Account, including the Notes or the Treasury Securities pursuant to the
         Pledge Agreement,

provided that upon a Termination Event, the rights of the Holder of such Units
under the Purchase Contract may be enforced without regard to any other rights
or obligations.

            (c) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees that to the extent and in the
manner provided in Section 5.02 hereof and the Pledge Agreement, but subject to
the terms thereof, Proceeds of the Notes or the Treasury Securities on the
Purchase Contract Settlement Date, shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
Proceeds.

            (d) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase


                                       30
<PAGE>
Contracts underlying the Certificate so transferred and the Pledge Agreement.
The Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.

            SECTION 5.02 Remarketing; Payment of Purchase Price.

                  (a) (i) The Company shall engage the Remarketing Agent
         pursuant to the Remarketing Agreement for Remarketing the Notes. By
         11:00 a.m. (New York City time) on the Business Day immediately
         preceding the Remarketing Date, the Purchase Contract Agent shall
         notify the Remarketing Agent of the aggregate principal amount of
         Pledged Notes, and the Custodial Agent shall notify the Remarketing
         Agent of the aggregate principal amount of Separate Notes (if any) that
         are to be remarketed pursuant to clause (ii) below. Concurrently, the
         Custodial Agent, pursuant to clause (ii) below, will present for
         Remarketing the Separate Notes, to the Remarketing Agent. Upon receipt
         of such notice from the Purchase Contract Agent and Custodial Agent and
         the Pledged Notes and Separate Notes (if any) from the Collateral Agent
         and Custodial Agent, the Remarketing Agent will, on the Remarketing
         Date, use its reasonable efforts to remarket (based on the Reset Rate)
         (the "Remarketing") such Pledged Notes and Separate Notes on such date
         at a price of approximately 100.25% (or, if the Remarketing Agent is
         unable to remarket the Pledged Notes and Separate Notes at such price,
         at a price below 100.25% in the discretion of the Remarketing Agent,
         but in no event less than 100%, net of any Remarketing Fee and any
         other fees and commissions) of the aggregate principal amount of the
         Notes and Separate Notes being remarketed in such Remarketing.

                  If the Remarketing Agent is able to remarket the Notes and
         Separate Notes at a price equal to or greater than 100% (net of the
         Remarketing Fee and any other fees and commissions) of the aggregate
         principal amount of the Notes and Separate Notes (if any) (a
         "Successful Remarketing"), the Remarketing Agent will remit the
         proceeds attributable to the Remarketing of the Pledged Notes from such
         Successful Remarketing to the Collateral Agent. The Remarketing Agent
         shall deduct as a remarketing fee (the "Remarketing Fee") an amount
         equal to the lesser of (i) 25 basis points (0.25%) of the aggregate
         principal amount of the Pledged Notes and Separate Notes remarketed and
         (ii) the amount of the proceeds of such Remarketing in excess of the
         aggregate principal amount of the Pledged Notes and Separate Notes
         remarketed. Upon receipt of the proceeds attributable to the
         Remarketing, the Collateral Agent shall cause the Securities
         Intermediary to transfer the Pledged Notes to the Purchase Contract
         Agent for disposition in accordance with instructions from the
         Remarketing Agent.

                  None of the Company, the Purchase Contract Agent, or any
         Holders of Corporate Units or holders of Separate Notes whose Notes or
         Separate Notes are so remarketed will otherwise be responsible for the
         payment of any Remarketing Fee in connection therewith. With respect to
         Separate Notes, any proceeds of the Remarketing in excess of the
         Remarketing Fee attributable to the Separate Notes will be remitted to
         the Custodial Agent for payment to the holders of Separate Notes. The
         proceeds from the Remarketing remitted to the Collateral Agent shall be
         invested by the Collateral Agent in Permitted Investments, in
         accordance with the Pledge Agreement, and then applied to satisfy in
         full the obligations of such Holders of Corporate Units to pay the
         Purchase Price for the


                                       31
<PAGE>
         shares of Common Stock under the related Purchase Contracts, less the
         amount of any Deferred Contract Adjustment Payments payable to such
         Holders, on the Purchase Contract Settlement Date. Any proceeds in
         excess of those required to pay the Purchase Price and the Remarketing
         Fee will be remitted to the Purchase Contract Agent for payment to the
         Holders of the related Corporate Units. With respect to Pledged Notes,
         any proceeds of the Remarketing in excess of the Remarketing Fee will
         be remitted to the Purchase Contract Agent for payment to the Holders
         of the related Corporate Units.

                  (ii) Prior to 5:00 p.m. (New York City time) on the fifth
         Business Day immediately preceding the Remarketing Date, but no earlier
         than the Payment Date immediately preceding such date, Holders of
         Separate Notes may elect to have their Separate Notes remarketed under
         the Remarketing Agreement by delivering their Separate Notes, along
         with a notice of such election, substantially in the form of Exhibit F
         to the Pledge Agreement, to the Custodial Agent. After such time, such
         election shall become an irrevocable election to have such Separate
         Notes remarketed in such Remarketing. The Custodial Agent shall hold
         Separate Notes in an account separate from the Collateral Account in
         which the Pledged Notes (as defined in the Pledge Agreement) shall be
         held. Holders of Separate Notes electing to have their Separate Notes
         remarketed will also have the right to withdraw that election by
         written notice to the Custodial Agent, substantially in the form of
         Exhibit G to the Pledge Agreement, on or prior to 5:00 p.m. (New York
         City time) on the fifth Business Day immediately preceding the
         Remarketing Date, upon which notice the Custodial Agent shall return
         such Separate Notes to such Holder. Promptly after 11:00 a.m. on the
         Business Day immediately preceding the Remarketing Date, the Custodial
         Agent shall notify the Remarketing Agent of the aggregate principal
         amount of the Separate Notes to be remarketed and will deliver to the
         Remarketing Agent for remarketing all such Separate Notes delivered to
         the Custodial Agent pursuant to Section 5.07(c) of the Pledge Agreement
         and not validly withdrawn prior to such date.

                  (iii) Not later than seven calendar days nor more than 15
         calendar days prior to the Remarketing Date, the Company shall request
         the Depositary or its nominee to notify the Beneficial Owners or
         Depositary Participants holding Units of the procedures to be followed
         in such Remarketing, including, in the case of a Failed Remarketing,
         the procedures to be followed if a Holder wishes to exercise its Put
         Right.

                  (iv) The Company agrees to use its best efforts to ensure
         that, if required by applicable law, a registration statement with
         regard to the full amount of the Notes to be remarketed in the
         Remarketing shall be effective with the Securities and Exchange
         Commission in a form that will enable the Remarketing Agent to rely on
         it in connection with such Remarketing.

                  (b) (i) Unless an Early Settlement or a Cash Merger Early
         Settlement has occurred, each Holder of Corporate Units shall have the
         right to satisfy such Holder's obligations under the Purchase Contract
         on the Purchase Contract Settlement Date in cash by notifying the
         Purchase Contract Agent by use of a notice in substantially the form of
         Exhibit E hereto of its intention to pay in cash ("Cash Settlement")
         prior to 5:00 p.m. (New York City time) on the fifth Business Day
         immediately preceding the Purchase Contract Settlement Date. Promptly
         following 5:00 p.m. (New York City time) on the fifth Business Day
         immediately preceding the Purchase


                                       32
<PAGE>
         Contract Settlement Date, the Purchase Contract Agent shall notify the
         Collateral Agent and the Indenture Trustee of the receipt of such
         notices from Holders intending to make a Cash Settlement.

                  (ii) A Holder of a Corporate Unit who has so notified the
         Purchase Contract Agent of its intention to effect a Cash Settlement
         shall pay the Purchase Price to the Collateral Agent for deposit in the
         Collateral Account prior to 5:00 p.m. (New York City time) on the
         fourth Business Day immediately preceding the Purchase Contract
         Settlement Date, in lawful money of the United States by certified or
         cashiers' check or wire transfer, in each case in immediately available
         funds payable to or upon the order of the Securities Intermediary. Any
         cash received by the Collateral Agent shall be invested promptly by the
         Securities Intermediary in Permitted Investments pursuant to written
         instructions received from the Company and paid to the Company on the
         Purchase Contract Settlement Date in settlement of the Purchase
         Contracts in accordance with the terms of this Agreement and the Pledge
         Agreement. Any funds received by the Securities Intermediary in respect
         of the investment earnings from such Permitted Investments in excess of
         the Purchase Price for the shares of Common Stock to be purchased by
         such Holder shall be distributed to the Purchase Contract Agent when
         received for payment to the Holder.

                  (iii) If a Holder of a Corporate Unit does not notify the
         Purchase Contract Agent of its intention to make a Cash Settlement in
         accordance with paragraph 5.02(b)(i) above, or does notify the Purchase
         Contract Agent in accordance with paragraph 5.02(b)(i) above but fails
         to make such payment as required by paragraph 5.02(b)(ii) above, such
         Holder shall be deemed to have consented to the disposition of the
         Pledged Notes pursuant to the Remarketing as described in paragraph
         5.02(a) above.

                  (iv) Promptly after 5:00 p.m. (New York City time) on the
         fourth Business Day preceding the Purchase Contract Settlement Date,
         the Collateral Agent, based on cash payments received by the Collateral
         Agent pursuant to Section 5.02(b)(ii) hereof, shall promptly notify the
         Purchase Contract Agent and the Indenture Trustee of the aggregate
         principal amount of Notes to be tendered for purchase in the
         Remarketing in a notice pursuant to the terms of the Pledge Agreement.

            (c) If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket all of the Pledged Notes and Separate Notes (if any) at a
price not less than 100% (net of the Remarketing Fee and any other fees and
commissions) of the aggregate principal amount of the Pledged Notes and Separate
Notes to be remarketed in the Remarketing or a condition precedent set forth in
the Remarketing Agreement is not fulfilled, the remarketing will be deemed to
have failed (a "Failed Remarketing"). The Company shall cause a notice of a
Failed Remarketing to be published (with a copy of such notice to be provided to
the Purchase Contract Agent) on the Business Day immediately following the
Remarketing Date, in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall Street
Journal and on Bloomberg News. Following a Failed Remarketing, as of the
Purchase Contract Settlement Date, each Holder of any Pledged Notes that are
subject to a Failed Remarketing, and any Notes that are a component of a
Corporate Unit with respect to which the


                                       33
<PAGE>

Holder has notified the Purchase Contract Agent of an intent to effect Cash
Settlement pursuant to Section 5.02(b)(i) or Section 5.02(d)(i) and failed to
deliver the Purchase Price pursuant to Section 5.02(b)(ii) or Section
5.02(d)(ii), shall be deemed to have exercised such Holder's Put Right with
respect to such Notes and to have authorized the Collateral Agent to pay, in the
manner provided for in the Pledge Agreement, the Purchase Price for the shares
of Common Stock to be issued under the related Purchase Contract from a portion
of the Proceeds of the Put Right in full satisfaction of such Holder's
obligations under the related Purchase Contracts, provided that if the Company
shall fail to pay the Put Price when due, the Company shall be deemed to have
netted such Holder's obligation to pay the Company the Purchase Price under the
Purchase Contracts against the Company's obligation to pay the Put Price, in
full satisfaction of such Holder's obligation under the Purchase Contracts.

            (d) (i) Each Holder of a Corporate Unit who intends to effect a Cash
Settlement of the underlying Purchase Contract following a Failed Remarketing
shall so notify the Purchase Contract Agent by use of a notice in substantially
the form of Exhibit E hereto prior to 11:00 a.m. (New York City time) on the
second Business Day immediately preceding the Purchase Contract Settlement Date.
Promptly following 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent shall notify the Collateral Agent and the Indenture Trustee of
the receipt of such notices from Holders intending to make a Cash Settlement.

                  (ii) A Holder of a Corporate Unit who has so notified the
         Purchase Contract Agent of its intention to effect a Cash Settlement
         shall pay the Purchase Price to the Collateral Agent for deposit in the
         Collateral Account prior to 11:00 a.m. (New York City time) on the
         Business Day immediately preceding the Purchase Contract Settlement
         Date, in lawful money of the United States by certified or cashiers'
         check or wire transfer, in each case in immediately available funds
         payable to or upon the order of the Collateral Agent.

                  (iii) If a Holder of a Corporate Unit does not notify the
         Purchase Contract Agent of its intention to make a Cash Settlement in
         accordance with Section 5.02(d)(i) above, or does notify the Purchase
         Contract Agent in accordance with Section 5.02(d)(i) above but fails to
         make such payment as required by Section 5.02(d)(ii) above, such Holder
         shall be deemed to have automatically exercised such Holder's Put Right
         following a Failed Remarketing as described in paragraph Section
         5.02(c) above.

            (e) Any distribution to Holders of any payments described above
shall be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Security Register or by wire transfer to an account specified by the Holder.

            (f) Upon Cash Settlement of any Purchase Contract:

                  (i) the Collateral Agent will in accordance with the terms of
         the Pledge Agreement cause the Pledged Notes underlying the relevant
         Corporate Units to be released from the Pledge, free and clear of any
         security interest of the Company, and

                                       34
<PAGE>
         transferred to the Purchase Contract Agent for delivery to the Holder
         thereof or its designee as soon as practicable; and

                  (ii) subject to the receipt thereof, the Purchase Contract
         Agent shall, by book-entry transfer or other appropriate procedures, in
         accordance with written instructions provided by the Holder thereof,
         transfer such Notes or, if no such instructions are given to the
         Purchase Contract Agent by the Holder, the Purchase Contract Agent
         shall hold such Notes, and any interest payment thereon, in the name of
         the Purchase Contract Agent or its nominee in trust for the benefit of
         such Holder until the expiration of the time period specified in the
         abandoned property laws of the relevant state where such property is
         held).

            (g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement, Cash Merger Early Settlement or Cash Settlement, are payable solely
out of the proceeds of any Collateral pledged to secure the obligations of the
Holders, and in no event will Holders be liable for any deficiency between the
proceeds of the disposition of Collateral and the Purchase Price.

            (h) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates thereof to
the Holder of the related Units unless the Company shall have received payment
for the Common Stock to be purchased thereunder in the manner herein set forth.

            SECTION 5.03 Issuance of Shares of Common Stock. Unless a
Termination Event, an Early Settlement or a Cash Merger Early Settlement shall
have occurred, subject to Section 5.04(b), on the Purchase Contract Settlement
Date upon receipt of the aggregate Purchase Price payable on all Outstanding
Units, the Company shall issue and deposit with the Purchase Contract Agent, for
the benefit of the Holders of the Outstanding Units, one or more certificates
representing newly issued shares of Common Stock registered in the name of the
Purchase Contract Agent (or its nominee) as custodian for the Holders (such
certificates for shares of Common Stock, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which the
Holders are entitled hereunder.

         Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date, Early
Settlement Date or Cash Merger Early Settlement Date, as the case may be,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith in exchange
therefor a certificate representing that number of newly issued whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Units then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.09 and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, but without any interest thereon,
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Purchase
Contract Agent. If any shares of Common


                                       35
<PAGE>
Stock issued in respect of a Purchase Contract are to be registered to a Person
other than the Person in whose name the Certificate evidencing such Purchase
Contract is registered (but excluding any Depositary or nominee thereof), no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.

            SECTION 5.04 Adjustment of Settlement Rate.

            (a) Adjustments for Dividends, Distributions, Stock Splits, Etc.

         (1) Stock Dividends. In case the Company shall pay or make a dividend
or other distribution on Common Stock in Common Stock, the Settlement Rate in
effect at the close of business on the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which:

                  (i) the numerator shall be the number of shares of Common
         Stock outstanding at the close of business on the date fixed for such
         determination; and

                  (ii) the denominator shall be the sum of such number of shares
         and the total number of shares constituting such dividend or other
         distribution, such increase to become effective immediately at the
         opening of business on the day following the date fixed for such
         determination.

For the purposes of this paragraph (1), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of the
Company but shall include any shares issuable in respect of any scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
agrees that it shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.

         (2) Stock Purchase Rights. In case the Company shall issue rights,
warrants or options, other than pursuant to any dividend reinvestment plans,
share purchase plans or the Rights Agreement, to all holders of its Common Stock
(not being available on an equivalent basis to Holders of the Units upon
settlement of the Purchase Contracts underlying such Units) entitling them, for
a period expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, warrants or options, to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price per share of Common Stock on the date of announcement of
such issuance, the Settlement Rate in effect at the close of business on the
date of such announcement shall be increased by dividing such Settlement Rate by
a fraction of which:

                  (i) the numerator shall be the number of shares of Common
         Stock outstanding at the close of business on the date of such
         announcement plus the number of shares of Common Stock which the
         aggregate of the offering price of the total number of shares of Common
         Stock so offered for subscription or purchase would purchase at such
         Current Market Price; and

                                       36
<PAGE>
                  (ii) the denominator shall be the number of shares of Common
         Stock outstanding at the close of business on the date of such
         announcement plus the number of shares of Common Stock so offered for
         subscription or purchase,

such increase to become effective immediately after the opening of business on
the Business Day following the date of such announcement.

The Company agrees that it shall notify the Purchase Contract Agent if any
issuance of such rights, warrants or options is cancelled or not completed
following the announcement thereof and the Settlement Rate shall thereupon be
readjusted to the Settlement Rate in effect immediately prior to the date of
such announcement. For the purposes of this subparagraph (ii), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company agrees that it shall not issue any such rights, warrants or options
in respect of shares of Common Stock held in the treasury of the Company.

         (3) Stock Splits; Reverse Splits. In case outstanding shares of Common
Stock shall be subdivided or split into a greater number of shares of Common
Stock, the Settlement Rate in effect at the close of business on the day
preceding the day upon which such subdivision or split becomes effective shall
be proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of Common
Stock, the Settlement Rate in effect at the close of business on the day
preceding the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately at the opening of business on the day following the
day upon which such subdivision, split or combination becomes effective.

         (4) Debt or Asset Distributions. In case the Company shall, by dividend
or otherwise, distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including shares of capital stock, securities, cash and
property but excluding any rights, warrants or options referred to in Section
5.04(a)(2), any dividend or distribution paid exclusively in cash and any
dividend or distribution referred to in Section 5.04(a)(1)), the Settlement Rate
in effect at the close of business on the date fixed for the determination of
shareholders entitled to receive such distribution shall be adjusted by dividing
such rate by a fraction of which:

                  (i) the numerator shall be the Current Market Price per share
         of Common Stock on the date fixed for such determination less the then
         fair market value (as reasonably determined by the Board of Directors,
         whose determination shall be conclusive and the basis for which shall
         be described in a Board Resolution) of the portion of the assets or
         evidences of indebtedness so distributed applicable to one share of
         Common Stock; and

                  (ii) the denominator shall be such Current Market Price per
         share of Common Stock,

such adjustment to become effective at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution. In any case in

                                       37
<PAGE>
which this paragraph (4) is applicable, paragraph (2) of this Section 5.04(a)
shall not be applicable. In the event that such dividend or distribution is not
so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or distribution
had not been declared.

         (5) Cash Distributions. In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock exclusively cash
(excluding cash that is distributed in a Reorganization Event to which Section
5.04(b) applies) to the extent that the aggregate cash distribution pursuant to
this Section 5.04(a)(5) plus (1) all other cash distributions made exclusively
in cash within twelve months preceding the date of such cash distribution and in
which no prior adjustment pursuant to this Section or Section 5.04(a)(6) has
been made and (2) any cash and fair market value (as reasonably determined by
the Board of Directors, whose determination shall be conclusive and the basis
for which shall be described in a Board Resolution), calculated as of the
expiration of the tender or exchange referred to in Section 5.04(a)(6), of
consideration payable in respect of any tender or exchange offer (other than
consideration payable in respect of an odd-lot tender offer) by the Company or
any subsidiary of the Company for all or any portion of Common Stock expiring
within twelve months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to this Section 5.04(a)(5) has
been made, exceeds the product of $1.00 (appropriately adjusted from time to
time for any stock dividends on or subdivisions or combinations of Common Stock)
multiplied by the number of shares of Common Stock outstanding on the Record
Date for such distribution, then, in such case, the Settlement Rate shall be
increased so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on such
record date by a fraction of which:

                  (i) the numerator shall be the Current Market Price of Common
         Stock on such record date less the amount of cash so distributed (and
         not excluded as provided above) applicable to one share of Common
         Stock; and

                  (ii) the denominator shall be the Current Market Price of
         Common Stock,

such increase to be effective immediately prior to the opening of business on
the day following the record date; provided, however, that in the event the
portion of cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price per share of Common Stock on the
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Unit shall have the right to receive upon
settlement of the Units the amount of cash such Holder would have received had
such Holder settled each Unit on the record date. In the event that such
dividend or distribution is not so paid or made, the Settlement Rate shall again
be adjusted to be the Settlement Rate which would then be in effect if such
dividend or distribution had not been declared.

         (6) Tender Offers. If the Company or any subsidiary of the Company
shall make a tender or exchange offer (other than any odd-lot tender offer) for
all or any portion of the Common Stock and upon expiration of such tender or
exchange offer (as amended upon the expiration thereof) the Company or its
subsidiary shall be required to pay to shareholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as herein defined) any consideration, then if the sum of (I)
the fair market

                                       38
<PAGE>
value of the aggregate consideration to be paid in such tender offer or exchange
offer (as reasonably determined by the Board of Directors, whose determination
shall be conclusive and the basis for which shall be described in a Board
Resolution) plus (II) the aggregate of the cash plus the fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution), as
of the expiration of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer (other than consideration payable
in respect of any odd-lot tender offer), by the Company or any subsidiary of the
Company for all or any portion of Common Stock expiring within the twelve months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to this paragraph (6) has been made, plus (III) the
aggregate amount of any distributions to all holders of Common Stock made
exclusively in cash within the twelve months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
Section 5.04(a)(5) has been made, exceeds the product of $1.00 (appropriately
adjusted from time to time for any stock dividends on or subdivisions or
combinations of Common Stock) multiplied by the number of shares of Common Stock
outstanding (including any tendered shares) as of the last time tenders could
have been made pursuant to such tender or exchange offer (as it may be amended)
("the Expiration Time"), then, the Settlement Rate in effect at the close of
business on the day of the Expiration Time shall be adjusted by dividing it by a
fraction:

                  (i) the numerator of which shall be equal to (A) the product
         of (I) the Current Market Price per share of Common Stock on the date
         of the Expiration Time and (II) the number of shares of Common Stock
         outstanding (including any tendered shares) on the date of the
         Expiration Time less (B) the amount of cash plus the fair market value
         (determined as aforesaid) of the aggregate consideration payable to
         shareholders based on the transactions described in clauses (I), (II)
         and (III) above (assuming in the case of clause (I) the acceptance, up
         to any maximum specified in the terms of the tender or exchange offer,
         of Purchased Shares); and

                  (ii) the denominator of which shall be equal to the product of
         (A) the Current Market Price per share of Common Stock as of the
         Expiration Time and (B) the number of shares of Common Stock
         outstanding (including any tendered shares) as of the Expiration Time
         less the number of all shares validly tendered and not withdrawn as of
         the Expiration Time (the shares deemed so accepted, up to any such
         maximum, being referred to as the "Purchased Shares"),

such adjustment to become effective at the opening of business on the date
following the date of the Expiration Time.

         (7) Reclassification. The reclassification of Common Stock into
securities including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.04(b) applies)
shall be deemed to involve:

                  (i) a distribution of such securities other than Common Stock
         to all holders of Common Stock (and the effective date of such
         reclassification shall be deemed to be "the date fixed for the
         determination of shareholders entitled to receive such distribution"
         and the "date fixed for such determination" within the meaning of
         Section 5.04(a)(4)); and

                                       39
<PAGE>
                  (ii) a subdivision, split or combination, as the case may be,
         of the number of shares of Common Stock outstanding immediately prior
         to such reclassification into the number of shares of Common Stock
         outstanding immediately thereafter (and the effective date of such
         reclassification shall be deemed to be "the day upon which such
         subdivision or split becomes effective" or "the day upon which such
         combination becomes effective", as the case may be, and "the day upon
         which such subdivision, split or combination becomes effective" within
         the meaning of Section 5.04(a)(3)).

         (8) Current Market Price. The "Current Market Price" per share of
Common Stock on any date of determination means the average of the daily Closing
Prices for the five consecutive Trading Days ending on the earlier of such date
of determination and the day before the "ex date" with respect to the issuance
or distribution requiring such computation. For purposes of this Section
5.04(a)(8), the term "ex date," when used with respect to any issuance or
distribution, shall mean the first date on which Common Stock trades regular way
on such exchange or in such market without the right to receive such issuance or
distribution.

         (9) Calculation of Adjustments. All adjustments to the Settlement Rate
shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if
there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
thereof; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.

         (10) Increase of Settlement Rate. The Company may, but shall not be
required to, make such increases in the Settlement Rate, in addition to those
required by this Section, as the Board of Directors considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reason.

         (11) Rights Agreement. The Company has entered into a Rights Agreement
dated as of September 8, 2000 (the "Rights Agreement") with The Bank of New York
pursuant to which share purchase rights (the "Rights") have been, and may in the
future be, issued in respect of shares of Common Stock. Each share of Common
Stock issued upon settlement of any Purchase Contract pursuant to this Article
Five shall be entitled to receive the appropriate number of Rights, if any, and
the certificates representing the Common Stock issued upon such settlement shall
bear such legends, if any, in each case as provided by and subject to the terms
of the Rights Agreement as in effect at the time of such settlement. If after
the date of this Agreement the Rights separate from the Common Stock in
accordance with the provisions of the Rights Agreement so that a Holder would
not be entitled to receive any Rights in respect of the Common Stock issuable
upon settlement of such Purchase Contract, the Settlement Rate will be adjusted
as provided in Section 5.04(a)(4) on the separation date, subject to
readjustment in the event of the expiration, termination or redemption of the
Rights. In lieu of any such adjustment, the Company may amend the Rights
Agreement to provide that, on the Purchase Contract Settlement Date, Holders
will receive, in addition to the Common Stock issuable upon such settlement, the
Rights that would have attached to such shares of Common Stock if the Rights

                                       40
<PAGE>
had not become separated from the Common Stock pursuant to the provisions of the
Rights Agreement. If the Company hereafter adopts any stockholder rights plan
similar to the Rights Agreement, a Holder shall be entitled to receive on the
Purchase Contract Settlement Date, in addition to the shares of Common Stock
issuable upon settlement, the related rights of the Common Stock under the
future rights plan, whether or not the rights under the future stockholder
rights plan have separated from the Common Stock on the Purchase Contract
Settlement Date, but otherwise subject to the generally applicable terms of such
plan, and no additional adjustment to the Settlement Rate shall be made for the
future stockholder rights plan under Section 5.04(a)(4).

            (b) Adjustment for Consolidation, Merger, Conversion or Other
Reorganization Event.

         (1) In the event of:

                  (i) any consolidation or merger of the Company with or into
         another Person (other than a merger or consolidation in which the
         Company is the continuing corporation and in which the shares of Common
         Stock outstanding immediately prior to the merger or consolidation are
         not exchanged for cash, securities or other property of the Company or
         another corporation);

                  (ii) any statutory share exchange of the Company with another
         Person (other than in connection with a merger or acquisition); or

                  (iii) any liquidation, dissolution or termination of the
         Company other than as a result of or after the occurrence of a
         Termination Event

(any event described in clauses (i), (ii) and (iii) a "Reorganization Event"),

each Purchase Contract shall become, without the consent of the Holder of the
Unit representing such Purchase Contract, an agreement to purchase only the kind
of securities, cash and other property receivable upon consummation of such
Reorganization Event by a holder of Common Stock immediately prior to the
closing date of such Reorganization Event.

         The amount of such securities, cash and other property receivable upon
settlement of each such Purchase Contract after the consummation of the
Reorganization Event shall be the amount of securities, cash and other property
receivable upon such Reorganization Event (without any interest thereon, and
without any right to dividends or distribution thereon which have a record date
that is prior to the Purchase Contract Settlement Date) by a Holder of the
number of shares of Common Stock issuable on account of each Purchase Contract
if the Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event. In determining the kind and amount of such securities,
cash and other property pursuant to the foregoing, it will be assumed that such
holder of Common Stock is not a Person with which the Company consolidated or
into which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a "Constituent
Person"), or an Affiliate of a Constituent Person to the extent such
Reorganization Event provides for different treatment of Common Stock held by
Affiliates of the Company and non-affiliates and such Holder failed to exercise
its rights of election, if any, as to the kind or


                                       41
<PAGE>
amount of securities, cash and other property receivable upon such
Reorganization Event (provided that if the kind or amount of securities, cash
and other property receivable upon such Reorganization Event is not the same for
each share of Common Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in respect of
which such rights of election shall not have been exercised ("Non-Electing
Share"), then for the purpose of this Section 5.04 the kind and amount of
securities, cash and other property receivable upon such Reorganization Event by
each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares).

         In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Unit shall have
the rights provided by this Section 5.04(b). Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 5.04. The above provisions of
this Section 5.04 shall similarly apply to successive Reorganization Events.

         (2) In the event of a consolidation or merger of the Company with or
into another Person or any merger of another Person into the Company (other than
a merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), in each case in which 30%
or more of the total consideration paid to the Company's shareholders consists
of cash or cash equivalents (a "Cash Merger"), a Holder of a Unit may settle
("Cash Merger Early Settlement") its Purchase Contract, upon the conditions set
forth below, at the Settlement Rate in effect immediately prior to the closing
of the Cash Merger; provided that (i) the Cash Merger Early Settlement Date (as
defined below) is no later than the fifth Business Day immediately preceding the
Purchase Contract Settlement Date and (ii) no Cash Merger Early Settlement will
be permitted pursuant to this Section 5.04(b)(2) unless, at the time such Cash
Merger Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Cash Merger Early Settlement, if such a Registration
Statement is required (in the view of counsel, which need not be in the form of
a written opinion, for the Company) under the Securities Act. If such a
Registration Statement is so required, the Company covenants and agrees to use
its best efforts to (A) have in effect a Registration Statement covering any
securities to be delivered in respect of the Purchase Contracts being settled
and (B) provide a Prospectus in connection therewith, in each case in a form
that may be used in connection with such Cash Merger Early Settlement. If a
Holder effects a Cash Merger Early Settlement of some or all of its Purchase
Contracts, such Holder shall be entitled to receive, on the Cash Merger Early
Settlement Date, the aggregate amount of any Deferred Contract Adjustment
Payments and any accrued and unpaid Contract Adjustment Payments since the
immediately preceding Payment Date with respect to such Purchase Contracts. The
Company shall pay such amount as a credit against the amount otherwise payable
by the Holders to effect such Cash Merger Early Settlement.

                                       42
<PAGE>

         Within five Business Days of the completion of a Cash Merger, the
Company shall provide written notice to Holders of Units of such completion of a
Cash Merger, which shall specify the deadline for submitting the notice to
settle early in cash pursuant to this Section 5.04(b)(2), the date on which such
Cash Merger Early Settlement shall occur (which date shall be at least five days
but not more than 20 days after the date of such written notice by the Company,
but which shall in no event be later than the fifth Business Day immediately
preceding the Purchase Contract Settlement Date) (the "Cash Merger Early
Settlement Date"), the applicable Settlement Rate and the amount (per share of
Common Stock) of cash, securities and other consideration receivable by the
Holder, including the amount of Contract Adjustment Payments receivable, upon
settlement.

         Treasury Units Holders may only effect Cash Merger Early Settlement
pursuant to this Section 5.04(b)(2) in integral multiples of 40 Treasury Units.
Other than the provisions relating to timing of notice and settlement, which
shall be as set forth above, the provisions of Section 5.01(a) shall apply with
respect to a Cash Merger Early Settlement pursuant to this Section 5.04(b)(2).

         In order to exercise the right to effect Cash Merger Early Settlement
with respect to any Purchase Contracts, a Holder of the Certificate evidencing
Units shall deliver, no later than 5:00 p.m. (New York City time) on the third
Business Day immediately preceding the Cash Merger Early Settlement Date, such
Certificate to the Purchase Contract Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds) in an amount (the "Cash
Merger Early Settlement Amount") equal to the product of (A) the Stated Amount
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Cash Merger Early Settlement, less the amount of any Contract
Adjustment Payments (including, for the avoidance of doubt, any accrued and
unpaid Contract Adjustment Payments and any Deferred Contract Adjustment
Payments) payable to such Holder on the next succeeding Payment Date as a result
of such Cash Merger Early Settlement; provided that, no amount shall be deducted
for which a Record Date establishing entitlement to such amount has passed, but
before the Payment Date with respect to such amount.

         If a Holder properly effects an effective Cash Merger Early Settlement
in accordance with the provisions of this Section 5.04(b)(2), the Company will
deliver (or will cause the Collateral Agent to deliver) to the Holder on the
Cash Merger Early Settlement Date:

                  (i) the kind and amount of securities, cash and other property
         receivable upon such Cash Merger by a holder of the number of shares of
         Common Stock issuable on account of each Purchase Contract if the
         Purchase Contract Settlement Date had occurred immediately prior to
         such Cash Merger (based on the Settlement Rate in effect at such time),
         assuming such Holder of Common Stock is not a Constituent Person or an
         Affiliate of a Constituent Person to the extent such Cash Merger
         provides for different treatment of Common Stock held by Affiliates of
         the Company and non-affiliates and such Holder failed to exercise its
         rights of election, if any, as to the kind or amount of securities,
         cash and other property receivable upon such Cash Merger (provided that
         if the kind or amount of securities, cash and other property receivable
         upon such Cash Merger is not


                                       43
<PAGE>

         the same for each Non-Electing Share, then for the purpose of this
         Section 5.04(b)(2), the kind and amount of securities, cash and other
         property receivable upon such Cash Merger by each Non-Electing Share
         shall be deemed to be the kind and amount so receivable per share by a
         plurality of the Non-Electing Shares), plus accrued and unpaid Contract
         Adjustment Payments. For the avoidance of doubt, for the purposes of
         determining the Adjusted Applicable Market Value (in connection with
         determining the appropriate Settlement Rate to be applied in the
         foregoing sentence), the date of the closing of the Cash Merger shall
         be deemed to be the Purchase Contract Settlement Date;

                  (ii) the Notes or Treasury Securities, as the case may be,
         related to the Purchase Contracts with respect to which the Holder is
         effecting a Cash Merger Early Settlement; and

                  (iii) if so required under the Securities Act, a Prospectus as
         contemplated by this Section 5.04(b)(2).

            (c) All calculations and determinations pursuant to this Section
5.04 shall be made by the Company or its agent and the Purchase Contract Agent
shall have no responsibility with respect thereto.

            (d) The Units of the Holders who do not elect Cash Merger Early
Settlement in accordance with the foregoing will continue to remain outstanding
and be subject to settlement on the Purchase Contract Settlement Date in
accordance with the terms hereof.

            SECTION 5.05 Notice of Adjustments and Certain Other Events.

            (a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.04 (or if
the Company is not aware of such occurrence, as soon as practicable after
becoming so aware):

                  (i) compute the adjusted Settlement Rate in accordance with
         Section 5.04 and prepare and transmit to the Purchase Contract Agent an
         Officers' Certificate setting forth the Settlement Rate, the method of
         calculation thereof in reasonable detail, and the facts requiring such
         adjustment and upon which such adjustment is based; and

                  (ii) provide a written notice to the Holders of the Units of
         the occurrence of such event and a statement in reasonable detail
         setting forth the method by which the adjustment to the Settlement Rate
         was determined and setting forth the adjusted Settlement Rate.

            (b) The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of Units to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall be fully authorized and protected in relying on any Officers' Certificate
delivered pursuant to Section 5.05(a)(i) and any adjustment contained therein
and the Purchase Contract Agent shall not be deemed to have knowledge of any
adjustment unless and


                                       44
<PAGE>

until it has received such certificate. The Purchase Contract Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Purchase Contract; and the Purchase
Contract Agent makes no representation with respect thereto. The Purchase
Contract Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a Purchase Contract
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article.

            SECTION 5.06 Termination Event; Notice. (a) The Purchase Contracts
and all obligations and rights of the Company and the Holders thereunder,
including, without limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments (including any
accrued and unpaid Contract Adjustment Payments and any Deferred Contract
Adjustment Payments), if the Company shall have such obligation, and the rights
and obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Purchase Contract Agent or the Company, if, prior to or on the
Purchase Contract Settlement Date, a Termination Event shall have occurred.

         Upon and after the occurrence of a Termination Event, the Units shall
thereafter represent the right to receive the Notes or the Treasury Securities,
as the case may be, forming part of such Units, in accordance with the
provisions of Section 5.04 of the Pledge Agreement.

         (b) Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice of such event to the Purchase Contract Agent, the Collateral Agent and
the Holders, at their addresses as they appear in the Security Register.

            SECTION 5.07 Early Settlement. (a) Subject to and upon compliance
with the provisions of this Section 5.07, at the option of the Holder thereof,
Purchase Contracts underlying Units may be settled early ("Early Settlement") at
any time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that no
Early Settlement will be permitted pursuant to this Section 5.07 unless, at the
time such Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration
Statement is so required, the Company covenants and agrees to use its best
efforts to (A) have in effect a Registration Statement covering any securities
to be delivered in respect of the Purchase Contracts being settled and (B)
provide a Prospectus in connection therewith, in each case in a form that may be
used in connection with such Early Settlement.

            (b) In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, at any time prior to 5:00 p.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
such Certificate to the Purchase Contract Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early on the reverse thereof duly completed and accompanied by payment

                                       45
<PAGE>
(payable to the Company in immediately available funds) in an amount (the "Early
Settlement Amount") equal to the sum of (A) the product of (I) the Stated Amount
times (II) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (B) if such delivery is made with
respect to any Purchase Contracts during the period from the close of business
on any Record Date next preceding any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments
(including any Deferred Contract Adjustment Payments) payable on such Payment
Date with respect to such Purchase Contracts.

         Except as contemplated in the immediately preceding sentence, no
payment shall be made upon Early Settlement of any Purchase Contract on account
of any Contract Adjustment Payments accrued on such Purchase Contract since the
immediately preceding Payment Date or on account of any dividends on the Common
Stock issued upon such Early Settlement. However, a Holder effecting an Early
Settlement of some or all of its Purchase Contracts shall be entitled to
receive, on the date it receives the shares of Common Stock referred to in
Section 5.07(d), the amount of any Deferred Contract Adjustment Payments with
respect to such Purchase Contracts, calculated as of the immediately preceding
Payment Date. The amount of such Deferred Contract Adjustment Payments shall be
credited against the amount otherwise payable by the Holder to effect such Early
Settlement as set forth in Section 5.07(b) above. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying any Units at
or prior to 5:00 p.m. (New York City time) on a Business Day, such day shall be
the "Early Settlement Date" with respect to such Units and if such requirements
are first satisfied after 5:00 p.m. (New York City time) on a Business Day or on
a day that is not a Business Day, the "Early Settlement Date" with respect to
such Units shall be the next succeeding Business Day.

         Upon the receipt of such Certificate and Early Settlement Amount from
the Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 5.06
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) the Purchase Contract Agent has received from such Holder, and
paid to the Company as confirmed in writing by the Company, the related Early
Settlement Amount and (C) all conditions to such Early Settlement have been
satisfied.

         Holders of Treasury Units may only effect Early Settlement pursuant to
this Section 5.07 in integral multiples of 40 Treasury Units.

         Upon Early Settlement of the Purchase Contracts, the rights of the
Holders to receive and the obligation of the Company to pay any accrued and
unpaid Contract Adjustment Payments since the immediately preceding Payment Date
and any future Contract Adjustment Payments with respect to such Purchase
Contracts shall immediately and automatically terminate.

            (c) Upon Early Settlement of Purchase Contracts by a Holder of the
related Units, the Company shall issue, and the Holder shall be entitled to
receive, [_____] shares of Common Stock on account of each Purchase Contract as
to which Early Settlement is effected


                                       46
<PAGE>
(the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in
the same manner and at the same time as the Settlement Rate is adjusted pursuant
to Section 5.04.

            (d) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:

                  (i) the shares of Common Stock issuable upon Early Settlement
         of Purchase Contracts to be issued and delivered, together with payment
         in lieu of any fraction of a share, as provided in Section 5.09; and

                  (ii) the related Notes in the case of Corporate Units, or the
         related Treasury Securities, in the case of Treasury Units, to be
         released from the Pledge by the Collateral Agent and transferred, in
         each case, to the Purchase Contract Agent for delivery to the Holder
         thereof or its designee.

            (e) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Notes or Treasury
Securities, as the case may be, from the Securities Intermediary, as applicable,
the Purchase Contract Agent shall, in accordance with the instructions provided
by the Holder thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Units:

                  (i) transfer to the Holder the Notes or Treasury Securities,
         as the case may be, forming a part of such Units,

                  (ii) deliver to the Holder a certificate or certificates for
         the full number of shares of Common Stock issuable upon such Early
         Settlement, together with payment in lieu of any fraction of a share,
         as provided in Section 5.09, and

                  (iii) if so required under the Securities Act, deliver a
         Prospectus for the shares of Common Stock issuable upon such Early
         Settlement as contemplated by Section 5.07(a).

            (f) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.

            (g) A Holder of a Unit who effects Early Settlement may elect to
have the Notes no longer a part of a Corporate Unit remarketed in accordance
with the provisions of Section 5.02.

            SECTION 5.08 Intentionally Omitted.

            SECTION 5.09 No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued or delivered upon
settlement on the Purchase Contract Settlement Date, or upon Early Settlement or
Cash Merger Early Settlement of any Purchase Contracts. If Certificates
evidencing more than one Purchase


                                       47
<PAGE>

Contract shall be surrendered for settlement at one time by the same Holder, the
number of full shares of Common Stock which shall be delivered upon settlement
shall be computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional share of
Common Stock which would otherwise be deliverable upon settlement of any
Purchase Contracts on the Purchase Contract Settlement Date, or upon Early
Settlement or Cash Merger Early Settlement, the Company, through the Purchase
Contract Agent, shall make a cash payment in respect of such fractional interest
in an amount equal to the percentage of such fractional share times the
Applicable Market Value calculated as if the date of such settlement were the
Purchase Contract Settlement Date. The Company shall provide the Purchase
Contract Agent from time to time with sufficient funds to permit the Purchase
Contract Agent to make all cash payments required by this Section 5.09 in a
timely manner.

            SECTION 5.10 Charges and Taxes. The Company will pay all stock
transfer and similar taxes attributable to the initial issuance and delivery of
the shares of Common Stock pursuant to the Purchase Contracts; provided,
however, that the Company shall not be required to pay any such tax or taxes
which may be payable in respect of any exchange of or substitution for a
Certificate evidencing a Unit or any issuance of a share of Common Stock in a
name other than that of the registered Holder of a Certificate surrendered in
respect of the Units evidenced thereby, other than in the name of the Purchase
Contract Agent, as custodian for such Holder, and the Company shall not be
required to issue or deliver such share certificates or Certificates unless or
until the Person or Persons requesting the transfer or issuance thereof shall
have paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

            SECTION 5.11 Contract Adjustment Payments.

            (a) Subject to Section 5.11(d), the Company shall pay, on each
Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name a Certificate is registered at the
close of business on the Record Date relating to such Payment Date. The Contract
Adjustment Payments will be payable at the office of the Purchase Contract Agent
in the Borough of Manhattan, New York City maintained for that purpose. If the
book-entry system for the Units has been terminated, the Contract Adjustment
Payments will be payable, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address as it appears on
the Security Register, or by wire transfer to the account designated by such
Person by a prior written notice to the Purchase Contract Agent. If any date on
which Contract Adjustment Payments are to be made is not a Business Day, then
payment of the Contract Adjustment Payments payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest in
respect of any such delay); provided that if such Business Day is in the next
succeeding calendar year, then payment of the Contract Adjustment Payments will
be made on the Business Day immediately preceding such Business Day. Contract
Adjustment Payments payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. The Contract Adjustment Payments will
accrue from the date of issuance of the Purchase Contracts.

                                       48
<PAGE>
            (b) Upon the occurrence of a Termination Event, the Company's
obligation to pay future Contract Adjustment Payments (including any accrued
Contract Adjustment Payments and any Deferred Contract Adjustment Payments)
shall cease.

            (c) Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including as a
result of a Collateral Substitution or the recreation of Corporate Units) any
other Certificate shall carry the right to accrued and unpaid Contract
Adjustment Payments and Deferred Contract Adjustment Payments, which right was
carried by the Purchase Contracts underlying such other Certificates.

            (d) In the case of any Unit with respect to which Early Settlement
or Cash Merger Early Settlement of the underlying Purchase Contract is effected
on a date that is after any Record Date and prior to or on the next succeeding
Payment Date, Contract Adjustment Payments otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such Early Settlement
or Cash Merger Early Settlement, and such Contract Adjustment Payments shall be
paid to the Person in whose name the Certificate evidencing such Unit is
registered at the close of business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Unit with respect to which Early Settlement or Cash Merger Early Settlement of
the underlying Purchase Contract is effected, future Contract Adjustment
Payments that would otherwise be payable after the Early Settlement Date or Cash
Merger Early Settlement Date with respect to such Purchase Contract shall not be
payable.

            (e) The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.

            (f) In the event (x) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject to the
provisions of Section 5.11(h) below, that (i) a default shall have occurred and
be continuing with respect to the payment of principal, interest or any other
monetary amounts due and payable on any Senior Indebtedness and such default
shall have continued beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness (and the Purchase Contract Agent
shall have received written notice thereof from the Company or one or more
holders of Senior Indebtedness or their representative or representatives or the
trustee or trustees under any indenture pursuant to which any such Senior
Indebtedness may have been issued), or (ii) the maturity of any Senior
Indebtedness shall have been accelerated because of a default in respect of such
Senior Indebtedness (and the Purchase Contract Agent shall have received written
notice thereof from the Company or one or more holders of Senior Indebtedness or
their representative or representatives or the trustee or trustees under any
indenture pursuant to which any such Senior Indebtedness may have been issued),
then:

                  (i) the holders of all Senior Indebtedness shall first be
         entitled to receive, in the case of clause (x) above, payment of all
         amounts due or to become due upon all Senior Indebtedness and, in the
         case of subclauses (i) and (ii) of clause (y) above,

                                       49
<PAGE>
         payment of all amounts due thereon, or provision shall be made for such
         payment in money or money's worth, before the Holders of any of the
         Units are entitled to receive any Contract Adjustment Payments on the
         Purchase Contracts underlying the Units;

                  (ii) any payment by, or distribution of assets of, the Company
         of any kind or character, whether in cash, property or securities, to
         which the Holders of any of the Units would be entitled except for the
         provisions of Section 5.11(e) through (q), including any such payment
         or distribution which may be payable or deliverable by reason of the
         payment of any other indebtedness of the Company being subordinated to
         the payment of such Contract Adjustment Payments on the Purchase
         Contracts underlying the Units, shall be paid or delivered by the
         Person making such payment or distribution, whether a trustee in
         bankruptcy, a receiver or liquidating trustee or otherwise, directly to
         the representative or representatives of the holders of Senior
         Indebtedness or to the trustee or trustees under any indenture under
         which any instruments evidencing any of such Senior Indebtedness may
         have been issued, ratably according to the aggregate amounts remaining
         unpaid on account of such Senior Indebtedness held or represented by
         each, to the extent necessary to make payment in full of all Senior
         Indebtedness remaining unpaid after giving effect to any concurrent
         payment or distribution (or provision therefor) to the holders of such
         Senior Indebtedness, before any payment or distribution is made of such
         Contract Adjustment Payments to the Holders of such Units; and

                  (iii) in the event that, notwithstanding the foregoing, any
         payment by, or distribution of assets of, the Company of any kind or
         character, whether in cash, property or securities, including any such
         payment or distribution which may be payable or deliverable by reason
         of the payment of any other indebtedness of the Company being
         subordinated to the payment of Contract Adjustment Payments on the
         Purchase Contracts underlying the Units, shall be received by the
         Purchase Contract Agent or the Holders of any of the Units when such
         payment or distribution is prohibited pursuant to Section 5.11(e)
         through (q), such payment or distribution shall be paid over to the
         representative or representatives of the holders of Senior Indebtedness
         or to the trustee or trustees under any indenture pursuant to which any
         instruments evidencing any such Senior Indebtedness may have been
         issued, ratably as aforesaid, for application to the payment of all
         Senior Indebtedness remaining unpaid until all such Senior Indebtedness
         shall have been paid in full, after giving effect to any concurrent
         payment or distribution (or provision therefor) to the holders of such
         Senior Indebtedness.

            (g) For purposes of Section 5.11(e) through (q), the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
Person provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in Section 5.11(e) through
(q) with respect to such Contract Adjustment Payments on the Units to the
payment of all Senior Indebtedness which may at the time be outstanding;
provided that (i) the indebtedness or guarantee of indebtedness, as the case may
be, that constitutes Senior Indebtedness is assumed by the Person, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of the Senior Indebtedness are


                                       50
<PAGE>
not, without the consent of each such holder adversely affected thereby, altered
by such reorganization or readjustment;

            (h) Any failure by the Company to make any payment on or perform any
other obligation under Senior Indebtedness, other than any indebtedness incurred
by the Company or assumed or guaranteed, directly or indirectly, by the Company
for money borrowed (or any deferral, renewal, extension or refunding thereof) or
any indebtedness or obligation as to which the provisions of Section 5.11(e)
through (g) shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed, guaranteed or otherwise
created such indebtedness or obligation, shall not be deemed a default or event
of default if (i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Company which is in
full force and effect and is not subject to further review, including a judgment
that has become final by reason of the expiration of the time within which a
party may seek further appeal or review, and (B) in the event a judgment that is
subject to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay of
execution shall have been obtained pending such appeal or review.

            (i) Subject to the irrevocable payment in full of all Senior
Indebtedness, the Holders of the Units shall be subrogated (equally and ratably
with the holders of all obligations of the Company which by their express terms
are subordinated to Senior Indebtedness of the Company to the same extent as
payment of the Contract Adjustment Payments in respect of the Purchase Contracts
underlying the Units is subordinated and which are entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all such Contract Adjustment
Payments owing on the Units shall be paid in full, and as between the Company,
its creditors other than holders of such Senior Indebtedness and the Holders, no
such payment or distribution made to the holders of Senior Indebtedness by
virtue of Section 5.11(e) through (q) that otherwise would have been made to the
Holders shall be deemed to be a payment by the Company on account of such Senior
Indebtedness, it being understood that the provisions of Section 5.11(e) through
(q) are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.

            (j) Nothing contained in Section 5.11(e) through (q) or elsewhere in
this Agreement or in the Units is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders such Contract Adjustment Payments on the Units as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Purchase Contract Agent or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Agreement, subject to the rights, if any, under Section 5.11(e) through
(q), of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.

                                       51
<PAGE>
            (k) Upon payment or distribution of assets of the Company referred
to in Section 5.11(e) through (q), the Purchase Contract Agent and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or Purchase Contract Agent or other
person making any payment or distribution, delivered to the Purchase Contract
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to these Section 5.11(e) through (q).

            (l) The Purchase Contract Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Purchase Contract Agent determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to Section 5.11(e) through (q), the Purchase Contract Agent may request
such Person to furnish evidence to the reasonable satisfaction of the Purchase
Contract Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
Section 5.11(e) through (q), and, if such evidence is not furnished, the
Purchase Contract Agent may defer payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

            (m) Nothing contained in Section 5.11(e) through (q) shall affect
the obligations of the Company to make, or prevent the Company from making,
payment of the Contract Adjustment Payments, except as otherwise provided in
these Section 5.11(e) through (q).

            (n) Each Holder of Units, by its acceptance thereof, authorizes and
directs the Purchase Contract Agent on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in Section
5.11 (e) through (q) and appoints the Purchase Contract Agent its
attorney-in-fact, as the case may be, for any and all such purposes.

            (o) The Company shall give prompt written notice to the Purchase
Contract Agent of any fact known to the Company that would prohibit the making
of any payment of moneys to or by the Purchase Contract Agent in respect of the
Units pursuant to the provisions of this Section. Notwithstanding the provisions
of Section 5.11(e) through (q) or any other provisions of this Agreement, the
Purchase Contract Agent shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of moneys to or by the
Purchase Contract Agent, or the taking of any other action by the Purchase
Contract Agent, unless and until the Purchase Contract Agent shall have received
written notice thereof mailed or delivered to the Purchase Contract Agent at its
Corporate Trust Office from the Company, any Holder, or the holder or
representative of any Senior Indebtedness; provided that if at least two
Business Days prior to the date upon which by the terms hereof any such moneys
may become

                                       52
<PAGE>
payable for any purpose, the Purchase Contract Agent shall not have received
with respect to such moneys the notice provided for in this Section, then,
anything herein contained to the contrary notwithstanding, the Purchase Contract
Agent shall have full power and authority to receive such moneys and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to or on or after such date.

            (p) The Purchase Contract Agent in its individual capacity shall be
entitled to all the rights set forth in this Section with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness and nothing in this Agreement shall deprive the Purchase
Contract Agent of any of its rights as such holder.

            (q) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.

            (r) Nothing in this Section 5.11 shall apply to claims of, or
payments to, the Purchase Contract Agent under or pursuant to Section 7.07.

            (s) With respect to the holders of Senior Indebtedness, (i) the
duties and obligations of the Purchase Contract Agent shall be determined solely
by the express provisions of this Agreement; (ii) the Purchase Contract Agent
shall not be liable to any such holders if it shall, acting in good faith,
mistakenly pay over or distribute to the Holders or to the Company or any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Section 5.11 or otherwise; (iii) no implied
covenants or obligations shall be read into this Agreement against the Purchase
Contract Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a
fiduciary as to such holders.

            SECTION 5.12 Deferral of Contract Adjustment Payments. (a) The
Company has the right at any time, and from time to time, to defer payment of
all or part of the Contract Adjustment Payments in respect of each Purchase
Contract by extending the period for payment of Contract Adjustment Payments to
any subsequent Payment Date (an "Extension Period"), but not beyond the Purchase
Contract Settlement Date (or, with respect to Purchase Contracts for which an
effective Early Settlement or Cash Merger Early Settlement has occurred, the
Early Settlement Date or Cash Merger Early Settlement Date, as the case may be).
Prior to the expiration of any Extension Period, the Company may further extend
such Extension Period to any subsequent Payment Date, but not beyond the
Purchase Contract Settlement Date (or any applicable Early Settlement Date or
Cash Merger Early Settlement Date).

         If the Company so elects to defer Contract Adjustment Payments, the
Company shall pay additional Contract Adjustment Payments on such deferred
installments of Contract Adjustment Payments at a rate equal to [__]% per annum,
compounding on each succeeding Payment Date, until such deferred installments
are paid in full (such deferred installments of Contract Adjustment Payments
together with the accrued additional Contract Adjustment Payments thereon, being
referred to herein as the "Deferred Contract Adjustment Payments").

                                       53
<PAGE>
         At the end of each Extension Period, including as the same may be
extended as provided above, or, in the event of an effective Early Settlement or
Cash Merger Early Settlement, on the Early Settlement Date or Cash Merger Early
Settlement Date, as the case may be, the Company shall pay all Deferred Contract
Adjustment Payments then due in the manner set forth in Section 5.11(a) (in the
case of the end of an Extension Period), in the manner set forth in Section
5.07(b) (in the case of an Early Settlement) or in the manner set forth in
Section 5.04(b)(2) (in the case of a Cash Merger Early Settlement) to the extent
such amounts are not deducted from the amount otherwise payable by the Holder in
the case of a Cash Settlement, any Early Settlement or any Cash Merger Early
Settlement. In the event of an Early Settlement, the Company shall pay all
Deferred Contract Adjustment Payments due on the Purchase Contracts being
settled early through the Payment Date immediately preceding the applicable
Early Settlement Date. In the event of a Cash Merger Early Settlement, the
Company shall pay all Deferred Contract Adjustment Payments due on the Purchase
Contracts being settled on the Cash Merger Early Settlement Date to but
excluding such Cash Merger Early Settlement Date.

         Upon termination of any Extension Period and the payment of all
Deferred Contract Adjustment Payments and all accrued and unpaid Contract
Adjustment Payments then due, the Company may commence a new Extension Period,
provided that such Extension Period, together with all extensions thereof, may
not extend beyond the Purchase Contract Settlement Date (or any applicable Early
Settlement Date or Cash Merger Early Settlement Date). Except in the case of an
Early Settlement or Cash Merger Early Settlement, no Contract Adjustment
Payments shall be due and payable during an Extension Period except at the end
thereof, except that prior to the end of such Extension Period, the Company, at
its option, may prepay on any Payment Date all or any portion of the Deferred
Contract Adjustment Payments accrued during the then elapsed portion of such
Extension Period.

            (b) The Company shall give written notice to the Purchase Contract
Agent (and the Purchase Contract Agent shall give notice thereof to Holders of
Purchase Contracts) of its election to extend any period for the payment of
Contract Adjustment Payments, the expected length of any such Extension Period
and any extension of any Extension Period, at least five Business Days before
the earlier of (i) the Record Date for the Payment Date on which Contract
Adjustment Payments would have been payable except for the election to begin or
extend the Extension Period or (ii) the date the Purchase Contract Agent is
required to give notice to any securities exchange or to Holders of Purchase
Contracts of such Record Date or such Payment Date.

            (c) The Company shall give written notice to the Purchase Contract
Agent (and the Purchase Contract Agent shall give notice thereof to Holders of
Purchase Contracts) of the end of an Extension Period or its election to pay any
portion of the Deferred Contract Adjustment Payments on a payment date prior to
the end of an Extension Period, at least five Business Days before the earlier
of (i) the Record Date for the Payment Date on which such Extension Period shall
end or such payment of Deferred Contract Adjustment Payments shall be made or
(ii) the date the Purchase Contract Agent is required to give notice to any
securities exchange or to Holders of Purchase Contracts of such Record Date or
such Payment Date.

            (d) In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until all Deferred Contract
Adjustment Payments have

                                       54
<PAGE>
been paid, the Company shall not, and shall not permit any of its subsidiaries
to, declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock or their capital stock; provided that the Company's subsidiaries
will not be restricted from declaring or paying such dividends, or making such
distributions, to the Company or any of the Company's other subsidiaries as a
result of the foregoing.

            SECTION 5.13 Additional Amounts. (a) All payments made by the
Company under or with respect to the Units (including interest payments payable
on the Notes and Contract Adjustment Payments on the Purchase Contracts that
form such Units) shall be made free and clear of and without withholding or
deduction for or an account of any present or future tax, duty, levy, impost,
assessment or other governmental charge (hereinafter "Taxes") imposed or levied
by or on behalf of the Republic of The Marshall Islands or any jurisdiction from
or through which payment on the Units is made, or any political subdivision
thereof, or by any authority or agency therein or thereof having power to tax (a
"Taxing Jurisdiction"), unless the Company is required to withhold or deduct
Taxes by law or by the interpretation or administration thereof. If the Company
is so required to withhold or deduct any amount of interest for or on account of
Taxes from any payment made under or with respect to the Units, the Company
shall pay such additional amounts of interest ("Additional Amounts") as may be
necessary so that the net amount received by each Holder (including Additional
Amounts) after such withholding or deduction shall not be less than the amount
the Holder would have received if such Taxes had not been withheld or deducted;
provided that the Company shall not pay Additional Amounts in connection with
any Taxes that are imposed due to any of the following ("Excluded Additional
Amounts"):

                  (i) the Holder or Beneficial Owner has some connection with
         the Taxing Jurisdiction other than merely holding the Units or
         receiving payments on the Units (such as citizenship, nationality,
         residence, domicile, or existence of a business, a permanent
         establishment, a dependent agent, a place of business or a place of
         management present or deemed present within the taxing jurisdiction);

                  (ii) any Tax imposed on or measured by net income;

                  (iii) the Holder or Beneficial Owner fails to comply with any
         certification, identification or other reporting requirements
         concerning its nationality, residence, identity or connection with the
         Taxing Jurisdiction, if (A) such compliance is required by applicable
         law, regulation, administrative practice or treaty as a precondition to
         exemption from all or a part of the Tax, (B) the Holder or Beneficial
         Owner is able to comply with such requirements without undue hardship
         and (C) at least 30 calendar days prior to the first payment date with
         respect to which such requirements under the applicable law,
         regulation, administrative practice or treaty shall apply, the Company
         notified such Holder that such Holder shall be required to comply with
         such requirements;

                  (iv) the Holder fails to present (where presentation is
         required) its Unit within 30 calendar days after we have made available
         to the Holder a payment, provided that the Company shall pay Additional
         Amounts which a Holder would have been entitled to had


                                       55
<PAGE>
         the Unit owned by such Holder been present on any day (including the
         last day) within such 30-day period;

                  (v) any estate, inheritance, gift, value added, use or sales
         Taxes or any similar Taxes;

                  (vi) where any Additional Amounts are imposed on a payment on
         the Units to an individual and are required to be made pursuant to any
         European Union Directive on the taxation of savings implementing the
         conclusions of the ECOFIN Council meeting of November 26-27, 2000 or
         any law implementing or complying with, or introduced in order to
         conform, to such Directive; or

                  (vii) where the Holder or Beneficial Owner could avoid any
         Additional Amounts by requesting that a payment on the Units be made
         by, or presenting the relevant Units for payment to, another paying
         agent located in a Member State of the European Union.

         The Company shall also (1) make such withholding or deduction and (2)
remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Company shall furnish to the holders of the
Units, within 30 calendar days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company.

         (b) The Company shall indemnify and hold harmless each Holder for the
amount (other than Excluded Additional Amounts) of (1) any Taxes not withheld or
deducted by the Company and levied or imposed by a Taxing Jurisdiction and paid
by such Holder as a result of payments made under or with respect to the Units,
(2) any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, and (3) any Taxes imposed by a Taxing Jurisdiction with
respect to any reimbursement under clause (1) or (2) of this paragraph.

         At least 30 calendar days prior to each date on which any payment under
or with respect to the Units is due and payable, if the Company is aware that it
will be obligated to pay Additional Amounts with respect to such payment, the
Company shall deliver to the Indenture Trustee and the Purchase Contract Agent
an Officers' Certificate stating the fact that such Additional Amounts shall be
payable, the amounts so payable and such other information necessary to enable
the Indenture Trustee or the Purchase Contract Agent to pay such Additional
Amounts to Holders on the Payment Date. Whenever in the Indenture or the
Purchase Contract Agreement there is mentioned, in any context, the payment of
any amount payable under or with respect to any Unit, such mention shall be
deemed to include mention of the payment of Additional Amounts provided for in
this section to the extent that, in such context, Additional Amounts are, were
or would be payable in respect thereof.

         The Company shall pay any stamp, administrative, court, documentary,
excise or property taxes arising in a Taxing Jurisdiction in connection with the
Additional Amounts and shall indemnify the Holders of the Units for any such
taxes paid by the Holders of the Units.

                                   ARTICLE VI
                                    REMEDIES


                                       56
<PAGE>
            SECTION 6.01 Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock. Each Holder of a
Unit shall have the right, which is absolute and unconditional, (i) subject to
Article Five, to receive each Contract Adjustment Payment due hereunder with
respect to the Purchase Contract comprising part of such Unit on the respective
Payment Date for such Unit and (ii) except upon and following a Termination
Event, to purchase shares of Common Stock pursuant to such Purchase Contract
and, in each such case, to institute suit for the enforcement of any such right
to receive Contract Adjustment Payments and the right to purchase shares of
Common Stock, and such rights shall not be impaired without the consent of such
Holder.

            SECTION 6.02 Restoration of Rights and Remedies. If any Holder has
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company and such Holder shall be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of such Holder shall continue as though no
such proceeding had been instituted.

            SECTION 6.03 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Certificates in Section 3.10(f), no right or remedy herein
conferred upon or reserved to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.

            SECTION 6.04 Delay or Omission Not Waiver. No delay or omission of
any Holder to exercise any right upon a default or remedy upon a default shall
impair any such right or remedy or constitute a waiver of any such right. Every
right and remedy given by this Article or by law to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by such Holders.

            SECTION 6.05 Undertaking for Costs. All parties to this Agreement
agree, and each Holder of a Unit, by its acceptance of such Unit shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Agreement, or in any suit
against the Purchase Contract Agent for any action taken, suffered or omitted by
it as Purchase Contract Agent, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
costs against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; provided
that the provisions of this Section shall not apply to any suit instituted by
the Purchase Contract Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Units, or to
any suit instituted by any Holder for the enforcement of interest on any Notes
or Contract Adjustment Payments on or after the respective Payment Date therefor
in respect of any Unit held by such Holder, or for enforcement


                                       57
<PAGE>
of the right to purchase shares of Common Stock under the Purchase Contracts
constituting part of any Unit held by such Holder.

            SECTION 6.06 Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Purchase Contract Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.

                                  ARTICLE VII
                           THE PURCHASE CONTRACT AGENT

            SECTION 7.01 Certain Duties and Responsibilities.

            (a) The Purchase Contract Agent:

         (1) undertakes to perform, with respect to the Units, such duties and
         only such duties as are specifically set forth in this Agreement, the
         Pledge Agreement and the Remarketing Agreement and no implied covenants
         or obligations shall be read into this Agreement, the Pledge Agreement
         or the Remarketing Agreement against the Purchase Contract Agent; and

         (2) in the absence of bad faith or gross negligence on its part, may,
         with respect to the Units, conclusively rely, as to the truth of the
         statements and the correctness of the opinions expressed therein, upon
         certificates or opinions furnished to the Purchase Contract Agent and
         conforming to the requirements of this Agreement or the Pledge
         Agreement or the Remarketing Agreement, as applicable, but in the case
         of any certificates or opinions which by any provision hereof are
         specifically required to be furnished to the Purchase Contract Agent,
         the Purchase Contract Agent shall be under a duty to examine the same
         to determine whether or not they conform to the requirements of this
         Agreement, the Pledge Agreement or the Remarketing Agreement, as
         applicable (but need not confirm or investigate the accuracy of the
         mathematical calculations or other facts stated therein).

            (b) No provision of this Agreement, the Pledge Agreement or the
Remarketing Agreement shall be construed to relieve the Purchase Contract Agent
from liability for its own grossly negligent action, its own grossly negligent
failure to act, or its own willful misconduct, except that:

         (1) this Section 7.01(b) shall not be construed to limit the effect of
         Section 7.01(a);

         (2) the Purchase Contract Agent shall not be liable for any error of
         judgment made in good faith by a Responsible Officer, unless it shall
         be conclusively determined by a court of competent jurisdiction that
         the Purchase Contract Agent was grossly negligent in ascertaining the
         pertinent facts; and

                                       58
<PAGE>
         (3) no provision of this Agreement or the Pledge Agreement or the
         Remarketing Agreement shall require the Purchase Contract Agent to
         expend or risk its own funds or otherwise incur any financial liability
         in the performance of any of its duties hereunder, or in the exercise
         of any of its rights or powers, if it shall have reasonable grounds for
         believing that repayment of such funds or adequate indemnity against
         such risk or liability is not reasonably assured to it.

            (c) Whether or not therein expressly so provided, every provision of
this Agreement, the Pledge Agreement and the Remarketing Agreement relating to
the conduct or affecting the liability of or affording protection to the
Purchase Contract Agent shall be subject to the provisions of this Section.

            (d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement and the Remarketing Agreement in its capacity as Purchase
Contract Agent.

            SECTION 7.02 Notice of Default. Within 30 days after the occurrence
of any default by the Company hereunder of which a Responsible Officer of the
Purchase Contract Agent has actual knowledge, the Purchase Contract Agent shall
transmit by mail to the Company and the Holders of Units, as their names and
addresses appear in the Security Register, notice of such default hereunder,
unless such default shall have been cured or waived.

            SECTION 7.03 Certain Rights of Purchase Contract Agent. Subject to
the provisions of Section 7.01:

         (1) the Purchase Contract Agent may, in the absence of bad faith,
         conclusively rely and shall be fully protected in acting or refraining
         from acting upon any resolution, certificate, statement, instrument,
         opinion, report, notice, request, direction, consent, order, bond,
         debenture, note, other evidence of indebtedness or other paper or
         document believed by it to be genuine and to have been signed or
         presented by the proper party or parties;

         (2) any request or direction of the Company mentioned herein shall be
         sufficiently evidenced by an Officers' Certificate, Issuer Order or
         Issuer Request, and any resolution of the Board of Directors of the
         Company may be sufficiently evidenced by a Board Resolution;

         (3) whenever in the administration of this Agreement or the Pledge
         Agreement or the Remarketing Agreement, the Purchase Contract Agent
         shall deem it desirable that a matter be proved or established prior to
         taking, suffering or omitting to take any action hereunder or
         thereunder, the Purchase Contract Agent (unless other evidence be
         herein specifically prescribed in this Agreement) may, in the absence
         of bad faith on its part, conclusively rely upon an Officers'
         Certificate of the Company;

         (4) the Purchase Contract Agent may consult with counsel of its
         selection appointed with due care by it hereunder and the advice of
         such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection in respect of any action taken, suffered
         or omitted by it hereunder in good faith and in reliance thereon;

                                       59
<PAGE>
         (5) the Purchase Contract Agent shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, other evidence of
         indebtedness or other paper or document, but the Purchase Contract
         Agent, in its discretion, may make reasonable further inquiry or
         investigation into such facts or matters related to the execution,
         delivery and performance of the Purchase Contracts as it may see fit,
         and, if the Purchase Contract Agent shall determine to make such
         further inquiry or investigation, it shall be entitled to examine the
         relevant books, records and premises of the Company, personally or by
         agent or attorney;

         (6) the Purchase Contract Agent may execute any of the powers hereunder
         or perform any duties hereunder either directly or by or through
         agents, attorneys, custodians or nominees or an Affiliate of the
         Purchase Contract Agent and the Purchase Contract Agent shall not be
         responsible for any misconduct or negligence on the part of any agent,
         attorney, custodian or nominee or an Affiliate of the Purchase Contract
         Agent appointed with due care by it hereunder; provided that the
         appointment of agents pursuant to this paragraph (6) are subject to the
         prior written consent of the Company, which consent shall not be
         unreasonably withheld;

         (7) the Purchase Contract Agent shall be under no obligation to
         exercise any of the rights or powers vested in it by this Agreement at
         the request or direction of any of the Holders pursuant to this
         Agreement, unless such Holders shall have offered to the Purchase
         Contract Agent security or indemnity satisfactory to the Purchase
         Contract Agent against the costs, expenses and liabilities which might
         be incurred by it in compliance with such request or direction;

         (8) the Purchase Contract Agent shall not be liable for any action
         taken, suffered, or omitted to be taken by it in the absence of bad
         faith or gross negligence by it;

         (9) the Purchase Contract Agent shall not be deemed to have notice of
         any adjustment to the Settlement Rate, the occurrence of a Termination
         Event or any default hereunder unless a Responsible Officer of the
         Purchase Contract Agent has actual knowledge thereof or unless written
         notice of any event which is in fact such a default is received by a
         Responsible Officer at the Corporate Trust Office of the Purchase
         Contract Agent, and such notice references the Units and this
         Agreement;

         (10) the Purchase Contract Agent may request that the Company deliver
         an Officers' Certificate setting forth the names of individuals and/or
         titles of officers authorized at such time to take specified actions
         pursuant to this Agreement, which Officers' Certificate may be signed
         by any person authorized to sign an Officers' Certificate, including
         any person specified as so authorized in any such certificate
         previously delivered and not superseded;

         (11) the rights, privileges, protections, immunities and benefits given
         to the Purchase Contract Agent, including, without limitation, its
         right to be indemnified, are extended to, and shall be enforceable by,
         the Purchase Contract Agent in each of its capacities hereunder, and to
         each officer, director, employee of the Purchase Contract Agent and
         each agent, custodian and other Person employed, in any capacity
         whatsoever, by the Purchase

                                       60
<PAGE>
         Contract Agent to act hereunder and shall survive the resignation or
         removal of the Purchase Contract Agent and the termination of this
         Agreement; and

         (12) The Purchase Contract Agent shall not be required to initiate or
         conduct any litigation or collection proceedings hereunder and shall
         have no responsibilities with respect to any default hereunder except
         as expressly set forth herein.

            SECTION 7.04 Not Responsible for Recitals or Issuance of Units. The
recitals contained herein, in the Pledge Agreement, the Remarketing Agreement
and in the Certificates shall be taken as the statements of the Company, and the
Purchase Contract Agent assumes no responsibility for their accuracy or
validity. The Purchase Contract Agent makes no representations as to the
validity or sufficiency of either this Agreement or of the Units, or of the
Pledge Agreement or the Pledge or the Collateral and shall have no
responsibility for perfecting or maintaining the perfection of any security
interest in the Collateral. The Purchase Contract Agent shall not be accountable
for the use or application by the Company of the proceeds in respect of the
Purchase Contracts.

            SECTION 7.05 May Hold Units. Any Security Registrar or any other
agent of the Company, or the Purchase Contract Agent and its Affiliates, in
their individual or any other capacity, may become the owner or pledgee of Units
and may otherwise deal with the Company, the Collateral Agent or any other
Person with the same rights it would have if it were not Security Registrar or
such other agent, or the Purchase Contract Agent. The Company may become the
owner or pledgee of Units.

            SECTION 7.06 Money Held in Custody. Money held by the Purchase
Contract Agent in custody hereunder need not be segregated from the Purchase
Contract Agent's other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder or agreed in writing with the Company.

            SECTION 7.07 Compensation and Reimbursement.

         The Company agrees:

         (1) to pay to the Purchase Contract Agent compensation for all services
         rendered by it hereunder, under the Pledge Agreement and under the
         Remarketing Agreement as the Company and the Purchase Contract Agent
         shall from time to time agree in writing;

         (2) except as otherwise expressly provided for herein, to reimburse the
         Purchase Contract Agent upon its request for all reasonable expenses,
         disbursements and advances incurred or made by the Purchase Contract
         Agent in accordance with any provision of this Agreement, the Pledge
         Agreement and the Remarketing Agreement (including the reasonable
         compensation and the expenses and disbursements of its agents and
         counsel) in connection with the negotiation, preparation, execution and
         delivery and performance of this Agreement, the Pledge Agreement and
         the Remarketing Agreement and any modification, supplement or waiver of
         any of the terms thereof, except any such expense, disbursement or
         advance as may be attributable to its negligence, willful misconduct or
         bad faith; and

                                       61
<PAGE>
         (3) to indemnify and defend the Purchase Contract Agent and any
         predecessor Purchase Contract Agent (and each of its directors,
         officers, agents and employees, collectively, the "Indemnitees") for,
         and to hold each Indemnitee harmless against, any loss, claim, damage,
         fine, penalty, liability or expense (including reasonable fees and
         expenses of counsel) incurred without negligence, willful misconduct or
         bad faith on its part, arising out of or in connection with the
         acceptance or administration of its duties hereunder and under the
         Pledge Agreement and the Remarketing Agreement, including the
         Indemnitees' reasonable costs and expenses of defending themselves
         against any claim (whether asserted by the Company, a Holder or any
         other person) or liability in connection with the exercise or
         performance of any of the Purchase Contract Agent's powers or duties
         hereunder or thereunder.

         The provisions of this Section shall survive the resignation and
removal of the Purchase Contract Agent and the termination of this Agreement.

            SECTION 7.08 Corporate Purchase Contract Agent Required;
Eligibility. There shall at all times be a Purchase Contract Agent hereunder
which shall be a Person organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or being
a member of a bank holding company having) a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and having a corporate trust office in the Borough of Manhattan, New
York City, if there be such a Person in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such Person publishes or files reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published or filed. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

            SECTION 7.09 Resignation and Removal; Appointment of Successor.

            (a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.

            (b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.

                                       62
<PAGE>

            (c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Units delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after such Act, the
Purchase Contract Agent being removed may petition any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.

            (d) If at any time:

         (1) the Purchase Contract Agent fails to comply with Section 310(b) of
         the TIA, as if the Purchase Contract Agent were an indenture trustee
         under an indenture qualified under the TIA, and shall fail to resign
         after written request therefor by the Company or by any Holder who has
         been a bona fide Holder of a Unit for at least six months;

         (2) the Purchase Contract Agent shall cease to be eligible under
         Section 7.08 and shall fail to resign after written request therefor by
         the Company or by any such Holder; or

         (3) the Purchase Contract Agent shall become incapable of acting or
         shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
         Contract Agent or of its property shall be appointed or any public
         officer shall take charge or control of the Purchase Contract Agent or
         of its property or affairs for the purpose of rehabilitation,
         conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Unit for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Purchase Contract Agent and the appointment of a successor Purchase Contract
Agent.

            (e) If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Purchase Contract Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Purchase Contract Agent
shall have been so appointed by the Company and accepted appointment in the
manner required by Section 7.10, any Holder who has been a bona fide Holder of a
Unit for at least six months, on behalf of itself and all others similarly
situated, or the Purchase Contract Agent may petition at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.

            (f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Security Register. Each notice shall include the name of the successor Purchase
Contract Agent and the address of its Corporate Trust Office.

            SECTION 7.10 Acceptance of Appointment by Successor.

                                       63
<PAGE>
            (a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.

            (b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in Section 7.10(a).

            (c) No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be qualified and eligible under this Article Seven.

            SECTION 7.11 Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Purchase Contract Agent, shall be the successor of the
Purchase Contract Agent hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract Agent
may adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Purchase
Contract Agent had itself authenticated and executed such Units.

            SECTION 7.12 Preservation of Information; Communications to Holders.

            (a) The Purchase Contract Agent shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Security Registrar.

            (b) If three or more Holders (herein referred to as "Applicants")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a Unit for a
period of at least six months preceding the date of such application, and such
application states that the Applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Units and is

                                       64
<PAGE>
accompanied by a copy of the form of proxy or other communication which such
Applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Purchase Contract Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.

            SECTION 7.13 No Obligations of Purchase Contract Agent. Except to
the extent otherwise expressly provided in this Agreement, the Purchase Contract
Agent assumes no obligations and shall not be subject to any liability under
this Agreement, the Pledge Agreement, the Remarketing Agreement or any Purchase
Contract in respect of the obligations of the Holder of any Unit thereunder. The
Company agrees, and each Holder of a Certificate, by its acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution of
the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, directors, employees or agents be
liable under this Agreement, the Pledge Agreement or the Remarketing Agreement
to any third party for indirect, incidental, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Purchase Contract Agent
and regardless of the form of action.

            SECTION 7.14 Tax Compliance.

            (a) The Purchase Contract Agent, on its own behalf and on behalf of
the Company, will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
by applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Units or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Units. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.

            (b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any written direction received from the Company with respect
to the execution or certification of any required documentation and the
application of such requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement conclusively
rely on any such direction in accordance with the provisions of Section
7.01(a)(2) hereof.

            (c) The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such request.


                                  ARTICLE VIII
                             SUPPLEMENTAL AGREEMENTS


                                       65
<PAGE>
            SECTION 8.01 Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Purchase Contract Agent, at any time and from time to time,
may enter into one or more agreements supplemental hereto, in form satisfactory
to the Company and the Purchase Contract Agent, to:

         (1) evidence the succession of another Person to the Company, and the
         assumption by any such successor of the covenants of the Company herein
         and in the Certificates;

         (2) evidence and provide for the acceptance of appointment hereunder by
         a successor Purchase Contract Agent;

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

         (4) make provision with respect to the rights of Holders pursuant to
         the requirements of Section 5.04(b); or

         (5) except as provided for in Section 5.04, cure any ambiguity, correct
         or supplement any provisions herein which may be inconsistent with any
         other provisions herein, or make any other provisions with respect to
         such matters or questions arising under this Agreement, provided that
         such action shall not adversely affect the interests of the Holders in
         any material respect.

            SECTION 8.02 Supplemental Agreements with Consent of Holders. (a)
With the consent of the Holders of not less than a majority of the Outstanding
Units voting together as one class, including without limitation the consent of
the Holders obtained in connection with a tender or an exchange offer, by Act of
said Holders delivered to the Company and the Purchase Contract Agent, the
Company, when authorized by a Board Resolution, and the Purchase Contract Agent
may enter into an agreement or agreements supplemental hereto for the purpose of
modifying in any manner the terms of the Purchase Contracts, or the provisions
of this Agreement or the rights of the Holders in respect of the Units;
provided, however, that, except as contemplated herein, no such supplemental
agreement shall, without the unanimous consent of the Holders of each
outstanding Purchase Contract affected thereby,

         (1) change any Payment Date;

         (2) change the amount or the type of Collateral required to be Pledged
         to secure a Holder's obligations under the Purchase Contract, unless
         such change is not adverse to the Holders, impair the right of the
         Holder of any Purchase Contract to receive distributions on the related
         Collateral or otherwise adversely affect the Holder's rights in or to
         such Collateral or adversely alter the rights in or to such Collateral;

         (3) impair the Holders' right to institute suit for the enforcement of
         any Purchase Contract or any Contract Adjustment Payments;

         (4) reduce the number of shares of Common Stock or the amount of any
         other property to be purchased pursuant to any Purchase Contract,
         increase the price to purchase

                                       66
<PAGE>
         shares of Common Stock or any other property upon settlement of any
         Purchase Contract or change the Purchase Contract Settlement Date or
         the right to Early Settlement or Cash Merger Early Settlement or
         otherwise adversely affect the Holder's rights under the Purchase
         Contract;

         (5) reduce any Contract Adjustment Payments or change any place where,
         or the coin or currency in which, any Contract Adjustment Payment is
         payable; or

         (6) reduce the percentage of the outstanding Purchase Contracts the
         consent of whose Holders is required for any modification or amendment
         to the provisions of this Agreement, the Purchase Contracts or the
         Pledge Agreement;

         provided that if any amendment or proposal referred to above would
         adversely affect only the Corporate Units or the Treasury Units, then
         only the affected class of Holders as of the record date for the
         Holders entitled to vote thereon will be entitled to vote on such
         amendment or proposal, and such amendment or proposal shall not be
         effective except with the consent of Holders of not less than a
         majority of such class; and provided, further, that the unanimous
         consent of the Holders of each outstanding Purchase Contract of such
         class affected thereby shall be required to approve any amendment or
         proposal specified in clauses (1) through (6) above.

            (b) It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.

            SECTION 8.03 Execution of Supplemental Agreements. In executing, or
accepting the additional agencies created by, any supplemental agreement
permitted by this Article or the modifications thereby of the agencies created
by this Agreement, the Purchase Contract Agent shall be entitled to receive, and
(subject to Sections 7.01 and 7.03) shall be fully authorized and protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such supplemental agreement is authorized or permitted by this
Agreement and that any and all conditions precedent to the execution and
delivery of such supplemental agreement have been satisfied. The Purchase
Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties, privileges, protections, indemnities, liabilities or immunities under
this Agreement or otherwise.

            SECTION 8.04 Effect of Supplemental Agreements. Upon the execution
of any supplemental agreement under this Article, this Agreement shall be
modified in accordance therewith, and such supplemental agreement shall form a
part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered hereunder, shall be bound thereby.

            SECTION 8.05 Reference to Supplemental Agreements. Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Purchase Contract Agent, bear a notation in form approved by
the Purchase Contract Agent as to any

                                       67
<PAGE>
matter provided for in such supplemental agreement. If the Company shall so
determine, new Certificates so modified as to conform, in the opinion of the
Purchase Contract Agent and the Company, to any such supplemental agreement may
be prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.

                                   ARTICLE IX
              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

            SECTION 9.01 Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions. The Company covenants that it
will not, in a single transaction or series of related transactions,

            (a) consolidate with, convert into, or merge with or into, any other
Person or permit any other Person to consolidate with, convert into, or merge
with or into the Company or

            (b) directly or indirectly sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any Person,

            unless in the case of clauses (a) and (b) of this covenant:

            (1) in a transaction in which the Company does not survive or in
which the Company sells, assigns, transfers, leases, conveys or otherwise
disposes of all or substantially all of its assets, the successor entity to the
Company is organized under (i) the laws of the United States or any State
thereof or the District of Columbia or (ii) the laws of the Republic of The
Marshall Islands and which, in the case of any of the events under subclause (i)
or (ii) shall expressly assume, by a supplemental agreement executed and
delivered to the Purchase Contract Agent, in a form reasonably satisfactory to
the Purchase Contract Agent, all of the Company's obligations, as modified
pursuant to Section 9.02 hereof, under the Purchase Contracts, the Purchase
Contract Agreement, the Pledge Agreement and the Remarketing Agreement;

            (2) immediately before and after giving effect to such transaction,
neither the Company nor any successor entity shall be in default of payment
obligations under the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement and the Remarketing Agreement or in material default in the
performance of any other covenants under such agreements; and

            (3) the Company and the successor Person have delivered to the
Purchase Contract Agent an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance, lease, acquisition or
transfer and such supplemental agreement comply with this Article Nine and that
all conditions precedent herein provided for relating to such transaction have
been complied with.

            SECTION 9.02 Rights and Duties of Successor Person. In case of any
such merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance and upon any such assumption by a successor Person in accordance with
Section 9.01, such successor Person shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as the Company. Such
successor Person thereupon may cause to be signed, and

                                       68
<PAGE>
may issue either in its own name or in the name of the Company, any or all of
the Certificates evidencing Units issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Purchase Contract Agent;
and, upon the order of such successor Person, instead of the Company, and
subject to all the terms, conditions and limitations in this Agreement
prescribed, the Purchase Contract Agent shall authenticate and execute on behalf
of the Holders and deliver any Certificates which previously shall have been
signed and delivered by the officers of the Company to the Purchase Contract
Agent for authentication and execution, and any Certificate evidencing Units
which such successor Person thereafter shall cause to be signed and delivered to
the Purchase Contract Agent for that purpose. All the Certificates issued shall
in all respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.

         In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Units
thereafter to be issued as may be appropriate.


                                    ARTICLE X
                                    COVENANTS

            SECTION 10.01 Performance under Purchase Contracts. The Company
covenants and agrees for the benefit of the Holders from time to time of the
Units that it will duly and punctually perform its obligations under the
Purchase Contracts in accordance with the terms of the Purchase Contracts and
this Agreement.

            SECTION 10.02 Maintenance of Office or Agency. (a) The Company will
maintain in the Borough of Manhattan, New York City an office or agency where
Certificates may be presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts on the Purchase Contract
Settlement Date or upon Early Settlement or Cash Merger Early Settlement and for
transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or recreation of Corporate Units and where notices and
demands to or upon the Company in respect of the Units and this Agreement may be
served. The Company will give prompt written notice to the Purchase Contract
Agent of the location, and any change in the location, of such office or agency.
The Company initially designates the Corporate Trust Office of the Purchase
Contract Agent as such office of the Company. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Purchase Contract Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Purchase Contract Agent as its agent
to receive all such presentations, surrenders, notices and demands.

            (b) The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such

                                       69
<PAGE>
designation or rescission and of any change in the location of any such other
office or agency. The Company hereby designates as the place of payment for the
Units the Corporate Trust Office and appoints the Purchase Contract Agent at its
Corporate Trust Office as paying agent in such city.

            SECTION 10.03 Company to Reserve Common Stock. The Company shall at
all times prior to the Purchase Contract Settlement Date reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock the full number of shares of Common Stock issuable against tender
of payment in respect of all Purchase Contracts constituting a part of the Units
evidenced by Outstanding Certificates.

            SECTION 10.04 Covenants as to Common Stock. The Company covenants
that all shares of Common Stock which may be issued against tender of payment in
respect of any Purchase Contract constituting a part of the Outstanding Units
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable.

            SECTION 10.05 Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120 days after
the end of each fiscal year of the Company (which as of the date hereof is
December 31) ending after the date hereof, an Officers' Certificate, stating
whether or not to the knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.

            SECTION 10.06 ERISA. Each Holder from time to time of the Units that
is a Plan or who used assets of a Plan to purchase Units hereby represents that
either (i) no portion of the assets used by such Holder to acquire the Corporate
Units constitutes assets of the Plan or (ii) the purchase or holding of the
Corporate Units by such purchaser or transferee will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4973 of the Code or
similar violation under any applicable laws.

            SECTION 10.07 Tax Treatment. The Company covenants and agrees, and
by purchasing a Treasury Unit or a Corporate Unit each Holder agrees, for United
States federal, state and local income and franchise tax purposes, to (i) treat
a Holder's acquisition of the Treasury Units or Corporate Units as the
acquisition of the Treasury Securities or Notes, as the case may be, and
Purchase Contracts constituting the Treasury Units or the Corporate Units, as
the case may be, (ii) treat each Holder as the owner of the applicable interest
in the Collateral Account, including the Notes or the Treasury Securities and
(iii) treat each Note as indebtedness of the Company.

                       [SIGNATURES ON THE FOLLOWING PAGE]

                                       70
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.



                                       TEEKAY SHIPPING CORPORATION


                                       By:
                                          --------------------------------------


                                       Name:
                                             -----------------------------------
                                       Title:
                                             -----------------------------------


                                       THE BANK OF NEW YORK,
                                       as Purchase Contract Agent


                                       By:
                                          --------------------------------------


                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------
<PAGE>
                                    EXHIBIT A

                  (FORM OF FACE OF CORPORATE UNIT CERTIFICATE)

[IF THIS CERTIFICATE IS TO BE A GLOBAL CERTIFICATE, INSERT:]

         THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. 1 CUSIP No. [             ]
Number of Corporate Units: [              ]


                           TEEKAY SHIPPING CORPORATION
                                 Corporate Units

This Corporate Units Certificate certifies that [Cede & Co.] [_______] is the
registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only - or such other number of Corporate Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto], which number shall not exceed [5,000,000]. Each Corporate Unit
consists of (i) the beneficial ownership by the Holder of one $25.00 principal
amount Note due May 16, 2006 (the "Note") of Teekay Shipping Corporation, a
corporation duly incorporated and existing under the laws of the Republic of The
Marshall Islands (the "Company"), subject to the Pledge of such Note by such
Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with the Company. All capitalized terms
used herein which are defined in the Purchase Contract Agreement (as defined on
the reverse hereof) have the meaning set forth therein.

                                      A-1
<PAGE>
         Pursuant to the Pledge Agreement, the Note constituting part of each
Corporate Unit evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising part of such Corporate Unit.

         The Purchase Contract Agreement and Pledge Agreement provide that all
payments with respect to any of the Pledged Notes constituting part of the
Corporate Units received by the Securities Intermediary shall be paid by wire
transfer in same day funds (i) in the case of (A) interest on Pledged Notes and
(B) any payments of the principal amount of any Notes that have been released
from the Pledge pursuant to the Pledge Agreement, to the Purchase Contract at an
account designated by the Purchase Contract Agent, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Securities
Intermediary (provided that in the event such payment is received by the
Securities Intermediary on a day that is not a Business Day or after 12:30 p.m.,
New York City time, on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding Business Day) and
(ii) in the case of payments with respect to the principal amount of the Notes,
to the Company on the Purchase Contract Settlement Date (as described herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the Corporate Units of which such
Pledged Notes are a part under the Purchase Contracts forming a part of such
Corporate Units. Interest on the Notes forming part of a Corporate Units
evidenced hereby, which are payable quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year, commencing May 16, 2003 a ("Payment
Date"), shall, subject to receipt thereof by the Purchase Contract Agent from
the Securities Intermediary, be paid to the Person in whose name this Corporate
Units Certificate (or a Predecessor Corporate Units Certificate) is registered
at the close of business on the Record Date for such Payment Date.

         Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on February
16, 2006 (the "Purchase Contract Settlement Date"), at a price equal to $25.00
(the "Stated Amount"), a number of newly issued shares of common stock, par
value $0.001 per share ("Common Stock"), of the Company, equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. The
purchase price (the "Purchase Price") for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall
be paid on the Purchase Contract Settlement Date by application of (i) cash
received from a Holder or (ii) payment received in respect of the Notes pledged
to secure the obligations under such Purchase Contract of the Holder of the
Corporate Units of which such Purchase Contract is a part.

         Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Corporate Units as an acquisition of the Notes
and Purchase Contracts constituting the Corporate Units, (ii) treat itself as
owner of the applicable interest in the Collateral Account, including the Notes
and (iii) treat each Note as indebtedness of the Company.

                                      A-2
<PAGE>
         The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Corporate Unit evidenced hereby, an amount
(the "Contract Adjustment Payments") equal to [___]% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Corporate Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.

         Interest on the Notes and the Contract Adjustment Payments will be
payable at the office of the Purchase Contract Agent in New York City. If the
book-entry system for the Corporate Units has been terminated, the Contract
Adjustment Payments will be payable, at the option of the Company, by check
mailed to the address of the Person entitled thereto at such Person's address as
it appears on the Security Register, or by wire transfer to the account
designated by such Person by a prior written notice to the Purchase Contract
Agent.

         Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Corporate Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.


                                      A-3
<PAGE>
         IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.

                                        TEEKAY SHIPPING CORPORATION


                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------


HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts)


                                        By: THE BANK OF NEW YORK,
                                        not individually but solely as
                                        Attorney-in-Fact of such Holder


                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------

Dated:


                                      A-4
<PAGE>


                          CERTIFICATE OF AUTHENTICATION
                           OF PURCHASE CONTRACT AGENT


         This is one of the Corporate Units Certificates referred to in the
within mentioned Purchase Contract Agreement.


                                        By: THE BANK OF NEW YORK, as
                                        Purchase Contract Agent


                                        By:
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------


Dated:


                                      A-5
<PAGE>
                 (FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)


         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of February [_], 2003 (as may be supplemented from
time to time, the ("Purchase Contract Agreement"), between the Company and The
Bank of New York, as Purchase Contract Agent (including its successors
hereunder, the ("Purchase Contract Agent"), to which Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Corporate Units Certificates are, and
are to be, executed and delivered.

         Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock equal to the Settlement
Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The ("Settlement Rate") is equal to:

         (1) if the Adjusted Applicable Market Value (as defined below) is
         greater than or equal to $[_____] (the "Threshold Appreciation Price"),
         [_____] shares of Common Stock per Purchase Contract;

         (2) if the Adjusted Applicable Market Value is less than the Threshold
         Appreciation Price but greater than $[_____] (the "Reference Price"),
         the number of shares of Common Stock per Purchase Contact having a
         value equal to the Stated Amount divided by the Adjusted Applicable
         Market Value; and

         (3) if the Adjusted Applicable Market Value is less than or equal to
         the Reference Price, [_____] shares of Common Stock per Purchase
         Contract;

in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).

         No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.

         Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).

         The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date subject to adjustments set forth under Section 5.04 of the Purchase
Contract Agreement.


                                      A-6

<PAGE>

         The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.

         The "Closing Price" per share of Common Stock on any date of
determination means:

         (1) the closing sale price as of the close of the principal trading
         session (or, if no closing price is reported, the last reported sale
         price) per share on the New York Stock Exchange, Inc. (the "NYSE") on
         such date;

         (2) if Common Stock is not listed for trading on the NYSE on any such
         date, the closing sale price (or, if no closing price is reported, the
         last reported sale price) per share as reported in the composite
         transactions for the principal United States national or regional
         securities exchange on which Common Stock is so listed;

         (3) if Common Stock is not so listed on a United States national or
         regional securities exchange, the last closing sale price per share as
         reported by The Nasdaq Stock Market, Inc.;

         (4) if Common Stock is not so reported, the last quoted bid price for
         Common Stock in the over-the-counter market as reported by the National
         Quotation Bureau or similar organization; or

         (5) if such bid price is not available, the market value of Common
         Stock on such date as determined by a nationally recognized independent
         investment banking firm retained for this purpose by the Company.

         A "Trading Day" means a day on which Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of Common
Stock.

         In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate Units Certificate may pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby, by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement or from the proceeds of the


                                      A-7

<PAGE>

Remarketing of the related Pledged Notes or the automatic Put Right. A Holder of
Corporate Units who (1) does not, on or prior to 5:00 p.m. (New York City time)
on the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, notify the Purchase Contract Agent of its intention to effect a Cash
Settlement, or who does so notify the Purchase Contract Agent but fails to make
an effective Cash Settlement prior to 5:00 p.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
or (2) on or prior to 5:00 p.m. (New York City time) on the fifth Business Day
prior to the Purchase Contract Settlement Date, does not make an effective Early
Settlement, shall pay the Purchase Price, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder, for the shares of Common
Stock to be delivered under the related Purchase Contract from the proceeds of
the sale of the related Pledged Notes held by the Collateral Agent unless the
Holder has previously made a Cash Merger Early Settlement. Such sale will be
made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
on the Remarketing Date.

         As provided in the Purchase Contract Agreement, upon the occurrence of
a Failed Remarketing, unless a Holder of a Pledged Note has notified the
Purchase Contract Agent of its intent to effect a Cash Settlement of the
Purchase Contract and delivered the Purchase Price to the Collateral Agent
pursuant to the Purchase Contract Agreement, such Holder shall be deemed to have
exercised such Holder's Put Right and to have elected to pay the Purchase Price
under the Purchase Contract out of a portion of the proceeds from the Put Right
in full satisfaction of such Holder's obligations under the Purchase Contract.
In the event of the Company's failure to pay the Put Price when due, the Company
shall be deemed to have netted such Holder's obligation to pay the Company the
Purchase Price under the Purchase Contracts against the Company's obligations to
pay the Put Price, in full satisfaction of such Holder's obligation under the
Purchase Contracts.

         The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.

         Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Notes. A
Corporate Unit shall thereafter represent the right to receive the Note in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.

         Under the terms of the Pledge Agreement and the Purchase Contract
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Notes, but only to the
extent instructed in writing by the Holders. Upon receipt of notice of any
meeting at which holders of Notes are entitled to vote or upon the solicitation
of consents, waivers or proxies of holders of Notes, the Purchase Contract Agent
shall, as soon as practicable thereafter, mail to the Corporate Units Holders a
notice:


                                      A-8

<PAGE>

         (1) containing such information as is contained in the notice or
         solicitation;

         (2) stating that each Corporate Units Holder on the record date set by
         the Purchase Contract Agent therefor (which, to the extent possible,
         shall be the same date as the record date for determining the holders
         of Notes entitled to vote) shall be entitled to instruct the Purchase
         Contract Agent as to the exercise of the voting rights pertaining to
         the Notes constituting a part of such Holder's Corporate Units; and

         (3)  stating the manner in which such instructions may be given.

         Upon the written request of the Corporate Units Holders on such record
date, received by the Purchase Contract Agent at least six days prior to such
meeting, the Purchase Contract Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum aggregate principal amount of Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Purchase Contract Agent
shall abstain from voting the Note evidenced by such Corporate Unit.

         The Corporate Units Certificates are issuable only in registered form
and only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Units Certificate will be registered and
Corporate Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute a Treasury Security for a Note, thereby creating Treasury Units,
shall be responsible for any fees or expenses payable in connection therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying a Corporate Units remains in effect, such Corporate
Units shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Corporate Units in respect of the Notes and
Purchase Contract constituting such Corporate Units may be transferred and
exchanged only as a Corporate Unit.

         Subject to the conditions set forth in the Purchase Contract Agreement,
the Holder of corporate Units may substitute, at anytime prior to 5:00 p.m. (New
York city time) on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, for the Pledged Notes securing such Holder's
obligations under the related Purchase Contracts, Treasury Securities in an
aggregate principal amount at maturity equal to the aggregate principal amount
of the Pledged Notes in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral Substitution,
each Unit for which such Pledged Treasury Securities secures the Holder's
obligation under the Purchase Contract shall be referred to as a ("Treasury
Unit"). A Holder may make such Collateral Substitution only in integral
multiples of 40 Corporate Units for 40 Treasury Units.

         The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Corporate Units


                                      A-9

<PAGE>

Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments
will be payable at the office of the Purchase Contract Agent in New York City.
If the book-entry system for the Corporate Units has been terminated, the
Contract Adjustment Payments will be payable, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Security Register, or by wire transfer to the
account designated by such Person by a prior written notice to the Purchase
Contract Agent.

         The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be) as set forth in the
Purchase Contract Agreement. If the Company so elects to defer Contract
Adjustment Payments, the Company shall pay additional Contract Adjustment
Payments on such deferred installments of Contract Adjustment Payments at a rate
equal to [___]% per annum, compounding on each succeeding Payment Date, until
such deferred installments are paid. In the event that the Company elects to
defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be), each Holder will receive
on the Purchase Contract Settlement Date, Early Settlement Date or Cash Merger
Early Settlement Date, as applicable, the Deferred Contract Adjustment Payments
to the extent such fees are not deducted from the Settlement Price in the case
of a Cash Settlement or any Early Settlement or Cash Merger Early Settlement as
set forth in the Purchase Contract Agreement.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice of the Termination Event to the Purchase Contract
Agent, the Collateral Agent and the Holders, at their addresses as they appear
in the Security Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Notes from the Pledge in accordance with
the provisions of the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Units may be settled early at any time prior to 5:00 p.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date ("Early Settlement") as provided in the Purchase Contract
Agreement. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contract evidenced by this Certificate, the Holder of
this Corporate Units Certificate shall deliver to the Purchase Contract Agent at
the Corporate Trust Office an Election to Settle Early form set forth below duly
completed and accompanied by payment in the form of immediately available funds
payable to the order of the Company in an amount (the "Early Settlement Amount")
equal to:


                                      A-10

<PAGE>

              (i) the sum of (A) the product of (I) the Stated Amount times
         (II) the number of Purchase Contracts with respect to which the Holder
         has elected to effect Early Settlement, plus (B) if such delivery is
         made with respect to any Purchase Contracts during the period from the
         close of business on any Record Date next preceding any Payment Date
         to the opening of business on such Payment Date, an amount equal to
         the Contract Adjustment Payments (including any Deferred Contract
         Adjustment Payments) payable on such Payment Date with respect to such
         Purchase Contracts.

         Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Notes shall be released from the Pledge as provided in the
Pledge Agreement and the Holder shall be entitled to receive a number of shares
of Common Stock on account of each Purchase Contract forming part of a Corporate
Unit as to which Early Settlement is effected equal to [_____] shares of Common
Stock per Purchase Contract (the "Early Settlement Rate"). The Early Settlement
Rate shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in Section 5.04 of the Purchase Contract Agreement.

         Upon the occurrence of a Cash Merger, a Holder of Corporate Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Corporate Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Corporate Units, the Pledged Notes shall be released from
the Pledge as provided in the Pledge Agreement.

         Upon registration of transfer of this Corporate Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Corporate Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.

         The Holder of this Corporate Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Corporate Units evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Purchase Contract Agent to enter into and perform the Purchase
Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Notes pursuant to the Pledge
Agreement. The Holder further covenants and agrees that, to the extent and in
the manner provided in the Purchase Contract Agreement and the Pledge Agreement,
but subject to the terms thereof, payments with respect to the aggregate
principal amount of the Pledged Notes on the Purchase Contract Settlement Date
shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.


                                      A-11

<PAGE>

         Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

         The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflicts of law provisions thereof.

         Prior to due presentment of this Certificate for registration of
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Corporate Units Certificate is registered as the owner of the
Corporate Units evidenced hereby for the purpose of receiving payments of
interest payable on the Notes, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.

         A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.









                                      A-12

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM: as tenants in common

UNIF GIFT MIN ACT:___________________       Custodian _______________________
                        (cust)                               (minor)

                        Under Uniform Gifts to Minors Act of ________________

TENANT:  as tenants by the entireties

JT TEN:  as joint tenants with right of survivorship and not as tenants in
common Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

(Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Corporate Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Corporate Units Certificates on the books of Teekay Shipping Corporation,
with full power of substitution in the premises.


Dated: _______________                Signature: _______________________________

                                      NOTICE: The signature to this assignment
                                      must correspond with the name as it
                                      appears upon the face of the within
                                      Corporate Units Certificates in every
                                      particular, without alteration or
                                      enlargement or any change whatsoever.

                                      Signature: _______________________________

                                      Guarantee: _______________________________



                                     A-13

<PAGE>

                             SETTLEMENT INSTRUCTIONS

The undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon settlement on or after the Purchase Contract Settlement Date of
the Purchase Contracts underlying the number of Corporate Units evidenced by
this Corporate Units Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.

Dated: ________
                                        ----------------------------------------
                                        Signature


                                        Signature Guarantee:


                                        ----------------------------------------
                                        (if assigned to another person)

If shares are to be registered in the name
of and delivered to a Registered Holder
Person other than the Holder, please (i)
print such Person's name and address and
(ii) provide a guarantee of your
signature:


Please print name and address of Registered Holder:

Name:                                   Name:
      ------------------------------         -----------------------------------

Address:                                Address:
         ---------------------------             -------------------------------

Social Security or other
Taxpayer Identification
Number, if any__________________________________________


                                      A-14

<PAGE>

              ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT

         The undersigned Holder of this Corporate Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement following a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts underlying the number
of Corporate Units evidenced by this Corporate Units Certificate specified
below. The undersigned Holder directs that a certificate for shares of Common
Stock or other securities deliverable upon such [Early Settlement] [Cash Merger
Early Settlement] be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Corporate Units Certificate
representing any Corporate Units evidenced hereby as to which [Early Settlement]
[Cash Merger Early Settlement] of the related Purchase Contracts is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. Pledged Notes deliverable upon such
[Early Settlement] [Cash Merger Early Settlement] will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.

Dated:
       ---------------                  ----------------------------------------
                                                     Signature

Signature Guarantee: ____________________________

Number of Units evidenced hereby as to which [Early Settlement] [Cash Merger
Early Settlement] of the related Purchase Contracts is being elected:

If shares of Common Stock or Corporate
Units Certificates are to be registered in
the name of and delivered to and Pledged
Notes are to be transferred to a Person
other than the Holder, please print such
Person's name and address:

Registered Holder:

Name:                                     Name:
      --------------------------------          --------------------------------

Address:                                  Address:
         -----------------------------             -----------------------------

Social Security or other
Taxpayer Identification
Number, if any _______________________________________

Transfer Instructions for Pledged Notes transferable upon [Early Settlement]
[Cash Merger Early Settlement] or a Termination Event:


                                      A-15
<PAGE>


                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The initial number of Corporate Units of this Global Certificate is [______].
The following increase or decreases in this Global Certificate have been made:

<TABLE>
<CAPTION>
  Amount of increase in       Amount of decrease in    Number of Corporate Units
Number of corporate Units      Number of Corporate      evidenced by this Global    Signature of authorized
 evidenced by the Global     Units evidenced by the    Certificate following such    Signatory of Purchase
       Certificate             Global Certificate         decrease or increase           Contract Agent
- -------------------------    ----------------------    --------------------------   ------------------------
<S>                          <C>                       <C>                          <C>






</TABLE>






                                      A-16

<PAGE>

                                    EXHIBIT B

                   (FORM OF FACE OF TREASURY UNIT CERTIFICATE)

[IF THIS CERTIFICATE IS TO BE A GLOBAL CERTIFICATE, INSERT:]

THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. 1 CUSIP No. ______________
Number of Treasury Units: 0

                           Teekay Shipping Corporation
                                 Treasury Units

         This Treasury Units Certificate certifies that [Cede & Co.]
[__________________] is the registered Holder of the number of Treasury Units
set forth above [For inclusion in Global Certificates only - or such other
number of Treasury Units as is reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto], which number shall not exceed
[________]. Each Treasury Unit consists of (i) a 1/40th undivided beneficial
ownership interest of a Treasury Security having a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Teekay Shipping Corporation, a
corporation duly organized and existing under the laws of the Republic of The
Marshall Islands (the "Company"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement (as defined on the reverse hereof)
have the meaning set forth therein.


                                      B-1

<PAGE>

         Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising part of such Treasury Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Treasury Units
Certificate to purchase, and the Company, to sell, on February 16, 2006 (the
"Purchase Contract Settlement Date"), at a price equal to $25.00 (the "Stated
Amount"), a number of newly issued shares of common stock, par value $0.001 per
share ("Common Stock"), of the Company, equal to the Settlement Rate, unless
prior to or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event, an Early Settlement or a Cash Merger Early Settlement with
respect to such Purchase Contract, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of the proceeds from the
Treasury Securities at maturity pledged to secure the obligations of the Holder
under such Purchase Contract of the Treasury Units of which such Purchase
Contract is a part.

         Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Treasury Units as an acquisition of the Treasury
Securities and Purchase Contracts constituting the Treasury Units and (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Treasury Securities.

         The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Treasury Unit evidenced hereby, an amount
(the "Contract Adjustment Payments") equal to [____]% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Treasury Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.

         Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the
Corporate Units has been terminated, the Contract Adjustment Payments will be
payable, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Security
Register, or by wire transfer to the account designated by such Person by a
prior written notice to the Purchase Contract Agent.

         Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Treasury Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.


                                      B-2

<PAGE>

IN WITNESS WHEREOF, the Company and the Holder specified above have caused this
instrument to be duly executed.

                                        Teekay Shipping Corporation


                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts)

                                        By: THE BANK OF NEW YORK,
                                        not individually but solely as
                                        Attorney-in-Fact of such Holder


                                        By:
                                            ------------------------------------
                                                    Authorized Officer
Dated:




                                      B-3

<PAGE>


                        CERTIFICATE OF AUTHENTICATION OF
                             PURCHASE CONTRACT AGENT

 This is one of the Treasury Units referred to in the within-mentioned Purchase
Contract Agreement.

                                        By: THE BANK OF NEW YORK,
                                        as Purchase Contract Agent


                                        By:
                                            ------------------------------------
                                                     Authorized Officer

Dated:


                                      B-4

<PAGE>

                     (REVERSE OF TREASURY UNIT CERTIFICATE)

         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of February __, 2003 (as such may be supplemented
from time to time, the "Purchase Contract Agreement") between the Company and
The Bank of New York, as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury Units Certificates are, and
are to be, executed and delivered.

         Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of newly issued shares of Common Stock equal to the Settlement
Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "Settlement Rate" is equal to:

         (1) if the Adjusted Applicable Market Value (as defined below) is
         greater than or equal to $[______] (the "Threshold Appreciation
         Price"), [_____] shares of Common Stock per Purchase Contract;

         (2) if the Adjusted Applicable Market Value is less than the Threshold
         Appreciation Price but greater than $[_____] (the "Reference Price"),
         the number of shares of Common Stock per Purchase Contact having a
         value equal to the Stated Amount divided by the Adjusted Applicable
         Market Value; and

         (3) if the Adjusted Applicable Market Value is less than or equal to
         the Reference Price, [______] shares of Common Stock per Purchase
         Contract;

         in each case subject to adjustment as provided in the Purchase Contract
         Agreement (and in each case rounded upward or downward to the nearest
         1/10,000th of a share).

         No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.

         Each Purchase Contract evidenced hereby that is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).

         The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.


                                      B-5

<PAGE>

         The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.

         The "Closing Price" per share of Common Stock on any date of
determination means the:

         (1) closing sale price as of the close of the principal trading session
         (or, if no closing price is reported, the last reported sale price) per
         share on the New York Stock Exchange, Inc. (the "NYSE") on such date;

         (2) if the Common Stock is not listed for trading on the NYSE on any
         such date, the closing sale price (or, if no closing price is reported,
         the last reported sale price) per share as reported in the composite
         transactions for the principal United States national or regional
         securities exchange on which the Common Stock is so listed;

         (3) if the Common Stock is not so listed on a United States national or
         regional securities exchange, the last closing sale price per share as
         reported by The Nasdaq Stock Market, Inc.;

         (4) if the Common Stock is not so reported, the last quoted bid price
         for the Common Stock in the over-the-counter market as reported by the
         National Quotation Bureau or similar organization; or

         (5) if such bid price is not available, the market value of the Common
         Stock on such date as determined by a nationally recognized independent
         investment banking firm retained for this purpose by the Company.

         A "Trading Day" means a day on which the Common Stock (1) is not
         suspended from trading on any national or regional securities exchange
         or association or over-the-counter market at the close of business and
         (2) has traded at least once on the national or regional securities
         exchange or association or over-the-counter market that is the primary
         market for the trading of the Common Stock.

         In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Purchase Price for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement of each such Purchase


                                      B-6

<PAGE>

Contract or by applying a principal amount of the Pledged Treasury Securities
underlying such Holder's Treasury Unit equal to the Stated Amount of such
Purchase Contract to the purchase of the Common Stock. A Holder of Treasury
Units who on or prior to 5:00 p.m. (New York City time) on the fifth Business
Day prior to the Purchase Contract Settlement Date, does not make an effective
Early Settlement shall pay the Purchase Price, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder, for the shares of Common
Stock to be issued under the related Purchase Contract from the proceeds of the
Pledged Treasury Securities.

         The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.

         The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be) as set forth in the
Purchase Contract Agreement. If the Company so elects to defer Contract
Adjustment Payments, the Company shall pay additional Contract Adjustment
Payments on such deferred installments of Contract Adjustment Payments at a rate
equal to [ ]% per annum, compounding on each succeeding Payment Date, until such
deferred installments are paid. In the event that the Company elects to defer
the payment of Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date (or, in the event of an effective Early
Settlement or Cash Merger Early Settlement, the Early Settlement Date or Cash
Merger Early Settlement Date, as the case may be), each Holder will receive on
the Purchase Contract Settlement Date, Early Settlement Date or Cash Merger
Early Settlement Date, as applicable, the aggregate amount of Deferred Contract
Adjustment Payments to the extent such fees are not deducted from the Settlement
Price in the case of a Cash Settlement or any Early Settlement or Cash Merger
Early Settlement as set forth in the Purchase Contract Agreement.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Treasury Unit. A Treasury Unit shall
thereafter represent the right to receive the Proceeds of the Treasury Security
forming a part of such Treasury Unit, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.

         The Treasury Units Certificates are issuable only in registered form
and only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged


                                      B-7

<PAGE>

as provided in the Purchase Contract Agreement. The Security Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange, but
the Company and the Purchase Contract Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. A Holder who elects to substitute Notes, for Treasury Securities,
thereby recreating Corporate Units, shall be responsible for any fees or
expenses associated therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a Treasury Unit
remains in effect, such Treasury Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Treasury
Unit in respect of the Treasury Security and the Purchase Contract constituting
such Treasury Unit may be transferred and exchanged only as a Treasury Unit.

         A Holder of Treasury Units may recreate, at any time prior to 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, Corporate Units by delivering to the
Securities Intermediary Notes with an aggregate principal amount, equal to the
aggregate principal amount at maturity of the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such substitution, the Holder's Units shall be referred to as a "Corporate
Unit". Any such creation of Corporate Units may be effected only in multiples of
40 Treasury Units for 40 Corporate Units.

         The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Holder, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Security Register.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Treasury Unit shall thereafter
represent the right to receive the interest in the Treasury Security forming a
part of such Treasury Unit, in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Units may be settled early ("Early Settlement") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contract evidenced by this


                                      B-8

<PAGE>

Certificate, the Holder of this Treasury Units Certificate shall deliver to the
Purchase Contract Agent at the Corporate Trust Office an Election to Settle
Early form set forth below duly completed and accompanied by payment in the form
of immediately available funds payable to the order of the Company in an amount
(the "Early Settlement Amount") equal to:

              (ii) the sum of (A) the product of (I) the Stated Amount times
         (II) the number of Purchase Contracts with respect to which the Holder
         has elected to effect Early Settlement, plus (B) if such delivery is
         made with respect to any Purchase Contracts during the period from the
         close of business on any Record Date next preceding any Payment Date
         to the opening of business on such Payment Date, an amount equal to
         the Contract Adjustment Payments (including any Deferred Contract
         Adjustment Payments) payable on such Payment Date with respect to such
         Purchase Contracts.

         Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities underlying such Units shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive a number of shares of Common Stock on account of each
Purchase Contract forming part of a Treasury Unit as to which Early Settlement
is effected equal to [     ] shares of Common Stock per Purchase Contract (the
"Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in Section 5.04 of the Purchase Contract Agreement.

         Upon the occurrence of a Cash Merger, a Holder of Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Treasury Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Treasury Units, the Pledged Treasury Securities underlying
such Treasury Units shall be released from the Pledge as provided in the Pledge
Agreement.

         Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.

         The Holder of this Treasury Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Treasury Units evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Purchase Contract Agent to enter into and perform the Purchase
Contract


                                      B-9

<PAGE>

Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying this Treasury Units
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged Treasury Securities
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.

         Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

         The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law provisions thereof.

         Prior to due presentment of this Certificate for registration or
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Treasury Units Certificate is registered as the owner of the
Treasury Units evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.

         A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.




                                      B-10

<PAGE>

                                  ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:

TEN COM: as tenants in common

UNIF GIFT MIN ACT: __________________________ Custodian ________________________
                            (cust)                               (minor)

                            Under Uniform Gifts to Minors Act of _______________

TENANT:  as tenants by the entireties

JT TEN: as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

                 (Please insert Social Security or Taxpayer I.D.
                    or other Identifying Number of Assignee)

(Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________ attorney to transfer said
Treasury Units Certificates on the books of Teekay Shipping Corporation, with
full power of substitution in the premises.

Dated:
       ---------------                  ----------------------------------------
                                        Signature

                                        NOTICE: The signature to this assignment
                                        must correspond with the name as it
                                        appears upon the face of the within
                                        Treasury Units Certificates in every
                                        particular, without alteration or
                                        enlargement or any change whatsoever.


                                        Signature Guarantee:
                                                             -------------------


                                      B-11

<PAGE>

                             SETTLEMENT INSTRUCTIONS

The undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon settlement on or after the Purchase Contract Settlement Date of
the Purchase Contracts underlying the number of Treasury Units evidenced by this
Treasury Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated:
       ---------------                  ----------------------------------------
                                        Signature

                                        Signature Guarantee:


                                        ----------------------------------------
                                        (if assigned to another person)

If shares are to be registered in the name
of and delivered to a Person other than
the Holder, please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:

REGISTERED HOLDER

Please print name and address of Registered Holder:

Name:                                     Name:
      --------------------------------          --------------------------------

Address:                                  Address:
         -----------------------------             -----------------------------

Social Security or other
Taxpayer Identification
Number, if any
               -----------------------


                                      B-12

<PAGE>

              ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT

The undersigned Holder of this Treasury Units Certificate hereby irrevocably
exercises the option to effect [Early Settlement] [Cash Merger Early Settlement
upon a Cash Merger] in accordance with the terms of the Purchase Contract
Agreement with respect to the Purchase Contracts underlying the number of
Treasury Units evidenced by this Treasury Units Certificate specified below. The
option to effect [Early Settlement] [Cash Merger Early Settlement] may be
exercised only with respect to Purchase Contracts underlying Treasury Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock or
other securities deliverable upon such [Early Settlement] [Cash Merger Early
Settlement] be registered in the name of, and delivered, together with a check
in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which Cash Merger Early
Settlement of the related Purchase Contracts is not effected, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. Pledged Treasury Securities deliverable upon such [Early
Settlement] [Cash Merger Early Settlement] will be transferred in accordance
with the transfer instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.

Dated:
       ---------------                  ----------------------------------------
                                                      Signature

Signature Guarantee:
                     --------------------

Number of Units evidenced hereby as to which [Early Settlement] [Cash Merger
Early Settlement] of the related Purchase Contracts is being elected:

If shares of Common Stock or Treasury
Units Certificates are to be registered in
the name of and delivered to and Pledged
Treasury Securities are to be transferred
to a Person other than the Holder, please
print such Person's name and address:

REGISTERED HOLDER Please print name and
address of Registered Holder:

Name:                                     Name:
      --------------------------------          --------------------------------

Address:                                  Address:
         -----------------------------             -----------------------------

Social Security or other
Taxpayer Identification


                                      B-13

<PAGE>

Number, if any
               -----------------------

Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:









                                      B-14

<PAGE>

                     [TO BE ATTACHED TO GLOBAL CERTIFICATES]

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The initial number of Treasury Units of this Global Certificate is 0. The
following increases or decreases in this Global Certificate have been made:

<TABLE>
<CAPTION>
  Amount of increase in       Amount of decrease in      Number of Treasury Units
Number of Treasury Units    Number of Treasury Units     evidenced by this Global    Signature of authorized
 evidenced by the Global     evidenced by the Global    Certificate following such    Signatory of Purchase
       Certificate                 Certificate             decrease or increase           Contract Agent
- ------------------------    ------------------------    --------------------------   ------------------------
<S>                         <C>                         <C>                          <C>






</TABLE>




                                      B-15

<PAGE>

                                    EXHIBIT C

                     INSTRUCTION TO PURCHASE CONTRACT AGENT

The Bank of New York
The Purchase Contract Agent
101 Barclay Street
New York, New York  10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division

Re: [_______ Corporate Units] [_______ Treasury Units] of Teekay Shipping
Corporation, a corporation duly incorporated and existing under the laws of the
Republic of The Marshall Islands (the "Company").

         The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate principal amount of [Notes] [Treasury Securities] in
exchange for the [Pledged Notes] [Pledged Treasury Securities] held in the
Collateral Account, in accordance with the Pledge Agreement, dated as of
February __, 2003 (the "Pledge Agreement"; unless otherwise defined herein,
terms defined in the Pledge Agreement are used herein as defined therein),
between you, the Company, the Collateral Agent, the Custodial Agent and the
Securities Intermediary. The undersigned Holder has paid all applicable fees and
expenses relating to such exchange. The undersigned Holder hereby instructs you
to instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Notes] [Pledged Treasury Securities] related to such
[Corporate Units] [Treasury Units].

Date:

                                        Signature
                                                  ------------------------------


                                        Signature Guarantee:
                                                             -------------------

                        Please print name and address of
                               Registered Holder:

Name:                                     Name:
      --------------------------------          --------------------------------

Address:                                  Address:
         -----------------------------             -----------------------------

Social Security or other
Taxpayer Identification
Number, if any
               -----------------------


                                      C-1

<PAGE>

                                    EXHIBIT D

                       NOTICE FROM PURCHASE CONTRACT AGENT
                                   TO HOLDERS
         (Transfer of Collateral upon Occurrence of a Termination Event)


[HOLDER]

Attention:
Telecopy:
          ---------------

Re: [__________ Corporate Units] [______ Treasury Units] of Teekay Shipping
Corporation, a corporation duly incorporated and existing under the laws of the
Republic of The Marshall Islands (the "Company")

         Please refer to the Purchase Contract Agreement, dated as of February
__, 2003 (the "Purchase Contract Agreement"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the holders of Corporate Units and Treasury Units
from time to time.

         We hereby notify you that a Termination Event has occurred and that
[the Notes] [the Treasury Securities] compromising a portion of your ownership
interest in _____ [Corporate Units] [Treasury Units] have been released and are
being held by us for your account pending receipt of transfer instructions with
respect to such [Notes][Treasury Securities] (the "Released Securities").

         Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [Corporate
Units][Treasury Units] effected through book-entry or by delivery to us of your
[Corporate Units Certificate][Treasury Units Certificate], we shall transfer the
Released Securities by book-entry transfer or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any distributions thereon, shall be
held in our name, or a nominee in trust for your benefit, until such time as
such [Corporate Units][Treasury Units] are transferred or your [Corporate Units
Certificate] [Treasury Units Certificate] is surrendered or satisfactory
evidence is provided that such [Corporate Units Certificate][Treasury Units
Certificate] has been destroyed, lost or stolen, together with any
indemnification that we or the Company may require.

Date:                                   By: THE BANK OF NEW YORK,
                                        as the Purchase Contract Agent


                                        Name:
                                              ----------------------------------
                                        Title: Authorized Signatory


                                      D-1

<PAGE>

                                    EXHIBIT E

                            NOTICE TO SETTLE BY CASH

The Bank of New York
101 Barclay Street
New York, New York  10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division

Re: _______ Corporate Units of Teekay Shipping Corporation a corporation duly
incorporated and existing under the laws of the Republic of The Marshall Islands
(the "Company")

         The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Purchase Contract Agreement, dated as of February __,
2003 (the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 5:00 p.m. (New York City time) on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers' check or wire transfer, in immediately
available funds), $______ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company with respect to _____ Purchase Contracts
on the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holder's election to make such Cash Settlement with respect to the Purchase
Contracts related to such Holder's Corporate Units.

Date:
                                        ----------------------------------------
                                        Signature


                                        Signature Guarantee:
                                                             -------------------

Please print name and address of Registered Holder:


                                      E-1

<PAGE>

                                    EXHIBIT F

                       NOTICE FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
              (Settlement of Purchase Contract through Remarketing)

The Bank of New York
The Collateral Agent
101 Barclay Street
New York, New York  10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division

Re: __________ Corporate Units of Teekay Shipping Corporation, a corporation
duly incorporated and existing under the laws of the Republic of The Marshall
Islands (the "Company")

         Please refer to the Purchase Contract Agreement, dated as of February
__, 2003 (the "Purchase Contract Agreement"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Corporate Units from time to time.

         In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on notices of [Early Settlements][Cash Settlements] received from Holders
of Corporate Units as of 5:00 p.m. (New York City time), on the fifth Business
Day immediately preceding the ______ Remarketing Date, we hereby notify you that
an aggregate principal amount of $______ Notes is to be tendered for purchase in
the Remarketing.

Date:                                   By: THE BANK OF NEW YORK,
                                        as the Purchase Contract Agent


                                        Name:
                                              ----------------------------------
                                        Title:  Authorized Signatory


                                      F-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.3
<SEQUENCE>5
<FILENAME>o08866exv4w3.txt
<DESCRIPTION>PLEDGE AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit 4.3

================================================================================







                           TEEKAY SHIPPING CORPORATION

                                       and

                              THE BANK OF NEW YORK,

        as Collateral Agent, Custodial Agent and Securities Intermediary

                                       and

                              THE BANK OF NEW YORK,

                           as Purchase Contract Agent

                                PLEDGE AGREEMENT

                          Dated as of February __, 2003








================================================================================
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
                                                     ARTICLE I
                                                    DEFINITIONS

        Section 1.01.     Definitions............................................................................2

                                                   ARTICLE II
                                                     PLEDGE

        Section 2.01.     Pledge 5
        Section 2.02.     Control; Financing Statement...........................................................5
        Section 2.03.     Termination............................................................................6

                                                   ARTICLE III
                                       DISTRIBUTIONS ON PLEDGED COLLATERAL

        Section 3.01.     Income and Distributions...............................................................6
        Section 3.02.     Principal Payments Following Termination Event.........................................6
        Section 3.03.     Principal Payments Prior to or on Purchase Contract Settlement Date....................6
        Section 3.04.     Payments to Purchase Contract Agent....................................................7
        Section 3.05.     Assets Not Properly Released...........................................................7

                                                   ARTICLE IV
                                                     CONTROL

        Section 4.01.     Establishment of Collateral Account....................................................7
        Section 4.02.     Treatment as Financial Assets..........................................................8
        Section 4.03.     Sole Control by Collateral Agent.......................................................8
        Section 4.04.     Securities Intermediary's Location.....................................................8
        Section 4.05.     No Other Claims........................................................................8
        Section 4.06.     Investment and Release.................................................................8
        Section 4.07.     Statements and Confirmations...........................................................9
        Section 4.08.     Tax Allocations........................................................................9
        Section 4.09.     No Other Agreements....................................................................9
        Section 4.10.     Powers Coupled with an Interest........................................................9
        Section 4.11.     Waiver of Lien; Waiver of Set-off......................................................9

                                                    ARTICLE V
                  INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION OF CORPORATE UNITS

        Section 5.01.     Initial Deposit of Notes...............................................................9
        Section 5.02.     Creation of Treasury Units............................................................10
        Section 5.03.     Recreation of Corporate Units.........................................................10
        Section 5.04.     Termination Event.....................................................................11
        Section 5.05.     Cash Settlement.......................................................................12
        Section 5.06.     Early Settlement and Cash Merger Early Settlement.....................................13
        Section 5.07.     Application of Proceeds in Settlement of Purchase Contracts...........................14

                                                   ARTICLE VI
                                          VOTING RIGHTS - PLEDGED NOTES
</TABLE>


                                       i

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
        Section 6.01.     Voting Rights.........................................................................16

                                                   Article VII
                                               RIGHTS AND REMEDIES

        Section 7.01.     Rights and Remedies of the Collateral Agent...........................................17
        Section 7.02.     Successful Remarketing................................................................18
        Section 7.03.     Substitutions.........................................................................18

                                                  Article VIII
                                    REPRESENTATIONS AND WARRANTIES; COVENANTS

        Section 8.01.     Representations and Warranties........................................................18
        Section 8.02.     Covenants.............................................................................19

                                                   Article IX
                                    THE COLLATERAL AGENT, THE CUSTODIAL AGENT
                                         AND THE SECURITIES INTERMEDIARY

        Section 9.01.     Appointment, Powers and Immunities....................................................19
        Section 9.02.     Instructions of the Company...........................................................20
        Section 9.03.     Reliance by Collateral Agent and Securities Intermediary..............................20
        Section 9.04.     Certain Rights........................................................................21
        Section 9.05.     Merger, Conversion, Consolidation or Succession to Business...........................21
        Section 9.06.     Rights in Other Capacities............................................................21
        Section 9.07.     Non-Reliance on the Collateral Agent, the Custodial Agent and the Securities
                          Intermediary..........................................................................22
        Section 9.08.     Compensation and Indemnity............................................................22
        Section 9.09.     Failure to Act........................................................................22
        Section 9.10.     Resignation of the Collateral Agent, the Custodial Agent and the Securities
                          Intermediary..........................................................................23
        Section 9.11.     Right to Appoint Agent or Advisor.....................................................24
        Section 9.12.     Survival..............................................................................25
        Section 9.13.     Exculpation...........................................................................25

                                                    Article X
                                                    AMENDMENT

        Section 10.01.    Amendment Without Consent of Holders..................................................25
        Section 10.02.    Amendment with Consent of Holders.....................................................25
        Section 10.03.    Execution of Amendments...............................................................26
        Section 10.04.    Effect of Amendments..................................................................26
        Section 10.05.    Reference of Amendments...............................................................27

                                                   Article XI
                                                  MISCELLANEOUS

        Section 11.01.    No Waiver.............................................................................27
        Section 11.02.    Governing Law; Submission to Jurisdiction.............................................27
        Section 11.03.    Notices...............................................................................27
        Section 11.04.    Successors and Assigns................................................................28
        Section 11.05.    Counterparts..........................................................................28
</TABLE>


                                       ii

<PAGE>

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>
        Section 11.06.    Severability..........................................................................28
        Section 11.07.    Expenses, Etc.........................................................................28
        Section 11.08.    Security Interest Absolute............................................................29

Exhibit A       -   Instruction from Purchase Contract Agent to Collateral Agent
                    (Creation of Treasury Units)
Exhibit B       -   Instruction from Collateral Agent to Securities Intermediary
                    (Creation of Treasury Units)
Exhibit C       -   Instruction from Purchase Contract Agent to Collateral Agent
                    (Recreation of Corporate Units)
Exhibit D       -   Instruction from Collateral Agent to Securities Intermediary
                    (Recreation of Corporate Units)
Exhibit E       -   Notice of Cash Settlement from Securities Intermediary to
                    Purchase Contract Agent (Cash Settlement Amounts)
Exhibit F       -   Instruction to Custodial Agent
                    (Regarding Remarketing)
Exhibit G       -   Instruction to Custodial Agent
                    (Withdrawal from Remarketing)
</TABLE>










                                      iii

<PAGE>

                                PLEDGE AGREEMENT

         PLEDGE AGREEMENT dated as of February __, 2003 by and between Teekay
Shipping Corporation, a corporation duly incorporated and existing under the
laws of the Republic of The Marshall Islands (the "Company"), The Bank of New
York, a banking corporation with trust powers, duly organized and existing under
the laws of the State of New York, as collateral agent (in such capacity,
together with its successors in such capacity, the "Collateral Agent"), as
custodial agent (in such capacity, together with its successors in such
capacity, the "Custodial Agent"), as securities intermediary (as defined in
Sections 8-102(a)(14) of the UCC) with respect to the Collateral Account (in
such capacity, together with its successors in such capacity, the "Securities
Intermediary"), and as purchase contract agent and as attorney-in-fact of the
Holders from time to time of the Units (in such capacity, together with its
successors in such capacity, the "Purchase Contract Agent") under the Purchase
Contract Agreement.

         Capitalized terms used herein and not defined herein have the meanings
assigned to them in the Purchase Contract Agreement (as defined herein).

                                    RECITALS

         WHEREAS, the Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which 5,000,000 Corporate Units (or 5,750,000 if the
over-allotment option granted to the Underwriters pursuant to the Underwriting
Agreement is exercised in full) will be issued;

         WHEREAS, each Corporate Unit, at issuance, consists of a unit comprised
of (a) a stock purchase contract (a "Purchase Contract") pursuant to which the
Holder will purchase from the Company on the Purchase Contract Settlement Date,
for an amount equal to $25.00 (the "Stated Amount"), a number of shares of the
Company's common stock, par value $0.001 per share ("Common Stock"), equal to
the Settlement Rate and (b) a Note; and

         WHEREAS, pursuant to the terms of the Purchase Contract Agreement and
the Purchase Contracts, the Holders of the Units have irrevocably authorized the
Purchase Contract Agent, as attorney-in-fact of such Holders, among other
things, to execute and deliver this Agreement on behalf of such Holders and to
grant the pledge provided herein of the Collateral to secure the Obligations.

         NOW, THEREFORE, the Company, the Collateral Agent, the Custodial Agent,
the Securities Intermediary and the Purchase Contract Agent agree as follows:

<PAGE>


                                   ARTICLE I
                                   DEFINITIONS

         Section 1.01. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:

         (a) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision;

         (b) the following terms which are defined in the UCC shall have the
meanings set forth therein: "Certificated Security," "Control," "Financial
Asset," "Entitlement Order," "Securities Account" and "Security Entitlement";
and

         (c) the following terms have the meanings given to them in this Section
1.01(c):

     "Agreement" means this Pledge Agreement, as the same may be amended,
modified or supplemented from time to time.

     "Cash" means any coin or currency of the United States of America as at the
time shall be legal tender for payment of public and private debts.

     "Collateral" means the collective reference to:

         (1) the Collateral Account and all investment property and other
         financial assets from time to time credited to the Collateral Account,
         including, without limitation, (A) the Notes and security entitlements
         relating thereto that are a component of the Corporate Units from time
         to time, (B) any Treasury Securities and security entitlements relating
         thereto delivered from time to time upon creation of Treasury Units in
         accordance with Section 5.02 hereof and (C) payments made by Holders
         pursuant to Section 5.05 hereof;

         (2) all Proceeds of any of the foregoing (whether such Proceeds arise
         before or after the commencement of any proceeding under any applicable
         bankruptcy, insolvency or other similar law, by or against the pledgor
         or with respect to the pledgor); and

         (3) all powers and rights now owned or hereafter acquired under or with
         respect to the Collateral.

     "Collateral Account" means the segregated securities account of the
Collateral Agent, maintained by the Securities Intermediary and designated "The
Bank of New York, as Collateral Agent of Teekay Shipping Corporation, as pledgee
of The Bank of New York, as the Purchase Contract Agent on behalf of and as
attorney-in-fact for the Holders".


                                       2

<PAGE>

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of the Purchase Contract Agreement, and thereafter
"Company" shall mean such successor.

     "Corporate Unit" means the collective rights and obligations of a Holder of
a Corporate Units Certificate in respect of a Note, subject to the Pledge
thereof, and the related Purchase Contract.

     "Corporate Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Corporate Units specified on
such certificate.

     "Obligations" means, with respect to each Holder, all obligations and
liabilities of such Holder under such Holder's Purchase Contract, the Purchase
Contract Agreement and this Agreement or any other document made, delivered or
given in connection herewith or therewith, in each case whether on account of
principal, interest (including, without limitation, interest accruing before and
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder, whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding), fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Company or the
Collateral Agent or the Securities Intermediary that are required to be paid by
the Holder pursuant to the terms of any of the foregoing agreements).

     "Permitted Investments" means any one of the following, in each case
maturing on the Business Day following the date of acquisition:

               (1) any evidence of indebtedness with an original maturity of 365
          days or less issued, or directly and fully guaranteed or insured, by
          the United States of America or any agency or instrumentality thereof
          (provided that the full faith and credit of the United States of
          America is pledged in support of the timely payment thereof or such
          indebtedness constitutes a general obligation of it);

               (2) deposits, certificates of deposit or acceptances with an
          original maturity of 365 days or less of any institution which is a
          member of the Federal Reserve System having combined capital and
          surplus and undivided profits of not less than $500 million as of the
          date of its latest filed report of condition or its audited financial
          statements (and which may include the Collateral Agent);

               (3) investments with an original maturity of 365 days or less of
          any Person that is fully and unconditionally guaranteed by a bank
          referred to in clause (2);

               (4) repurchase agreements and reverse repurchase agreements
          relating to marketable direct obligations issued or unconditionally
          guaranteed by the United States of America or issued by any agency
          thereof and backed as to timely payment by the full faith and credit
          of the United States of America;

               (5) investments in commercial paper, other than commercial paper
          issued by the Company or its affiliates, of any corporation
          incorporated under the


                                       3

<PAGE>

          laws of the United States of America or any State thereof, which
          commercial paper has a rating at the time of purchase at least equal
          to "A-1" by Standard & Poor's Ratings Services ("S&P") or at least
          equal to "P-1" by Moody's Investors Service, Inc. ("Moody's"); and

               (6) investments in money market funds (including, but not limited
          to, money market funds managed by the Collateral Agent or an affiliate
          of the Collateral Agent) registered under the Investment Company Act
          of 1940, as amended, rated in the highest applicable rating category
          by S&P or Moody's.

     "Person" means any legal person, including, without limitation, any
individual, corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

     "Pledge" means the lien and security interest created by this Agreement.

     "Pledged Notes" means Notes and security entitlements with respect thereto
from time to time credited to the Collateral Account and not then released from
the Pledge.

     "Pledged Securities" means the Pledged Notes and the Pledged Treasury
Securities, collectively.

     "Pledged Treasury Securities" means Treasury Securities and security
entitlements with respect thereto from time to time credited to the Collateral
Account and not then released from the Pledge.

     "Proceeds" has the meaning ascribed thereto in the UCC and includes,
without limitation, all interest, dividends, Cash, instruments, securities,
financial assets and other property received, receivable or otherwise
distributed upon the sale, exchange, collection or disposition of any financial
assets from time to time held in the Collateral Account.

     "Purchase Contract Agent" has the meaning specified in the paragraph
preceding the recitals of this Agreement.

     "Separate Notes" means Notes which are not components of Corporate Units.

     "Trades" means the Treasury/Reserve Automated Debt Entry System maintained
by the Federal Reserve Bank of New York pursuant to the TRADES Regulations.

     "Trades Regulations" means the regulations of the United States Department
of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time.
Unless otherwise defined herein, all terms defined in the TRADES Regulations are
used herein as therein defined.

     "Transfer" means (1) in the case of certificated securities in registered
form, delivery as provided in Section 8-301(a) of the UCC, endorsed to the
transferee or in blank by an effective endorsement; (2) in the case of Treasury
Securities, registration of the transferee as the owner of such Treasury
Securities on TRADES; and (3) in the case of security entitlements, including,


                                       4

<PAGE>

without limitation, security entitlements with respect to Treasury Securities, a
securities intermediary indicating by book entry that such security entitlement
has been credited to the transferee's securities account.

     "Treasury Securities" means zero-coupon U.S. treasury securities that
mature on February 15, 2006 (CUSIP No. 912803AJ2).

     "Treasury Unit" means, following the substitution of Treasury Securities
for Notes as collateral to secure a Holder's obligations under the Purchase
Contract, the collective rights and obligations of a Holder of a Treasury Units
Certificate in respect of such Treasury Securities, subject to the Pledge
thereof, and the related Purchase Contract.

     "Treasury Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.

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

     "Value" means, with respect to any item of Collateral on any date, as to
(1) Cash, the face amount thereof and (2) Treasury Securities or Notes, the
aggregate principal amount thereof at maturity.


                                   ARTICLE II
                                     PLEDGE

         Section 2.01. Pledge. Each Holder, acting through the Purchase Contract
Agent as such Holder's attorney-in-fact, and the Purchase Contract Agent, acting
solely as such attorney-in-fact, hereby pledges and grants to the Collateral
Agent, as agent of and for the benefit of the Company, a continuing first
priority security interest in and to, and a lien upon and right of set-off
against, all of such Person's right, title and interest in and to the Collateral
to secure the prompt and complete payment and performance when due (whether at
stated settlement, by early settlement or otherwise) of the Obligations. The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the UCC, in addition to,
and not in limitation of, the other rights, remedies and recourses afforded to
the Collateral Agent by this Agreement.

         Section 2.02. Control; Financing Statement.

         (a) The Collateral Agent shall have control of the Collateral Account
pursuant to the provisions of Article 4 of this Agreement.

         (b) Subsequent to the date of initial issuance of the Units, the
Purchase Contract Agent shall deliver to the Collateral Agent a copy of the
financing statement prepared by the Company and filed in the Office of the
Secretary of State of the State of New York and any other jurisdictions which
the Company deems necessary, authorized by the Purchase Contract Agent, as
attorney-in-fact for the Holders, as Debtors, and describing the Collateral,
such filing to be undertaken by the Company.


                                       5

<PAGE>

         (c) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, and each of them severally, with
full power of substitution, as the Purchase Contract Agent's attorney-in-fact to
take on behalf of, and in the name, place and stead of the Purchase Contract
Agent and the Holders, any action necessary or desirable to perfect and to keep
perfected the security interest in the Collateral referred to in Section 2.01.
The grant of such power-of-attorney shall not be deemed to require of the
Collateral Agent any specific duties or obligations not otherwise assumed by the
Collateral Agent hereunder.

         Section 2.03. Termination. As to each Holder, this Agreement and the
Pledge created hereby shall automatically terminate upon the satisfaction of
such Holder's Obligations. Upon such termination, the Collateral Agent shall
Transfer such Holder's portion of the Collateral to the Purchase Contract Agent
for distribution to such Holder, free and clear of the Pledge created hereby.


                                  ARTICLE III
                       DISTRIBUTIONS ON PLEDGED COLLATERAL

         Section 3.01. Income and Distributions. The Collateral Agent shall
transfer all income and distributions received by the Collateral Agent on
account of the Pledged Notes or Permitted Investments from time to time held in
the Collateral Account (ABA No. [_________], A/C No. [________], Re: [________],
Attention: [___________]) to the Purchase Contract Agent for distribution to the
applicable Holders as provided in the Purchase Contracts or Purchase Contract
Agreement.

         Section 3.02. Principal Payments Following Termination Event. Following
a Termination Event, the Collateral Agent shall transfer all principal payments
it receives, if any, in respect of (a) the Pledged Notes and (b) the Pledged
Treasury Securities, to the Purchase Contract Agent for the benefit of the
applicable Holders for distribution to such Holders in accordance with their
respective interests, free and clear of the Pledge created hereby.

         Section 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.

         (a) Subject to the provisions of Section 5.06, and except as provided
in subsection (b) of this Section, if no Termination Event shall have occurred,
all principal payments received by the Collateral Agent in respect of (1) the
Pledged Notes or (2) the Pledged Treasury Securities, shall be held and invested
in Permitted Investments until the Purchase Contract Settlement Date, and
transferred to the Company on the Purchase Contract Settlement Date as provided
in Section 5.07 hereof. Any balance remaining in the Collateral Account shall be
released from the Pledge and transferred to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests, free and clear of the Pledge created thereby.
The Company shall instruct the Collateral Agent in writing as to the type of
Permitted Investments in which any payments made under this Section shall be
invested, provided, however, that if the Company fails to deliver such
instructions by 10:30 a.m. (New York City time) on the day such payments are
received by the Collateral Agent,


                                       6

<PAGE>

the Collateral Agent shall invest such payments in the Permitted Investments
described in clause (6) of the definition of Permitted Investments. In no event
shall the Collateral Agent be liable for the selection of Permitted Investments
or for investment losses incurred thereon. The Collateral Agent shall have no
liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.

         (b) All principal payments received by the Collateral Agent in respect
of (1) the Pledged Notes and (2) the Treasury Securities or security
entitlements thereto, that, in each case, have been released from the Pledge
pursuant hereto shall be transferred to the Purchase Contract Agent for the
benefit of the applicable Holders for distribution to such Holders in accordance
with their respective interests.

         Section 3.04. Payments to Purchase Contract Agent. The Collateral Agent
shall use all commercially reasonable efforts to deliver payments required to be
made to the Purchase Contract Agent hereunder to the account designated by the
Purchase Contract Agent for such purpose not later than 12:00 p.m. (New York
City time) on the Business Day such payment is received by the Collateral Agent;
provided, however, that if such payment is received on a day that is not a
Business Day or after 11:00 a.m. (New York City time) on a Business Day, then
the Collateral Agent shall use all commercially reasonable efforts to deliver
such payment to the Purchase Contract Agent no later than 10:30 a.m. (New York
City time) on the next succeeding Business Day.

         Section 3.05. Assets Not Properly Released. If the Purchase Contract
Agent or any Holder shall receive any principal payments on account of financial
assets credited to the Collateral Account and not released therefrom in
accordance with this Agreement, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the Company and,
upon receipt of an Officers' Certificate of the Company so directing, promptly
deliver the same to the Collateral Agent for credit to the Collateral Account or
to the Company for application to the Obligations of the Holders, and the
Purchase Contract Agent and Holders shall acquire no right, title or interest in
any such payments of principal amounts so received. The Purchase Contract Agent
shall have no liability under this Section 3.05 unless and until it has been
notified in writing that such payment was delivered to it erroneously and shall
have no liability for any action taken, suffered or omitted to be taken prior to
its receipt of such notice.


                                   ARTICLE IV
                                     CONTROL

         Section 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:

         (a) the Securities Intermediary has established the Collateral Account;

         (b) the Collateral Account is a securities account;

         (c) subject to the terms of this Agreement, the Securities Intermediary
shall identify in its records the Collateral Agent as the entitlement holder
entitled to exercise the rights that comprise any financial asset credited to
the Collateral Account;


                                       7

<PAGE>

         (d) all property delivered to the Securities Intermediary pursuant to
this Agreement or the Purchase Contract Agreement will be credited promptly to
the Collateral Account; and

         (e) all securities or other property underlying any financial assets
credited to the Collateral Account shall be (1) registered in the name of Cede &
Co., as nominee for DTC, and endorsed to the Collateral Agent or in blank, (2)
registered in the name of the Collateral Agent or (3) credited to another
securities account maintained in the name of the Collateral Agent. The
Collateral Agent may, at any time or from time to time, in its sole discretion,
cause any or all securities or other property underlying any financial assets
credited to the Collateral Account not registered in its name to be so
registered in its name. In no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract Agent or
any Holder or specially endorsed to the Purchase Contract Agent or any Holder.

         Section 4.02. Treatment as Financial Assets. Each item of property
(whether investment property, financial asset, security, instrument or cash)
credited to the Collateral Account shall be treated as a financial asset.

         Section 4.03. Sole Control by Collateral Agent. Except as provided in
Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect to
the Collateral Account solely from the Collateral Agent. If at any time the
Securities Intermediary shall receive an entitlement order issued by the
Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further consent by
the Purchase Contract Agent or any Holder or any other Person. Except as
otherwise permitted under this Agreement, until termination of the Pledge, the
Securities Intermediary will not comply with any entitlement orders issued by
the Purchase Contract Agent or any Holder.

         Section 4.04. Securities Intermediary's Location. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York, without giving
effect to the conflicts of law provisions thereof. Regardless of any provision
in any other agreement, for purposes of the UCC, New York shall be deemed to be
the Securities Intermediary's location.

         Section 4.05. No Other Claims. Except for the claims and interest of
the Collateral Agent and of the Purchase Contract Agent and the Holders in the
Collateral Account, the Securities Intermediary (without any duty to
investigate) does not know of any claim to, or interest in, the Collateral
Account or in any financial asset credited thereto. If any Person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against the Collateral
Account or in any financial asset carried therein, the Securities Intermediary
will promptly notify the Collateral Agent and the Purchase Contract Agent.

         Section 4.06. Investment and Release. All Proceeds of financial assets
from time to time deposited in the Collateral Account shall be invested and
reinvested as provided in


                                       8

<PAGE>

this Agreement. At all times prior to termination of the Pledge, no property
shall be released from the Collateral Account except in accordance with this
Agreement or upon written instructions of the Collateral Agent.

         Section 4.07. Statements and Confirmations. The Securities Intermediary
will promptly send copies of all statements, confirmations and other
correspondence concerning the Collateral Account and any financial assets
credited thereto simultaneously to each of the Purchase Contract Agent and the
Collateral Agent at their addresses for notices under this Agreement.

         Section 4.08. Tax Allocations. The Purchase Contract Agent shall report
all items of income, gain, expense and loss recognized in the Collateral
Account, to the extent such reporting is required by law, to the Internal
Revenue Service or applicable state authorities in the manner required by law.
Neither the Securities Intermediary nor the Collateral Agent shall have any tax
reporting duties hereunder.

         Section 4.09. No Other Agreements. The Securities Intermediary has not
entered into, and prior to the termination of the Pledge will not enter into,
any agreement with any other Person relating to the Collateral Account or any
financial assets credited thereto, including, without limitation, any agreement
to comply with entitlement orders of any Person other than the Collateral Agent.

         Section 4.10. Powers Coupled with an Interest. The rights and powers
granted in this Article 4 to the Collateral Agent have been granted in order to
perfect its security interests in the Collateral Account, are powers coupled
with an interest and will be affected neither by the bankruptcy of the Purchase
Contract Agent or any Holder nor by the lapse of time. The obligations of the
Securities Intermediary under this Article 4 shall continue in effect until the
termination of the Pledge.

         Section 4.11. Waiver of Lien; Waiver of Set-off. The Securities
Intermediary waives any security interest, lien or right to make deductions or
setoffs that it may now have or hereafter acquire in or with respect to the
Collateral Account, any financial asset credited thereto or any security
entitlement in respect thereof. Neither the financial assets credited to the
Collateral Account nor the security entitlements in respect thereof will be
subject to deduction, set-off, banker's lien, or any other right in favor of any
Person other than the Company.


                                   ARTICLE V
          INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION OF
                                CORPORATE UNITS

         Section 5.01. Initial Deposit of Notes. (a) Prior to or concurrently
with the execution and delivery of this Agreement, the Purchase Contract Agent,
on behalf of the initial Holders of the Corporate Units, shall Transfer to the
Collateral Agent, for credit to the Collateral Account, the Notes or security
entitlements relating thereto, and, in the case of security entitlements, the
Securities Intermediary shall indicate by book-entry that a securities
entitlement to such Notes has been credited to the Collateral Account.


                                       9

<PAGE>

         (a) The Collateral Agent agrees to hold any Notes or security interests
relating thereto, constituting a portion of the Collateral registered in the
name of the Purchase Contract Agent, as attorney-in-fact for the Holders, with
appropriate endorsement in the form delivered to it and shall not re-register
such Notes or security interests relating thereto.

         Section 5.02. Creation of Treasury Units.

         (a) A Holder of Corporate Units shall have the right, at any time prior
to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, to create Treasury Units by
substitution of Treasury Securities or security entitlements with respect
thereto for the Pledged Notes comprising a part of such Holder's Corporate
Units, in integral multiples of 40 Corporate Units by:

         (1) Transferring to the Securities Intermediary on behalf of the
         Collateral Agent, for credit to the Collateral Account, Treasury
         Securities or security entitlements with respect thereto having a Value
         equal to the aggregate principal amount of the Pledged Notes to be
         released, accompanied by a notice, substantially in the form of Exhibit
         C to the Purchase Contract Agreement, whereupon the Purchase Contract
         Agent shall deliver to the Collateral Agent a notice, substantially in
         the form of Exhibit A hereto, (A) stating that such Holder has notified
         the Purchase Contract Agent that such Holder has Transferred Treasury
         Securities or security entitlements with respect thereto to the
         Collateral Agent for credit to the Collateral Account, (B) stating the
         Value of the Treasury Securities or security entitlements with respect
         thereto Transferred by such Holder and (C) requesting that the
         Collateral Agent release from the Pledge the Pledged Notes that are a
         component of such Corporate Units; and

         (2) delivering the related Corporate Units to the Purchase Contract
         Agent.

     Upon receipt of such notice and confirmation that Treasury Securities or
     security entitlements with respect thereto have been credited to the
     Collateral Account as described in such notice, the Collateral Agent shall
     instruct the Securities Intermediary by a notice, substantially in the form
     of Exhibit B, to release such Pledged Notes from the Pledge by Transfer to
     the Purchase Contract Agent for distribution to such Holder, free and clear
     of the Pledge created hereby.

         (b) Upon credit to the Collateral Account of Treasury Securities or
security entitlements with respect thereto delivered by a Holder of Corporate
Units and receipt of the related instruction from the Collateral Agent, the
Securities Intermediary shall release such Pledged Notes and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of the Pledge created hereby.

         Section 5.03. Recreation of Corporate Units.

         (a) At any time prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Treasury Units shall have the right to recreate Corporate Units by
substitution of Notes or security entitlements


                                       10

<PAGE>

with respect thereto for Pledged Treasury Securities in integral multiples of 40
Treasury Units by:

         (1) Transferring to the Securities Intermediary on behalf of the
         Collateral Agent, for credit to the Collateral Account, Notes or
         security entitlements with respect thereto having a principal amount
         equal to the Value of the Pledged Treasury Securities to be released,
         accompanied by a notice, substantially in the form of Exhibit C to the
         Purchase Contract Agreement, whereupon the Purchase Contract Agent
         shall deliver to the Collateral Agent a notice, substantially in the
         form of Exhibit C hereto, stating that such Holder has Transferred the
         Notes or security entitlements with respect thereto to the Collateral
         Account for credit to the Collateral Account and requesting that the
         Collateral Agent release from the Pledge the Pledged Treasury
         Securities related to such Treasury Units; and

         (2) delivering the related Treasury Units to the Purchase Contract
         Agent.

     Upon receipt of such notice and confirmation that Notes or security
     entitlements with respect thereto have been credited to the Collateral
     Account as described in such notice, the Collateral Agent shall instruct
     the Securities Intermediary by a notice substantially in the form of
     Exhibit D hereto to release such Pledged Treasury Securities from the
     Pledge by Transfer to the Purchase Contract Agent for distribution to such
     Holder, free and clear of the Pledge created hereby.

         (b) Upon credit to the Collateral Account of Notes or security
entitlements with respect thereto delivered by a Holder of Treasury Units and
receipt of the related instruction from the Collateral Agent, the Securities
Intermediary shall release such Pledged Treasury Securities and shall promptly
Transfer the same to the Purchase Contract Agent for distribution to such
Holder, free and clear of the Pledge created hereby.

         Section 5.04. Termination Event.

         (a) Upon receipt by the Collateral Agent of written notice from the
Company or the Purchase Contract Agent that a Termination Event has occurred,
the Collateral Agent shall release all Collateral from the Pledge and shall
promptly Transfer:

         (1) any Pledged Notes or security entitlements with respect thereto,

         (2) any Pledged Treasury Securities, and

         (3) any payments by Holders (or the Permitted Investments of such
         payments) pursuant to Section 5.05 hereof, to the Purchase Contract
         Agent for the benefit of the Holders for distribution to such Holders,
         in accordance with their respective interests, free and clear of the
         Pledge created hereby.

         (b) If such Termination Event shall result from the Company's becoming
a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Notes, Pledged Treasury Securities and payments by Holders (or the Permitted
Investments of such payments) pursuant to Section 5.05


                                       11

<PAGE>

hereof and Proceeds of any of the foregoing, as the case may be, as provided by
this Section 5.04, the Purchase Contract Agent shall:

         (1) use its best efforts to obtain an opinion of a nationally
         recognized law firm reasonably acceptable to the Collateral Agent to
         the effect that, notwithstanding the Company's being the debtor in such
         a bankruptcy case, the Collateral Agent will not be prohibited from
         releasing or Transferring the Collateral as provided in this Section
         5.04, and shall deliver or cause to be delivered such opinion to the
         Collateral Agent within ten days after the occurrence of such
         Termination Event, and if (A) the Purchase Contract Agent shall be
         unable to obtain such opinion within ten days after the occurrence of
         such Termination Event or (B) the Collateral Agent shall continue,
         after delivery of such opinion, to refuse to effectuate the release and
         Transfer of all Pledged Notes, Pledged Treasury Securities and the
         payments by Holders (or the Permitted Investments of such payments)
         pursuant to Section 5.05 hereof and Proceeds of any of the foregoing,
         as the case may be, as provided in this Section 5.04, then the Purchase
         Contract Agent shall within 15 days after the occurrence of such
         Termination Event commence an action or proceeding in the court having
         jurisdiction of the Company's case under the Bankruptcy Code seeking an
         order requiring the Collateral Agent to effectuate the release and
         transfer of all Pledged Notes, Pledged Treasury Securities and the
         payments by Holders (or the Permitted Investments of such payments)
         pursuant to Section 5.05 hereof and Proceeds of any of the foregoing,
         or as the case may be, as provided by this Section 5.04; and

         (2) commence an action or proceeding like that described in clause
         5.04(b)(i) hereof within fifteen days after the occurrence of such
         Termination Event.

         Section 5.05. Cash Settlement.

         (a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Corporate Units that such Holder has elected,
in accordance with the procedures specified in Section 5.02(b)(i) of the
Purchase Contract Agreement to effect a Cash Settlement and (2) payment by such
Holder by deposit in the Collateral Account prior to 5:00 p.m. (New York City
time) on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date of the Purchase Price in lawful money of the United States of
America by certified or cashier's check or wire transfer of immediately
available funds payable to or upon the order of the Securities Intermediary,
then the Collateral Agent shall:

         (1) instruct the Securities Intermediary promptly to invest any such
         Cash in Permitted Investments;

         (2) instruct the Securities Intermediary to release from the Pledge
         such Holder's related Pledged Notes as to which such Holder has
         effected a Cash Settlement pursuant to this Section 5.05(a); and


                                       12

<PAGE>

         (3) instruct the Securities Intermediary to Transfer all such Pledged
         Notes to the Purchase Contract Agent for distribution to such Holder,
         in each case free and clear of the Pledge created hereby.

     The Company shall instruct the Collateral Agent in writing as to the type
of Permitted Investments in which any such Cash shall be invested; provided,
however, that if the Company fails to deliver such written instructions by 10:30
a.m. (New York City time) on the day such Cash is received by the Collateral
Agent or to be reinvested by the Securities Intermediary, the Collateral Agent
shall instruct the Securities Intermediary to invest such Cash in the Permitted
Investments described in clause (6) of the definition of Permitted Investments.
In no event shall the Collateral Agent or Securities Intermediary be liable for
the selection of Permitted Investments or for investment losses incurred
thereon. The Collateral Agent and Securities Intermediary shall have no
liability in respect of losses incurred as a result of the failure of the
Company to provide timely written investment direction.

     Upon receipt of the proceeds upon the maturity of the Permitted Investments
on the Purchase Contract Settlement Date, the Collateral Agent shall (A)
instruct the Securities Intermediary to pay the portion of such proceeds and
deliver any certified or cashier's checks received, in an aggregate amount equal
to the Purchase Price, to the Company on the Purchase Contract Settlement Date,
and (B) release any amounts in excess of the Purchase Price earned from such
Permitted Investments to the Purchase Contract Agent for distribution to such
Holder.

         (b) If a Holder of Corporate Units (i) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement as provided in Section
5.02(b)(i) of the Purchase Contract Agreement or (ii) does notify the Purchase
Contract Agent of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by Section 5.02(b)(ii) of the Purchase Contract
Agreement, such Holder shall be deemed to have consented to the disposition of
such Holder's Pledged Notes in accordance with Section 5.02(b)(iii) of the
Purchase Contract Agreement.

         (c) Intentionally Omitted.

         (d) As soon as practicable after 5:00 p.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall deliver to the Purchase Contract Agent a notice,
substantially in the form of Exhibit E hereto, stating (i) the amount of Cash
that it has received with respect to the Cash Settlement of Corporate Units and
(ii) the amount of Pledged Notes to be remarketed in the Remarketing pursuant to
Section 5.02(b)(iii) of the Purchase Contract Agreement.

         Section 5.06. Early Settlement and Cash Merger Early Settlement. Upon
receipt by the Collateral Agent of a notice from the Purchase Contract Agent
that (a) a Holder of Units has elected to effect either (1) Early Settlement of
its obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms of the Purchase Contracts and Section 5.07 of the
Purchase Contract Agreement or (2) Cash Merger Early Settlement of its
obligations under the Purchase Contracts forming a part of such Units in
accordance with the terms of the Purchase Contracts and Section 5.04(b)(2) of
the Purchase Contract Agreement (which notice shall set forth the number of such
Purchase Contracts as to which such Holder has elected to


                                       13

<PAGE>

effect Early Settlement or Cash Merger Early Settlement), and (b) the Purchase
Contract Agent has received from such Holder, and paid to the Company as
confirmed in writing by the Company, the related Early Settlement Amount or Cash
Merger Early Settlement Amount, as applicable, pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement or Cash Merger Early Settlement, as the case may be,
have been satisfied, then the Collateral Agent shall release from the Pledge,
(i) Pledged Notes in the case of a Holder of Corporate Units or (ii) Pledged
Treasury Securities in the case of a Holder of Treasury Units, in each case with
a Value equal to the product of (x) the Stated Amount times (y) the number of
Purchase Contracts as to which such Holder has elected to effect Early
Settlement or Cash Merger Early Settlement, and shall instruct the Securities
Intermediary to Transfer all such Pledged Notes or Pledged Treasury Securities,
as the case may be, to the Purchase Contract Agent for distribution to such
Holder, in each case free and clear of the Pledge created hereby. A holder of
Treasury Units may settle early only in integral multiples of 40 Treasury Units.

         Section 5.07. Application of Proceeds in Settlement of Purchase
Contracts.

         (a) If a Holder of Corporate Units has not elected to make an effective
Cash Settlement by notifying the Purchase Contract Agent in the manner provided
for in Section 5.02(b)(i) of the Purchase Contract Agreement or does notify the
Purchase Contract Agent as provided in Section 5.02(b)(i) of the Purchase
Contract Agreement of its intention to pay the Purchase Price in cash, but fails
to make such payment as required by Section 5.02(b)(ii) of the Purchase Contract
Agreement, such Holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contracts from the Proceeds of the
Remarketing of the related Pledged Notes. In such event, upon written direction
from the Purchase Contract Agent, the Remarketing Agent, pursuant to the terms
of the Remarketing Agreement, will use its reasonable efforts to remarket such
Pledged Notes. The Remarketing Agent will deposit the Proceeds of such
Remarketing (less, to the extent permitted by the Remarketing Agreement, the
Remarketing Fee) in the Collateral Account, and the Collateral Agent shall
invest the Proceeds of the Remarketing in Permitted Investments set forth in
clause (6) of the definition of Permitted Investments. In the event of a
Successful Remarketing, the Collateral Agent shall instruct the Securities
Intermediary to transfer the related Pledged Notes to the Remarketing Agent,
upon confirmation of deposit by the Remarketing Agent of the Proceeds of such
Final Remarketing (less, to the extent permitted by the Remarketing Agreement,
the Remarketing Fee) in the Collateral Account. On the Purchase Contract
Settlement Date, the Purchase Contract Agent shall consult with the Collateral
Agent regarding the instruction the Collateral Agent shall give to the
Securities Intermediary in order to apply a portion of the Proceeds from such
Remarketing equal to the aggregate principal amount of such Pledged Notes, less
the amount of any Deferred Contract Adjustment Payments payable to such Holder
on the Purchase Contract Settlement Date, to satisfy in full such Holder's
obligations to pay the Purchase Price to purchase the shares of Common Stock
under the related Purchase Contracts and the balance of the Proceeds from the
Remarketing, if any, that shall be transferred to the Purchase Contract Agent
for distribution to such Holder.

         Upon a Failed Remarketing, each Holder of Corporate Units that has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in Section 5.02(b)(i) or Section 5.02(d)(i) of
the Purchase Contract Agreement or does notify


                                       14

<PAGE>


the Purchase Contract Agent as provided in Section 5.02(b)(i) or Section
5.02(d)(i) of the Purchase Contract Agreement of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by Sections
5.02(b)(ii) or Section 5.02(d)(ii) of the Purchase Contract Agreement, as
applicable, shall be deemed to have exercised such Holder's Put Right with
respect to such Notes that are a component of Corporate Units. Upon exercise of
the Put Right with respect to the Notes, the Company shall on the Purchase
Contract Settlement Date cause the aggregate Put Price with respect to such
Notes to be deposited in the Collateral Account and the Collateral Agent shall
cause the Securities Intermediary to remit the Purchase Price for the shares of
Common Stock to be issued under the related Purchase Contract from a portion of
the Proceeds of the Put Right to the Company in full satisfaction of such
Holder's obligations under the related Purchase Contract; provided that if the
Company shall fail to pay the Put Price when due, the Company shall be deemed to
have netted such Holder's obligations to pay the aggregate Purchase Price under
such Purchase Contracts against the Company's obligation to pay the Put Price in
full satisfaction of such Holder's obligations under the Purchase Contracts.
Following such payment or netting of the Put Price, such Holder's obligations to
pay the Purchase Price under the Purchase Contracts will be deemed to be
satisfied in full, and the Collateral Agent shall cause the Securities
Intermediary to release the Pledged Notes from the Collateral Account and shall
promptly deliver the Pledged Notes to the Company. Thereafter, the Collateral
Agent shall promptly remit the remaining portion, if any, of the Put Price in
excess of the aggregate Purchase Price under such Purchase Contracts to the
Purchase Contract Agent for payment to such Holder of the Corporate Units to
which such Notes relate.

         If there has been a Failed Remarketing, as soon as practicable after
11:00 a.m. (New York City time) on the Business Day immediately preceding the
Purchase Contract Settlement Date, the Collateral Agent shall deliver to the
Purchase Contract Agent a notice, stating (i) the amount of Cash that it has
received with respect to the Cash Settlement of Corporate Units, (ii) the amount
of Cash that it has received with respect to the Cash Settlement of Treasury
Units and (iii) the amount of Pledged Notes with respect to which an automatic
deemed exercise of the Put Right has occurred pursuant to Section 5.02(c) of the
Purchase Contract Agreement.

         (b) In the case of a Treasury Unit or a Corporate Unit, promptly, after
11:00 a.m. (New York City time) on the Business Day immediately prior to the
Purchase Contract Settlement Date, the Collateral Agent shall invest the Cash
Proceeds of the maturing Pledged Treasury Securities in Permitted Investments
set forth in clause (6) of the definition of Permitted Investments, unless prior
to 10:30 a.m. (New York City time) on such date, the Company shall otherwise
instruct the Collateral Agent in writing as to the type of Permitted Investments
in which any such Cash Proceeds shall be invested. In no event shall the
Collateral Agent be liable for the selection of Permitted Investments or for
investment losses incurred thereon. The Collateral Agent shall have no liability
in respect of losses incurred as a result of the failure of the Company to
provide timely written investment direction. Without receiving any instruction
from any such Holder, the Collateral Agent shall apply the Proceeds of the
related Pledged Treasury Securities to the settlement of such Purchase Contracts
on the Purchase Contract Settlement Date. In the event the sum of the Proceeds
from the related Pledged Treasury Securities and the investment earnings from
the investment in Permitted Investments exceeds the aggregate Purchase Price of
the Purchase Contracts being settled thereby, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder on the Purchase Contract


                                       15

<PAGE>

Settlement Date, the Collateral Agent shall instruct the Securities Intermediary
to transfer such excess, when received, to the Purchase Contract Agent for
distribution to such Holder.

         (c) Prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Remarketing Date, but no earlier than the Payment Date
immediately preceding such date, Holders of Separate Notes may elect to have
their Separate Notes remarketed under the Remarketing Agreement, by delivering
their Separate Notes along with a notice of such election, substantially in the
form of Exhibit F hereto, to the Custodial Agent. After such time, such election
shall become an irrevocable election to have such Separate Notes remarketed in
the Remarketing. The Custodial Agent shall hold Separate Notes in an account
separate from the Collateral Account in which the Pledged Securities shall be
held. Holders of Separate Notes electing to have their Separate Notes remarketed
will also have the right to withdraw that election by written notice to the
Custodial Agent, substantially in the form of Exhibit G hereto, prior to 5:00
p.m. (New York City time) on the fifth Business Day immediately preceding the
Remarketing Date, upon which notice the Custodial Agent shall return such
Separate Notes to such Holder.

         By 5:00 p.m. (New York City time) on the Business Day immediately
preceding the Remarketing Date, the Custodial Agent shall notify the Remarketing
Agent of the aggregate principal amount of the Separate Notes to be remarketed
and deliver to the Remarketing Agent for remarketing all Separate Notes
delivered to the Custodial Agent pursuant to this Section 5.07(c) and not
validly withdrawn prior to such date. In the event of a Successful Remarketing,
after deducting the Remarketing Fee (to the extent permitted under the terms of
the Remarketing Agreement), the Remarketing Agent will remit to the Custodial
Agent the remaining portion of the proceeds of such Remarketing for payment to
the Holders of the remarketed Separate Notes, in accordance with their
respective interests. In the event of a Failed Remarketing, the Remarketing
Agent will promptly return such Separate Notes to the Custodial Agent, and the
Custodial Agent shall deliver such Separate Notes to the appropriate Holders.


                                   ARTICLE VI
                          VOTING RIGHTS - PLEDGED NOTES

         Section 6.01. Voting Rights. Subject to the terms of Section 4.02 of
the Purchase Contract Agreement, the Purchase Contract Agent may exercise, or
refrain from exercising, any and all voting and other consensual rights
pertaining to the Pledged Notes or any part thereof for any purpose not
inconsistent with the terms of this Agreement and in accordance with the terms
of the Purchase Contract Agreement; provided, that the Purchase Contract Agent
shall not exercise or shall not refrain from exercising such right, as the case
may be, if, in the judgment of the Purchase Contract Agent, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Notes; and provided, further, that the Purchase Contract Agent shall
give the Company and the Collateral Agent at least five Business Days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Notes, including notice of any
meeting at which holders of the Notes are entitled to vote or solicitation of
consents, waivers or proxies of holders of the Notes, the Collateral Agent shall
use reasonable efforts to send promptly to the Purchase


                                       16

<PAGE>

Contract Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the Purchase
Contract Agent, execute and deliver to the Purchase Contract Agent such proxies
and other instruments in respect of such Pledged Notes (in form and substance
satisfactory to the Collateral Agent) as are prepared by the Company and
delivered to the Purchase Contract Agent with respect to the Pledged Notes.


                                  ARTICLE VII
                               RIGHTS AND REMEDIES

         Section 7.01. Rights and Remedies of the Collateral Agent.

         (a) In addition to the rights and remedies specified in Section 5.07
hereof or otherwise available at law or in equity, after a default or an event
of default hereunder, the Collateral Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the UCC
(whether or not the UCC is in effect in the jurisdiction where the rights and
remedies are asserted) and the TRADES Regulations and such additional rights and
remedies to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted. Without
limiting the generality of the foregoing, such remedies may include, to the
extent permitted by applicable law, (1) retention of the Pledged Notes or
Pledged Treasury Securities or (2) sale of the Pledged Notes or Pledged Treasury
Securities in one or more public or private sales, and in each instance, the
Holders' obligations under the Purchase Contracts and the Purchase Contract
Agreement shall be deemed to have been satisfied in full.

         (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of any Pledged
Treasury Securities as provided in Article 3 hereof, in satisfaction of the
Obligations of the Holder of the Units of which such Pledged Treasury
Securities, are a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities any and all of the rights and remedies available to a
secured party under the UCC and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.

         (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the principal amount of
the Pledged Notes, and (ii) the principal amount of the Pledged Treasury
Securities, subject, in each case, to the provisions of Article 3 hereof, and as
otherwise granted herein.

         (d) The Purchase Contract Agent, individually or as attorney-in-fact,
and each Holder of Units agrees that, from time to time, upon the written
request of the Collateral Agent or the Purchase Contract Agent, such Holder
shall execute and deliver such further documents and do such other acts and
things as the Collateral Agent may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the rights of
the Collateral Agent hereunder. The Purchase Contract Agent shall have no
liability to any Holder


                                       17

<PAGE>

for executing any documents or taking any such acts requested by the Collateral
Agent hereunder, except for liability for its own grossly negligent acts, its
own grossly negligent failure to act or its own willful misconduct.

         Section 7.02. Successful Remarketing. With respect to Separate Notes,
any Proceeds of the Remarketing (after deducting any Remarketing Fee to the
extent permitted under the terms of the Remarketing Agreement) attributable to
the Separate Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Notes.

         Section 7.03. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or security entitlements for any of them,
as the case may be, for financial assets held in the Collateral Account, such
substitution shall not constitute a novation of the security interest created
hereby.


                                  ARTICLE VIII
                    REPRESENTATIONS AND WARRANTIES; COVENANTS

         Section 8.01. Representations and Warranties. Each Holder from time to
time, acting through the Purchase Contract Agent as attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represents
and warrants to the Collateral Agent (with respect to such Holder's interest in
the Collateral), which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral, that:

         (a) such Holder has the power to grant a security interest in and lien
on the Collateral;

         (b) such Holder is the sole beneficial owner of the Collateral and, in
the case of Collateral delivered in physical form, is the sole holder of such
Collateral and is the sole beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent for credit to the Collateral
Account, free and clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the security interest and
lien granted under Article 2 hereof;

         (c) upon the Transfer of the Collateral to the Collateral Agent for
credit to the Collateral Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first priority security interest
therein (assuming that any central clearing operation or any securities
intermediary or other entity not within the control of the Holder involved in
the Transfer of the Collateral, including the Collateral Agent and the
Securities Intermediary, gives the notices and takes the action required of it
hereunder and under applicable law for perfection of that interest and assuming
the establishment and exercise of control pursuant to Article 4 hereof); and

         (d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security interest,
lien or other encumbrance on the Collateral other than the security interest and
lien granted under Article 2 hereof or violate any provision of any existing law
or regulation applicable to it or of any mortgage, charge,


                                       18

<PAGE>

pledge, indenture, contract or undertaking to which it is a party or which is
binding on it or any of its assets.

         Section 8.02. Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:

         (a) neither the Purchase Contract Agent nor such Holders will create or
purport to create or allow to subsist any mortgage, charge, lien, pledge or any
other security interest whatsoever over the Collateral or any part of it other
than pursuant to this Agreement; and

         (b) neither the Purchase Contract Agent nor such Holders will sell or
otherwise dispose (or attempt to dispose) of the Collateral or any part of it
except for the beneficial interest therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of the Units.


                                   ARTICLE IX
                    THE COLLATERAL AGENT, THE CUSTODIAL AGENT
                         AND THE SECURITIES INTERMEDIARY

     It is hereby agreed as follows:

         Section 9.01. Appointment, Powers and Immunities. The Collateral Agent,
the Custodial Agent or Securities Intermediary shall act as agent for the
Company hereunder with such powers as are specifically vested in the Collateral
Agent, the Custodial Agent or Securities Intermediary, as the case may be, by
the terms of this Agreement. The Collateral Agent, the Custodial Agent and
Securities Intermediary shall:

         (a) have no duties or responsibilities except those expressly set forth
in this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against the Collateral Agent, the Custodial Agent and Securities
Intermediary, nor shall the Collateral Agent, the Custodial Agent and Securities
Intermediary be bound by the provisions of any agreement by any party hereto
beyond the specific terms hereof;

         (b) not be responsible for any recitals contained in this Agreement, or
in any certificate or other document referred to or provided for in, or received
by it under, this Agreement, the Units or the Purchase Contract Agreement, or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the Collateral Agent, the
Custodial Agent or Securities Intermediary, as the case may be), the Units, any
Collateral or the Purchase Contract Agreement or any other document referred to
or provided for herein or therein or for any failure by the Company or any other
Person (except the Collateral Agent, the Custodial Agent or Securities
Intermediary, as the case may be) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as expressly required
hereby, maintenance of any security interest created hereunder;


                                       19

<PAGE>

         (c) not be required to initiate or conduct any litigation or collection
proceedings hereunder (except pursuant to directions furnished under Section
9.02 hereof, subject to Section 9.08 hereof);

         (d) not be responsible for any action taken or omitted to be taken by
it hereunder or under any other document or instrument referred to or provided
for herein or in connection herewith or therewith, except for its own
negligence, bad faith or willful misconduct; and

         (e) not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with respect to, any securities or
other property deposited hereunder.

     Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall take all
reasonable action in connection with the safekeeping of the Collateral
hereunder.

     No provision of this Agreement shall require the Collateral Agent,
Custodial Agent or Securities Intermediary to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder. In no event shall the Collateral Agent, Custodial Agent or Securities
Intermediary be liable for any amount in excess of the Value of the Collateral.

         Section 9.02. Instructions of the Company. The Company shall have the
right, by one or more written instruments executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (a) such direction shall not conflict
with the provisions of any law or of this Agreement or involve the Collateral
Agent in personal liability and (b) the Collateral Agent shall be indemnified to
its satisfaction as provided herein. Nothing contained in this Section 9.02
shall impair the right of the Collateral Agent in its discretion to take any
action or omit to take any action which it deems proper and which is not
inconsistent with such direction.

         Section 9.03. Reliance by Collateral Agent and Securities Intermediary.
Each of the Securities Intermediary, the Custodial Agent and the Collateral
Agent shall be entitled to rely conclusively upon any certification, order,
judgment, opinion, notice or other written communication (including, without
limitation, any thereof by e-mail or similar electronic means, telecopy, telex
or facsimile) reasonably believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons (without
being required to determine the correctness of any fact stated therein) and
consult with and conclusively rely upon advice, opinions and statements of legal
counsel and other experts selected by the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be. As to any matters not
expressly provided for by this Agreement, the Collateral Agent, the Custodial
Agent and the Securities Intermediary shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.


                                       20
<PAGE>

     Section 9.04. Certain Rights. (a) Whenever in the administration of the
provisions of this Agreement the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action to be taken
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of gross negligence, bad faith or
willful misconduct on the part of the Collateral Agent, the Custodial Agent or
the Securities Intermediary, be deemed to be conclusively proved and established
by a certificate signed by one of the Company's officers, and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary and such
certificate, in the absence of gross negligence, bad faith or willful misconduct
on the part of the Collateral Agent, the Custodial Agent or the Securities
Intermediary, shall be full warrant to the Collateral Agent, the Custodial Agent
or the Securities Intermediary for any action taken, suffered or omitted by it
under the provisions of this Agreement upon the faith thereof.

     (b) The Collateral Agent, the Custodial Agent or the Securities
Intermediary shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, entitlement order, approval or other paper or
document.

     Section 9.05. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Collateral Agent, the Custodial Agent or the
Securities Intermediary may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Collateral Agent, the Custodial Agent or the
Securities Intermediary shall be a party, or any corporation succeeding to the
business of the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall be the successor of the Collateral Agent, the Custodial Agent
or the Securities Intermediary hereunder without the execution or filing of any
paper with any party hereto or any further act on the part of any of the parties
hereto except where an instrument of transfer or assignment is required by law
to effect such succession, anything herein to the contrary notwithstanding.

     Section 9.06. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Company, the Purchase Contract Agent, any other
Person interested herein and any Holder of Units (and any of their respective
subsidiaries or affiliates) as if they were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent, the Securities Intermediary and their
affiliates may accept fees and other consideration from the Company, the
Purchase Contract Agent and any Holder of Units without having to account for
the same to the Company; provided that each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent covenants and agrees with the Company
that it shall not accept, receive or permit there to be created in favor of
itself and shall take no affirmative action to permit there to be created in
favor of any other Person, any security interest, lien or other encumbrance of
any kind in or upon the Collateral other than the lien created by the Pledge.



                                       21
<PAGE>

     Section 9.07. Non-Reliance on the Collateral Agent, the Custodial Agent and
the Securities Intermediary. None of the Securities Intermediary, the Custodial
Agent or the Collateral Agent shall be required to keep itself informed as to
the performance or observance by the Purchase Contract Agent or any Holder of
Units of this Agreement, the Purchase Contract Agreement, the Units or any other
document referred to or provided for herein or therein or to inspect the
properties or books of the Purchase Contract Agent or any Holder of Units. None
of the Collateral Agent, the Custodial Agent or the Securities Intermediary
shall have any duty or responsibility to provide the Company with any credit or
other information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Units (or any of their respective
affiliates) that may come into the possession of the Collateral Agent, the
Custodial Agent or the Securities Intermediary or any of their respective
affiliates.

     Section 9.08. Compensation and Indemnity. The Company agrees to:

     (a) pay the Collateral Agent, the Custodial Agent and the Securities
Intermediary from time to time such compensation as shall be agreed in writing
between the Company and the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, for all services rendered by them
hereunder;

     (b) indemnify, defend and hold harmless the Collateral Agent, the Custodial
Agent, the Securities Intermediary and each of their respective directors,
officers, agents and employees (collectively, the "Indemnitees"), harmless from
and against any and all claims, liabilities, losses, damages, fines, penalties
and expenses (including reasonable fees and expenses of counsel) (collectively,
"Losses" and individually, a "Loss") that may be imposed on, reasonably incurred
by, or asserted against, the Indemnitees or any of them for following any
instructions or other directions upon which any of the Indemnitees is entitled
to rely pursuant to the terms of this Agreement, provided that such Indemnitee
has not acted with gross negligence or bad faith or engaged in willful
misconduct with respect to the specific Loss against which indemnification is
sought; and

     (c) in addition to and not in limitation of subsection (b) of this Section,
indemnify and hold the Indemnitees and each of them harmless from and against
any and all Losses that may be imposed on, incurred by or asserted against, the
Indemnitees or any of them in connection with or arising out of the Collateral
Agent's, the Custodial Agent's or the Securities Intermediary's acceptance,
performance or exercise of its rights, powers and duties under this Agreement,
provided the Collateral Agent, the Custodial Agent or the Securities
Intermediary has not acted with negligence or bad faith or engaged in willful
misconduct with respect to the specific Loss against which indemnification is
sought.

     The provisions of this Section and Section 11.07 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or Securities
Intermediary and the termination of this Agreement.

     Section 9.09. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, then at its sole option, each of the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be


                                       22
<PAGE>

entitled, after prompt notice to the Company and the Purchase Contract Agent, to
refuse to comply with any and all claims, demands or instructions with respect
to such property or funds so long as such dispute or conflict shall continue,
and the Collateral Agent, the Custodial Agent and the Securities Intermediary
shall not be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall be entitled to refuse to act until either:

     (a) such conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by agreement between
the conflicting parties as evidenced in a writing satisfactory to the Collateral
Agent, the Custodial Agent or the Securities Intermediary; or

     (b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to it
sufficient to save it harmless from and against any and all loss, liability or
reasonable out-of-pocket expense which it may incur by reason of its acting at
the expense of the Company.

         The Collateral Agent, the Custodial Agent and the Securities
Intermediary may in addition elect to commence an interpleader action or seek
other judicial relief or orders as the Collateral Agent, the Custodial Agent or
the Securities Intermediary may deem necessary. Notwithstanding anything
contained herein to the contrary, none of the Collateral Agent, the Custodial
Agent or the Securities Intermediary shall be required to take any action that
is in its opinion contrary to law or to the terms of this Agreement, or which
would in its opinion subject it or any of its officers, employees or directors
to liability.

     Section 9.10. Resignation of the Collateral Agent, the Custodial Agent and
the Securities Intermediary.

     (a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:

     (1) the Collateral Agent, the Custodial Agent and the Securities
     Intermediary may resign at any time by giving notice thereof to the Company
     and the Purchase Contract Agent as attorney-in-fact for the Holders of
     Units;

     (2) the Collateral Agent, the Custodial Agent and the Securities
     Intermediary may be removed at any time by the Company; and

     (3) if the Collateral Agent, the Custodial Agent or the Securities
     Intermediary fails to perform any of its material obligations hereunder in
     any material respect for a period of not less than 20 days after receiving
     written notice of such failure by the Purchase Contract Agent and such
     failure shall be continuing, the Collateral Agent, the Custodial Agent and
     the Securities Intermediary may be removed by the Purchase Contract Agent,
     acting at the direction of the Holders of a majority of the Units.



                                       23
<PAGE>

         The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent, the Custodial Agent or the Securities
Intermediary pursuant to clause (3) of this Section 9.10(a). Upon any such
resignation or removal, the Company shall have the right to appoint a successor
Collateral Agent, Custodial Agent or Securities Intermediary, as the case may
be, which shall not be an Affiliate of the Purchase Contract Agent. If no
successor Collateral Agent, Custodial Agent or Securities Intermediary shall
have been so appointed and shall have accepted such appointment within 30 days
after the retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's giving of notice of resignation or the Company's or the Purchase
Contract Agent's giving notice of such removal, then the retiring or removed
Collateral Agent, Custodial Agent or Securities Intermediary may petition any
court of competent jurisdiction, at the expense of the Company, for the
appointment of a successor Collateral Agent, Custodial Agent or Securities
Intermediary. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each be a bank or a national banking association which has an
office (or an agency office) in New York City with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent, Custodial Agent or Securities Intermediary hereunder by a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, such successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, and the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the
case may be, shall take all appropriate action, subject to payment of any
amounts then due and payable to it hereunder, to transfer any money and property
held by it hereunder (including the Collateral) to such successor. The retiring
Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such
succession, be discharged from its duties and obligations as Collateral Agent,
Custodial Agent or Securities Intermediary hereunder. After any retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation
hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the
provisions of this Article 9 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent, Custodial Agent or Securities Intermediary. Any resignation or
removal of the Collateral Agent, Custodial Agent or Securities Intermediary
hereunder, at a time when such Person is acting as the Collateral Agent,
Custodial Agent or Securities Intermediary, shall be deemed for all purposes of
this Agreement as the simultaneous resignation or removal of the Collateral
Agent, Securities Intermediary or Custodial Agent, as the case may be.

     (b) Since The Bank of New York is serving as the Collateral Agent hereunder
and the Purchase Contract Agent under the Purchase Contract Agreement, if an
event of default (other than an event of default occurring as a result of a
Final Remarketing) occurs hereunder or under the Purchase Contract Agreement,
The Bank of New York will resign as the Collateral Agent, but continue to act as
the Purchase Contract Agent. A successor Collateral Agent will be appointed in
accordance with the terms hereof.

     Section 9.11. Right to Appoint Agent or Advisor. The Collateral Agent shall
have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to


                                       24
<PAGE>

this Section 9.11 shall be subject to prior written consent of the Company,
which consent shall not be unreasonably withheld.

     Section 9.12. Survival. The provisions of this Article 9 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent, the Custodial Agent or the Securities Intermediary.

     Section 9.13. Exculpation. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, directors, employees or
agents be liable under this Agreement to the Company or any third party for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, whether or not the
likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them and regardless of
the form of action.

                                   ARTICLE X
                                   AMENDMENT

     Section 10.01. Amendment Without Consent of Holders. Without the consent of
any Holders, the Company, when authorized by a Board Resolution, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, at any time and from time to time, may amend this Agreement, in
form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, to:

     (a) evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company;

     (b) evidence and provide for the acceptance of appointment hereunder by a
successor Collateral Agent, Custodial Agent, Securities Intermediary or Purchase
Contract Agent;

     (c) add to the covenants of the Company for the benefit of the Holders, or
surrender any right or power herein conferred upon the Company, provided that
such covenants or such surrender do not adversely affect the validity,
perfection or priority of the Pledge created hereunder; or

     (d) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions
herein, or make any other provisions with respect to such matters or questions
arising under this Agreement, provided that such action shall not adversely
affect the interests of the Holders in any material respect.

     Section 10.02. Amendment with Consent of Holders. With the consent of the
Holders of not less than a majority of the Purchase Contracts at the time
outstanding, including without limitation the consent of the Holders obtained in
connection with a tender or an exchange offer, by Act of such Holders delivered
to the Company, the Purchase Contract Agent, the Custodial Agent, the Securities
Intermediary and the Collateral Agent, as the case may be,


                                       25
<PAGE>

the Company, when duly authorized by a Board Resolution, the Purchase Contract
Agent, the Collateral Agent, the Securities Intermediary and the Collateral
Agent may amend this Agreement for the purpose of modifying in any manner the
provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that no such supplemental agreement shall, without the
unanimous consent of the Holders of each Outstanding Unit adversely affected
thereby in any material respect:

     (a) change the amount or type of Collateral underlying a Unit (except for
the rights of holders of Corporate Units to substitute the Treasury Securities
for the Pledged Notes, or the rights of Holders of Treasury Units to substitute
Notes for the Pledged Treasury Securities), unless such change is not adverse to
the Holders, impair the right of the Holder of any Unit to receive distributions
on the underlying Collateral or otherwise adversely affect the Holder's rights
in or to such Collateral; or

     (b) otherwise effect any action that would require the consent of the
Holder of each Outstanding Unit affected thereby pursuant to the Purchase
Contract Agreement if such action were effected by a modification or amendment
of the provisions of the Purchase Contract Agreement; or

     (c) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for the modification or amendment of the provisions of this
Agreement;

provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or only the Treasury Units, then only the
affected class of Holders as of the record date for the Holders entitled to vote
thereon will be entitled to vote on such amendment or proposal, and such
amendment or proposal shall not be effective except with the consent of Holders
of not less than a majority of such class; provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (a) through (c) above.

         It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.

     Section 10.03. Execution of Amendments. In executing any amendment
permitted by this Article, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 7.01 of the Purchase Contract Agreement with
respect to the Purchase Contract Agent) shall be fully authorized and protected
in relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied. The Collateral Agent, Custodial Agent, Securities Intermediary and
Purchase Contract Agent may, but shall not be obligated to, enter into any such
amendment which affects their own respective rights, duties or immunities under
this Agreement or otherwise.

     Section 10.04. Effect of Amendments. Upon the execution of any amendment
under this Article, this Agreement shall be modified in accordance therewith,
and such


                                       26
<PAGE>

amendment shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered under the Purchase Contract Agreement shall be bound
thereby.

     Section 10.05. Reference of Amendments. Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Certificates representing Outstanding Units.

                                   ARTICLE XI
                                 MISCELLANEOUS

     Section 11.01. No Waiver. No failure on the part of the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary or any of
their respective agents to exercise, and no course of dealing with respect to,
and no delay in exercising, any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise by the Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary or any of
their respective agents of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

     Section 11.02. Governing Law; Submission to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. The Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary and the Holders from time to time of the Units, acting through the
Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Holders from
time to time of the Units, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.

     Section 11.03. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its


                                       27
<PAGE>

name on the signature pages hereof or, as to any party, at such other address as
shall be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telecopier or personally delivered or,
in the case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.

     Section 11.04. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the Units,
by their acceptance of the same, shall be deemed to have agreed to be bound by
the provisions hereof and to have ratified the agreements of, and the grant of
the Pledge hereunder by, the Purchase Contract Agent.

     Section 11.05. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.

     Section 11.06. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

     Section 11.07. Expenses, Etc. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:

     (a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
the reasonable fees and expenses of counsel to the Collateral Agent, the
Custodial Agent and the Securities Intermediary), reasonably incurred in
connection with (i) the negotiation, preparation, execution and delivery or
performance of this Agreement and (ii) any modification, supplement or waiver of
any of the terms of this Agreement;

     (b) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without limitation,
reasonable fees and expenses of counsel) reasonably incurred in connection with
(i) any enforcement or proceedings resulting or incurred in connection with
causing any Holder of Units to satisfy its obligations under the Purchase
Contracts forming a part of the Units and (ii) the enforcement of this Section
11.07;

     (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any other document referred to herein and all costs, expenses,
taxes, assessments and other charges reasonably incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated hereby;



                                       28
<PAGE>

     (d) all reasonable fees and expenses of any agent or advisor appointed by
the Collateral Agent and consented to by the Company under Section 9.11 of this
Agreement;

     (e) any out-of-pocket costs and expenses reasonably incurred by the
Collateral Agent, the Custodial Agent, and the Securities Intermediary in
connection with the exercise of their rights or performance of their obligations
and duties under Section 9.10 hereof; and

     (f) any other reasonable out-of-pocket costs and expenses reasonably
incurred by the Collateral Agent, the Custodial Agent and the Securities
Intermediary in connection with the performance of their duties hereunder.

     Section 11.08. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:

     (a) any lack of validity or enforceability of any provision of the Purchase
Contracts or the Units or any other agreement or instrument relating thereto;

     (b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of the Units under the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or

     (c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledgor.


                       [SIGNATURES ON THE FOLLOWING PAGE]




                                       29
<PAGE>


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


<TABLE>
<CAPTION>
<S>                                                        <C>
TEEKAY SHIPPING CORPORATION                                  THE BANK OF NEW YORK, as Purchase
                                                             Contract Agent and as attorney-in-fact of the
                                                             Holders from time to time of the Units

By:                                                          By:
    ---------------------------------------------------          ---------------------------------------------------

Name:                                                        Name:
      -------------------------------------------------            -------------------------------------------------
Title:                                                       Title:
       ------------------------------------------------             ------------------------------------------------

Address for Notices:                                         Address for Notices:

Teekay Shipping Corporation                                  The Bank of New York
550 Burrand Street                                           101 Barclay Street
Suite 2200, Bentall 5                                        New York, New York 10286
Vancouver, British Columbia                                  Fax: (212) 815-5802/03
V6C 2K2                                                      Attention:  Corporate Trust Division


                                                             THE BANK OF NEW YORK,
                                                             as Collateral Agent, Custodial Agent and
                                                             Securities Intermediary

                                                             By:
                                                                 ------------------------------------------------
                                                             Name:
                                                                   ----------------------------------------------
                                                             Title:
                                                                    ---------------------------------------------

                                                             Address for Notices:
                                                             The Bank of New York
                                                             101 Barclay Street
                                                             New York, New York 10286
                                                             Fax: (212) 815-5802/03
                                                             Attention: Corporate Trust Division
</TABLE>






                                       30
<PAGE>


                                    EXHIBIT A

                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                          (Creation of Treasury Units)

The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

Re: _______       Corporate Units of Teekay Shipping Corporation (the "Company")
                  The securities account of The Bank of New York, as Collateral
                  Agent, maintained by the Securities Intermediary and
                  designated The Bank of New York, as Collateral Agent of Teekay
                  Shipping Corporation, as pledgee of The Bank of New York, as
                  the Purchase Contract Agent on behalf of and as
                  attorney-in-fact for the Holders" (the "Collateral Account")

                  Please refer to the Pledge Agreement, dated as of February __,
                  2003 (the "Pledge Agreement"), among the Company, you, as
                  Collateral Agent, as Securities Intermediary and as Custodial
                  Agent and the undersigned, as Purchase Contract Agent and as
                  attorney-in-fact for the holders of Corporate Units from time
                  to time. Capitalized terms used herein but not defined shall
                  have the meaning set forth in the Pledge Agreement.

         We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Treasury Securities or security entitlements
with respect thereto in exchange for an equal Value of Pledged Notes relating to
_________ Corporate Units and has delivered to the undersigned a notice stating
that the Holder has Transferred such Treasury Securities or security
entitlements with respect thereto to the Securities Intermediary, for credit to
the Collateral Account.


                                       A-1
<PAGE>


         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Treasury Securities or security entitlements thereto have
been credited to the Collateral Account, to release to the undersigned an equal
Value of Pledged Notes in accordance with Section 5.02 of the Pledge Agreement.

<TABLE>
<CAPTION>
<S>                                                         <C>
Date: ___________                                             THE BANK OF NEW YORK,
                                                              as Purchase Contract Agent and as attorney-in-fact
                                                              of the Holders from time to time of the Units

                                                              By:
                                                                  -------------------------------------------------
                                                              Name:
                                                                    -----------------------------------------------
                                                              Title:
                                                                     ----------------------------------------------
</TABLE>


Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the Pledged Notes:


<TABLE>
<CAPTION>
<S>                                                         <C>
                                                              Name:
                                                                    -----------------------------------------------

                                                              Social Security:
                                                                               ------------------------------------

                                                              or other Taxpayer Identification Number,
                                                              if any
                                                                     ----------------------------------------------

                                                              Address:
                                                                       --------------------------------------------
</TABLE>



                                       A-2
<PAGE>


                                    EXHIBIT B

                                   INSTRUCTION
                              FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                          (Creation of Treasury Units)

The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

Re: __________      Corporate Units of Teekay Shipping Corporation (the
                    "Company") The securities account of The Bank of New York,
                    as Collateral Agent, maintained by the Securities
                    Intermediary and designated The Bank of New York, as
                    Collateral Agent of Teekay Shipping Corporation, as pledgee
                    of The Bank of New York, as the Purchase Contract Agent on
                    behalf of and as attorney-in-fact for the Holders" (the
                    "Collateral Account").

         Please refer to the Pledge Agreement, dated as of February 3, 2003 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary, The
Bank of New York, as Purchase Contract Agent and as attorney-in-fact for the
holders of Corporate Units from time to time, and the undersigned, as Collateral
Agent. Capitalized terms used herein but not defined shall have the meanings set
forth in the Pledge Agreement.

         When you have confirmed that $__________ Value of Treasury Securities
or security entitlements thereto has been credited to the Collateral Account by
or for the benefit of _________, as Holder of Corporate Units (the "Holder"),
you are hereby instructed to release from the Collateral Account an equal Value
of Pledged Notes or security entitlements with respect thereto relating to
_______ Corporate Units of the Holder by Transfer to the Purchase Contract
Agent.



                                       B-1
<PAGE>


                                        THE BANK OF NEW YORK,
                                        as Collateral Agent

Dated: __________

                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------


                                        Please print name and address of Holder:

                                        Name:
                                             -----------------------------------

                                        Social Security:
                                                        ------------------------

                                        or other Taxpayer Identification Number,
                                        if any
                                               ---------------------------------

                                        Address:
                                                --------------------------------


                                       B-2
<PAGE>


                                    EXHIBIT C
                                   INSTRUCTION
                          FROM PURCHASE CONTRACT AGENT
                               TO COLLATERAL AGENT
                         (Recreation of Corporate Units)

The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

         Re:____________      Treasury Units of Teekay Shipping Corporation
                              (the "Company")


         Please refer to the Pledge Agreement dated as of February __, 2003 (the
"Pledge Agreement"), among the Company, you, as Collateral Agent, as Securities
Intermediary, as Custodial Agent and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the holders of Treasury Units from time to time.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.

         We hereby notify you in accordance with Section 5.03(a) of the Pledge
Agreement that the holder of securities named below (the "Holder") has elected
to substitute $__________ Value of Notes or security entitlements with respect
thereto in exchange for $__________ Value of Pledged Treasury Securities and has
delivered to the undersigned a notice stating that the holder has Transferred
such Notes or security entitlements with respect thereto to the Securities
Intermediary, for credit to the Collateral Account.

         We hereby request that you instruct the Securities Intermediary, upon
confirmation that such Notes or security entitlements with respect thereto have
been credited to the Collateral Account, to release to the undersigned
$__________ Value of Treasury Securities or security entitlements with respect
thereto related to _____ Treasury Units of such Holder in accordance with
Section 5.03(a) of the Pledge Agreement.

                                              THE BANK OF NEW YORK
                                              as Purchase Contract Agent

Dated:___________                             By:
                                                 -------------------------------
                                              Name:
                                                   -----------------------------
                                              Title:
                                                    ----------------------------


                                       C-1
<PAGE>


Please print name and address of Holder electing to substitute Notes or security
entitlements with respect thereto for Pledged Treasury Securities:

                                              Name:
                                                   -----------------------------

                                              Social Security:
                                                              ------------------

                                              or other Taxpayer Identification
                                              Number, if any
                                                            --------------------

                                              Address:
                                                      --------------------------


                                       C-2
<PAGE>


                                    EXHIBIT D

                        INSTRUCTION FROM COLLATERAL AGENT
                           TO SECURITIES INTERMEDIARY
                         (Recreation of Corporate Units)

The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

Re:___________             Treasury Units of Teekay Shipping Corporation (the
                           "Company") The securities account of The Bank of New
                           York, as Collateral Agent, maintained by the
                           Securities Intermediary and designated The Bank of
                           New York, as Collateral Agent of Teekay Shipping
                           Corporation, as pledgee of The Bank of New York, as
                           the Purchase Contract Agent on behalf of and as
                           attorney-in-fact for the Holders" (the "Collateral
                           Account").

         Please refer to the Pledge Agreement dated as of February __, 2003 (the
"Pledge Agreement"), among the Company, you, as Securities Intermediary,
Custodial Agent and Collateral Agent and The Bank of New York, as Purchase
Contract Agent and as attorney-in-fact for the holders of Corporate Units from
time to time, and the undersigned, as Collateral Agent. Capitalized terms used
herein but no defined shall have the meaning set forth in the Pledge Agreement.

         When you have confirmed that $ __________ Value of Notes or security
entitlements with respect thereto has been credited to the Collateral Account by
or for the benefit of ________________, as Holder of Treasury Units (the
"Holder"), you are hereby instructed to release from the Collateral Account
$__________ Value of Treasury Securities or security entitlements thereto by
Transfer to the Purchase Contract Agent.

                                              THE BANK OF NEW YORK
                                              as Collateral Agent

Dated: ___________                            By:
                                                 -------------------------------
                                              Name:
                                                   -----------------------------
                                              Title:
                                                    ----------------------------

                                              Name:
                                                   -----------------------------

                                              Social Security:
                                                              ------------------

                                              or other Taxpayer Identification
                                              Number, if any
                                                            --------------------

                                              Address:
                                                      --------------------------


                                       D-1
<PAGE>



                                    EXHIBIT E

                    NOTICE OF CASH SETTLEMENT FROM COLLATERAL
                        AGENT TO PURCHASE CONTRACT AGENT
                            (Cash Settlement Amounts)

The Bank of New York
The Purchase Contract Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

         Re:      __________ Corporate Units of Teekay Shipping Corporation
                             (the "Company") __________ Treasury Units of the
                             Company


         Please refer to the Pledge Agreement dated as of February __, 2003 (the
"Pledge Agreement"), by and among you, the Company, and The Bank of New York, as
Collateral Agent, Custodial Agent and Securities Intermediary. Unless otherwise
defined herein, terms defined in the Pledge Agreement are used herein as defined
therein.

         In accordance with Section 5.05(d) of the Pledge Agreement, we hereby
notify you that as of 5:00 p.m. (New York City time) on the fourth Business Day
immediately preceding [_____________] (the "Purchase Contract Settlement Date"),
we have received (i) $ _______________ in immediately available funds paid in an
aggregate amount equal to the Purchase Price due to the Company on the Purchase
Contract Settlement Date with respect to ________________ Corporate Units and
(ii) based on the funds received set forth in clause (i) above, an aggregate
principal amount of $_________ of Pledged Notes are to be tendered for purchase
in the Remarketing.

                                             THE BANK OF NEW YORK
                                             as Collateral Agent

Dated: ___________                           By:
                                                --------------------------------
                                             Name:
                                                  ------------------------------
                                             Title:
                                                   -----------------------------


                                       E-1
<PAGE>




                                    EXHIBIT F

              INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

The Bank of New York
The Custodial Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

Re: Notes Due May 18, 2006 of Teekay Shipping Corporation (the "Company").

         The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of February __, 2003 (the "Pledge Agreement"),
among the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary and The Bank of New York, as the Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, that the
undersigned elects to deliver $______________ aggregate principal amount of
Separate Notes for delivery to the Remarketing Agent prior to 5:00 p.m. (New
York City time) on the fifth Business Day immediately preceding the Remarketing
Date for remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and deliver any
additional documents deemed by the Remarketing Agent or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Separate Notes tendered hereby. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.

         The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent, to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions." The undersigned hereby instructs you, in the event of a
Failed Remarketing, upon receipt of the Separate Notes tendered herewith from
the Remarketing Agent, to deliver such Separate Notes to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."

         With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Separate Notes tendered hereby and that the undersigned is the
record owner of any Notes tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Notes
tendered herewith by book-entry transfer to your account at DTC, (ii) agrees to
be bound by the terms and conditions of Section 5.07(c) of the Pledge Agreement
and (iii) acknowledges and agrees that after 5:00 p.m. (New York City time) on
the fifth Business Day immediately preceding the Remarketing Date, such election
shall become an irrevocable election to have such Separate Notes remarketed in
the Remarketing and, in the case of a Failed Remarketing, in any subsequent
Remarketing, and that the Separate Notes tendered herewith will only be returned
in the event of a Failed Remarketing.


                                       F-1
<PAGE>




Date: ___________                          By:
                                              ----------------------------------
                                           Name:
                                                --------------------------------
                                           Title:
                                                 -------------------------------

                                           Signature:
                                                     ---------------------------

                                           Guarantee:
                                                     ---------------------------

                                           Social Security or other Taxpayer
                                           Identification Number, if any

                                           -------------------------------------

                                           Name:
                                                --------------------------------

                                           Address:
                                                   -----------------------------



                                       F-2
<PAGE>


A.       PAYMENT INSTRUCTIONS


Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

Name(s)
        ---------------------------------------------

(Please Print)
               --------------------------------------

Address
        ---------------------------------------------

(Please Print)
               --------------------------------------

(Zip Code)
           ------------------------------------------

(Tax Identification or Social Security Number)

- -----------------------------------------------------


B.       DELIVERY INSTRUCTIONS

In the event of a failed final remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.

Name(s)
        ---------------------------------------------

(Please Print)
               --------------------------------------

Address
        ---------------------------------------------

(Please Print)
               --------------------------------------

(Zip Code)
           ------------------------------------------

(Tax Identification or Social Security Number)

- -----------------------------------------------------



In the event of a failed remarketing, Notes which are in book-entry form should
be credited to the account at The Depository Trust Company set forth below.

DTC Account Number
                   ----------------------------------

Name of Account Party:
                       ------------------------------



                                       F-3
<PAGE>



                                    EXHIBIT G

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING

The Bank of New York
The Custodial Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attention: Corporate Trust Division

Re: Notes due May 18, 2006 of Teekay Shipping Corporation (the "Company").
                                                                -------

         The undersigned hereby notifies you in accordance with Section 5.07(c)
of the Pledge Agreement, dated as of February __, 2003 (the "Pledge Agreement"),
among the Company and you, as Collateral Agent, Custodial Agent and Securities
Intermediary, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units from time to time, that the
undersigned elects to withdraw the $_________ aggregate principal amount of
Separate Notes delivered to the Collateral Agent on _________, 200_ for
remarketing pursuant to Section 5.07(c) of the Pledge Agreement. The undersigned
hereby instructs you to return such Notes to the undersigned in accordance with
the undersigned's instructions. With this notice, the Undersigned hereby agrees
to be bound by the terms and conditions of Section 5.07(c) of the Pledge
Agreement. Capitalized terms used herein but not defined shall have the meaning
set forth in the Pledge Agreement.

Date: ___________                        By:
                                            ------------------------------------
                                         Name:
                                              ----------------------------------
                                         Title:
                                               ---------------------------------

                                         Signature:
                                                   -----------------------------

                                         Guarantee:
                                                   -----------------------------

                                         Social Security or other Taxpayer
                                         Identification Number, if any

                                         ---------------------------------------

                                         Name:
                                              ----------------------------------

                                         Address:
                                                 -------------------------------


                                       G-1









</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>6
<FILENAME>o08866exv4w4.txt
<DESCRIPTION>REMARKETING AGREEMENT
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.4


                              REMARKETING AGREEMENT

                                February __, 2003

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

The Bank of New York
101 Barclay Street
New York, New York 10286
Attention:  Corporate Trust Division

Ladies and Gentlemen:

         This Agreement is dated as of February __, 2003 (the "Agreement") by
and among Teekay Shipping Corporation, a corporation duly incorporated and
existing under the laws of the Republic of The Marshall Islands (the "Company"),
Morgan Stanley & Co. Incorporated, as the remarketing agent (the "Remarketing
Agent"), and The Bank of New York, a New York banking corporation, not
individually but solely as Purchase Contract Agent (the "Purchase Contract
Agent") and as attorney-in-fact of the holders of Purchase Contracts (as defined
in the Purchase Contract Agreement referred to below).

Section 1. Definitions.

     (a) Capitalized terms used and not defined in this Agreement shall have the
meanings set forth in the Purchase Contract Agreement, dated as of February __,
2003, between the Company and The Bank of New York, as Purchase Contract Agent,
as amended from time to time (the "Purchase Contract Agreement").

     (b) As used in this Agreement, the following terms have the following
meanings:

     "Commission" means the United States Securities and Exchange Commission.

     "Coupon Rate" has the meaning set forth in Section 205(a) of the
Supplemental Indenture No. 1.

     "Notes" means the [____]% Notes due May 18, 2006 of the Company.

     "Preliminary Prospectus" means any preliminary prospectus relating to the
Remarketed Notes included in the Registration Statement, including the documents
incorporated by reference therein as of the date of such Preliminary Prospectus;
and any reference to any amendment or supplement to such Preliminary Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus, under the Exchange Act, and incorporated by
reference in such Preliminary Prospectus.

     "Prospectus" means the prospectus relating to the Remarketed Notes, in the
form in which first filed, or transmitted for filing, with the Commission after
the effective date of the



                                       1
<PAGE>

Registration Statement pursuant to Rule 424(b), including the documents
incorporated by reference therein as of the date of such Prospectus; and any
reference to any amendment or supplement to such Prospectus shall be deemed to
refer to and include any documents filed after the date of such Prospectus,
under the Exchange Act, and incorporated by reference in such Prospectus.

     "Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the Remarketing of
the Remarketed Notes pursuant to Section 5(a) hereunder, including all exhibits
thereto and the documents incorporated by reference in the prospectus contained
in such registration statement, and any post-effective amendments thereto.

     "Remarketed Notes" means the Pledged Notes and the Separate Notes, if any,
subject to Remarketing as identified to the Remarketing Agent by the Purchase
Contract Agent and the Custodial Agent, respectively, after 5:00 p.m., New York
City time, on the Business Day immediately preceding the Remarketing Date, and
shall include: (a) the Notes of the Holders of Corporate Units who have not
notified the Purchase Contract Agent prior to 5:00 p.m., New York City time, on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date of their intention to effect a Cash Settlement of the related Purchase
Contracts pursuant to the terms of the Purchase Contract Agreement or who have
so notified the Purchase Contract Agent but failed to make the required cash
payment prior to 5:00 p.m., New York City time, on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date pursuant to the
terms of the Purchase Contract Agreement, and (b) the Separate Notes of the
holders of Separate Notes, if any, who have elected to have their Separate Notes
be remarketed in such Remarketing pursuant to the terms of the Purchase Contract
Agreement.

     "Remarketing" means the remarketing of the Remarketed Notes pursuant to
this Remarketing Agreement.

     "Remarketing Date" has the meaning set forth in Section 2.

     "Remarketing Fee" has the meaning set forth in Section 4.

     "Remarketing Materials" means the Preliminary Prospectus, the Prospectus or
any other information furnished by the Company to the Remarketing Agent
expressly for distribution to investors in connection with the Remarketing.

     "Remarketing Price" has the meaning set forth in Section 2.

     "Transaction Documents" means this Agreement, the Purchase Contract
Agreement, the Pledge Agreement and the Indenture, in each case as amended or
supplemented from time to time.

Section 2. Appointment and Obligations of the Remarketing Agent.

     (a) The Company hereby appoints Morgan Stanley & Co. Incorporated as the
exclusive Remarketing Agent, and, subject to the terms and conditions set forth
herein, Morgan Stanley & Co. Incorporated hereby accepts appointment as
Remarketing Agent, for the purpose



                                       2
<PAGE>

of (i) remarketing the Remarketed Notes on behalf of the holders thereof, (ii)
determining, in consultation with the Company, in the manner provided for herein
and in the Purchase Contract Agreement and the Indenture, the Reset Rate for the
Notes, and (iii) performing such other duties as are assigned to the Remarketing
Agent in the Transaction Documents.

     (b) On the third Business Day immediately preceding February 16, 2006 (the
"Remarketing Date"), the Remarketing Agent shall use its reasonable efforts to
remarket (the "Remarketing") the Remarketed Notes at a price (the "Remarketing
Price"), based on the Reset Rate, equal to approximately 100.25% (or, if the
Remarketing Agent is unable to remarket the Remarketed Notes at such price, at a
price below 100.25% in the discretion of the Remarketing Agent, but in no event
less than 100%, net of any Remarketing Fee and any other fees and commissions)
of the aggregate principal amount of the Remarketed Notes being remarketed in
such Remarketing. It is understood and agreed that the Remarketing on the
Remarketing Date will be considered successful and no further attempts will be
made if the resulting proceeds are at least 100% (net of any Remarketing Fee and
any other fees and commissions) of the aggregate principal amount of the
Remarketed Notes.

     (c) In connection with the Remarketing, the Remarketing Agent shall
determine, in consultation with the Company, the rate per annum, rounded to the
nearest one-thousandth (0.001) of one percent per annum, that the Notes should
bear (the "Reset Rate") in order for the Remarketed Notes to have an aggregate
market value equal to the Remarketing Price, and that in the sole reasonable
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Notes at the Remarketing Price in such Remarketing, provided that
such rate shall not exceed the maximum interest rate permitted by law.

     (d) In the event of a Failed Remarketing, or if no Notes are included in
Corporate Units and none of the holders of the Separate Notes elect to have
Notes remarketed in such Remarketing, the applicable interest rate on the Notes
will not be reset and will continue to be the Coupon Rate set forth in the
Indenture.

     (e) If, by 4:00 p.m., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Remarketed Notes at the
Remarketing Price pursuant to the terms and conditions hereof, a Failed
Remarketing shall be deemed to have occurred, and the Remarketing Agent shall
advise by telephone the Depositary, the Purchase Contract Agent and the Company.
Whether or not there has been a Failed Remarketing will be determined in the
sole reasonable discretion of the Remarketing Agent. No Remarketed Notes shall
be sold if there is a Failed Remarketing.

     (f) In the event of a Successful Remarketing, by approximately 4:30 p.m.,
New York City time, on the Remarketing Date, the Remarketing Agent shall advise,
by telephone:

         (1) the Depositary, the Purchase Contract Agent and the Company of the
     Reset Rate determined by the Remarketing Agent in the Remarketing and the
     number of Remarketed Notes sold in such Remarketing;

                                       3
<PAGE>

         (2) each purchaser (or the Depositary Participant thereof) of
     Remarketed Notes of the Reset Rate and the number of Remarketed Notes such
     purchaser is to purchase; and

         (3) each such purchaser to give instructions to its Depositary
     Participant to pay the purchase price prior to 11:00 a.m., New York City
     time, on the third Business Day immediately following the date of the
     Successful Remarketing in same day funds against delivery of the Remarketed
     Notes purchased through the facilities of the Depositary.

     The Remarketing Agent shall also, if required by the Securities Act or the
rules and regulations promulgated thereunder, deliver to each purchaser a
Prospectus in connection with the Remarketing.

     (g) After deducting any fees specified in Section 4 below, the proceeds
from a Successful Remarketing (1) with respect to the Notes that are components
of the Corporate Units, shall be paid to the Collateral Agent in accordance with
Sections 5.07 of the Pledge Agreement and Section 5.02 of the Purchase Contract
Agreement and (2) with respect to the Separate Notes, shall be paid to the
Custodial Agent for payment to the holders of such Separate Notes in accordance
with Section 5.02 of the Purchase Contract Agreement.

     (h) The right of each holder of Separate Notes or Corporate Units to have
Remarketed Notes remarketed and sold on the Remarketing Date shall be subject to
the conditions that (1) the Remarketing Agent conducts a Remarketing pursuant to
the terms of this Agreement, (2) the Remarketing Agent is able to find a
purchaser or purchasers for Remarketed Notes at the Remarketing Price based on
the Reset Rate, and (3) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent as and when required.

     (i) It is understood and agreed that the Remarketing Agent shall not have
any obligation whatsoever to purchase any Remarketed Notes, whether in the
Remarketing or otherwise, and shall in no way be obligated to provide funds to
make payment upon tender of Remarketed Notes for Remarketing or to otherwise
expend or risk its own funds or incur or to be exposed to financial liability in
the performance of its duties under this Agreement, and without limitation of
the foregoing, the Remarketing Agent shall not be deemed an underwriter of the
Remarketed Notes. Neither the Company nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment upon tender of the
Remarketed Notes for Remarketing.

Section 3. Representations and Warranties of the Company.

     The Company represents and warrants (1) on and as of the date any
Remarketing Materials are first distributed in connection with the Remarketing
(the "Commencement Date"), (2) on and as of the Remarketing Date and (3) on and
as of the settlement date relating to the Remarketing Date, that:

     (a) Each of the representations and warranties of the Company as set forth
in Sections 1(c) through 1(r), 1(u) through 1(mm) and Section 2(a) through 2(j)
of the Underwriting Agreement dated as of February __, 2003 (the "Underwriting
Agreement") among the Company and the Underwriters identified in Schedule II, as
adapted as necessary for any changed


                                       4
<PAGE>


circumstances or events occurring subsequent to the date of this Agreement (such
adaptations to be reasonably acceptable to counsel to the Remarketing Agent), is
true and correct as if made on each of the dates specified above (other than any
such representations and warranties which are by their terms made as of another
date, which shall be true and correct as of such dates specified therein);
provided that for purposes of this Section 3(a), any reference in such sections
of the Underwriting Agreement to (1) the "Registration Statement", the
"Prospectus" or the "Preliminary Prospectus" shall be deemed to refer to such
terms as defined herein, (2) the "Closing Date" shall be deemed to refer to the
applicable Remarketing Date and (3) the term "Significant Navion Subsidiary" as
used in Section 2(b) of the Underwriting Agreement shall be deemed to include
any subsidiaries of Navion that are, on each of the dates specified above,
"significant subsidiaries" of Navion within the meaning of Regulation S-X.

     (b) The Registration Statement, if any, in the form heretofore delivered or
to be delivered to the Remarketing Agent, has been declared effective by the
Commission in such form; and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission.

     (c) The documents incorporated by reference in the Prospectus, when they
were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information relating to
the Remarketing Agent furnished in writing to the Company by the Remarketing
Agent or its counsel expressly for use in the Prospectus.

     (d) The Registration Statement, if any, conforms (and the Prospectus, if
any, and any further amendments or supplements to the Registration Statement or
the Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform) in all material respects to the requirements of
the Securities Act and the rules and regulations promulgated thereunder, and the
Registration Statement and the Remarketing Materials (and any amendment or
supplement thereto) as of their respective effective or filing dates and as of
the Commencement Date, the Remarketing Date and Purchase Contract Settlement
Date do not and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation and warranty
is made as to any statement of eligibility on Form T-1 filed or incorporated by
reference as part of the Registration Statement, the Prospectus or the
Remarketing Materials, or as to information relating to the Remarketing Agent
contained in or omitted from the Registration Statement, the Prospectus or the
Remarketing Materials in reliance


                                       5
<PAGE>

upon and in conformity with written information furnished to the Company by the
Remarketing Agent.

     (e) This Agreement has been duly authorized, executed and delivered by the
Company.

Section 4. Fees.

     (a) In the event of a Successful Remarketing, the Remarketing Agent may
retain as the remarketing fee, an amount equal to the lesser of (1) 25 basis
points (0.25%), of the principal amount of the Remarketed Notes and (2) the
amount of the proceeds of such Remarketing on the Remarketing Date in excess of
the aggregate principal amount of such Remarketed Notes (the "Remarketing Fee").

Section 5. Covenants of the Company.

     The Company covenants and agrees as follows:

     (a) If and to the extent the Remarketed Notes are required (in the
reasonable view of counsel, which need not be in the form of a written opinion,
for either the Remarketing Agent or the Company) to be registered under the
Securities Act as in effect at the time of the Remarketing,

         (1) to prepare the Registration Statement and the Prospectus, in a form
     approved by the Remarketing Agent, to file any such Prospectus pursuant to
     the Securities Act within the period required by the Securities Act and the
     rules and regulations thereunder and to use commercially reasonable efforts
     to cause the Registration Statement to be declared effective by the
     Commission prior to the second Business Day immediately preceding the
     applicable Remarketing Date;

         (2) to file promptly with the Commission any amendment to the
     Registration Statement or the Prospectus or any supplement to the
     Prospectus that may, in the reasonable judgment of the Company or the
     Remarketing Agent, be required by the Securities Act or requested by the
     Commission;

         (3) to advise the Remarketing Agent, promptly after it receives notice
     thereof, of the time when any amendment to the Registration Statement has
     been filed or becomes effective or any supplement to the Prospectus or any
     amended Prospectus has been filed and to furnish the Remarketing Agent with
     copies thereof;

         (4) to file promptly all reports and any definitive proxy or
     information statements required to be filed by the Company with the
     Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
     Act subsequent to the date of the Prospectus and for so long as the
     delivery of a Prospectus is required in connection with the offering or
     sale of the Remarketed Notes;

         (5) to advise the Remarketing Agent, promptly after it receives notice
     thereof, of the issuance by the Commission of any stop order or of any
     order preventing or


                                       6
<PAGE>

     suspending the use of the Prospectus, of the suspension of the
     qualification of any of the Remarketed Notes for offering or sale in any
     jurisdiction, of the initiation or threatening of any proceeding for any
     such purpose, or of any request by the Commission for the amending or
     supplementing of the Registration Statement or the Prospectus or for
     additional information, and, in the event of the issuance of any stop order
     or of any order preventing or suspending the use of any Prospectus or
     suspending any such qualification, to use promptly its best efforts to
     obtain its withdrawal;

         (6) to furnish promptly to the Remarketing Agent such copies of the
     following documents as the Remarketing Agent shall reasonably request: (A)
     conformed copies of the Registration Statement as originally filed with the
     Commission and each amendment thereto (in each case excluding exhibits);
     (B) the Preliminary Prospectus and any amended or supplemented Preliminary
     Prospectus, (C) the Prospectus and any amended or supplemented Prospectus;
     and (D) any document incorporated by reference in the Prospectus (excluding
     exhibits thereto); and, if at any time when delivery of a prospectus is
     required in connection with the Remarketing, any event shall have occurred
     as a result of which the Prospectus as then amended or supplemented would
     include any untrue statement of a material fact or omit to state any
     material fact necessary in order to make the statements therein, in the
     light of the circumstances under which they were made when such Prospectus
     is delivered, not misleading, or if for any other reason it shall be
     necessary during such same period to amend or supplement the Prospectus or
     to file under the Exchange Act any document incorporated by reference in
     the Prospectus in order to comply with the Securities Act or the Exchange
     Act, to notify the Remarketing Agent and, upon its request, to file such
     document and to prepare and furnish without charge to the Remarketing Agent
     and to any dealer in securities as many copies as the Remarketing Agent may
     from time to time reasonably request of an amended or supplemented
     Prospectus that will correct such statement or omission or effect such
     compliance;

         (7) prior to filing with the Commission (A) any amendment to the
     Registration Statement or supplement to the Prospectus or (B) any
     Prospectus pursuant to Rule 424 under the Securities Act, to furnish a copy
     thereof to the Remarketing Agent and counsel to the Remarketing Agent; and
     not to file any such amendment or supplement that shall be reasonably
     disapproved by the Remarketing Agent promptly after reasonable notice;

         (8) as soon as practicable, but in any event not later than eighteen
     months, after the effective date of the Registration Statement, to make
     "generally available to its security holders" an "earnings statement" of
     the Company and its subsidiaries complying with (which need not be audited)
     Section 11(a) of the Securities Act and the rules and regulations
     thereunder (including, at the option of the Company, Rule 158). The terms
     "Generally available to its securityholders" and "Earnings Statement" shall
     have the meanings set forth in Rule 158; and

         (9) to take such action as the Remarketing Agent may reasonably request
     in order to qualify the Remarketed Notes for offer and sale under the
     securities or "blue sky" laws of such jurisdictions as the Remarketing
     Agent may reasonably request;


                                       7
<PAGE>

     provided that in no event shall the Company be required to qualify as a
     foreign corporation or to file a general consent to service of process in
     any jurisdiction.

     (b) To pay: (1) the costs incident to the preparation and printing of the
Registration Statement, if any, any Prospectus and any other Remarketing
Materials and any amendments or supplements thereto; (2) the costs of
distributing the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto; (3) any fees
and expenses of qualifying the Remarketed Notes under the securities laws of the
several jurisdictions as provided in Section 5(a)(9) and of preparing, printing
and distributing a Blue Sky Memorandum, if any (including any related reasonable
fees and expenses of counsel to the Remarketing Agent); (4) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder; (5) all other reasonable costs and expenses incident to the
performance of the obligations of the Remarketing Agent hereunder; and (6) the
reasonable fees and expenses of counsel to the Remarketing Agent in connection
with their duties hereunder.

     (c) To furnish the Remarketing Agent with such information and documents as
the Remarketing Agent may reasonably request in connection with the transactions
contemplated hereby, and to make reasonably available to the Remarketing Agent
and any accountant, attorney or other advisor retained by the Remarketing Agent
such information that parties would customarily require in connection with a due
diligence investigation conducted in accordance with applicable securities laws
and to cause the Company's officers, directors, employees and accountants to
participate in all such discussions and to supply all such information
reasonably requested by any such Person in connection with such investigation.

Section 6. Conditions to the Remarketing Agent's Obligations.

     The obligations of the Remarketing Agent hereunder shall be subject to the
following conditions:

     (a) The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission; and
any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied
with.

     (b) (1) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, the American Stock Exchange, the Nasdaq
National Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (2) trading of any securities of the
Company shall not have been suspended on any exchange or in any over-the-counter
market, (3) a material disruption in securities settlement, payment or clearance
services in the United States or Canada shall not have occurred, (4) a
moratorium on commercial banking activities shall not have been declared by
Federal, New York State or Canadian authorities, or (5) there shall not have
occurred any outbreak or escalation of hostilities or declaration of war or any
change in financial markets or any calamity or crisis, that, in the Remarketing
Agent's judgment, is material and adverse and which, singly or together with any
other such event specified in clause (5), makes it, in the Remarketing Agent's



                                       8
<PAGE>

judgment, impracticable or inadvisable to proceed with the Remarketing or the
delivery of the Remarketed Notes on the terms and in the manner contemplated in
the Transaction Documents.

     (c) The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the Remarketing
Date (other than any such representations and warranties which are by their
terms made as of another date, which shall be true and correct as of such dates
specified therein), and the Company, the Purchase Contract Agent and the
Collateral Agent shall have performed in all material respects all covenants and
agreements contained herein or in the Purchase Contract Agreement or Pledge
Agreement to be performed on their part at or prior to the Remarketing Date.

     (d) The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of the Chief Financial Officer
satisfactory to the Remarketing Agent stating that: (1) no order suspending the
effectiveness of the Registration Statement, if any, or prohibiting the sale of
the Remarketed Notes is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of such officers, threatened by the
Commission; (2) the representations and warranties of the Company in Section 3
are true and correct on and as of the Remarketing Date (other than any such
representations and warranties which are by their terms made as of another date,
which shall be true and correct as of such dates specified therein) and the
Company has performed in all material respects all covenants and agreements
contained herein to be performed on its part at or prior to the Remarketing
Date; and (3) the Registration Statement, as of its effective date, and the
Remarketing Materials, as of their respective dates, did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the Prospectus did not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading (provided, however, that such certificate may exclude
from its coverage any information relating to the Remarketing Agent contained in
the Registration Statement, the Prospectus or the Remarketing Materials in
reliance upon and in conformity with written information furnished to the
Company by the Remarketing Agent).

     (e) On the Remarketing Date, the Remarketing Agent shall have received a
letter addressed to the Remarketing Agent and dated such date, in form and
substance satisfactory to the Remarketing Agent, of the independent accountants
of the Company, containing statements and information of the type ordinarily
included in accountants' "comfort letters" with respect to certain financial
information contained in the Remarketing Materials, if any.

     (f) Each of (1) Watson, Farley & Williams, (2) Graham, Thompson & Co., (3)
Seward & Kissel LLP, (4) Thommessen Krefting Greve Lund AS Advokatfirma, (5)
Perkins Coie LLP and (6) Appleby Spurling & Kempe, shall have furnished to the
Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the
Remarketing Date, in form and substance reasonably satisfactory to the
Remarketing Agent addressing such matters as are set forth in such counsel's
opinion furnished pursuant to Sections 6(d) through 6(i), respectively of the
Underwriting Agreement, adapted as necessary to relate to the securities being
remarketed hereunder and to the Remarketing Materials, if any, or to any changed
circumstances or events



                                       9
<PAGE>

occurring subsequent to the date of this Agreement, such adaptations being
reasonably acceptable to counsel to the Remarketing Agent.

     (g) Seward & Kissel LLP, counsel for the Purchase Contract Agent, shall
have furnished to the Remarketing Agent its opinion, addressed to the
Remarketing Agent and dated the Remarketing Date, in form and substance
reasonably satisfactory to the Remarketing Agent addressing such matters as are
set forth in such counsel's opinion furnished pursuant to Section 6(k) of the
Underwriting Agreement, adapted as necessary to relate to the securities being
remarketed hereunder and to the Remarketing Materials, if any, or to any changed
circumstances or events occurring subsequent to the date of this Agreement, such
adaptations being reasonably acceptable to counsel to the Remarketing Agent.

     (h) Counsel for the Remarketing Agent, shall have furnished to the
Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the
applicable Remarketing Date, in form and substance satisfactory to the
Remarketing Agent.

     (i) Subsequent to the execution and delivery of this Agreement and prior to
the applicable Remarketing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate an improvement, in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.

Section 7. Indemnification.

     (a) The Company agrees to indemnify and hold harmless the Remarketing Agent
and each person, if any, who controls the Remarketing Agent within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act and each
affiliate of the Remarketing Agent within the meaning of Rule 405 under the
Securities Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in investigating or defending any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), any
Preliminary Prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to the Remarketing Agent furnished to the Company in
writing by the Remarketing Agent expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Remarketing Agent from whom the
person asserting any such losses, claims, damages or liabilities purchased
Remarketed Notes, or any person controlling the Remarketing Agent, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendment or supplements thereto) was not sent or given by or on
behalf of the Remarketing Agent to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Remarketed Notes to such person, and if the Prospectus (as so amended or
supplemented) would have cured



                                       10
<PAGE>

the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 5(a)(6)
hereof.

     (b) The Remarketing Agent agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement, and
each person, if any, who controls the Company to the same extent as the
foregoing indemnity from the Company to the Remarketing Agent, but only with
reference to information relating to such Remarketing Agent furnished to the
Company by the Remarketing Agent expressly for use in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto.

     (c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 7(a) or 7(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, in which case the indemnifying party shall pay
the reasonable fees and disbursements of such counsel. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceeding in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Remarketing Agent, in
the case of parties indemnified pursuant to Section 7(a), and by the Company, in
the case of parties indemnified pursuant to Section 7(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought



                                       11
<PAGE>

hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

Section 8. Contribution.

     (a) To the extent the indemnification provided for in Section 7(a) or 7(b)
hereof is unavailable to any indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Remarketing Agent on
the other hand from the offering of the Remarketed Notes or (ii) if the
allocation provided by clause (i) of this Section 8(a) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) of this Section 8(a) but also the
relative fault of the Company on the one hand and the Remarketing Agent on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations.

     The relative benefits received by the Company on one hand and the
Remarketing Agent on the other hand in connection with the Remarketing shall be
deemed to be in the same proportions as the aggregate principal amount of the
Remarketed Notes less the fee paid to the Remarketing Agent on the one hand and
the fee paid to the Remarketing Agent on the other hand bear to the aggregate
principal amount of the Remarketed Notes.

     The relative fault of the Company on the one hand and the Remarketing Agent
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Remarketing Agent on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     The Company and the Remarketing Agent agree that it would not be just or
equitable if contribution pursuant to this Section 8(a) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8(a). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to above in this Section 8(a) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in investigating or
defending any such action or claim.

     Notwithstanding the provisions of this Section 8(a), the Remarketing Agent
shall not be required to contribute any amount in excess of the amount by which
the fees received by it under Section 4 exceeds the amount of any damages which
the Remarketing Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

                                       12
<PAGE>

     No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.

     (b) The indemnity and contribution provisions contained in Section 7 and
this Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect, regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Remarketing Agent or any person
controlling the Remarketing Agent or any affiliate of the Remarketing Agent, or
by or on behalf of the Company, its officers or director or any person
controlling the Company, and (iii) the completion of the Remarketing.

Section 9. Resignation and Removal of the Remarketing Agent.

     The Remarketing Agent may resign and be discharged from its duties and
obligations hereunder, and the Company may remove the Remarketing Agent, by
giving 30 days' prior written notice, in the case of a resignation, to the
Company and the Depositary and, in the case of a removal, to the removed
Remarketing Agent and the Depositary; provided, however, that:

     (a) the Remarketing Agent may not resign without reasonable cause; and

     (b) no such resignation nor any such removal shall become effective until
the Company shall have appointed at least one nationally recognized
broker-dealer as successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in which
it shall have agreed to conduct the Remarketing in accordance with the
Transaction Documents in all material respects.

     In any such case, the Company will use commercially reasonable efforts to
appoint a successor Remarketing Agent and enter into such a remarketing
agreement with such person as soon as reasonably practicable. The provisions of
Section 7 and Section 8 shall survive the resignation or removal of any
Remarketing Agent pursuant to this Agreement.

Section 10. Dealing in Securities.

     The Remarketing Agent, when acting as a Remarketing Agent or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the Remarketed Notes, Corporate Units, Treasury
Units or any of the securities of the Company (together, the "Securities");
provided that the Remarketing Agent agrees, on behalf of itself and its
affiliates, not to buy any Remarketed Notes in the Remarketing. The Remarketing
Agent may exercise any vote or join in any action which any beneficial owner of
such Securities may be entitled to exercise or take pursuant to the Indenture
with like effect as if it did not act in any capacity hereunder. The Remarketing
Agent, in its individual capacity, either as principal or agent, may also engage
in or have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.

                                       13
<PAGE>

Section 11. Remarketing Agent's Performance; Duty of Care.

     The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement and the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into this Agreement or any of the Transaction Documents. In
the absence of bad faith on the part of the Remarketing Agent, the Remarketing
Agent may conclusively rely upon any document furnished to it, as to the truth
of the statements expressed in any of such documents. The Remarketing Agent
shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties except as otherwise set forth herein. The Remarketing Agent, acting
under this Agreement, shall incur no liability to the Company or to any holder
of Remarketed Notes in its individual capacity or as Remarketing Agent for any
action or failure to act, on its part in connection with a Remarketing or
otherwise, except if such liability is judicially determined to have resulted
from its failure to comply with the material terms of this Agreement or bad
faith, gross negligence or willful misconduct on its part. The provisions of
this Section 11 shall survive the termination of this Agreement and shall
survive the resignation or removal of any Remarketing Agent pursuant to this
Agreement.

Section 12. Termination.

     This Agreement shall automatically terminate (1) as to the Remarketing
Agent on the effective date of the resignation or removal of the Remarketing
Agent pursuant to Section 9 and (2) on the Purchase Contract Settlement Date. If
this Agreement is terminated pursuant to any of the other provisions hereof,
except as otherwise provided herein, the Company shall not be under any
liability to the Remarketing Agent and the Remarketing Agent shall not be under
any liability to the Company, except that if this Agreement is terminated by the
Remarketing Agent because of any failure or refusal on the part of the Company
to comply with the terms or to fulfill any of the conditions of this Agreement,
the Company will reimburse the Remarketing Agent for all of its out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by it. Sections 7, 8 and 11 hereof shall survive the termination of
this Agreement or the resignation or removal of the Remarketing Agent.

Section 13. Notices.

     All statements, requests, notices and agreements hereunder shall be in
writing, and:

     (a) if to the Remarketing Agent, shall be delivered or sent by mail, telex
or facsimile transmission to Morgan Stanley & Co. Incorporated, 1585 Broadway,
New York, New York, 10036, Attention: Kevin Woodruff (Fax: (212) 761-0538);

     (b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Teekay Shipping Corporation, 550 Burrard Street, Suite
2200, Bentall 5, Vancouver, British Columbia, V6C 2K2, Attention: General
Counsel (Fax: 604-609-6447); and

     (c) if to the Purchase Contract Agent, shall be delivered or sent by mail,
telex or facsimile transmission to The Bank of New York, 101 Barclay Street, New
York, New York 10286, Attention: Corporate Trust Division (Fax: (212)
815-5802/03).

                                       14
<PAGE>

     Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof.

Section 14. Persons Entitled to Benefit of Agreement.

     This Agreement shall inure to the benefit of and be binding upon each party
hereto and its respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
Remarketing Agent and the person or persons, if any, who control the Remarketing
Agent within the meaning of Section 15 of the Securities Act and (y) the
indemnity agreement of the Remarketing Agent contained in Section 7(b) of this
Agreement shall be deemed to be for the benefit of the Company's directors and
officers who sign the Registration Statement, if any, and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any
person, other than the persons referred to herein, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.

Section 15. Survival.

     The respective indemnities, representations, warranties and agreements of
the Company and the Remarketing Agent contained in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall survive any
Remarketing and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.

Section 16. Governing Law.

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

Section 17. Judicial Proceedings.

     (a) Each party hereto expressly accepts and irrevocably submits to the
non-exclusive jurisdiction of the United States Federal or New York State court
sitting in the Borough of Manhattan, The City of New York, New York, over any
suit, action or proceeding arising out of or relating to this Agreement or the
Remarketed Notes. To the fullest extent it may effectively do so under
applicable law, each party hereto irrevocably waives and agrees not to assert,
by way of motion, as a defense or otherwise, any claim that it is not subject to
the jurisdiction of any such court, any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.

     (b) Each party hereto agrees, to the fullest extent that it may effectively
do so under applicable law, that a judgment in any suit, action or proceeding of
the nature referred to in Section 17(a) brought in any such court shall be
conclusive and binding upon such party, subject to rights of appeal and may be
enforced in the courts of the United States of America or the State of


                                       15
<PAGE>

New York (or any other court the jurisdiction to which the Company is or may be
subject) by a suit upon such judgment.

Section 18. Counterparts.

     This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to
be an original but all such counterparts shall together constitute one and the
same instrument.

Section 19. Headings.

     The headings herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.

Section 20. Severability.

     If any provision of this Agreement shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular
case in any or all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule or public policy or for any other reason, then, to
the extent permitted by law, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.

Section 21. Amendments.

     This Agreement may be amended by an instrument in writing signed by the
parties hereto. Each of the Company and the Purchase Contract Agent agrees that
it will not enter into, cause or permit any amendment or modification of the
Transaction Documents or any other instruments or agreements relating to the
Notes or the Corporate Units that would in any way adversely affect the rights,
duties and obligations of the Remarketing Agent, without the prior written
consent of the Remarketing Agent.

Section 22. Successors and Assigns.

     The rights and obligations of the Company hereunder may not be assigned or
delegated to any other Person without the prior written consent of the
Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder
may not be assigned or delegated to any other Person (other than an affiliate of
the Remarketing Agent) without the prior written consent of the Company.

     If the foregoing correctly sets forth the agreement by and between the
Company, the Remarketing Agent and the Purchase Contract Agent, please indicate
your acceptance in the space provided for that purpose below.

                       [SIGNATURES ON THE FOLLOWING PAGE]



                                       16
<PAGE>


                                        Very truly yours,


                                        TEEKAY SHIPPING CORPORATION


                                        By:
                                            -----------------------------------

                                        Name:
                                              ---------------------------------

                                        Title:
                                               --------------------------------



CONFIRMED AND ACCEPTED:

MORGAN STANLEY & CO. INCORPORATED,
as Remarketing Agent


By:
    --------------------------------------

Name:
      ------------------------------------

Title:
       -----------------------------------


THE BANK OF NEW YORK,

not individually, but solely as
Purchase Contract Agent and as
attorney-in-fact for the Holders
of the Purchase Contracts


By:
    --------------------------------------

Name:
      ------------------------------------

Title:
       -----------------------------------


                                       17





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>7
<FILENAME>o08866exv4w5.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.5


                           Teekay Shipping Corporation

                                 5,000,000 Units

                        [ ]% Premium Equity Participating
                          Security Units - PEPSSM Units

                             Underwriting Agreement

                               February [__], 2003

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013


Ladies and Gentlemen:

         Teekay Shipping Corporation, a Republic of The Marshall Islands
corporation, (the "Company"), proposes to issue and sell to the several
Underwriters listed in Schedule I hereto (the "Underwriters"), subject to the
terms and conditions stated herein, an aggregate of 5,000,000 [ ]% Premium
Equity Participating Security Units - PEPSSM Units (the "Firm Securities") of
the Company, the terms of which are set forth in Schedule II hereto. Each PEPS
Unit will consist of (a) a stock purchase contract (a "Purchase Contract") under
which the holder of the Securities (as defined below) will purchase from the
Company on February 16, 2006, for an amount in cash equal to the stated amount
per Security of $25.00 (the "Stated Amount"), a number of shares (each, a
"Common Share" and, collectively with all other Common Shares that may be issued
and sold by the Company upon settlement of the Purchase Contracts, the "Common
Shares") of the Company's common shares, par value $0.001 per share (the
"Common Stock"), as set forth in such Purchase Contract, and (b) $25.00
principal amount of the Company's [ ]% Notes due May 18, 2006 (a "Note" and
collectively with each other Note, including each Note that is part of the
Option Securities as defined below, the "Notes") with a principal amount of
$1,000. Additionally, the Company proposes to issue and sell to the several
Underwriters, for the sole purpose of covering over-allotments in connection
with the sale of the Firm Securities, at the option of the Underwriters, up to
an additional 750,000 [ ]% Premium Equity Participating Security Units - PEPSSM
Units (the "Option Securities"). The Firm Securities and any Option Securities
are herein referred to as the "Securities."

         In accordance with the terms of a Purchase Contract Agreement (the
"Purchase Contract Agreement"), to be dated as of the Closing Date (as defined
below) and entered into between the Company and The Bank of New York, as
Purchase Contract Agent (the "Purchase Contract Agent"), the holders of the
Securities will pledge the Notes to The Bank of New York, as Collateral Agent
(the "Collateral Agent"), pursuant to a Pledge Agreement (the "Pledge
Agreement") to be dated as of the Closing Date and entered into among the
Company, the



                                       1
<PAGE>

Collateral Agent, the Purchase Contract Agent and The Bank of New York, as
Securities Intermediary, to secure the holders' obligations to purchase Common
Shares under the Purchase Contracts. The Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement are herein collectively referred to
as the "PEPS Agreements."

         The Company will also enter into a Remarketing Agreement (the
"Remarketing Agreement"), to be dated as of the Closing Date, with Morgan
Stanley & Co. Incorporated, as Remarketing Agent, which will provide for the
remarketing of the Notes prior to the Settlement Date (as defined in the
Purchase Contract).

         The Company has filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (the
"Securities Act"), a registration statement on Form F-3 (registration no.
333-102594), including a related prospectus, relating to the registration of
certain securities of the Company, including the Premium Equity Participating
Security Units - PEPSSM Units, the Purchase Contracts, the Notes and the Common
Shares (the "Shelf Securities"), to be sold from time to time by the Company.
The registration statement, as amended at the time it became effective,
including information, if any, deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act is
hereinafter referred to as the "Registration Statement," and the prospectus
included therein relating to the Shelf Securities at the time the Registration
Statement became effective, is hereinafter referred to as the "Base Prospectus."
The Base Prospectus, as supplemented by the prospectus supplement dated February
[__], 2003 (the "Prospectus Supplement"), relating to the Securities, in the
form first used to confirm sales of the Securities is hereinafter referred to as
the "Prospectus." If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. Any reference
to the term Registration Statement, the Base Prospectus, any preliminary form of
prospectus previously filed with the Commission pursuant to Rule 424 of the
Securities Act or the Prospectus shall include the documents incorporated
therein by reference. The terms "supplement" and "amendment" or "amend" as used
in this Agreement shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are deemed to be incorporated by reference in the
Prospectus.

1.   Representations and Warranties of the Company.  The Company represents and
warrants to and agrees with each of the Underwriters that:

     (a) The Company and the transactions contemplated by this Agreement meet
the requirements for using Form F-3 under the Securities Act. The Registration
Statement has become effective; no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of the Company, contemplated by the
Commission.

     (b) The Registration Statement, when it became effective, did not contain
and, as amended or supplemented, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not


                                       2
<PAGE>

misleading, the Registration Statement and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") and the Prospectus does not, as of its date, contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein. No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company,
threatened or contemplated by the Commission.

     (c) The Company has been duly organized in the Republic of Liberia and is
validly existing as a corporation in good standing under the laws of the
Republic of The Marshall Islands, with power and authority (corporate and other)
to own its properties and to conduct its business as described in the
Registration Statement and the Prospectus and has been duly qualified to
transact business and is in good standing in each other jurisdiction in which
the conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the general
affairs, management, the current or future consolidated financial position,
business prospects, shareholders' equity or result of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").

     (d) Each subsidiary of the Company has been duly organized or incorporated,
is validly existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as
described in the Registration Statement and the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; and all of the issued
shares of capital stock or membership interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned by the Company, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind, except as
set forth in Schedule III attached hereto. There are no outstanding rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or membership interests of any subsidiary of
the Company.

     (e) Schedule IV(a) hereto is a complete and accurate list of the Company's
operating subsidiaries incorporated under the laws of the Republic of Liberia
and Schedule IV(b) is a complete and accurate list of the Company's subsidiaries
organized or incorporated under the laws of the Republic of Liberia that have no
operations or assets; Schedule V(a) hereto is a complete and accurate list of
the Company's operating subsidiaries organized or incorporated under the laws of
The Bahamas; Schedule V(b) hereto is a complete and accurate list of the


                                       3
<PAGE>


Company's subsidiaries organized or incorporated under the laws of The Bahamas
that have no operations or assets; Schedule VI(a) hereto is a complete and
accurate list of the Company's operating subsidiaries organized or incorporated
under the laws of the Republic of The Marshall Islands; Schedule VI(b) hereto is
a complete and accurate list of the Company's subsidiaries organized or
incorporated under the laws of the Republic of The Marshall Islands that have no
operations or assets; Schedule VII(a) hereto is a complete and accurate list of
the Company's operating subsidiaries organized or incorporated under the laws of
Norway; Schedule VII(b) hereto is a complete and accurate list of the Company's
subsidiaries organized or incorporated under the laws of Norway that have no
operations or assets; Schedule VIII(a) hereto is a complete and accurate list of
the Company's operating subsidiaries organized or incorporated under the laws of
Bermuda and Schedule VIII(b) hereto is a complete and accurate list of the
Company's subsidiaries organized or incorporated under the laws of Bermuda that
have no operations or assets.

     (f) The authorized capital stock of the Company conforms as to legal
matters to the descriptions thereof contained in the Prospectus.

     (g) All of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable, conform as
to legal matters to the descriptions thereof contained in the Prospectus and
none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or similar rights of any shareholder of the Company.

     (h) This Agreement has been duly authorized and, when executed and
delivered by the Company, this Agreement will constitute a valid and legally
binding instrument.

     (i) The Securities have been duly authorized, and, when authenticated and
executed in accordance with the provisions of the Purchase Contract Agreement
and the first supplemental indenture (the "First Supplemental Indenture") to be
dated as of February [__], 2003 to the indenture dated as of February [ ], 2003
(the "Base Indenture," and as supplemented by the First Supplemental Indenture,
the "Indenture") between the Company and The Bank of New York as Trustee (the
"Trustee") and delivered to and paid for by the Underwriters pursuant to this
Agreement, will have been duly executed, authenticated, issued and delivered and
the Securities will be entitled to the benefits of the Purchase Contract
Agreement in the case of the Purchase Contracts and the Indenture in the case of
the Notes and will constitute valid and legally binding agreements of the
Company enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; provided, however, that upon the occurrence of a Termination Event
(as defined in the Purchase Contract), the Bankruptcy Code (11 U.S.C. ss.ss.
101-1330, as amended) should not substantively limit the provisions of Sections
3.15 and 5.06(a) of the Purchase Contract Agreement or Section 5.04 of the
Pledge Agreement that require termination of the Purchase Contracts and release
of the Collateral Agent's security interest in (1) the Notes or (2) the Treasury
Securities (as defined in the Purchase Contract Agreement), as applicable, and
the transfer of such Notes and Treasury Securities to the Purchase Contract
Agent, for the benefit of the Holders of the Securities; provided further, that
the Company makes no representation as to whether a court exercising bankruptcy
jurisdiction might issue a temporary restraining order or provide other interim
relief

                                       4
<PAGE>

that would delay the exercise of such termination right for a period of time
pending final adjudication of any challenge to the exercise of such right during
a bankruptcy case involving the Company.

     (j) The Indenture has been duly authorized by the Company and duly
qualified under the Trust Indenture Act, and, when the Base Indenture and the
First Supplemental Indenture are executed and delivered by the Company and the
Trustee, will constitute a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (regardless of whether considered in a proceeding at law or in
equity) and the Securities and the Indenture will conform in all material
respects to the descriptions thereof in the Prospectus and will be in
substantially the form previously delivered to you.

     (k) The Securities have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance; and the Securities have been
registered under the Exchange Act.

     (l) The Notes included in the Securities have been duly authorized, and,
when authenticated and executed in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute valid and legally binding agreements of the Company
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
will conform in all material respects to the description thereof contained in
the Prospectus and will be in substantially the form previously delivered to
you.

     (m) The Common Shares issuable pursuant to the Purchase Contracts included
in the Securities have been duly authorized and reserved for issuance. Such
Common Shares, when issued and delivered in accordance with the provisions of
the PEPS Agreements, will be validly issued, fully paid and non-assessable; and
the issuance of such Common Shares will not be subject to any preemptive rights
other than those that have been waived.

     (n) Each of the PEPS Agreements and the Remarketing Agreement has been duly
authorized and, when validly executed and delivered by the Company, will
constitute a valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles, (regardless of
whether considered in a proceeding at law or in equity); provided, however, that
upon the occurrence of a Termination Event (as defined in the Purchase
Contract), the Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as amended) should
not substantively limit the provisions of Sections 3.15 and 5.06(a) of the
Purchase Contract Agreement or Section 5.04 of the Pledge Agreement that require
termination of the Purchase Contracts and release of the Collateral Agent's
security interest in (1) the Notes or (2) the Treasury Securities (as defined in
the Purchase Contract Agreement), as applicable, and the transfer of such Notes
and Treasury Securities to the Purchase Contract Agent, for the benefit of the
Holders of the Securities; provided further, the Company makes no representation
as to whether a court exercising bankruptcy jurisdiction might issue a temporary



                                       5
<PAGE>

restraining order or provide other interim relief that would delay the exercise
of such termination right for a period of time pending final adjudication of any
challenge to the exercise of such right during a bankruptcy case involving the
Company; and each of the PEPS Agreements and the Remarketing Agreement will
conform in all material respects to the descriptions thereof in the Prospectus.

     (o) None of the Company nor any of the subsidiaries is in violation of its
articles of incorporation or by-laws, or in default in the performance or
observance of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Company or the subsidiaries is a party or by
which any of them is bound.

     (p) Neither the execution and delivery by the Company of, or the
performance by it of its obligations under, this Agreement, the PEPS Agreements,
the Remarketing Agreement, the Securities, the Notes and the Indenture, nor the
consummation of the transactions contemplated hereby will (A) conflict with or
result in a breach or violation of any provision of (i) the articles of
incorporation and by-laws of the Company, (ii) any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any of
the Company or any of the subsidiaries is a party or by which any of them is or
may be bound or to which any of their respective properties or assets is or may
be subject, or (iii) any statute or any judgment, order, decree, rule or
regulation (collectively, any "Order") of any court, central bank, stock
exchange or governmental agency or body (collectively, a "Regulatory Authority")
having jurisdiction over the Company or any of its subsidiaries or any of their
properties, except, with respect to the foregoing clause (ii), to the extent
such conflict or contravention would not have a Material Adverse Effect, or (B)
result in the creation or imposition of any lien, charge or encumbrance upon or
with respect to any property or assets of any of the Company or the
subsidiaries.

     (q) No consent, approval, authorization or order of, qualification with, or
registration or filing with any Regulatory Authority is required for the issue
and sale of the Securities or the performance by the Company of its obligations
under this Agreement, the PEPS Agreements, the Remarketing Agreement, the
Securities, the Notes or the Indenture, except such as may be required (1) for
registrations and filings under the Securities Act or the Exchange Act, (2) the
qualification of the Indenture under the Trust Indenture Act, and (3) under the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities.

     (r) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all properties and
assets owned by them, in each case free and clear of all liens, encumbrances and
defects, except such as are described in the Prospectus or are created pursuant
to credit agreements and related security agreements disclosed or referred to in
the Prospectus or Schedule III attached hereto or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries.

     (s) The consolidated financial statements of the Company (together with
related schedules and notes) incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder and present fairly the

                                       6
<PAGE>


consolidated financial position of the Company and its subsidiaries as of the
dates indicated and the consolidated results of its operations and changes in
financial position of the Company and its subsidiaries for the periods
specified; except with respect to Ugland Nordic Shipping ASA, a Norwegian
corporation ("UNS"), such financial statements and related schedules and notes
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis during the periods involved.
The selected financial data included in the Prospectus present fairly the
information shown therein. Such selected financial data as at and for the fiscal
years ended December 31, 2001, 2000, 1999, March 31, 1999 and 1998 have been
derived from the audited consolidated financial statements of the Company, and
such summary financial data as at and for the nine month periods ended September
30, 2002 and 2001 have been derived from the unaudited consolidated financial
statements of the Company.

     (t) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements incorporated by reference in the
Registration Statement and Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Registration
Statement and Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has not
been any material change in the capital stock or long-term debt (other than an
immaterial change due to repayment or borrowing under existing credit
agreements) of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Registration Statement
and Prospectus.

     (u) Other than as set forth in the Registration Statement and Prospectus,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or to which any of their respective
properties is subject which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate, have a Material
Adverse Effect; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by Regulatory Authorities or threatened by
others.

     (v) Each of the Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, franchises, licenses, certificates (including
certificates of authority), concessions or permits (collectively, "Permits") of
and from, and has made all declarations and filings with, all federal,
provincial, state, local or other Regulatory Authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease license and use
its properties and assets and to conduct the business as described in the
Registration Statement and the Prospectus, except where the failure to possess
such Permits or to make such declarations or filings would not have a Material
Adverse Effect; neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to revocation, modification or any other material
impairment of any Permit.

     (w) The Company is not, and after giving effect to the offering and sale of
the Securities will not be, an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act").

                                       7
<PAGE>

     (x) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
include any securities of the Company with the Securities registered pursuant to
the Registration Statement or, except as described in the Prospectus and
Registration Statement, to file a registration statement under the Securities
Act with respect to any securities of the Company, in each case, other than such
rights as have been waived.

     (y) The statements set forth in the Prospectus Supplement under the caption
"Description of the PEPS Units," "Description of the Purchase Contracts,"
"Description of the Notes," "Certain Provisions of the Purchase Contracts, the
Purchase Contract Agreement and the Pledge Agreement," "Taxation of Teekay," and
"Tax Consequences" and the statements set forth in the Base Prospectus under the
captions "Securities We May Issue," "Description of Capital Stock," "Description
of Warrants," "Description of Stock Purchase Contracts and Stock Purchase
Units," and "Description of Debt Securities," insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair.

     (z) No material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in or contemplated by the
Registration Statement or Prospectus, or to the knowledge of the Company, is
imminent.

     (aa) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility, participate in insurance clubs, self-insure
or have similar coverage against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged.

     (bb) Except as otherwise described in the Prospectus and Registration
Statement, the Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, provincial, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect.

     (cc) Except as otherwise described in the Registration Statement and
Prospectus, in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect.

                                       8
<PAGE>

     (dd) Except as otherwise described in the Prospectus, each of the Company
and its subsidiaries has filed all income or other tax returns that are required
to have been filed in its relevant jurisdictions, except insofar as the failure
to file such returns would not have a Material Adverse Effect, and has paid all
taxes due pursuant to such returns or pursuant to any assessment received by the
Company, except for such taxes, if any, as are being contested in good faith and
for which adequate reserves have been provided.

     (ee) There is no tax, levy, impost, deduction, charge or withholding
imposed by the Republic of The Marshall Islands, Republic of Liberia, Bermuda,
Norway or any political subdivision or taxing authority thereof either (i) on or
by virtue of the execution, delivery or performance of this Agreement, the
Indenture, the PEPS Agreements, the Remarketing Agreement or any other document
to be furnished hereunder, or (ii) on any payment to be made by the Company
pursuant to this Agreement, the Indenture, the PEPS Agreements, the Remarketing
Agreement or the Securities, except for any tax, levy, impost, deduction, charge
or withholding imposed on payments made to holders of Securities who reside in,
maintain an office in or engage in business in the Republic of The Marshall
Islands, Republic of Liberia, Bermuda or Norway.

     (ff) Each of the Company, Teekay Chartering Limited ("Teekay Chartering"),
Bona Shipholding Ltd. ("Bona") and UNS, is, and immediately after the Closing
Date will be, Solvent. As used herein, the term "Solvent" means, with respect to
each of the Company, Teekay Chartering, Bona or UNS on a particular date (i) the
fair market value of the assets of the Company, Teekay Chartering, Bona or UNS,
as the case may be, is greater than the total amount of liabilities (including
contingent liabilities) of the Company, Teekay Chartering, Bona or UNS, as the
case may be, (ii) the present fair saleable value of the assets of the Company,
Teekay Chartering, Bona or UNS, as the case may be, is greater than the amount
that will be required to pay the probable liabilities of the Company, Teekay
Chartering, Bona or UNS, as the case may be, on its debts as they become
absolute and matured, (iii) the Company, Teekay Chartering, Bona or UNS, as the
case may be, is able to realize upon its assets and pay its debts and other
liabilities, including contingent obligations, as they mature and (iv) the
Company, Teekay Chartering, Bona or UNS, as the case may be, does not have an
unreasonably small capital.

     (gg) The Company maintains, and each of the subsidiaries maintain, a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and with statutory accounting principles, as the
case may be, and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

     (hh) None of the Company nor any of its subsidiaries or any employee or
agent thereof has made any payment of funds or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Prospectus.

                                       9
<PAGE>

     (ii) The statements made in the Prospectus under the caption "Service of
Process and Enforcement of Liabilities", insofar as they purport to constitute a
summary of the provisions of the laws therein, are accurate, complete and fair,
in all material respects.

     (jj) The Company is subject to Section 13 or 15(d) of the Exchange Act.

     (kk) The Company is not a Passive Foreign Investment Company ("PFIC")
within the meaning of Section 1296 of the United States Internal Revenue Code of
1986, as amended, and is not likely to become a PFIC.

     (ll) Neither the sale of the Securities by the Company hereunder nor the
use of the proceeds thereof will cause any U.S. person participating in the
offering, either as underwriter and/or purchasers of the Securities, to violate
the Trading With the Enemy Act, as amended, the International Emergency
Economics Powers Act, as amended or any foreign asset control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
(all such laws and regulations collectively referred to as the "Sanctions Laws
and Regulations") or any enabling legislation or executive order relating
thereto.

     (mm) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes.

     (nn) The documents incorporated by reference in the Registration Statement
and Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading when they were filed with the Commission; and any further documents
so incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.

     (oo) None of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation, Regulations G,
T, U, and X of the Board of Governors of the Federal Reserve System.

2.   Representations and Warranties of the Company.  The Company represents and
warrants to and agrees with each of the Underwriters that, to its knowledge:

     (a) Navion ASA, a wholly-owned subsidiary of Statoil ASA ("Navion"), has
been duly organized and is validly existing as a corporation under the laws of
the Kingdom of Norway, with corporate power and authority to own, its properties
and to conduct its business and has been duly qualified to transact business and
is in good standing in each other jurisdiction


                                       10
<PAGE>

in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not, after giving effect to the
acquisition by the Company of such assets of Navion that is contemplated in the
Share Sale and Purchase Agreement by and among Statoil ASA and Statpet AS and
Norsk Teekay AS, dated December 15, 2002, on the general affairs, management,
the current or future consolidated financial position, business prospects,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect After Navion").

     (b) Each subsidiary of Navion listed on Schedule IX(a) attached hereto
(that purports to identify each subsidiary of Navion that constitutes a
"significant subsidiary" as such term is defined in Rule 1-02 of Regulation S-X)
(collectively, the "Significant Navion Subsidiaries") has been duly
incorporated, is validly existing as a corporation under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect After Navion.

     (c) None of Navion nor any of the Significant Navion Subsidiaries is in
violation of its articles of incorporation or by-laws, or in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which Navion or any of the Significant Navion
Subsidiaries is a party or by which it is bound.

     (d) Navion and each of the Significant Navion Subsidiaries has good and
marketable title in fee simple to all real property and good and marketable
title to all properties and assets owned by them, in each case free and clear of
all liens, encumbrances and defects, except such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by Navion and the Significant Navion Subsidiaries.

     (e) There are no legal or governmental proceedings pending to which Navion
or any Significant Navion Subsidiaries is a party or to which its properties is
subject which, if determined adversely to Navion or any Significant Navion
Subsidiaries, would individually or in the aggregate, have a Material Adverse
Effect After Navion; and no such proceedings are threatened or contemplated by
Regulatory Authorities or threatened by others.

     (f) Each of Navion and the Significant Navion Subsidiaries has all
necessary Permits of and from, and has made all declarations and filings with,
all federal, provincial, state, local or other Regulatory Authorities, all
self-regulatory organizations and all courts and other tribunals, to own, lease
license and use its properties and assets and to conduct the business, except
where the failure to possess such Permits or to make such declarations or
filings would not have a Material Adverse Effect After Navion; and neither
Navion nor any Significant Navion Subsidiaries has received any notice of
proceedings relating to revocation, modification or any other material
impairment of any Permit.

                                       11
<PAGE>

     (g) Navion and the Significant Navion Subsidiaries (i) are in compliance
with any and all Environmental Laws, (ii) have received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a Material
Adverse Effect After Navion.

     (h) The Company believes that, in the ordinary course of its business,
Navion conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of Navion and its subsidiaries, in the
course of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). The Company believes that, on the
basis of such review, Navion has reasonably concluded that such associated costs
and liabilities would not, singly or in the aggregate, have a Material Adverse
Effect After Navion.

     (i) No material labor dispute with the employees of Navion or any of the
Significant Navion Subsidiaries exists or, to the best of the Company's
knowledge, is imminent.

     (j) Navion and each of the Significant Navion Subsidiaries are insured by
insurers of recognized financial responsibility, participate in insurance clubs,
self-insure or have similar coverage against such losses and risks and in such
amounts as are prudent and customary in the business in which they are engaged.

3.   Agreements to Sell and Purchase. The Company hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agrees, severally and not jointly, to purchase from
the Company at $25.00 per Firm Security (the "Purchase Price") the number of
Firm Securities set forth in Schedule I hereto opposite the name of such
Underwriter.

     On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Option Securities, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 750,000 Option
Securities at the Purchase Price, plus accrued dividends, if any, to the Option
Closing Date (as defined below). If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Company in writing not later than
30 days after the date of this Agreement, which notice shall specify the number
of Option Securities to be purchased by the Underwriters and the date on which
such Option Securities are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Option Securities may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Securities. If
any Option Securities are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Option Securities (subject to such
adjustments to eliminate fractional units as you may determine) that bears the
same proportion to the total number of Option Securities to be


                                       12
<PAGE>

purchased as the number of Firm Securities set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of Firm
Securities.

     The Company hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated and Salomon Smith Barney Inc. it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
Prospectus Supplement (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any Securities, Purchase Contracts or Common Shares or
any securities convertible into or exercisable or exchangeable for any
Securities, Purchase Contracts or Common Shares or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Securities, Purchase Contracts or
Common Shares, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Securities to the Underwriters hereunder, (b) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, or (c) the sale or issuance by the
Company of shares of Common Stock pursuant to employee benefit, option or stock
repurchase plans in existence as of the date hereof.

4.   Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Securities are to be offered to the public initially at
$25.00 per PEPS Unit (the "Public Offering Price"), and to certain dealers
selected by you at a price that represents a concession not in excess of $[__]
per PEPS Unit under the Public Offering Price.

5.   Payment and Delivery. Payment for the Firm Securities to be sold by the
Company shall be made to the Company in Federal or other funds immediately
available in New York City against delivery to you for the respective accounts
of the several Underwriters of the certificates for the Firm Securities at the
offices of Shearman & Sterling, 1080 Marsh Road, Menlo Park, California,
94025-1022, at 9:00 a.m., New York City time, on February [__], 2003, or at such
other time on the same or such other date, not later than five business days
after the date of this Agreement as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "Closing Date."

     Payment for the Option Securities shall be made to the Company in Federal
or other funds immediately available in New York City against delivery to
Underwriters of the certificates for the Option Securities purchased by the
Underwriters on the date specified in the notice described in Section 3 or at
such other time on the same or on such other date, in any event not later than
10 business days after the expiration of the Underwriters' option to purchase
Option Securities as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Option Closing Date."

                                       13
<PAGE>

     The certificates, if any, for the Securities purchased by the Underwriters
shall be registered in such names and in such denominations as you shall request
in writing not later than one full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates, if any, evidencing
the Firm Securities or Option Securities shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, for the respective
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Firm Securities or Option Securities to the
Underwriters duly paid, against payment of the Purchase Price with respect to
such Securities.

6.   Conditions to the Underwriters' Obligations. The several obligations of the
Underwriters to purchase and pay for the Securities on the Closing Date are
subject, in the discretion of the Underwriters, to the condition that all
representations and warranties and other statements of the Company in this
Agreement are, at and as of the Closing Date, true and correct, the condition
that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and to the following conditions:

     (a) The Prospectus as amended or supplemented in relation to the Securities
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the rules and regulations
under the Securities Act and in accordance with Section 6(a) hereof; no stop
order suspending the effectiveness of the Registration Statement shall have been
instituted or shall be pending or, to the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of the Underwriters.

     (b) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:

         (i)   there shall not have occurred any downgrading, nor shall any
     notice have been given of any intended or potential downgrading or of any
     review for a possible change that does not indicate the direction of the
     possible change, in the rating accorded any of the Company's securities by
     any "nationally recognized statistical rating organization" as such term is
     defined for purposes of Rule 436(g)(2) under the Securities Act; and

         (ii)  there shall not have occurred any change, or any development
     involving a prospective change, in the condition, financial or otherwise,
     or in the earnings, business or operations of the Company and its
     subsidiaries, taken as a whole, from that set forth in the Prospectus
     (exclusive of any amendments or supplements thereto subsequent to the date
     of this Agreement) that, in your judgment, is material and adverse and that
     makes it, in your judgment, impracticable to market the Securities on the
     terms and in the manner contemplated in the Prospectus.

     (c) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 6(b)(i) above and to the effect that (A) the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the


                                       14
<PAGE>

Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date; and (B) there shall not have occurred any change, or any
development involving a prospective change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).

     (d) The Underwriters shall have received on the Closing Date an opinion of
Watson, Farley & Williams, counsel for the Company, dated the Closing Date and
addressed to you in form and substance satisfactory to counsel for the
Underwriters, to the effect that:

         (i)     The Company was duly incorporated in the Republic of Liberia.

         (ii)    The Company is validly existing as a corporation in good
     standing under the law of the Republic of The Marshall Islands, has the
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus.

         (iii)   The Underwriting Agreement has been duly authorized, executed
     and delivered on behalf of the Company.

         (iv)    The Indenture has been duly authorized, executed and delivered
     on behalf of the Company.

         (v)     Each of the PEPS Agreements has been duly authorized, executed
     and delivered on behalf of the Company.

         (vi)    The Remarketing Agreement has been duly authorized, executed
     and delivered on behalf of the Company.

         (vii)   The Company has an authorized capitalization as set forth in
     the Prospectus, and all of the issued shares of capital stock of the
     Company have been duly and validly authorized and issued and are fully paid
     and non-assessable.

         (viii)  Each of the subsidiaries of the Company listed on Schedules
     IV(a) and VI(a) hereto has been duly formed or incorporated, is validly
     existing as a corporation or a limited liability company in good standing
     under the laws of the Republic of The Marshall Islands or Republic of
     Liberia, as the case may be, and has the limited liability company or
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus.

         (ix)    All of the issued shares of capital stock or membership
     interests, as the case may be, of each subsidiary listed on Schedule IV(a)
     have been duly authorized and validly issued and, assuming issuance against
     payment therefor, are fully paid and non-assessable. To such counsel's
     knowledge, all of the shares of capital stock or membership interests, as
     the case may be, of each subsidiary listed on Schedules IV(a) and VI(a) are
     owned, directly or indirectly, by the Company free and clear of any pledge,
     lien, security interest, charge, claim, equity or encumbrance of any kind
     except as set



                                       15
<PAGE>

     forth in Schedule III. To such counsel's knowledge, there are no
     outstanding rights, warrants or options to acquire, or instruments
     convertible into or exchangeable for, any shares of capital stock or
     membership interests of any subsidiary listed on Schedules IV(a) and VI(a).

         (x)     The Securities have been duly authorized, executed and
     delivered on behalf of the Company.

         (xi)    The Notes have been duly authorized, executed and delivered on
     behalf of the Company.

         (xii)   The shares of Common Stock to be issued and sold by the Company
     pursuant to the Purchase Contracts have been duly authorized and reserved
     for issuance and, when issued and delivered in accordance with the
     provisions of the Purchase Contract Agreement, will be validly issued,
     fully paid and non-assessable.

         (xiii)  The statements in the Registration Statement and Prospectus
     under the captions "Taxation of Teekay - Marshall Islands Taxation" and
     "Regulation" and in the Company's Form 20-F for the year ended December 31,
     2001 ("20-F") under the captions "Item 4 - Environmental Regulation -
     International Maritime Organization," "Item 4 - Environmental Regulation -
     The United States Oil Pollution Act of 1990," "Item 4 - Environmental
     Regulation - Other Environmental Initiatives," and "Item 10 - Taxation,"
     insofar as such statements constitute summaries of the legal matters,
     documents or proceedings referred to therein, fairly summarize the matters
     referred to therein.

         (xiv)   Although such counsel assumes no responsibility for the factual
     accuracy, completeness or fairness of the statements contained in the
     Registration Statement and Prospectus under the caption "Regulation," and
     in the 20-F under the captions "Item 4 - Environmental Regulation -
     International Maritime Organization," "Item 4 - Environmental Regulation -
     The United States Oil Pollution Act of 1990," and "Item 4 - Environmental
     Regulation - Other Environmental Initiatives," on the basis of the
     procedures undertaken by counsel (and relying as to materiality to the
     extent such counsel deems appropriate upon the opinions of officers and
     other representatives of the Company), no facts have come to the attention
     of counsel that cause it to believe that the statements contained in the
     Registration Statement and Prospectus under the caption "Regulation" and in
     the 20-F under the captions "Item 4 - Environmental Regulation -
     International Maritime Organization," "Item 4 - Environmental Regulation -
     The United States Oil Pollution Act of 1990," and "Item 4 - Environmental
     Regulation - Other Environmental Initiatives," and any further amendments
     or supplements thereto and made by the Company prior to the Closing Date
     contained as of its date or contains as of the Closing Date an untrue
     statement of a material fact or omitted or omits, as the case may be, to
     state a material fact necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading.

         (xv)    The choice of New York law to govern the Underwriting Agreement
     constitutes a valid choice of law insofar as the laws of The Republic of
     the Marshall

                                       16
<PAGE>

     Islands are concerned. The submission by the Company to the non-exclusive
     jurisdiction of any federal or state court in the Borough of Manhattan, The
     City of New York (a "New York Court") is a valid submission insofar as the
     laws of The Republic of the Marshall Islands are concerned, provided that
     Watson, Farley & Williams has accepted its appointment by the Company as
     its agent to accept service of process in the United States of America
     under this Agreement.

         (xvi)   A judgment granted by a foreign court against the Company may
     be enforced in The Republic of the Marshall Islands without a retrial on
     the merits of the matter provided that: (A) the judgment is for a specific,
     ascertained sum of money and is final in the jurisdiction granting the
     judgment; (B) the court granting the judgment had jurisdiction under the
     laws of the place where the court is seated; (C) the judgment does not
     offend the principles of the Republic of the Marshall Islands as to due
     process, natural justice or public policy; (D) the judgment was not
     obtained by fraud; (E) the judgment does not conflict with another final
     and conclusive judgment; (F) the defendant was actually present in person
     or by a duly appointed representative and (G) the judgment does not in
     effect constitute a default judgment.

     (e) The Underwriters shall have received on the Closing Date an opinion of
Graham, Thompson & Co., special Bahamian counsel for the Company, dated the
Closing Date and addressed to you in form and substance satisfactory to counsel
for the Underwriters, to the effect that:

         (i)     Each of the subsidiaries of the Company listed on Schedule V(a)
     thereto, has been duly organized, is validly existing as a corporation in
     good standing under the laws of Commonwealth of The Bahamas and has the
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus and is
     duly qualified to transact business.

         (ii)    All of the issued shares of capital stock of each subsidiary
     listed on Schedule V(a) have been duly authorized and validly issued and,
     assuming issuance against payment therefor, are fully paid and
     non-assessable. To such counsel's knowledge, all of the shares of capital
     stock of each subsidiary listed on Schedule V(a) are owned, directly or
     indirectly, by the Company free and clear of any pledge, lien, security
     interest, charge, claim, equity or encumbrance of any kind. To such
     counsel's knowledge, there are no outstanding rights, warrants or options
     to acquire, or instruments convertible into or exchangeable for, any shares
     of capital stock of any subsidiary listed on Schedule V(a).

         (iii)   The statements in the Prospectus under the caption "Taxation of
     Teekay - Bahamian Taxation," insofar as such statements constitute
     summaries of the legal matters, documents or proceedings referred to
     therein, fairly present the information called for with respect to such
     legal matters, documents and proceedings and fairly summarize the matters
     referred to therein.

     (f) The Underwriters shall have received on the Closing Date an opinion of
Seward & Kissel LLP, special counsel for the Company, dated the Closing Date and
addressed to you in


                                       17
<PAGE>

form and substance satisfactory to counsel for the Underwriters, to the effect
that the statements in the Prospectus under the caption "Taxation of Teekay -
United States Taxation," "- Taxation of Our Shipping Income: In General," "-
Application of Code Section 883," and "- Taxation in Absence of Internal Revenue
Code Section 883 Exemption" insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.

     (g) The Underwriters shall have received on the Closing Date an opinion of
Thommessen Krefting Greve Lund AS Advokatfirma, special Norwegian counsel for
the Company, dated the Closing Date and addressed to you in form and substance
satisfactory to counsel for the Underwriters, to the effect that:

         (i)     Each of the corporations of the Company listed on Schedule
     VII(a) thereto has been duly incorporated. Each of the partnerships of the
     Company listed on Schedule VII(a) thereto has been duly established. Each
     of the subsidiaries listed on Schedule VII(a) is validly existing under the
     laws of the Kingdom of Norway and has the corporate power and authority to
     own its property and to conduct its business as described in the
     Registration Statement and Prospectus and is duly qualified to transact
     business.

         (ii)    All of the issued shares of each corporation listed on Schedule
     VII(a) or interest in each partnership listed on Schedule VII(a) have been
     duly authorized and validly issued and the shares, assuming issuance
     against payment therefor, are fully paid and non-assessable. To such
     counsel's knowledge, all of the shares of capital stock of each subsidiary
     listed on Schedule VII(a) are owned, directly or indirectly, by the Company
     free and clear of any pledge, lien, security interest, charge, claim,
     equity or encumbrance of any kind. To such counsel's knowledge, there are
     no outstanding rights, warrants or options to acquire, or instruments
     convertible into or exchangeable for, any shares of capital stock of any
     corporations listed on Schedule VII(a) nor any such corresponding rights to
     any partnership interest in any of the partnerships listed on Schedule
     VII(a).

         (iii)   The statements in the Registration Statement and Prospectus
     under the captions "Taxation of Teekay - Norwegian Taxation" insofar as
     such statements constitute summaries of the legal matters, documents or
     proceedings referred to therein, fairly present the information called for
     with respect to such legal matters, documents and proceedings and fairly
     summarize the matters referred to therein.

         (iv)    Each of Navion and the Significant Navion Subsidiaries has been
     duly incorporated under the laws of the Kingdom of Norway. Each of Navion
     and the Significant Navion Subsidiaries is validly existing under the laws
     of the Kingdom of Norway and has the corporate power and authority to own
     its property and to conduct its business and is duly qualified to transact
     business in Norway.

         (v)     All of the issued shares of capital stock of each Significant
     Navion Subsidiary have been duly authorized and validly issued and,
     assuming issuance against payment therefor, are fully paid and
     non-assessable.

                                       18
<PAGE>

     (h) The Underwriters shall have received on the Closing Date an opinion of
Perkins Coie LLP, counsel for the Company, dated the Closing Date and addressed
to you in form and substance satisfactory to counsel for the Underwriters, to
the effect that:

         (i)     The Securities, the Indenture, the Underwriting Agreement, the
     PEPS Agreements, the Remarketing Agreement and the Notes conform in all
     material respects to the descriptions thereof in the Prospectus.

         (ii)    The execution and delivery by the Company of, and the
     performance by the Company of its obligations under, the Underwriting
     Agreement, the Indenture, the PEPS Agreements, the Remarketing Agreement,
     the Securities and the Notes (i) will not contravene any provision of the
     laws of the United States or New York or, to such counsel's knowledge, any
     agreement listed as an exhibit to the Company's most recent Form 20-F filed
     with the Commission and any additional documents filed under the Exchange
     Act since the date of such filing or, to such counsel's knowledge, any
     judgment or decree of any governmental body, agency or court of the United
     States or any state thereof having jurisdiction over the Company or any
     subsidiary that has been disclosed in the Company's most recent Form 20-F
     filed with the Commission and any additional documents filed under the
     Exchange Act since the date of such filing and (ii) to such counsel's
     knowledge, will not result in any violation of the provisions of the
     articles of incorporation and by-laws of the Company and will not result in
     or require the creation or imposition of any lien, charge, or other
     encumbrance upon or with respect to any of the properties of the Company or
     any of its subsidiaries, except pursuant to the terms of the Indenture; and
     no consent, approval, authorization or order of or qualification with any
     Regulatory Authority of the United States or New York is required for the
     issue and sale of the Securities or the performance by the Company of its
     obligations under the Underwriting Agreement, the Indenture, the PEPS
     Agreements, the Remarketing Agreement, the Securities or the Notes in
     connection with the offer and sale of the Securities by the Underwriters
     except as may be required by the federal securities or blue sky laws of the
     various states in the United States.

         (iii)   The statements in the Prospectus Supplement under the captions
     "Description of the PEPS Units," "Description of Certain Debt" and "Tax
     Consequences - Material United States Federal Income Tax Consequences" and
     the statements set forth in the Base Prospectus under the captions
     "Securities We May Issue," "Description of Capital Stock," "Description of
     Stock Purchase Contracts and Stock Purchase Units," and "Description of
     Debt Securities," in each case insofar as such statements constitute
     summaries of legal matters, documents or proceedings referred to therein,
     fairly summarize the matters referred to therein in all material respects.

         (iv)    The Company is not an "investment company" or an entity
     "controlled" by an "investment company", as such terms are defined in the
     Investment Company Act, nor a "Passive Foreign Investment Company" within
     the meaning of Section 1297 of the United States Internal Revenue Code of
     1986.

         (v)     Assuming the due authorization, execution, issuance and
     delivery of the Securities by the Company and the due authentication of the
     Securities pursuant to the



                                       19
<PAGE>

     Purchase Contract Agreement and the Indenture, the Securities constitute
     valid and legally binding obligations of the Company entitled to the
     benefits provided by the Indenture on the part of the Notes and the
     Purchase Contract Agreement on the part of the Purchase Contracts,
     enforceable against the Company in accordance with their respective terms,
     subject, as to enforcement, to bankruptcy, insolvency (including, without
     limitation, all laws relating to fraudulent transfers), reorganization,
     moratorium and other laws of general applicability from time to time in
     effect relating to or affecting creditors' rights and to general equitable
     principles (regardless of whether considered in a proceeding in equity or
     at law); provided, however, that upon the occurrence of a Termination Event
     (as defined in the Purchase Contract), the Bankruptcy Code (11
     U.S.C.ss.ss.101-1330, as amended) should not substantively limit the
     provisions of Sections 3.15 and 5.06(a) of the Purchase Contract Agreement
     or Section 5.04 of the Pledge Agreement that require termination of the
     Purchase Contracts and release of the Collateral Agent's security interest
     in (1) the Notes or (2) the Treasury Securities (as defined in the Purchase
     Contract Agreement), as applicable, and the transfer of such Notes and
     Treasury Securities to the Purchase Contract Agent, for the benefit of the
     Holders of the Securities; provided further, however, that no opinion is
     expressed as to whether a court exercising bankruptcy jurisdiction might
     issue a temporary restraining order or provide other interim relief that
     would delay the exercise of such termination right for a period of time
     pending final adjudication of any challenge to the exercise of such right
     during a bankruptcy case involving the Company.

         (vi)    Assuming the due authorization, execution and delivery of the
     Notes by the Company and the due authorization of the Notes by the Trustee,
     the Notes constitute valid and legally binding obligations of the Company
     entitled to the benefits provided by the Indenture, enforceable against the
     Company in accordance with their terms, subject, as to enforcement, to
     bankruptcy, insolvency (including, without limitation, all laws relating to
     fraudulent transfers), reorganization, moratorium and other laws of general
     applicability from time to time in effect relating to or affecting
     creditors' rights and to general equitable principles (regardless of
     whether considered in a proceeding in equity or at law).

         (vii)   The Indenture has been duly qualified under the Trust Indenture
     Act; assuming the due authorization, execution and delivery of the
     Indenture by the Company and the due authentication, execution and delivery
     of the Indenture by the Trustee, the Indenture constitutes a valid and
     legally binding instrument of the Company, enforceable against the Company
     in accordance with its terms, subject, as to enforcement, to bankruptcy,
     insolvency (including, without limitation, all laws relating to fraudulent
     transfers), reorganization, moratorium and other laws of general
     applicability from time to time in effect relating to or affecting
     creditors' rights and to general equitable principles (regardless of
     whether considered in a proceeding in equity or at law).

         (viii)  Assuming the due authorization, execution and delivery of each
     of the PEPS Agreements and the Remarketing Agreement by the Company, each
     of the PEPS Agreements and the Remarketing Agreement constitutes a valid
     and binding agreement of the Company, enforceable against the Company in
     accordance with its terms, subject, as to enforcement, to bankruptcy,
     insolvency (including, without limitation, all laws



                                       20
<PAGE>

     relating to fraudulent transfers), reorganization, moratorium and other
     laws of general applicability from time to time in effect relating to or
     affecting creditors' rights and to general equitable principles (regardless
     of whether considered in a proceeding in equity or at law), provided,
     however, that upon the occurrence of a Termination Event (as defined in the
     Purchase Contract), the Bankruptcy Code (11 U.S.C.ss.ss.101-1330, as
     amended) should not substantively limit the provisions of Sections 3.15 and
     5.06(a) of the Purchase Contract Agreement or Section 5.04 of the Pledge
     Agreement that require termination of the Purchase Contracts and release of
     the Collateral Agent's security interest in (1) the Notes or (2) the
     Treasury Securities (as defined in the Purchase Contract Agreement), as
     applicable, and the transfer of such Notes and Treasury Securities to the
     Purchase Contract Agent, for the benefit of the Holders of the Securities;
     provided further, however, that no opinion is expressed as to whether a
     court exercising bankruptcy jurisdiction might issue a temporary
     restraining order or provide other interim relief that would delay the
     exercise of such termination right for a period of time pending final
     adjudication of any challenge to the exercise of such right during a
     bankruptcy case involving the Company.

         (ix)    To such counsel's knowledge and other than as set forth in the
     Registration Statement and Prospectus, there are no legal or governmental
     proceedings pending or threatened to which the Company or any of its
     subsidiaries is a party or of which any property of the Company or any of
     its subsidiaries is the subject which, if determined adversely to the
     Company or any of its subsidiaries, would have a Material Adverse Effect.

         (x)     The Registration Statement and the Prospectus (other than the
     financial statements and supporting schedules and other financial data
     therein, as to which such counsel need express no belief) comply as to form
     in all material respects with the Securities Act and the applicable rules
     and regulations of the Commission thereunder and the Trust Indenture Act.

         (xi)    The documents incorporated by reference in the Prospectus and
     Registration Statement (other than the financial statements and supporting
     schedules and other financial data therein, as to which such counsel need
     express no belief), when they were filed with the Commission, conformed in
     all material respects to the requirements of the Exchange Act and the rules
     and regulations of the Commission thereunder.

     In addition to the matters set forth above, counsel rendering the foregoing
opinion shall also include a statement to the effect that although such counsel
is not passing upon such statements and assumes no responsibility for and has
made no independent check or investigation to verify the factual accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus, on the basis of the procedures undertaken by counsel
(and relying as to materiality to the extent such counsel deems appropriate upon
the opinions of officers and other representatives of the Company), no facts
have come to the attention of counsel that cause it to believe that the
Registration Statement and Prospectus and any further amendments or supplements
thereto made by the Company prior to the Closing Date contained as of its date
or as of the Closing Date contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the

                                       21
<PAGE>

     circumstances under which they were made, not misleading (other than the
     financial statements and supporting schedules and other financial data
     therein, as to which such counsel need express no belief).

     (i) The Underwriters shall have received on the Closing Date, an opinion of
Appleby Spurling & Kempe, special Bermudian counsel for the Company, dated the
Closing Date and addressed to you, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:

         (i)     Each of the subsidiaries of the Company listed on Schedule
     VIII(a) thereto has been duly incorporated, is validly existing as a
     corporation in good standing under the laws of Bermuda and has the
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus and is
     duly qualified to transact business.

         (ii)    All of the issued shares of capital stock of each subsidiary
     listed on Schedule VIII(a) have been duly authorized and validly issued
     and, assuming issuance against payment therefor, are fully paid and
     non-assessable. To such counsel's knowledge, all of the shares of capital
     stock of each subsidiary listed on Schedule VIII(a) are owned, directly or
     indirectly, by the Company free and clear of any pledge, lien, security
     interest, charge, claim, equity or encumbrance of any kind. To such
     counsel's knowledge, there are no outstanding rights, warrants or options
     to acquire, or instruments convertible into or exchangeable for, any shares
     of capital stock of any subsidiary listed on Schedule VIII(a), including
     Bona.

         (iii)   The statements in the Prospectus under the captions "Taxation
     of Teekay - Bermudian Taxation" insofar as such statements constitute
     summaries of the legal matters, documents or proceedings referred to
     therein, fairly present the information called for with respect to such
     legal matters, documents and proceedings and fairly summarize the matters
     referred to therein.

         (iv)    Each of the subsidiaries listed on Schedule VIII(a) has been
     designated as non-resident for the purposes of the Exchange Control Act,
     1972 and regulations made thereunder.

         (v)     Each of the subsidiaries listed on Schedule VIII(a) has
     received an assurance from the Ministry of Finance granting an exemption,
     until 28 March 2016, from the imposition of tax under any applicable
     Bermuda law computed on profits or income or computed on any capital asset,
     gain or appreciation, or any tax in the nature of estate duty or
     inheritance tax, provided that such exemption shall not prevent the
     application of any such tax or duty to such persons as are ordinarily
     resident in Bermuda and shall not prevent the application of any tax
     payable in accordance with the provisions of the Land Tax Act 1967 or
     otherwise payable in relation to land in Bermuda leased to the Bermuda
     Subsidiary. Each of the subsidiaries listed on Schedule VIII(a) is not
     required by any Bermuda law or regulation to make any deductions or
     withholdings in Bermuda from any payment it may make to a third party.

                                       22
<PAGE>

         (vi)    There are no Bermuda taxes on profits, income or dividends,
     nor is there any capital gains tax, estate duty or death duty applicable to
     the Company, each of the subsidiaries listed on Schedule VIII(a) or any
     other subsidiary of the Company.

         (vii)   No litigation, arbitration or administrative or other
     proceeding of or before any arbitrator or governmental authority of Bermuda
     is pending against any of the subsidiaries listed on Schedule VIII(a), or
     affecting any of its properties, rights, revenues or assets; and

         (viii)  No notice to the Registrar of Companies of the passing of a
     resolution of members or creditors to wind up or the appointment of a
     liquidator or receiver has been given and no petition to wind up any of the
     subsidiaries listed on Schedule VIII(a) or application to reorganize its
     affairs pursuant to a Scheme of Arrangement or application for the
     appointment or a receiver has been filed with the Supreme Court.

     The opinion of Watson, Farley & Williams described in subsection (d) of
this Section, the opinion of Graham, Thompson & Co. described in subsection (e)
of this Section, the opinion of Seward & Kissell, LLP described in subsection
(f) of this Section, the opinion of Thommessen Krefting Greve Lund AS
Advokatfirma described in subsection (g) of this Section, the opinion of Perkins
Coie LLP described in subsection (h) of this Section and the opinion of Appleby
Spurling & Kempe described in subsection (i) of this Section shall each be
rendered to you at the request of the Company and shall so state therein.

     (j) The Underwriters shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing Date in
form and substance satisfactory to the Underwriters.

     (k) The Underwriters shall have received on the Closing Date an opinion of
Seward & Kissel LLP, counsel to The Bank of New York, as Purchase Contract
Agent, dated the Closing Date, and addressed to you in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect that:

         (i)     The Purchase Contract Agent is a banking corporation validly
     existing under the laws of the State of New York.

         (ii)    The Purchase Contract Agent has the requisite power and
     authority to execute, deliver and perform its obligations under the
     Purchase Contract Agreement and the Pledge Agreement.

         (iii)   The execution, delivery and performance by the Purchase
     Contract Agent of the Purchase Contract Agreement and the Pledge Agreement
     have been duly authorized by all necessary corporate action on the part of
     the Purchase Contract Agent, and the Purchase Contract Agreement and the
     Pledge Agreement have been duly executed and delivered by the Purchase
     Contract Agent, and constitute the valid and binding agreements of the
     Purchase Contract Agent, enforceable against the Purchase Contract Agent in
     accordance with their terms, subject to the effects of bankruptcy,
     insolvency, fraudulent conveyance, reorganization, moratorium and other
     similar laws relating to or affecting creditors' rights generally, general
     equitable principles (whether


                                       23
<PAGE>

     considered in a proceeding in equity or at law) and an implied covenant of
     good faith and fair dealing.

         (iv)    The execution, delivery and performance of the Purchase
     Contract Agreement and the Pledge Agreement by the Purchase Contract Agent
     does not conflict with or constitute a breach of the charter or by-laws of
     the Purchase Contract Agent.

         (v)     No consent, approval or authorization of, or registration with
     or notice to, any state or federal governmental authority or agency
     governing the corporate trust powers of the Purchase Contract Agent is
     required for the execution, delivery or performance by the Purchase
     Contract Agent of the Purchase Contract Agreement and the Pledge Agreement.

     (l) The Underwriters shall have received, on each of the date hereof and on
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
Deloitte & Touche, independent chartered accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statement and certain financial
information of Ugland Nordic Shipping ASA.

     (m) The Underwriters shall have received, on each of the date hereof and on
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from Ernst
& Young, independent chartered accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statement and certain financial
information contained in the Registration Statement and the Prospectus.

     (n) The Securities shall have been approved for listing, subject only to
official notice of issuance, on the New York Stock Exchange.

     (o) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between you and certain executive officers, directors of the Company and
Resolute Investments Inc. relating to sales and certain other dispositions of
shares of Securities, Purchase Contracts, Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.

     (p) The Company shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have reasonably requested.

     The several obligations of the Underwriters to purchase Option Securities
hereunder are subject to the delivery to the Underwriters on the Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Option
Securities and other matters related to the issuance of the Option Securities.

                                       24
<PAGE>

7.   Covenants of the Company. In further consideration of the agreements of the
Underwriters herein contained, the Company covenants with each Underwriter as
follows:

     (a) To furnish to you, without charge, copies of the Registration Statement
as originally filed with the Commission and of each amendment thereto (including
financial statements, all exhibits thereto and documents incorporated therein by
reference and exhibits thereto) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto but
including documents incorporated therein by reference) and to furnish to you in
New York City and to each Underwriter and dealer, without charge, prior to 10:00
A.M. New York City time on the business day next succeeding the date of this
Agreement and from time to time as expeditiously as possible during the period
mentioned in Section 7(c) below, as many copies of the Prospectus, any documents
incorporated therein by reference and exhibits thereto, and any supplements and
amendments thereto or to the Registration Statement as originally filed and of
each amendment thereto, as you may reasonably request. The Company consents to
the use of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Securities Act and with the securities or
Blue Sky laws of the jurisdictions in which the Securities are offered by the
several Underwriters and by all dealers to whom Securities may be sold, in
connection with the offering and sale of the Securities.

     (b) (i) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule, and (ii) during the period mentioned in
Section 6(c) below not to file any information, documents or reports pursuant to
the Exchange Act that upon filing becomes a document incorporated by reference
in the Registration Statement, without delivering a copy of such information,
documents or reports to you prior to or concurrently with such filing.

     (c) If, during such period after execution and delivery of this Agreement
as in the opinion of counsel for the Underwriters a prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus (or to file under the Exchange
Act any document which, upon filing, becomes a document incorporated therein by
reference) to comply with applicable law, forthwith to prepare and, subject to
the provisions of Section 6(b) above, file with the Commission and furnish, at
its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Securities may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.

                                       25
<PAGE>

     (d) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.

     (e) Not to be or become, at any time prior to the expiration of three years
after the Closing Date, an open-end investment company, unit investment trust,
closed-end investment company or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act.

     (f) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds".

     (g) The Company will not take, and will cause each subsidiary not to take,
directly or indirectly, any action that will result in a violation by any U.S.
person participating in the offering of the Sanctions Laws and Regulations with
respect to the sale of the Securities hereunder. Further, the Company will not
use, and will cause each subsidiary not to use, the proceeds from the sale of
the Securities, directly or indirectly, for any purpose or activity that would
cause the Underwriters or any purchaser of the Securities to be in violation of
the Sanctions Laws and Regulations or any agent or "Specially Designated
National" of any country the subject of the Sanctions Laws and Regulations, or
any person or entity of any country the subject of the Sanctions Laws and
Regulations.

     (h) To make generally available to its securityholders as soon as
practicable, but in any event not later than fifteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder (including at the option of the Company Rule 158).

     (i) To endeavor to list any Common Shares underlying the Securities on the
New York Stock Exchange.

     (j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company (including
local and special counsel) and accountants in connection with the registration
and delivery of the Securities under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments and
supplements to any of the foregoing, including all printing or reproduction
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, (ii) the costs of producing this Agreement, the
Indenture, the PEPS Agreements, the Remarketing Agreement and any Blue Sky
memorandum and legal investment surveys, closing documents and any other
documents in connection with the offer, purchase, sale and delivery of the
Securities, (iii) all expenses in connection with the qualification of the
Securities for the offering and sale under state securities




                                       26
<PAGE>

laws and all as provided in Section 7(d) hereof, including filing fees and the
fees and disbursements of counsel for the Underwriters in connection with the
Blue Sky memoranda and legal investment surveys and such qualification, (iv) any
filing fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Securities
by the National Association of Securities Dealers, Inc., (v) any fees charged by
rating agencies for the rating of the Securities, (vi) all costs and expenses
incident to the listing of the Securities and the Common Shares underlying the
Securities on any national securities exchange, (vii) all fees and expenses in
connection with the preparation and filing of the registration statement on Form
8-A relating to the Securities and all costs and expenses incident to the
listing the Securities on the New York Stock Exchange, (viii) the cost of
producing certificates representing the Securities, (ix) the fees and expenses
of the Trustee, Purchase Contract Agent, Collateral Agent and any transfer
agent, registrar or depositary and the fees and disbursements of counsel for the
Trustee, Purchase Contract Agent and Collateral Agent in connection with the
Securities, (x) all taxes arising as a result of the issuance, sale and delivery
of the Securities by the Underwriters in the manner contemplated by this
Agreement, including in any case, any Marshall Islands income, capital gains,
withholding, transfer or other tax asserted against the Underwriters by reason
of the purchase and sale of the Securities pursuant to this Agreement, (xi) the
costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and (xii) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 8 and
the last paragraph of Section 10, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Securities by them and any advertising
expenses connected with any offers they may make.

     8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, however that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from


                                       27
<PAGE>

whom the person asserting any such losses, claims damages or liabilities
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendment or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages or liabilities,
unless such failure is the result of noncompliance by the Company with Section
7(a) hereof.

     (b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.

     (c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such



                                       28
<PAGE>

indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into, and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

     (d) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to any indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the Prospectus, bear to the aggregate Public Offering Price
of the Securities. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the respective number of Securities they have purchased hereunder,
and not joint.

     (e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(d). The amount paid or payable
by an indemnified party as the result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged


                                       29
<PAGE>

untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

     (f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
any affiliate of any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.

9.   Termination. The Underwriters may terminate this Agreement by notice given
by you to the Company if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
States or Canada shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal, New York State or Canadian
authorities or (v) there shall have occurred any outbreak or escalation of
hostilities or declaration of war or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and which,
singly or together with any other such event specified in clause (v), makes it,
in your judgment, impracticable or inadvisable to proceed with the offer, sale
or delivery of the Securities on the terms and in the manner contemplated in the
Prospectus.

10.  Effectiveness; Defaulting Underwriters.  This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

     If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Securities that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Firm
Securities set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the number of Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 10 by an amount in excess
of one-ninth of such number of Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Securities and the



                                       30
<PAGE>

aggregate number of Firm Securities with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Securities to be purchased,
and arrangements satisfactory to you and the Company for the purchase of such
Firm Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Option Securities and the aggregate number of Option Securities with
respect to which such default occurs is more than one-tenth of the aggregate
number of Option Securities to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Option Securities or (ii) purchase not less than the number of Option Securities
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.

     If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform their obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

11.  Counterparts.  This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

12.  Applicable Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

13.  Judicial Proceedings. (a) The Company irrevocably (i) agrees that any legal
suit, action or proceeding against the Company brought by the Underwriters or by
any person who controls the Underwriters arising out of or based upon this
Agreement or the transactions contemplated hereby may be instituted in any New
York court, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding in any New York court and (iii) submits to the exclusive jurisdiction
of such courts in any such suit, action or proceeding. The Company has appointed
Watson, Farley & Williams, New York, New York, as its authorized agent (the
"Authorized Agent") upon whom process may be served in any such action arising
out of or based on this Agreement or the transactions contemplated hereby which
may be instituted in any New York Court by the Underwriters or by any person who
controls the Underwriters, expressly consents to the jurisdiction of any such
court in respect of any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto. Such appointment shall
be irrevocable. The Company represents and warrants that the Authorized Agent
has agreed to act


                                       31
<PAGE>

as such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.

     (b) If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due hereunder into any currency other than United States
dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Underwriters could purchase United
States dollars with such other currency in the City of New York on the business
day proceeding that on which final judgment is given. The obligations of the
Company in respect of any sum due from it to the Underwriters shall,
notwithstanding any judgment in a currency other than United States dollars, not
be discharged until the first business day, following receipt by the
Underwriters of any sum adjudged to be so due in such other currency, on which
(and only to the extent that) the Underwriters may in accordance with normal
banking procedures purchase United States dollars with such other currency; if
the United States dollars so purchased are less than the sum originally due to
the Underwriters hereunder, the Company agrees, as a separate obligation and
notwithstanding any such judgment, that the party responsible for such judgment
shall indemnify the Underwriters against such loss. If the United States dollars
so purchased are greater than the sum originally due to the Underwriters
hereunder, the Underwriters agree to pay to the Company an amount equal to the
excess of the dollars so purchased over the sum originally due to the
Underwriters hereunder.

14.  Notice. Except as otherwise provided herein, notice given pursuant to any
provision of this Agreement shall be delivered or sent by mail, telex or
facsimile (i) if to the Company, at the address of the Company set forth in the
Prospectus; or (ii) if to you, care of Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036, Attention: Manager, Corporate Finance
Division.

15.  Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.



                                       32
<PAGE>


                                       Very truly yours,

                                       TEEKAY SHIPPING CORPORATION

                                       By:
                                           -----------------------------------
                                           Name:
                                           Title:


Accepted as of the date hereof.

MORGAN STANLEY & CO. INCORPORATED

By:
   ----------------------------------------
   Name:
   Title:


SALOMON SMITH BARNEY INC.

By:
   ----------------------------------------
   Name:
   Title:



<PAGE>




                                   SCHEDULE I

                                                                Number of
                                                             Firm Securities
                        Underwriter                          To Be Purchased
                        ----------                           ---------------
Morgan Stanley & Co. Incorporated......................
Salomon Smith Barney Inc...............................
                           Total                                5,000,000




                                     Sch. I

<PAGE>



                                   SCHEDULE II

Title of Securities:

Registration Statement:  Registration Statement No. 333-102594

Number of Firm Securities: 5,000,000 PEPS(SM) Units

Number of Option Securities: 750,000 PEPS(SM) Units

Price to Public: $25.00 per Security

Purchase Price by Underwriters: $[    ] per Security

Interest Rate on Notes: [   ]%

Specified funds for payment of purchase price: Federal (same day) funds

Reference Price: $[    ]

Threshold Appreciation Price: $[    ]

Closing Price of Teekay Shipping Corporation Common Stock on
February 10, 2003:  $38.52

Payment Dates: February 16, May 16, August 16, and November 16, commencing
May 16, 2003

Purchase Contract Settlement Date: February 16, 2006

Maturity of Note: May 18, 2006

Stock Exchange Listing:  New York Stock Exchange

Closing Date: February 18, 2003

Closing Location: Menlo Park, California

Names and addresses of Underwriters:

         Morgan Stanley & Co. Incorporated
         1585 Broadway
         New York, New York 10036

         Salomon Smith Barney Inc.
         388 Greenwich Street
         24th Floor
         New York, New York  10013


                                    Sch. II
<PAGE>


                                  SCHEDULE III

              Encumbrances on shares of the Company's Subsidiaries

          1. Shares of the following of the Company's subsidiaries are
encumbered pursuant to the Pledge Agreement and Irrevocable Proxy dated January
29, 1996, relating to Teekay Shipping Corporation's $225 Million 8.32% First
Preferred Ship Mortgage Notes Due 2008.

         Poul Spirit LLC
         Torben Spirit LLC
         Senang Spirit LLC
         Mayon Spirit LLC
         Leyte Spirit LLC
         Luzon Spirit LLC
         Samar Spirit LLC

          2. Shares of the following of the Company's subsidiaries are
encumbered pursuant to the Amended and Restated Reimbursement Agreement, dated
April 16, 1998, between Barrington (Australia) Pty Limited, Palmerston
(Australia) Pty Limited, VSSI Australia Limited, VSSI Transport Inc., Alliance
Chartering Pty Limited and Nedship Bank (America) N. V.

         Dampier Spirit LLC
         Avalon Spirit LLC

          3. Shares of the following of the Company's subsidiaries are
encumbered pursuant to the Agreement for a U.S. $200,000,000 Reducing Revolving
Credit Facility, dated January 26, 1998, to be made available to certain
wholly-owned subsidiaries of Teekay Shipping Corporation, by Den Norske Bank
ASA, Nordea Bank, and The Bank of Nova Scotia.

         Musashi Spirit LLC
         Onozo Spirit LLC
         Palmstar Cherry LLC
         Palmstar Lotus LLC
         Palmstar Poppy LLC
         Teekay Spirit LLC
         Vancouver Spirit LLC
         Victoria Spirit LLC



                                    Sch. III

<PAGE>



                                 SCHEDULE IV(a)

  Company Subsidiaries Incorporated in the Republic of Liberia With Operations

Teekay Norge Limited

                                 SCHEDULE IV(b)

 Company Subsidiaries Incorporated in the Republic of Liberia Without Operations

Willow Ltd.
Cranberry Corporation
Jasmin Holdings Ltd.


                                    Sch. IV
<PAGE>



                                  SCHEDULE V(a)

        Company Subsidiaries Incorporated in The Bahamas With Operations

         Teekay Shipping Limited

                                  SCHEDULE V(b)

       Company Subsidiaries Incorporated in The Bahamas Without Operations

         Seagull International Ltd.


                                     Sch. V
<PAGE>



                                 SCHEDULE VI(a)

 Company Subsidiaries Incorporated in The Republic of The Marshall Islands With
                                   Operations

Alliance Spirit LLC                           Palmstar Orchid LLC
Avalon Spirit LLC                             Palmstar Poppy LLC
Bahamas Spirit LLC                            Palmstar Rose LLC
Cook Spirit LLC                               Palmstar Thistle LLC
Cork Spirit LLC                               PetroAtlantic LLC
Dampier Spirit LLC                            PetroNordic LLC
Donegal Spirit LLC                            Poul Spirit LLC
DSME Hull No. 5248 LLC                        Samar Spirit LLC
DSME Hull No. 5249 LLC                        Sebarok Spirit LLC
Galway Spirit LLC                             Seletar Spirit LLC
Great West Hull No. 1465 LLC                  Semakau Spirit LLC
Great West Hull No. 1466 LLC                  Senang Spirit LLC
Hamane Spirit LLC                             Sentosa Spirit LLC
Kanata Spirit LLC                             Seraya Spirit LLC
Kareela Spirit LLC                            Shannon Spirit LLC
Koyagi Spirit LLC                             Shilla Spirit LLC
Kyushu Spirit LLC                             Singapore Spirit LLC
Leyte Spirit LLC                              Sudong Spirit LLC
Limerick Spirit LLC                           Teekay Spirit LLC
Luzon Spirit LLC                              Teekay Chartering Limited
Magellan Spirit LLC                           Teekay Lightering Services LLC
Mayon Spirit LLC                              Teekay Nordic Holdings Inc.
Mushashi Spirit LLC                           Torben Spirit LLC
Namsan Spirit LLC                             Torres Spirit LLC
Nordic NB LLC                                 Ulsan Spirit LLC
Norsk Teekay Holdings Ltd.                    Vancouver Spirit LLC
Onozo Spirit LLC                              Victoria Spirit LLC
Pacific Spirit LLC
Palmstar Cherry LLC
Palmstar Lotus LLC


                                 SCHEDULE VI(b)

    Company Subsidiaries Incorporated in The Republic of The Marshall Islands
                               Without Operations


                                    Sch. VI
<PAGE>


                                 SCHEDULE VII(a)

           Company Subsidiaries Incorporated in Norway With Operations

Ugland Nordic Shipping AS                     KS Nordic Laurita
Ugland Nordic Investment AS                   KS Bona Fortuna
Teekay Shipping (Norway) AS                   KS Bona Freighter
Norsk Teekay AS                               KS Nordic Akarita
Nordic Akarita AS                             KS Nordic Apollo
Nordic Apollo AS
Nordic Laurita AS
Nordic Sarita Investment AS


                                 SCHEDULE VII(b)

         Company Subsidiaries Incorporated in Norway Without Operations





                                    Sch. VII
<PAGE>




                                SCHEDULE VIII(a)

          Company Subsidiaries Incorporated in Bermuda With Operations

Bona Shipholding Ltd.
Teekay Shipping Limited
Bona Shipping India Ltd.
Bona Freighter & Fortuna Ltd.

                                SCHEDULE VIII(b)

         Company Subsidiaries Incorporated in Bermuda Without Operations





                                   Sch. VIII

<PAGE>



                                 SCHEDULE IX(a)

                         Significant Navion Subsidiaries

Navion Offshore Loading AS
Navion Shipping Holding AS
Navion Shipping Operations AS





                                    Sch. IX

<PAGE>



                                    Exhibit A

                        [Form of PEPS Lock-Up Agreement]

                                February __, 2003

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Salomon Smith Barney Inc.
388 Greenwich Street
24th Floor
New York, New York 10013

Dear Sirs and Mesdames:

         The undersigned understands that Morgan Stanley & Co. Incorporated
("Morgan Stanley") and Salomon Smith Barney Inc. (collectively with Morgan
Stanley, the "Underwriters") propose to enter into an Underwriting Agreement
(the "Underwriting Agreement") with Teekay Shipping Corporation, a Republic of
The Marshall Islands corporation (the "Company"), providing for the public
offering (the "Public Offering") by the Underwriters Premium Equity
Participating Security Units - PEPS (each a "Security" and collectively, the
"Securities") which require any holder of a Security to, among other things,
purchase from the Company, on a future date, shares of the Company's Common
Stock, par value $0.0001 per share (the "Common Stock").

         To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the final prospectus supplement relating to the
Public Offering (the "Prospectus Supplement"), (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Securities,
Purchase Contracts or shares of Common Stock or any securities convertible into
or exercisable or exchangeable for any Securities, Purchase Contracts or shares
of Common Stock or (2) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Securities, Purchase Contracts or shares of Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Securities, Purchase Contracts or Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the sale of any Securities to the Underwriters pursuant to the Underwriting
Agreement, (b) transactions relating to shares of Securities, Purchase Contracts
or Common Stock or other securities acquired in open market transactions after
the completion of the Public Offering, or (c) dispositions of shares of Common
Stock by gift to the undersigned's immediate family members, to trusts
established for the benefit of the undersigned's immediate family members or to
charitable organizations; provided that any such person, trust or charitable
organization agrees as a condition to receiving such gifts to be bound



<PAGE>

by the terms of the foregoing sentence. In addition, the undersigned agrees
that, without the prior written consent of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus Supplement, make any demand for or exercise any right with
respect to, the registration of any Securities, Purchase Contracts or shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Securities, Purchase Contracts or Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's share of
Securities, Purchase Contracts or Common Stock except in compliance with the
foregoing restrictions.

         The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.

         Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.

         This Lock-up Agreement will terminate and shall be of no further effect
in the event that either the Underwriting Agreement is terminated or the sale of
the Securities in the Public Offering has not occurred on or before February 28,
2003.

                                       Very truly yours,

                                       ----------------------------------------
                                       (Name)


                                       ----------------------------------------
                                       (Address)








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>8
<FILENAME>o08866exv8w1.txt
<DESCRIPTION>OPINION OF  PERKINS COIE LLP
<TEXT>
<PAGE>

                                   Exhibit 8.1

                                                       [PERKINS COIE LETTERHEAD]

                                              1211 S.W. Fifth Avenue, Suite 1500
                                                         Portland, OR 97204-3715
                                                             PHONE: 503-727-2000
                                                               FAX: 503-727-2222
                                                             www.perkinscoie.com

February 11, 2003


Teekay Shipping Corporation
TK House
Bayside Executive Park
West Bay Street and Blake Road
P.O. Box AP-59213
Nassau, Commonwealth of the Bahamas

RE:      REGISTRATION STATEMENT ON FORM F-3

Ladies and Gentlemen:

         We have acted as counsel to Teekay Shipping Corporation, a Republic of
The Marshall Islands corporation (the "Company"), in connection with the
issuance and sale (the "Offering") by the Company of 5,000,000 PEPS Units (or up
to 5,750,000 PEPS Units if the underwriters exercise their over-allotment option
in full). The PEPS Units will be issued pursuant to the Company's Registration
Statement, including the Prospectus therein, on Form F-3 (No. 333-102594) filed
by the Company with the United States Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), and declared effective February 4, 2003 (the "Registration Statement").
At your request, we have examined the Company's Prospectus supplement filed by
the Company with the Commission on February 11, 2003 in connection with the
Offering (the "Prospectus Supplement").

         You have requested our opinion regarding the accuracy of the United
States federal income tax matters described in the Prospectus Supplement under
the caption "Tax Consequences - Material United States Federal Income Tax
Consequences."

         In rendering our opinion, we have examined the Registration Statement,
the Prospectus Supplement and such other documents as we have deemed necessary
or appropriate. We have relied upon the truth and accuracy at all relevant times
of (i) the facts, statements and representations contained in the Registration
Statement and Prospectus Supplement and (ii) certain factual representations
made by the Company. We also have assumed, without any independent
investigation, the authenticity of original documents submitted to us, the
conformity to the originals of documents





<PAGE>

Teekay Shipping Corporation
February 11, 2003
Page 2


submitted to us as copies, and the due and valid execution and delivery of all
such documents where due execution and delivery are a prerequisite to the
effectiveness thereof.



         Based upon the foregoing and subject to the limitations and
qualifications set forth herein, we are of the opinion that the discussion set
forth in the Prospectus Supplement under the caption "Tax Consequences -
Material United States Federal Income Tax Consequences," to the extent it
constitutes descriptions of legal matters or legal conclusions, is accurate in
all material respects.

         This opinion represents our best judgment regarding the application of
the United States federal income tax laws in effect as of the date hereof,
including the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), applicable Treasury Regulations, published rulings and
administrative practices of the Internal Revenue Service (the "Service") and
court decisions. Our opinion is not binding on the Service or the courts, and
there is no assurance that the Service will not successfully assert a contrary
position. Furthermore, no assurance can be given that future legislative,
judicial or administrative changes, on either a prospective or retroactive
basis, will not adversely affect the accuracy of the conclusions stated herein.
We undertake no responsibility to advise you of any subsequent changes of the
facts, statements, representations or assumptions herein, or of any new
developments in the application or interpretation of the United States federal
income tax laws. In the event any one of the facts, statements, representations,
or assumptions upon which we have relied to issue this opinion is incorrect, our
opinion might be adversely affected and may not be relied upon.

         This opinion addresses only the matters described above, and does not
address any other United States federal state, local or foreign tax consequences
that may result from the purchase, ownership and disposition of PEPS Units,
purchase contracts, notes and Treasury securities that are or may be the
components of a PEPS Unit, and shares of the Company's common stock acquired
under a purchase contract, or any other transaction undertaken in connection
with the Offering. Furthermore, we express no opinion as to the United States
federal income taxation of the Company under Sections 882, 883 or 887 of the
Code.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the captions "Legal
Matters" in the



<PAGE>

Teekay Shipping Corporation
February 11, 2003
Page 3


Prospectus Supplement. In giving this consent, we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act, nor do we admit that we are experts with respect to any part of
the Registration Statement within the meaning of the term "expert" as used in
the Securities Act.

Very truly yours,


S/PERKINS COIE LLP




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.2
<SEQUENCE>9
<FILENAME>o08866exv8w2.txt
<DESCRIPTION>OPINION OF SEWARD AND KISSEL, LLP
<TEXT>
<PAGE>
                                                                     Exhibit 8.2


                              SEWARD & KISSEL LLP
                             ONE BATTERY PARK PLAZA
                            NEW YORK, NEW YORK 10004

WRITER'S DIRECT DIAL     TELEPHONE: (212) 574-1290        1200 G STREET, N.W.
                         FACSIMILE: (212) 480-8421      WASHINGTON, D.C. 20005
                              WWW.SEWKIE.COM           TELEPHONE: (202) 737-8833
                                                       FACSIMILE: (202) 737-5184




                                                               February 11, 2003

Teekay Shipping Corporation
TK House, Bayside Executive Park
West Bay and Blake Road
P.O. Box AP-59213
Nassau, Commonwealth of the Bahamas


                     Re: Registration on Form F-3 of 5,000,000
                         PEPS Units of Teekay Shipping Corporation

Ladies and Gentlemen:

     In connection with the Registration Statement on Form F-3, as amended,
filed by Teekay Shipping Corporation (the "Company"), with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, and the
rules and regulations thereunder, and prepared in connection with the offer by
the Company of 5,000,000 PEPS Units of the Company (or up to 5,750,000 PEPS
Units if the underwriters exercise their overallotment option in full) (the
"Registration Statement"), we have been requested to render our opinion as to
the matters hereinafter set forth.

     In formulating our opinion as to the United States tax matters described
below, we have examined such documents as we have deemed appropriate, including
the Registration Statement and that certain Prospectus Supplement dated February
11, 2003 (the "Prospectus Supplement") that forms a part thereof. We also have
obtained such additional information as we have deemed relevant and necessary
from representatives of the Company.

<PAGE>
February   , 2003
Page 2




     Based on the facts as set forth in the Prospectus Supplement and, in
particular, on the representations, covenants, assumptions, conditions and
qualifications described in the Prospectus Supplement under the captions
"Taxation of Teekay -- United States Taxation", "Taxation of Our Shipping
Income: In General", "Application of Code Section 883", "Taxation in Absence of
Internal Revenue Code Section 883 Exemption", we hereby confirm that the
statements contained in the Prospectus Supplement under the captions "Taxation
of Teekay -- United States Taxation", "Taxation of Our Shipping Income: In
General", "Application of Code Section 883", "Taxation in Absence of Internal
Revenue Code Section 883 Exemption" fairly summarize the legal matters referred
to therein and fairly present the information called for with respect to such
legal matters.

     We hereby consent to the use of our name in the Registration Statement and
in the Prospectus Supplement as the same appears under the captions "Taxation of
Teekay -- United States Taxation", "Taxation of Our Shipping Income: In
General", "Application of Code Section 883", "Taxation in Absence of Internal
Revenue Code Section 883 Exemption" and "Legal Matters" and to the use of this
opinion as an exhibit to the Registration Statement.

     Our opinions and the tax discussion as set forth in the Prospectus under
the caption "Taxation of Teekay -- United States Taxation", "Taxation of Our
Shipping Income: In General", "Application of Code Section 883", "Taxation in
Absence of Internal Revenue Code Section 883 Exemption" are based on the
Internal Revenue Code of 1986, as amended, existing and proposed Treasury
Regulations promulgated thereunder, published pronouncements of the Internal
Revenue Service which may be cited or used as precedents, and the published
opinions of the United States Tax Court and other United States Federal Courts,
each as they exist as of the date hereof, and any of which may be changed at any
time with retroactive effect. No opinion is expressed on any matters other than
those specifically referred to above by reference to the Prospectus Supplement.

                                            Very truly yours,

                                            /s/ Seward & Kissel LLP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.3
<SEQUENCE>10
<FILENAME>o08866exv8w3.txt
<DESCRIPTION>OPINION OF WATSON, FARLEY & WILLIAMS
<TEXT>
<PAGE>

                                                                     EXHIBIT 8.3

                                                       WATSON, FARLEY & WILLIAMS
380 MADISON AVENUE
NEW YORK o NEW YORK 10017

TELEPHONE (212) 922-2200                                     N E W  Y O R K
FAX (212) 922-1512

Telex 6790626 WFWNY

Direct dial                                           Our reference
                                                                     02375.20065




February 10, 2003






Teekay Shipping Corporation
TK House, Bayside Executive Park
West Bay and Blake Road
P.O. Box AP-59213
Nassau, Commonwealth of the Bahamas



Dear Sirs:


TEEKAY SHIPPING CORPORATION -- REGISTRATION STATEMENT ON FORM F-3


We have acted as special counsel for Teekay Shipping Corporation, a Marshall
Islands corporation (the "Company"), on matters of Marshall Islands law in
connection with the Registration Statement on Form F-3 (No. 333-102594) (the
"Registration Statement"), and the prospectus included therein, as supplemented
by the prospectus supplement dated February 10, 2003 (the "Prospectus
Supplement"), filed by the Company with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, and the rules and
regulations thereunder, in connection with the issuance and sale by the Company
of an aggregate of 5,000,000 [  ]% Premium Equity Participating Security Units
- -- PEPS(SM) Units (the "Firm Securities") and an additional 750,000 [  ]%
Premium Equity Participating Security Units -- PEPS(SM) Units (the "Option
Securities", and together with the Firm Securities, the "Securities") relating
to the underwriters' over-allotment option.

As such counsel, we have examined the Prospectus Supplement and such other
papers, documents and certificates of public officials and certificates of
officers of the Company and its subsidiaries as we have deemed relevant and
necessary as the basis for the opinions hereafter expressed. In such
examinations, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity
to original documents of all documents submitted to us as conformed or
photostatic copies.

This opinion is limited to the law of the Republic of The Marshall Islands.
Insofar as Marshall Islands law is involved in the rendering of this opinion,
we have relied on opinions of counsel in the Marshall Islands rendered in
transactions which we consider to be sufficiently similar to those


<PAGE>

Teekay Shipping Corporation
February 10, 2003                                                         Page 2


contemplated by the Registration Statement and the Prospectus Supplement in
order to afford a satisfactory basis for such opinion, and upon our independent
examinations of the Associations Law of the Republic of the Marshall Islands and
our knowledge and interpretation of analogous laws of the United States.

Based on the foregoing and having regard to legal considerations which we deem
relevant, we are of the opinion that the statements in the Prospectus Supplement
under the captions "Tax Consequences -- Marshall Islands Tax Consequences" and
"Taxation of Teekay -- Marshall Islands Taxation" insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein, fairly present the information expected to be relevant to purchasers of
the Securities offered pursuant to the Prospectus Supplement, and fairly
summarize the matters referred to therein.

We consent to the reference of our Firm under the captions "Tax Consequences --
Marshall Islands Tax Consequences", "Taxation of Teekay -- Marshall Islands
Taxation" and "Legal Matters" in the Prospectus Supplement, and to the use of
this opinion as an exhibit to the Registration Statement.

This opinion is solely for the benefit of and may be relied upon by the Company.
This opinion may not be relied upon by any other person or entity without the
prior written approval of the undersigned.

Very truly yours,

WATSON, FARLEY & WILLIAMS

/s/ Watson, Farley & Williams

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.4
<SEQUENCE>11
<FILENAME>o08866exv8w4.txt
<DESCRIPTION>OPINION OF GRAHAM, THOMPSON & CO.
<TEXT>
<PAGE>

                                                                     EXHIBIT 8.4

                             GRAHAM, THOMPSON & CO.
                             ----------------------
                   COUNSEL & ATTORNEYS-AT-LAW-NOTARIES PUBLIC


           CONSULTANT COUNSEL
         Peter D. Graham, CMG
           Anthony C. Hepburn
                 +Erica Paine

                     PARTNERS
             M. Craig Roberts
                Dana C. Wells
           Michael L. Barnett
                Sean McWeeney
              Gilbert A. Ward
          Judith A. Whitehead
             Clare L. Hepburn
   Michelle M. Pindling-Sands
              Andrew G. Wells
         Gregory I. H. Cottis
         Pembroke H. Williams
             +Gregory K. Moss
             +Robert K. Adams

                   ASSOCIATES
               Tami C. Kassim
               Tanya R. Hanna
               Dolly P. Young
     Michaela S. Sumner-Budhi
             Krystal D. Rolle
         Sandra J. Lightbourn
        Monique R. Cartwright
             Andre J. Rakming
            Colin M. Thompson
         +Antionette E. Allen
           Bethsheba G. Rolle
             Lethera S. Smith
             +Paula L. Gibson

              NASSAU CHAMBERS
                 Sasson House
  Shirley St. & Victoria Ave.
               P.O. Box N-272
       Nassau, New Providence
                  The Bahamas

    Telephone: (242) 322-4130
               (242) 323-8405
      Telefax: (242) 328-1069
               (242) 356-9368

           +FREEPORT CHAMBERS
  The First Commercial Centre
           3rd Floor, Suite 9
             P.O. Box F-42533
       Freeport, Grand Bahama
                  The Bahamas

    Telephone: (242) 351-7474
               (242) 351-7482
      Telefax: (242) 351-7752
               (242) 351-7782


Writer's Direct:
Telephone:     (242) 328-6287
Telefax:       (242) 328-0386
E-Mail:        gaw@gtclaw.com

VIA E-MAIL: DBosley@PerkinsCoie.com

February 10th, 2003
Our Ref: GAW/pr/T-218/5565/35

Teekay Shipping Corporation
TK House, Bayside Executive Park
West Bay and Blake Road
P.O. Box AP-59213
Nassau, Commonwealth of The Bahamas

Dear Sirs:

RE:   TEEKAY SHIPPING CORPORATION -- REGISTRATION STATEMENT ON
      FORM-3

In connection with the Registration Statement on Form-3 filed, and the
Prospectus Supplement to be filed, by Teekay Shipping Corporation, a Republic
of The Marshall Islands corporation ("Teekay"), with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, and the
rules and regulations thereunder, prepared in connection with the offer of
US$125 million PEPS Units of Teekay, we have been requested to render our
opinion as to the matters hereinafter set forth.

In this regard, we have examined a draft as at February 7th, 2003, identified
to our satisfaction, of the Registration Statement and the related Prospectus
Supplement relating to the Units (the "Documents"), and in our examination of
same, we have assumed, without independent investigation, the authenticity of
such Documents, the power, authority and legal right of all parties thereto to
enter into and perform their respective obligations under the said Documents
and the due authorization, execution and delivery of the said Documents by all
of the parties to that Documents to which they are a party. We have also
assumed the accuracy and completeness of all factual representations made in
the Documents.


<PAGE>


Teekay Shipping Corporation
February 10, 2003                                                         Page 2


GRAHAM, THOMPSON & CO.

Based upon and subject to the foregoing we are of the opinion that the summaries
set forth under the heading "Tax Consequences -- Bahamian Taxation Consequences"
and "Taxation of Teekay -- Bahamian Taxation" in the Prospectus Supplement
forming a part of the Registration Statement are accurate and describes the
Bahamian Tax consequences expected to be relevant to the prospective purchasers
of the Units offered pursuant to the Prospectus Supplement.

We hereby consent to the use of our name in the related Document as the same
appears under the caption "Tax Consequences -- Bahamian Taxation Consequences",
"Taxation of Teekay -- Bahamian Taxation" and "Legal Matters", and to the use of
this opinion as an exhibit to the Registration Statement.

Our opinion expressed above is limited to the laws of the Commonwealth of The
Bahamas as in effect on the date hereof. Insofar the Registration Statement and
the related Prospectus are expressed to be governed by any other system of law,
we have assumed with your approval the validity and enforceability of same under
the applicable system of law.

This opinion is solely for the benefit of and may be relied upon by Teekay. This
opinion may not be relied upon by any other person or entity without the prior
written approval of the undersigned.

Yours faithfully,
GRAHAM, THOMPSON & CO.

/s/ Gilbert A. Ward

PER: Gilbert A. Ward


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.5
<SEQUENCE>12
<FILENAME>o08866exv8w5.txt
<DESCRIPTION>OPINION OF APPLEBY, SPURLING & KEMPE
<TEXT>
<PAGE>
                                                                     EXHIBIT 8.5

[AS & K Logo]

APPLEBY SPURLING & KEMPE
BARRISTERS & ATTORNEYS

Cedar House, 41 Cedar Avenue,                    CJK /rl/6860.19
Hamilton HM 12, Bermuda                          Your Ref:
Mail: P.O. Box HM 1179,                           Direct Tel: +441 298 3559
Hamilton HM EX, Bermuda                           Direct Fax: +441 298 4154
Telephone: 441 295 2244                          Our Ref:
Fax: 441 292 8666/441 295 5328                    Direct e-mail: eknight@ask.bm
e-mail:askcorp@ask.bm
Website: www.ask.bm
www.justaskinc.bm                                10 February 2003


Teekay Shipping Corporation
TK House, Bayside Executive Park
West Bay Street and Blake Road
P.O. Box AP-59213
Nassau, Commonwealth of the Bahamas

Dear Sirs

TEEKAY SHIPPING CORPORATION (THE ''COMPANY'') AND
BONA SHIPHOLDING LTD. (THE ''BERMUDA SUBSIDIARY'')

We have acted as legal counsel in Bermuda to the Company and the Bermuda
Subsidiary and have been requested to Provide this opinion to you in connection
with the draft Prospectus Supplement to be filed in connection with the
Registration Statement (each as defined in the Schedule to this opinion).

For the purposes of this opinion we have examined and relied upon the documents
listed, and in some cased defined, in the Schedule to this opinion (the
''Document'').

ASSUMPTIONS

In stating our opinion we have assumed:-

(a)  the authenticity, accuracy and completeness of all Documents and other
     documentation examined by us submitted to us as originals and the
     conformity to authentic original documents of all Documents and other such
     documentation submitted to us as certified, conformed, notarised, faxed or
     photostatic copies.

(b)  that each of the Documents and all other such documentation which was
     received by electronic means is complete, intact and in conformity with the
     transmission as sent;

(c)  the genuineness of all signatures on the Documents;

(d)  the authority, capacity and power of each of the persons signing the
     Documents;

(e)  that any representation, warranty or statement of fact or law, other than
     as to the laws of Bermuda, made in any of the Documents is true, accurate
     and complete;
<PAGE>

[AS & K LOGO]

(f)  that the Bermuda Subsidiary is not carrying on investment business in or
     from within Bermuda under the provisions of the Investment Business Act
     1998 as amended from time to time; and

(g)  that, when completed, signed and delivered, the Registration Statement and
     related Prospectus Supplement will be in a form which does not differ in
     any material respect from the draft which we have examined for the purposes
     of this opinion.


OPINION
- -------

Based upon and subject to the foregoing and subject to the reservation set out
below and to any matters not disclosed to us, we are of the opinion that the
statements in the Prospectus Supplement that forms part of the Registration
Statement under the captions "Taxation of Teekay -- Bermudian Taxation" insofar
as they purport to describe the provisions of the laws of Bermuda referred to
therein or legal conclusions with respect thereto, have been reviewed by us and
are accurate and correct in all material respects and fairly present the
information disclosed in all material respects.


RESERVATION
- -----------

We have the following reservation: -

We express no opinion as to any law other than Bermuda law and the opinion
expressed herein does not relate to compliance with or matters governed by the
laws of any jurisdiction except Bermuda. This opinion is limited to Bermuda law
as applied by the Courts of Bermuda at the date hereof.


DISCLOSURE
- ----------

We consent to the reference of our Firm under the captions "Taxation of Teekay
- -- Bermudian Taxation" and "Legal Matters" in the Registration Statement and the
related Prospectus Supplement, and to the use of this opinion as an exhibit to
the Registration Statement. This consent may be incorporated by reference in any
registration statement of the Company filed pursuant to the United States
Securities Act of 1933, as amended, in connection with the offer of the Units.

This opinion speaks as of its date and is strictly limited to the matters stated
herein and we assume no obligation to review or update this opinion if
applicable law or the existing facts or circumstances should change. This
opinion is governed by and is to be construed in accordance with Bermuda law. It
is given on the basis that it will not give rise to any legal proceedings with
respect thereto in any jurisdiction other than Bermuda.
<PAGE>

[AS & K LOGO]

This opinion is solely for the benefit of and may be relied upon by the Company.
This opinion may not be relied upon by any other person or entity without the
prior written approval of the undersigned.


Yours faithfully

/s/ Appleby Spurling & Kempe
- -----------------------------
APPLEBY SPURLING & KEMPE
<PAGE>


[AS&K LOGO]

                                    SCHEDULE

1. A certified copy of the "TAX ASSURANCE" dated 21 September 1990, issued by
   the Minister of Finance in relation to the Bermuda subsidiary

2. A Registration Statement dated 17 January 2003 on Form F-3  and related
   Prospectus Supplement (the "REGISTRATION STATEMENT") to be filed by the
   Company with the Securities and Exchange Commission pursuant to The
   Securities Act of 1933 of the United States of America as amended, and the
   rules and regulations thereunder, prepared in connection with the offer of
   5,000,000 Remarketing Enhanced -- Premium Equity Participating Security Units
   of the Company (the "Units").



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.6
<SEQUENCE>13
<FILENAME>o08866exv8w6.txt
<DESCRIPTION>OPINION OF THOMMESSEN KREFTING GREVE LUND
<TEXT>
<PAGE>
                     [THOMMESSEN KREFTING GREVE LUND LETTERHEAD]

                                                                     Exhibit 8.6

Teekay Shipping Corporation
TK House, Bayside Executive Park
West Bay and Blake Road
P.O. Box AP-59213
Nassau
COMMONWEALTH OF THE BAHAMAS

Your ref:            Our ref:                           Date:
                                                        Oslo, 11th February 2003

REGISTRATION STATEMENT ON PROSPECTUS SUPPLEMENT --
NORWEGIAN LEGAL OPINION

We act as special Norwegian counsel for Teekay Shipping Corporation (the
"Company") in matters pertaining to Norwegian law in connection with the
registration statement filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, and the rules
and regulations thereunder on Form F-3, dated 17 January 2003 (registration no.
333-102594) (the "Registration Statement"), and the prospectus included therein
relating to the shelf securities at the time the Registration Statement became
effective (the "Base Prospectus"). The Base Prospectus is amended by the
supplement to the Base Prospectus dated February 10th, 2003 (the "Supplement")
in respect of the offering by the Company of 5 million PEPS Units (the
"Units"). The Base Prospectus and the Supplement hereafter referred to as the
"Prospectus". The Units are being issued under the first supplemental indenture
to be dated as of [        ], 2003 to the indenture dated as of [        ],
2003 (the "Indenture") between the Company and The Bank of New York, as
trustee. You have asked us to render our opinion as to the matters hereinafter
set forth.

For the purpose of rendering this opinion we have examined the Registration
Statement, the prospectus which forms part of the Registration Statement (the
"Prospectus") and such publicly available documents in relation to the
corporate existence of Ugland Nordic Shipping AS ("UNS"), Ugland Nordic
Investment AS (together the "Corporations"), Nordic Laurita KS, Nordic Akarita
KS and KS Nordic Apollo



<PAGE>
(collectively the "Partnerships", and together with the Corporations the
"Companies") as we have deemed necessary.

In rendering this opinion we have assumed that documents submitted to us as
copies conform to the originals thereof, and all signatures thereon are
authentic.

We express no opinion as to the laws of any jurisdiction other than those of the
Kingdom of Norway in force and effect as at the date hereof.

Based on the foregoing and subject to the qualifications set out herein, we are
of the opinion that the statements in the Prospectus under the captions
"Taxation of Teekay -- Norwegian Taxation" insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters referred to therein.

We consent to the reference of our Firm under the captions "Taxation of Teekay
- -- Norwegian Taxation" in the Registration Statement and the related Prospectus,
and to the use of this opinion as an exhibit to the Registration Statement.

The Opinions given herein are as of the date hereof, and we assume no obligation
to update or supplement this opinion to reflect any facts of circumstances which
may hereafter come to our attention or to any changes in law which may occur.

This Opinion is strictly limited to the matters set out above, and is not to be
extended by implication to any of the matters. This Opinion is furnished by us
for the benefit of the Company and may not be relied upon by any other person or
entity for any other purpose without the prior written permission of the
undersigned.

Your sincerely,
THOMMESSEN KREFTING GREVE LUND AS Advokatfirma

/s/  Henning Naas
- -------------------
Henning Naas

                                  Page 2 of 2







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.7
<SEQUENCE>14
<FILENAME>o08866exv23w7.txt
<DESCRIPTION>CONSENT OF DELOITTE & TOUCHE
<TEXT>
<PAGE>

Deloitte & Touche                                                   EXHIBIT 23.7
Statsautoriserte Revisorer AS
Radhusgara 1
Postboks 443
N-3101 Tonsberg

Telefon: 33 00 39 00
Telefax: 33 00 39 01
www.deloitte.no                                        [DELOITTE  & TOUCHE LOGO]





                       Consent of Independent Accountants


We consent to the reference to our firm under the caption "Experts" in the
Registration Statements (Form F-3 No. 33-00000) and related Prospectus of Teekay
Shipping Corporation ("Teekay") for the registration of up to $500,000,000 of
its common stock, preferred stock, warrants, stock purchase contracts, stock
purchase units or debt securities and to the incorporation by reference therein
of our report dated May 22, 2002,with respect to the consolidated financial
statements of Ugland Nordic Shipping ASA and its subsidiaries for the fiscal
year ended December 31, 2001.


/s/ Deloitte & Touche,
Independent Accountants

Tonsberg, Norway
February 11, 2003








- --------      Bergen Floro Forde Grenland Haugesund Knarvik Kristiansand Lyngdal
DELOITTE      Oslo Sogndal Stavanger Steinkjer Trondheim Tonsberg
TOUCHE
TOHMATSU      Medlemmer de Den norskr Revisorforening
- --------      Org.n: 980 211 282

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
