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<SEC-DOCUMENT>0000911971-03-000028.txt : 20030515
<SEC-HEADER>0000911971-03-000028.hdr.sgml : 20030515
<ACCEPTANCE-DATETIME>20030515163001
ACCESSION NUMBER:		0000911971-03-000028
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20030331
FILED AS OF DATE:		20030515

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:		03705135

	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>form6k_033103.htm
<DESCRIPTION>FORM 6K FOR PERIOD ENDED 03/31/03
<TEXT>
<HTML>
<HEAD>
<TITLE>TEEKAY SHIPPING CORPORATION</TITLE>
</HEAD>
<BODY>
<H1 ALIGN=CENTER>
<FONT FACE="Times New Roman, Times, Serif" SIZE=5>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</FONT></H1>

<H1 ALIGN=CENTER>
<FONT FACE="Times New Roman, Times, Serif" SIZE=3><u><B>WASHINGTON, D.C. 20549</B></u>
</FONT>
</H1>

<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 6-K</FONT></H1>

<P ALIGN=CENTER>Report of Foreign Private Issuer</P>
<P ALIGN=CENTER>Pursuant to Rule 13a-16 or 15d-16 of<BR>
the Securities Exchange Act of 1934</P>

<hr width=15% size=1 noshade>

                                   <P ALIGN=CENTER>For the quarterly period ended <u>March 31, 2003</u><BR>
<BR>
                                            <FONT SIZE=4><B>TEEKAY SHIPPING CORPORATION</B></FONT><BR>
                              (Exact name of Registrant as specified in its charter)<BR>
<BR>
                                                     TK House<BR>
                                              Bayside Executive Park<BR>
                                           West Bay Street &amp; Blake Road<BR>
                                        P.O. Box AP-59213, Nassau, Bahamas<BR>
                                      (Address of principal executive office)<BR></P>

<hr width=15% size=1 noshade>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.]</P>

<P ALIGN=CENTER>Form 20-F&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Form 40- F&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</P>

<P ALIGN=CENTER>Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</P>

<P ALIGN=CENTER>Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[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.]</P>

<P ALIGN=CENTER>Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b):82-<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>]</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
REPORT ON FORM 6-K FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003</FONT></H1>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<U>INDEX</U></FONT></H1>

<PRE>
PART I:   FINANCIAL INFORMATION                                                                     PAGE

Item 1.  Financial Statements

                Independent Accountant's Review Report on Interim Financial Statements.................         3

                Consolidated Statements of Income
                       for the three months ended March 31, 2003 and 2002................................       4

                Consolidated Balance Sheets
                       March 31, 2003 and December 31, 2002..............................................       5

                Consolidated Statements of Cash Flows
                       for the three months ended March 31, 2003 and 2002................................       6

                Notes to the Consolidated Financial Statements.........................................         7

                Schedule A to the Consolidated Financial Statements....................................        12


Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations..............................................................      15

Item 3.  Quantitative and Qualitative Disclosures about Market Risk....................................        21

PART II: OTHER INFORMATION.............................................................................        22

SIGNATURES.............................................................................................        23
</PRE>
<BR>
<BR>
<BR>
<BR>
<BR>

<P><B>ITEM 1 - FINANCIAL STATEMENTS</B></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><b>
INDEPENDENT ACCOUNTANT'S REVIEW REPORT ON INTERIM<BR>
FINANCIAL STATEMENTS</b></font></p>
<BR><BR>
<p>To the Shareholders and Board of Directors of<BR>
<b>Teekay Shipping Corporation</b></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We have reviewed the accompanying  consolidated  balance sheet of Teekay Shipping  Corporation and subsidiaries as
of March 31, 2003,  the related  consolidated  statements  of income for the  three-month  periods ended March 31,
2003 and 2002,  and the  consolidated  statements of cash flows for the  three-month  periods ended March 31, 2003
and 2002.  Our review also included  Schedule A listed in Index Item 1. These  consolidated  financial  statements
and schedule are the responsibility of the Company's management.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We were  furnished  with the report of other  accountants  on their  review of the interim  information  of Ugland
Nordic  Shipping AS, a wholly-owned  subsidiary,  for the three months ended March 31, 2002 and whose total assets
as of March 31, 2002 and whose net voyage  revenues for the  three-month  period ended March 31, 2002  constituted
22 percent and 18 percent, respectively, of the consolidated totals.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We conducted our reviews in accordance with standards  established by the American  Institute of Certified  Public
Accountants.  A review of interim financial  information consists principally of applying analytical procedures to
financial  data,  and making  inquiries  of persons  responsible  for  financial  and  accounting  matters.  It is
substantially  less in scope than an audit conducted in accordance with auditing  standards  generally accepted in
the  United  States,  which  will be  performed  for the full year with the  objective  of  expressing  an opinion
regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Based on our reviews and the report of other  accountants,  we are not aware of any  material  modifications  that
should be made to the accompanying  consolidated  financial  statements and schedule referred to above for them to
be in conformity with accounting principles generally accepted in the United States.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We have previously  audited,  in accordance with auditing  standards  generally accepted in the United States, the
consolidated  balance sheet of Teekay  Shipping  Corporation  and  subsidiaries  as of December 31, 2002,  and the
related  consolidated  statements  of  income,  changes in  stockholders'  equity and cash flows for the year then
ended,  not  presented  herein,  and in our report  dated  February 13, 2003 (except for Note 15(b) which is as of
February 19, 2003.),  we expressed an  unqualified  opinion on those  consolidated  financial  statements.  In our
opinion,  the  information set forth in the  accompanying  consolidated  balance sheet and related  schedule as of
December 31, 2002, is fairly stated, in all material respects,  in relation to the consolidated  balance sheet and
schedule from which they have been derived.</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
        <TD WIDTH=45%>Vancouver, Canada,<BR>
        April 22, 2003</TD>
        <TD WIDTH=55%>/s/ ERNST &amp; YOUNG LLP<BR>
        Chartered Accountants</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><b>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
CONSOLIDATED STATEMENTS OF INCOME<BR>
(in thousands of U.S. dollars, except per share amounts)<BR>
</b></font></P><BR>
<BR>
<BR>
<PRE>
                                                                                           <B>Three Months Ended March 31,
                                                                                             2003               2002
                                                                                               $                  $</B>
                                                                                        ---------------- ------------------
                                                                                                   <B>(unaudited)</B>
<B>NET VOYAGE REVENUES</B>
Voyage revenues                                                                               282,232          188,630
Voyage expenses                                                                                69,334           52,471
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------

Net voyage revenues                                                                           212,898          136,159
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------

<B>OPERATING EXPENSES</B>
Vessel operating expenses                                                                      42,646           40,387
Time-charter hire expense                                                                      12,911           12,714
Depreciation and amortization                                                                  39,130           36,078
General and administrative                                                                     14,727           14,167
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------
                                                                                              109,414          103,346
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------

Income from vessel operations                                                                 103,484           32,813
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------

<B>OTHER ITEMS</B>
Interest expense                                                                              (14,386)         (14,701)
Interest income                                                                                   846              792
Write-down of vessels <I>(note 10)</I>                                                               (26,792)               -
Other loss <I>(note 7)</I>                                                                            (9,573)          (3,213)
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------
                                                                                              (49,905)         (17,122)
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------

<B>Net income</B>                                                                                     53,579           15,691
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------

<B>Earnings per common share</B>
     - Basic                                                                                     1.35             0.40
     - Diluted                                                                                   1.32             0.39
<B>Weighted average number of common shares</B>
     - Basic                                                                              39,740,399       39,554,461
     - Diluted                                                                            40,451,189       40,254,683
- -------------------------------------------------- ------------------ ----------------- ---------------- ------------------
</PRE><p><font size=2><i>The accompanying notes are an integral part of the consolidated financial statements.</i></font></p>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><b>
                                   TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                            CONSOLIDATED BALANCE SHEETS<BR>
                                           (in thousands of U.S. dollars)</B></FONT></P>

<PRE>
<B>                                                                                        As at            As at
                                                                                      March 31,       December 31,
                                                                                        2003              2002
                                                                                          $                $</B>
                                                                                   ---------------- -----------------
<B>                                                                                     (unaudited)</B>
     <B>ASSETS</B>
     <B>Current</B>
     Cash and cash equivalents <I>(note 4)</I>                                                   247,639          284,625
     Restricted cash                                                                        2,275            4,180
     Accounts receivable                                                                   86,473           70,906
     Prepaid expenses and other assets                                                     31,192           27,847
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total current assets</B>                                                                 367,579          387,558
     ----------------------------------------------------------------------------- ---------------- -----------------

     Marketable securities                                                                 14,141           13,630

     <B>Vessels and equipment</B> <I>(notes 4 and 10</I>)
     At cost, less accumulated depreciation of $991,783
         (December 31, 2002 -  $940,082)                                                1,909,681        1,928,488
     Advances on newbuilding contracts <I>(note 6)</I>                                           139,915          138,169
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total vessels and equipment</B>                                                        2,049,596        2,066,657
     ----------------------------------------------------------------------------- ---------------- -----------------
     Restricted cash <I>(note 4)</I>                                                               6,520            4,605
     Deposit for purchase of Navion ASA <I>(note 2)</I>                                           76,000           76,000
     Investment in joint ventures                                                          55,225           56,354
     Other assets                                                                          36,792           29,513
     Intangible assets &#150; net                                                                7,609                -
     Goodwill                                                                              90,257           89,189
     ----------------------------------------------------------------------------- ---------------- -----------------

                                                                                        2,703,719        2,723,506
     ----------------------------------------------------------------------------- ---------------- -----------------


     <B>LIABILITIES AND STOCKHOLDERS' EQUITY</B>
     <B>Current</B>
     Accounts payable                                                                      21,747           22,307
     Accrued liabilities                                                                   65,092           83,643
     Current portion of long-term debt <I>(note 4)</I>                                            92,695           83,605
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total current liabilities</B>                                                            179,534          189,555
     ----------------------------------------------------------------------------- ---------------- -----------------
     Long-term debt <I>(note 4)</I>                                                              979,192        1,047,217
     Other long-term liabilities                                                           64,565           44,512
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total liabilities</B>                                                                  1,223,291        1,281,284
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Minority interest</B>                                                                     21,095           20,324

     <B>Stockholders' equity</B>
     Capital stock <I>(note 5)</I>                                                               467,941          470,988
     Retained earnings                                                                    999,042          954,005
     Accumulated other comprehensive loss                                                  (7,650)          (3,095)
     ----------------------------------------------------------------------------- ---------------- -----------------

     <B>Total stockholders' equity</B>                                                         1,459,333        1,421,898
     ----------------------------------------------------------------------------- ---------------- -----------------

                                                                                        2,703,719        2,723,506
     ----------------------------------------------------------------------------- ---------------- -----------------
</PRE>
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and contingencies (note 6)</font></p>
<p><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes are an integral part of the consolidated financial statements.</i></font></p>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><b>
                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
                                           (in thousands of U.S. dollars)</B></FONT></P>


<PRE>                                                                                    <B>Three Months Ended March 31,
                                                                                    2003                    2002
                                                                                     $                       $</B>
                                                                           ----------------------- -----------------------
                                                                                            <B>(unaudited)</B>
Cash and cash equivalents provided by (used for)

<B>OPERATING ACTIVITIES</B>
Net income                                                                          53,579              15,691
Non-cash items:
     Depreciation and amortization                                                  39,130              36,078
     Loss on disposition of available-for-sale securities                                -               1,130
     Gain on disposition of vessels and equipment                                   (1,005)                  -
     Write-down of vessels and marketable securities                                31,702                   -
     Equity income (net of dividends received: March 31, 2003 &#150; $2,046;              1,160              (1,885)
        March 31, 2002 &#150; $Nil)
     Deferred income taxes                                                           3,322               3,181
     Other &#150; net                                                                      (475)              2,067
Change in non-cash working capital items related to
   operating activities                                                            (38,323)             (7,191)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from operating activities</B>                                             89,090              49,071
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                                                   155,733               9,630
Scheduled repayments of long-term debt                                             (19,258)             (8,761)
Prepayments of long-term debt                                                     (200,000)                  -
Increase in restricted cash                                                            (10)             (3,290)
Proceeds from issuance of Common Stock                                               1,755                 408
Cash dividends paid                                                                 (8,541)             (8,505)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from financing activities</B>                                            (70,321)            (10,518)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                                             (62,891)            (13,869)
Expenditures for drydocking                                                         (5,019)             (3,858)
Proceeds from disposition of assets                                                 18,000                   -
Proceeds from disposition of available-for-sale securities                               -               6,771
Other                                                                               (5,845)             (1,885)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from investing activities</B>                                            (55,755)            (12,841)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>(Decrease) increase in cash and cash equivalents</B>                                   (36,986)             25,712
Cash and cash equivalents, beginning of the period                                 284,625             174,950
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Cash and cash equivalents, end of the period</B>                                       247,639             200,662
- -------------------------------------------------------------------------- ----------------------- -----------------------
</PRE>
<p><font size=2><i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying notes are an integral part of the consolidated financial statements.</i></font></p>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                                    <b>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
                    (all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
                         (Information as at March 31, 2003 and for the Three-Month Periods<BR>
                                        Ended March 31, 2003 and 2002 is unaudited)</b></font></P>
<BR>
<BR>
<P><b>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis of Presentation</b></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>The accompanying  unaudited interim  consolidated  financial  statements have been prepared in accordance
         with accounting  principles  generally accepted in the United States and the rules and regulations of the
         Securities  and  Exchange   Commission.   They  include  the  accounts  of  Teekay  Shipping  Corporation
         ("Teekay"),  which is incorporated under the laws of the Republic of the Marshall Islands, and its wholly
         owned  or  controlled  subsidiaries  (the  "Company").   Certain  information  and  footnote  disclosures
         required by generally accepted accounting  principles for complete annual financial  statements have been
         omitted and,  therefore,  it is suggested that these interim financial  statements be read in conjunction
         with the Company's audited  financial  statements for the year ended December 31, 2002. In the opinion of
         management,  these statements  reflect all adjustments  (consisting  only of normal recurring  accruals),
         necessary to present fairly, in all material respects,  the Company's  consolidated  financial  position,
         results of operations,  and cash flows for the interim periods  presented.  The results of operations for
         the  three-month  period ended March 31, 2003 are not  necessarily  indicative of those for a full fiscal
         year.
</TD>
</TR>
</TABLE>
<BR>
<P><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisition of Navion ASA</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>On April 7, 2003,  Teekay  completed  its  acquisition  of 100% of the issued and  outstanding  shares of
         Navion ASA, on a debt-free  basis,  for  approximately  $800 million in cash.  As of March 31, 2003,  the
         Company had made a deposit of $76.0 million towards the purchase price;  the remaining  unpaid portion of
         the purchase  price was paid upon  closing.  The Company  funded its  acquisition  of Navion by borrowing
         under a $500 million  Revolving  Credit  Facility,  together with  available  cash and cash generated from
         operations and borrowings under other existing credit facilities.<BR>
<BR>
         Navion,  based in Norway,  operates  primarily in the shuttle tanker and the  conventional  crude oil and
         product tanker  markets.  Its modern shuttle tanker fleet,  which as of March 31, 2003, consisted of eight
         owned and 16  chartered-in  vessels  (including  four vessels  chartered-in  from the  Company's  shuttle
         tanker  subsidiary  Ugland  Nordic  Shipping AS ("UNS")),  provides  logistical  services to the Norwegian
         state-owned  oil  company,  Statoil  ASA,  and other  oil  companies  in the North Sea under  fixed-rate,
         long-term  contracts of affreightment.  Navion's modern,  chartered-in,  conventional tanker fleet, which
         as of March 31, 2003  consisted  of 12 crude oil tankers and 11 product  tankers,  operates  primarily in
         the Atlantic  region,  providing  services to Statoil and other oil companies.  In addition,  Navion owns
         two  floating  storage and  off-take  vessels  currently  trading as  conventional  crude  oil tankers in the
         Atlantic region,  and one gas carrier on long-term  charter to Statoil.  Through Navion Chartering AS, an
         entity owned  jointly with Statoil,  Navion has a right of first refusal on Statoil's oil  transportation
         requirements at the prevailing market rate until December 31, 2007.<BR>
<BR>
         The  acquisition  of Navion will be accounted  for using the purchase  method of  accounting,  based upon
         estimates of fair value.  In  accordance  with  accounting  principles  generally  accepted in the United
         States,  Navion's results will be consolidated with Teekay's  commencing April 7, 2003, the closing date.
         Given that this business  combination  was completed  after the balance sheet date of March 31, 2003, the
         Company will disclose the allocation of the purchase price and other  financial  information  relating to
         the transaction in its Report on Form 6-K for the quarterly period ending June 30, 2003, as it is not practical to do so in this Report.</TD>
</TR>
</TABLE>
<BR>
<P><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Flows</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>Cash  interest  paid during the  three-month  period ended March 31, 2003 and 2002 totaled  approximately
         $25.3 million and $27.5 million, respectively.
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
                    (all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
                         (Information as at March 31, 2003 and for the Three-Month Periods<BR>
                                        Ended March 31, 2003 and 2002 is unaudited)</B>
</FONT></P>



<P><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term Debt</B></P>

<PRE>
                                                                                  March 31,         December 31,
                                                                                    2003                2002
                                                                                      $                   $
                                                                             -------------------- ------------------
         Revolving Credit Facilities.......................................              -              210,000
         Premium Equity Participating Security Units (7.25%) due May 18,
         2006 .............................................................        143,750                    -
         First Preferred Ship Mortgage Notes (8.32%) due through 2008......        167,229              167,229
         Term Loans due through 2010 ......................................        408,967              401,593
         Senior Notes (8.875%) due July 15, 2011 ..........................        351,941              352,000
                                                                             -------------------- ------------------
                                                                                 1,071,887            1,130,822
         Less current portion..............................................         92,695               83,605
                                                                             -------------------- ------------------
                                                                                   979,192            1,047,217
                                                                             ==================== ==================
</PRE>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>As of March 31, 2003, the Company had two long-term  Revolving  Credit  Facilities (the  "Revolvers")  available,  which, as at
         such date,  provided for borrowings of up to $440.7  million.  The Revolvers are  collateralized  by
         first  priority  mortgages  granted  on  33  of  the  Company's  vessels,  together  with  other  related
         collateral, and a guarantee from Teekay for all amounts outstanding under the Revolvers.<BR>
<BR>
         The 7.25%  Premium  Equity  Participating  Security  Units  due May 18,  2006 (the  "Equity  Units")  are
         unsecured and  subordinated  to all of the Company's  senior debt. The Equity Units are not guaranteed by
         any of the  Company's  subsidiaries  and  effectively  rank behind all existing and future  secured debt.
         Each  Equity  Unit  includes  (a) a forward  contract  that  requires  the holder to  purchase  for $25 a
         specified  fraction  of a share  of the  Company's  Common  Stock  on  February  16,  2006  and (b) a $25
         principal  amount,  subordinated  note due May 18,  2006.  The forward  contracts  provide  for  contract
         adjustment  payments of 1.25% annually and the notes bear interest at 6.0% annually.  Upon  settlement on
         February 16, 2006 of the 5.75 million forward  contracts  included in the Equity Units,  the Company will
         issue  between  3,267,150  and 3,991,075  shares of its Common Stock  (depending  on the average  closing
         price of the  Common  Stock for the  20-trading  day  period  ending on the  third  trading  day prior to
         February 16, 2006).<BR>
<BR>
         The  8.32%  First   Preferred  Ship  Mortgage  Notes  due  February  1,  2008  (the  "8.32%  Notes")  are
         collateralized  by first preferred  mortgages on seven of the Company's  Aframax  tankers,  together with
         other  related  collateral,  and are  guaranteed by seven  subsidiaries  of Teekay that own the mortgaged
         vessels (the "8.32%  Notes  Guarantor  Subsidiaries")  to a maximum of 95% of the fair value of their net
         assets. As at March 31, 2003, the fair value of these net assets approximated  $187.4 million.  The 8.32%
         Notes are also subject to a sinking fund,  which will retire $45.0 million  principal amount of the 8.32%
         Notes on each February 1, commencing 2004.<BR>
<BR>
         Condensed  financial  information  regarding  Teekay,  the  8.32%  Notes  Guarantor   Subsidiaries,   and
         non-guarantor  subsidiaries  of  Teekay  is  set  out  in  Schedule  A of  these  consolidated  financial
         statements.<BR>
<BR>
         The Company has several term loans outstanding,  which, as at March 31, 2003, totaled $409.0 million. All
         term loans of the Company are  collateralized  by first  preferred  mortgages on the vessels to which the
         loans relate,  together with other collateral.  All term loans, other than UNS term loans totaling $321.2
         million,  are  guaranteed  by Teekay.  One term loan  required a retention  deposit of $6.5 million as at
         March 31, 2003.<BR>
<BR>
         Pursuant to long-term debt agreements,  the amount of Restricted Payments,  as defined,  that the Company
         can make,  including  dividends and purchases of its own capital stock, was limited as of March 31, 2003,
         to $461.0 million.  Certain loan agreements  require that a minimum level of free cash be maintained.  As
         at March 31, 2003, this amount was $80.4 million.<BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
                    (all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
                         (Information as at March 31, 2003 and for the Three-Month Periods<BR>
                                        Ended March 31, 2003 and 2002 is unaudited)</B></FONT></P>


<P><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital Stock</B><P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>The authorized  capital stock of Teekay at March 31, 2003 was 25,000,000  shares of Preferred Stock, with
         a par value of $1 per  share,  and  725,000,000  shares of Common  Stock,  with a par value of $0.001 per
         share.  As at March 31,  2003,  Teekay had  39,759,515  shares of Common Stock and no shares of Preferred
         Stock issued and outstanding.<BR>
<BR>
         As at March 31,  2003,  the Company had  reserved  5,736,040  shares of Common  Stock for  issuance  upon
         exercise of options  granted or to be granted  pursuant to its 1995 Stock  Option  Plan.  As at March 31,
         2003,  options to purchase a total of  4,484,176  shares of Teekay's  Common Stock were  outstanding,  of
         which 2,485,980  options were then exercisable at prices ranging from $16.875 to $41.190 per share,  with
         a weighted-average  exercise price of $28.486 per share. The remaining  outstanding options have exercise
         prices  ranging from $16.875 to $41.190 per share and a  weighted-average  exercise  price of $33.362 per
         share.  All  outstanding  options  expire  between July 19, 2005 and March 10, 2013,  ten years after the
         date of each respective grant.<BR>
<BR>
         Under  Statement of Financial  Accounting  Standards No. 123 ("SFAS 123"),  "Accounting  for  Stock-Based
         Compensation",  and as amended by Statement  of  Financial  Accounting  Standards  No. 148 ("SFAS  148"),
         "Accounting  for  Stock-Based   Compensation-Transition   and  Disclosure",  disclosures  of  stock-based
         compensation  arrangements  with employees are required and companies are  encouraged  (but not required)
         to record  compensation  costs  associated  with employee  stock option  awards,  based on estimated fair
         values at the grant  dates.  The Company has chosen to continue to account for  stock-based  compensation
         using the  intrinsic  value  method  prescribed  in APB Opinion No. 25 ("APB 25")  "Accounting  for Stock
         Issued to  Employees".  As the exercise  price of the Company's  employee stock options equals the market
         price of underlying  stock on the date of grant,  no compensation  expense has been recognized  under APB
         25. The following  table  illustrates  the effect on net income and earnings per share if the Company had
         applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation.
</TD>
</TR>
</TABLE>

<PRE>
                                                                               Three Months        Three Months
                                                                                  Ended               Ended
                                                                                 March 31,           March 31,
                                                                                    2003               2002
                                                                                     $                   $
                                                                             ------------------- ------------------

         Net income - as reported..........................................           53,579              15,691
         Less: Total stock-based compensation expense......................            2,063               1,632
         Net income - pro forma............................................           51,516              14,059

         Basic earnings per common share:
         As reported......................................................              1.35                0.40
         Pro forma........................................................              1.30                0.36

         Diluted earnings per common share:
         As reported......................................................              1.32                0.39
         Pro forma........................................................              1.27                0.35
</PRE>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
                    (all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
                         (Information as at March 31, 2003 and for the Three-Month Periods<BR>
                                        Ended March 31, 2003 and 2002 is unaudited)</B></FONT></P>

<P><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and Contingencies</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>As at March 31, 2003,  the Company was committed to the  construction  of one shuttle,  three Suezmax and
         ten Aframax  tankers  scheduled  for delivery  between July 2003 and  December  2005,  at a total cost of
         approximately  $600.3  million,  excluding  capitalized  interest.  As of March 31, 2003,  payments  made
         towards these commitments  totaled $129.3 million and long-term  financing  arrangements exist for $193.1
         million of the unpaid cost of these  vessels.  It is the  Company's  intention  to finance the  remaining
         $277.9 million through either debt borrowing or surplus cash balances,  or a combination  thereof.  As of
         March 31,  2003,  the  remaining  payments  required to be made under these  newbuilding  contracts  are:
         $164.3  million in 2003,  $188.5  million in 2004 and $118.2  million in 2005.  The  shuttle  and Suezmax
         tankers and two of the Aframax tanker  newbuildings  will be subject to long-term  charter contracts upon
         delivery. These charter contracts expire between 2009 and 2015.<BR>
<BR>
         The  Company  is also  committed  to a  capital  lease  on an  Aframax  tanker  that is  currently  under
         construction  and is expected to deliver in the fourth  quarter of 2003.  The lease will require  minimum
         payments of $66.9 million (including a purchase obligation payment) over the 15-year term of the lease.<BR>
<BR>
         Teekay and certain of its subsidiaries  have guaranteed  their share of the outstanding  mortgage debt in
         three  50%-owned  joint  venture  companies.  As of March 31,  2003,  Teekay and these  subsidiaries  had
         guaranteed  $81.7 million of such debt, or 50% of the total $163.5 million in  outstanding  mortgage debt
         of the joint venture companies. These joint venture companies own three shuttle tankers.<BR>
<BR>
        The Company enters into indemnification agreements with certain officers and directors.  In addition, the Company enters into
        other indemnication agreements in the ordinary course of business.  The maximum potential amount of future payments
        required under these indemnification agreements is unlimited.  However, the Company maintains appropriate
        liability insurance that limits the exposure and enables the Company to recover any future amounts paid, less
        any deductible amounts pursuant to the terms of the respective policies, the amounts of which are not considered
        material.
</TD>
</TR>
</TABLE>

<P><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other Loss</B></P>
<PRE>
                                                                                      <B>Three Months Ended

                                                                                March 31,            March 31,
                                                                                   2003                2002
                                                                                    $                    $</B>
                                                                            ------------------- --------------------
         Loss on disposition of available-for-sale securities..........              -              (1,130)
         Gain on disposition of vessels and equipment..................          1,005                   -
         Write-down of marketable securities...........................         (4,910)                  -
         Equity income.................................................            785               1,885
         Deferred income taxes.........................................         (3,322)             (3,181)
         Miscellaneous.................................................         (3,131)               (787)
                                                                            ------------------- --------------------
                                                                                (9,573)             (3,213)
                                                                            =================== ====================
</PRE>

<P><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive Income</B></P>
<PRE>
                                                                                      Three Months Ended

                                                                                March 31,            March 31,
                                                                                   2003                2002
                                                                                    $                    $
                                                                            ------------------- --------------------
         Net income....................................................         53,579              15,691
         Other comprehensive income:
            Unrealized gain on available-for-sale securities...........            368               1,024
            Reclassification adjustment for loss on
               available-for-sale securities included in net income....          4,910                 737
            Unrealized (loss) gain on derivative instruments...........         (9,415)                723
            Reclassification adjustment for gain on derivative
                instruments............................................           (418)               (139)
                                                                            ------------------- --------------------
         Comprehensive income..........................................         49,024              18,036
                                                                            =================== ====================
</PRE>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                   NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
                    (all tabular amounts stated in thousands of U.S. dollars, except share data)<BR>
                         (Information as at March 31, 2003 and for the Three-Month Periods<BR>
                                        Ended March 31, 2003 and 2002 is unaudited)</B></FONT></P>

<P><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Derivative Instruments and Hedging Activities</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>The Company uses  derivatives  only for hedging  purposes.  The following  summarizes  the Company's risk
         strategies  with respect to market risk from foreign  currency  fluctuations,  changes in interest  rates
         and bunker fuel prices and the effect of these strategies on the Company's financial statements.<BR>
<BR>
         The Company  hedges  portions of its  forecasted  expenditures  denominated  in foreign  currencies  with
         forward contracts and a portion of its bunker fuel  expenditures  with bunker fuel swap contracts.  As at
         March 31, 2003,  the Company was  committed to foreign  exchange  contracts  for the forward  purchase of
         approximately  Norwegian  Kroner 224.3 million,  Canadian  Dollars 73.5 million,  Euros 1.5 million,  and
         Australian  Dollars 2.2 million for U.S.  Dollars at an average  rate of  Norwegian  Kroner 7.11 per U.S.
         Dollar,  Canadian Dollar 1.59 per U.S. Dollar,  Euros 0.93 per U.S. Dollar and Australian Dollar 1.69 per
         U.S. Dollar,  respectively.  The foreign exchange forward  contracts mature as follows:  $54.0 million in
         2003 and $26.5  million in 2004.  As at March 31,  2003,  the Company was  committed  to bunker fuel swap
         contracts totaling 20,727 metric tonnes,  with a  weighted-average  price of $116.0 per tonne. These swap
         contracts expire between April 2003 and May 2004.<BR>
<BR>
         As at March 31, 2003, the Company was committed to interest rate swap  agreements  whereby $710.0 million
         of the Company's  floating-rate debt was swapped with fixed rate  obligations  having a  weighted-average
         remaining  term of 2.3 years.  These  agreements,  which expire  between  January 2004 and January  2006,
         effectively  change the Company's  interest rate exposure on $710.0 million of debt from a floating LIBOR
         rate to a  weighted-average  fixed-rate  of 2.70%.  The Company is exposed to credit loss in the event of
         non-performance  by the counter parties to the interest rate swap agreements;  however,  the Company does
         not anticipate non-performance by any of the counter parties.
</TD>
</TR>
</TABLE>

<P><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write-Down of Vessels</B></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=3% ALIGN=RIGHT><P> </P></TD>
<TD WIDTH=97%>During  April  2003,  the  Company  sold the  Teekay  Fulmar  (1983-built  Aframax-size  oil/bulk/ore  carrier
         ("O/B/O")),  the Clare Spirit (1986-built  Aframax tanker),  and the Shannon Spirit  (1987-built  Aframax
         tanker).  In  addition,  the  Company  anticipates  selling  four  additional  older  vessels  during the
         remainder of 2003. The disposal of the three vessels  identified  above and the  anticipated  disposal of
         the four additional  vessels are part of the Company's  current fleet renewal  program.  The vessels sold
         in April 2003 have been  written  down in the three-month period ended March 31, 2003 to their fair market  value,
         which was  determined  using the net
         proceeds  received  from the sales.  The total  write-down  for these three  vessels  was $13.9  million.
         Subsequent  to the Company's  review of estimated  future cash flows of the four  additional  vessels that the
         Company anticipates selling during the remainder of 2003,  the Company  recorded  a $12.9  million  write-down  in their
         carrying value in the quarter ended March 31, 2003.
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=RIGHT><b>SCHEDULE A</b></P><BR>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS<BR>
                                           (in thousands of U.S. dollars)<BR>
                                                    (unaudited)</B></FONT></P>


<PRE>
                                                                 <B>Three Months Ended March 31, 2003</B>
                                           -------------------------------------------------------------------------------
<B>                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                   -         8,867          212,898        (8,867)         212,898
Operating expenses                                3,548         8,490          106,243        (8,867)         109,414
                                           -------------------------------------------------------------------------------
   (Loss) income from vessel operations          (3,548)          377          106,655             -          103,484
Net interest expense                            (10,816)            -           (2,724)            -          (13,540)
Equity in net income of subsidiaries             68,526             -                -       (68,526)               -
Other loss                                         (583)            -          (35,782)            -          (36,365)
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                       53,579           377           68,149       (68,526)          53,579
Retained earnings (deficit), beginning of
    the period                                  954,005       (13,112)       1,145,412    (1,132,300)         954,005
Dividends declared                               (8,542)            -                -             -           (8,542)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
    period</B>                                      999,042       (12,735)       1,213,561    (1,200,826)         999,042
                                           ===============================================================================




                                                                 <B>Three Months Ended March 31, 2002</B>
                                           -------------------------------------------------------------------------------
<B>                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Net voyage revenues                                   -         8,939          161,931       (34,711)         136,159
Operating expenses                                2,614         7,185          128,258       (34,711)         103,346
                                           -------------------------------------------------------------------------------
   (Loss) income from vessel operations          (2,614)        1,754           33,673             -           32,813
Net interest expense                            (10,451)            -           (3,458)            -          (13,909)
Equity in net income of subsidiaries             27,557             -                -       (27,557)               -
Other income (loss)                               1,199             -           (4,412)            -           (3,213)
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                       15,691         1,754           25,803       (27,557)          15,691
Retained earnings (deficit), beginning of
    the period                                  935,660       (15,278)       1,036,401    (1,021,123)         935,660
Dividends declared                               (8,507)            -                -             -           (8,507)
                                           -------------------------------------------------------------------------------
<B>Retained earnings (deficit), end of the
    period</B>                                      942,844       (13,524)       1,062,204    (1,048,680)         942,844
                                           ===============================================================================
</PRE>

<p><font size=2>____________<BR>
&nbsp;&nbsp;&nbsp;(See Note 6)</FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>


<P ALIGN=RIGHT><b>SCHEDULE A</b></P>
<BR>

<P ALIGN=CENTER>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                              CONDENSED BALANCE SHEETS<BR>
                                           (in thousands of U.S. dollars)<BR>
                                                    (unaudited)</B></P>

<PRE>
                                                                        <B>As at March 31, 2003</B>
                                          ---------------------------------------------------------------------------------
<B>                                                            8.32% Notes                                        Teekay
                                          Teekay Shipping    Guarantor    Non-Guarantor                    Shipping Corp.
                                               Corp.       Subsidiaries    Subsidiaries    Eliminations    &amp; Subsidiaries
                                                 $               $              $                $               $</B>
                                          ---------------------------------------------------------------------------------
<B>ASSETS</B>
Cash and cash equivalents                            -               -         247,639               -           247,639
Other current assets                             1,772             303         213,865         (96,000)          119,940
                                          ---------------------------------------------------------------------------------
     Total current assets                        1,772             303         461,504         (96,000)          367,579
Vessels and equipment (net)                          -         254,822       1,794,774               -         2,049,596
Advances due from subsidiaries                 384,872               -               -        (384,872)                -
Other assets (principally marketable
     securities and investments
     in subsidiaries)                        1,761,749               -         141,062      (1,761,749)          141,062
Investment in joint ventures                         -               -          55,225               -            55,225
Goodwill                                             -               -          90,257               -            90,257
                                          ---------------------------------------------------------------------------------
                                             2,148,393         255,125       2,542,822      (2,242,621)        2,703,719
                                          =================================================================================
<B>LIABILITIES &amp; STOCKHOLDERS'
EQUITY</B>
Current liabilities                             13,864           2,747         258,923         (96,000)          179,534
Long-term debt and other long-term
     liabilities                               667,546               -         376,211               -         1,043,757
Due to (from) affiliates                             -        (104,217)        537,973        (433,756)                -
                                          ---------------------------------------------------------------------------------
     Total liabilities                         681,410        (101,470)      1,173,107        (529,756)        1,223,291
                                          ---------------------------------------------------------------------------------
Minority interest                                    -               -          21,095               -            21,095
Stockholders' equity
Capital stock                                  467,941              23           5,943          (5,966)          467,941
Contributed capital                                  -         369,307         136,766        (506,073)                -
Retained earnings (deficit)                    999,042         (12,735)      1,213,561      (1,200,826)          999,042
Accumulated other comprehensive loss                 -               -          (7,650)              -            (7,650)
                                          ---------------------------------------------------------------------------------
     Total stockholders' equity              1,466,983         356,595       1,348,620      (1,712,865)        1,459,333
                                          ---------------------------------------------------------------------------------
                                             2,148,393         255,125       2,542,822      (2,242,621)        2,703,719
                                          =================================================================================

                                                                       <B>As at December 31, 2002</B>
                                          ---------------------------------------------------------------------------------
<B>                                                            8.32% Notes                                        Teekay
                                               Teekay        Guarantor     Non-Guarantor                   Shipping Corp.
                                           Shipping Corp.   Subsidiaries   Subsidiaries     Eliminations   &amp; Subsidiaries
                                                 $               $               $               $                $</B>
                                          ---------------------------------------------------------------------------------
<B>ASSETS</B>
Cash and cash equivalents                            -               -         284,625               -           284,625
Other current assets                             1,500              43         197,390         (96,000)          102,933
                                          ---------------------------------------------------------------------------------
     Total current assets                        1,500              43         482,015         (96,000)          387,558
Vessels and equipment (net)                          -         258,664       1,807,993               -         2,066,657
Advances due from subsidiaries                 263,105               -              -         (263,105)                -
Other assets (principally marketable
     securities and investments
     in subsidiaries)                        1,701,937               -         123,748      (1,701,937)          123,748
Investment in joint ventures                         -               -          56,354               -            56,354
Goodwill                                             -               -          89,189               -            89,189
                                          ---------------------------------------------------------------------------------
                                             1,966,542         258,707       2,559,299      (2,061,042)        2,723,506
                                          =================================================================================
<B>LIABILITIES &amp; STOCKHOLDERS'
EQUITY</B>
Current liabilities                             22,320           7,574         255,661         (96,000)          189,555
Long-term debt and other long-term
     liabilities                               519,229               -         572,500               -         1,091,729
Due to (from) affiliates                             -        (105,085)        425,788        (320,703)                -
                                          ---------------------------------------------------------------------------------
     Total liabilities                         541,549         (97,511)      1,253,949        (416,703)        1,281,284
                                          ---------------------------------------------------------------------------------
Minority interest                                    -               -          20,324               -            20,324
Stockholders' equity
Capital stock                                  470,988              23           5,943          (5,966)          470,988
Contributed capital                                  -         369,307         136,766        (506,073)                -
Retained earnings (deficit)                    954,005         (13,112)      1,145,412      (1,132,300)          954,005
Accumulated other comprehensive loss                 -               -          (3,095)              -            (3,095)
                                          ---------------------------------------------------------------------------------
     Total stockholders' equity              1,424,993         356,218       1,285,026      (1,644,339)        1,421,898
                                          ---------------------------------------------------------------------------------
                                             1,966,542         258,707       2,559,299      (2,061,042)        2,723,506
                                          =================================================================================
</PRE>
<p><font size=2>____________<BR>
&nbsp;&nbsp;&nbsp;(See Note 6)</FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>


<P ALIGN=RIGHT><b>SCHEDULE A</b></P>
<BR>

<P ALIGN=CENTER>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
<BR>
                                         CONDENSED STATEMENTS OF CASH FLOWS<BR>
                                           (in thousands of U.S. dollars)<BR>
                                                    (unaudited)</B></P>

<PRE>
<B>                                                                        Three Months Ended March 31, 2003</B>
                                                     -------------- --------------- ------------- ------------ ---------------<B>
                                                        Teekay       8.32% Notes        Non-                       Teekay
                                                       Shipping       Guarantor      Guarantor                 Shipping Corp.
                                                         Corp.       Subsidiaries   Subsidiaries  Eliminations &amp; Subsidiaries
                                                           $              $              $             $             $</B>
                                                     -------------- --------------- ------------- ------------ ---------------
Cash and cash equivalents provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from operating activities            (10,882)          (476)        100,448           -         89,090
                                                     -------------- --------------- ------------- ------------ ---------------

<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                        139,436              -          16,297           -        155,733
Scheduled repayments of long-term debt                        -              -         (19,258)          -        (19,258)
Prepayments of long-term debt                                 -              -        (200,000)          -       (200,000)
Other                                                  (128,554)           868         120,890           -         (6,796)
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from financing activities             10,882            868         (82,071)          -        (70,321)
                                                     -------------- --------------- ------------- ------------ ---------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                        -           (392)        (67,518)          -        (67,910)
Proceeds from disposition of assets                           -              -          18,000           -         18,000
Other                                                         -              -          (5,845)          -         (5,845)
                                                     -------------- --------------- ------------- ------------ ---------------
     Net cash flow from investing activities                  -           (392)        (55,363)          -        (55,755)
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Decrease in cash and cash equivalents</B>                         -              -         (36,986)          -        (36,986)
Cash and cash equivalents, beginning of the period            -              -         284,625           -        284,625
                                                     -------------- --------------- ------------- ------------ ---------------
<B>Cash and cash equivalents, end of the period</B>                  -              -         247,639           -        247,639
                                                     ============== =============== ============= ============ ===============



                                                                        <B>Three Months Ended March 31, 2002</B>
                                                     --------------- -------------- ------------ ------------- ---------------
<B>                                                                      8.32% Notes                                  Teekay
                                                         Teekay        Guarantor    Non-Guarantor              Shipping Corp.
                                                     Shipping Corp.  Subsidiaries   Subsidiaries Eliminations  &amp; Subsidiaries
                                                           $               $             $            $              $</B>
                                                     --------------- -------------- ------------ ------------- ---------------
Cash and cash equivalents provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                                     --------------- -------------- ------------ ------------- ---------------
     Net cash flow from operating activities            (11,471)          7,040         53,502          -          49,071
                                                     --------------- -------------- ------------ ------------- ---------------
<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                              -               -          9,630          -           9,630
Scheduled repayments of long-term debt                        -               -         (8,761)         -          (8,761)
Other                                                    11,471          (5,638)       (17,220)         -         (11,387)
                                                     --------------- -------------- ------------ ------------- ---------------
     Net cash flow from financing activities             11,471          (5,638)       (16,351)         -         (10,518)
                                                     --------------- -------------- ------------ ------------- ---------------
                                                                                                        -
<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                        -          (1,402)       (16,325)                   (17,727)
Other                                                         -               -          4,886          -           4,886
                                                     --------------- -------------- ------------ ------------- ---------------
     Net cash flow from investing activities                  -          (1,402)       (11,439)         -         (12,841)
                                                     --------------- -------------- ------------ ------------- ---------------
<B>Increase in cash and cash equivalents</B>                         -               -         25,712          -          25,712
Cash and cash equivalents, beginning of the period            -               -        174,950          -         174,950
                                                     --------------- -------------- ------------ ------------- ---------------
<B>Cash and cash equivalents, end of the period</B>                  -               -        200,662          -         200,662
                                                     =============== ============== ============ ============= ===============
</PRE>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
____________<BR>
(See Note 6)</font>
<BR>
<BR>
<BR>
<BR>
<BR>


<P ALIGN=CENTER>
<b>                                    TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
                                                  MARCH 31, 2003<BR>
                                          PART I - FINANCIAL INFORMATION</B></P>

<P><B>ITEM 2 &#150;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>

<P><B>RESULTS OF OPERATIONS</B></P>

<P><B>General</B></P>

<P>Teekay is a leading provider of international  crude oil and petroleum  product  transportation  services to major
oil companies,  major oil traders and government  agencies  worldwide.  As at March 31, 2003, the Company's  fleet
consisted of 105 vessels  (including  fifteen  newbuildings  on order,  five vessels  time-chartered-in,  and four
vessels owned by joint ventures),  for a total  cargo-carrying  capacity of approximately  10.8 million deadweight
tonnes.<BR>
<BR>
During the three  months  ended March 31,  2003,  approximately  49% (March 31, 2002 - 48%) of the  Company's  net
voyage  revenues was derived from spot  voyages.  The balance of the  Company's  revenue is generated by two other
modes of  employment  -  time-charters,  whereby  vessels are  chartered  to  customers  for a fixed  period,  and
contracts of affreightment  ("COAs"),  whereby the Company carries an agreed quantity of cargo for a customer over
a specified  trade route  within a given period of time.  In the three months ended March 31, 2003,  approximately
29% (March 31,  2002 - 19%) of net voyage  revenues  was  generated  by  time-charters  and COAs  priced on a spot
market basis.  In the  aggregate,  approximately  78% (March 31, 2002 - 67%) of the Company's net voyage  revenues
during the three months ended March 31, 2003 was derived from spot voyages or  time-charters  and COAs priced on a
spot market basis,  with the remaining 22% (March 31, 2002 - 33%) being derived from fixed-rate  time-charters and
COAs.  The change in the Company's composition of net voyage revenues reflects the change in spot tanker rates over
this period.  This dependence on the spot market,  which is within  industry norms,  contributes to the volatility of the
Company's revenues, cash flow from operations, and net income.<BR>
<BR>
Historically,  the tanker industry has been cyclical,  experiencing  volatility in profitability  and asset values
resulting  from  changes in the supply of, and demand for,  vessel  capacity.  In  addition,  tanker  markets have
historically  exhibited seasonal  variations in charter rates. Tanker markets are typically stronger in the winter
months as a result of increased oil  consumption in the northern  hemisphere and  unpredictable  weather  patterns
that tend to disrupt vessel scheduling.</P>

<P><B>Acquisition of Navion ASA</B></P>

<P>On April 7, 2003,  Teekay  completed its acquisition of 100% of the issued and  outstanding  shares of Navion ASA,
on a debt-free  basis,  for  approximately  $800  million in cash.  As of March 31,  2003,  the Company had made a
deposit of $76.0 million towards the purchase price;  the remaining  unpaid portion of the purchase price was paid
upon closing.  The Company funded its  acquisition of Navion by borrowing  under a $500 million  Revolving  Credit
Facility,  together with  available cash and cash  generated  from  operations and borrowings  under other existing
credit facilities.<BR>
<BR>
Navion,  based in Norway,  operates  primarily in the shuttle  tanker and the  conventional  crude oil and product
tanker  markets.  Its modern  shuttle  tanker  fleet,  which as of March 31, 2003,  consisted of eight owned and 16
chartered-in   vessels  (including  four  vessels  chartered-in  from  the  Company's  subsidiary  UNS),  provides
logistical  services to Statoil ASA and other oil  companies in the North Sea under  fixed-rate,  long-term  COAs.
Navion's modern,  chartered-in,  conventional  tanker fleet,  which as of March 31, 2003, consisted of 12 crude oil
tankers and 11 product  tankers,  operates  primarily in the Atlantic  region,  providing  services to Statoil and
other oil companies.  In addition,  Navion owns two floating  storage and off-take  vessels  currently  trading as
conventional  crude oil tankers in the Atlantic region,  and one gas carrier on long-term charter to Statoil.  Through
Navion  Chartering AS, an entity owned jointly with Statoil,  Navion has a right of first refusal on Statoil's oil
transportation  requirements at the prevailing market rate until December 31, 2007.  Navion provides the Company with a leadership  position in
the attractive  shuttle tanker COA market segment.  Management  believes the acquisition  will provide the Company
with new growth opportunities and enhanced  earnings  and cash  flow  stability  due to the  fixed-rate,
long-term nature of Navion's shuttle tanker contracts.<BR>
<BR>
The acquisition of Navion will be accounted for using the purchase  method of accounting,  based upon estimates of
fair value. In accordance with accounting  principles  generally  accepted in the United States,  Navion's results
will be  consolidated  with Teekay's  commencing  from April 7, 2003,  the closing date.  Given that this business
combination  was  completed  after the  balance  sheet date of March 31,  2003,  the  Company  will  disclose  the
allocation of the purchase  price and other  financial  information  relating to the  transaction in its Report on
Form 6-K for the quarterly period ending June 30, 2003.</P>

<P><B>Critical Accounting Policies</B></P>

<P>The Company's  consolidated  financial statements are prepared in accordance with accounting  principles generally
accepted in the United States,  which require the Company to make  estimates in the  application of its accounting
policies based on the best assumptions,  judgments,  and opinions of management.  Following is a discussion of the
accounting  policies  that  involve a higher  degree of  judgment  and the  methods  of their  application.  For a
description  of all of the  Company's  material  accounting  policies,  see Note 1 to the  Company's  consolidated
financial  statements  for the year ended  December 31, 2002 included in the Company's  Annual Report on Form 20-F
filed with the SEC.</P>

<P><I>Revenue Recognition</I></P>

<P>The Company  generates a majority of its revenues  from voyage  charters.  Within the shipping  industry,  the two
methods used to account for voyage  revenues  and expenses are the  percentage  of  completion  and the  completed
voyage  methods.  For each method,  voyages may be calculated on either a load-to-load  or  discharge-to-discharge
basis. Most shipping companies, including the Company, use the percentage of completion method.<BR>
<BR>
In applying the percentage of completion  method,  management  believes that the  discharge-to-discharge  basis of
calculating  voyages more  accurately  reflects voyage results than the  load-to-load  basis. At the time of cargo
discharge,  the Company  generally has information about the next load port and expected  discharge port,  whereas
at the time of loading the Company normally is less certain what the next load port will be.</P>

<P><I>Vessel Lives and Impairment</I></P>

<P>The carrying  value of each of the  Company's  vessels  represents  its  original  cost at the time of delivery or
purchase  less  depreciation  calculated  using an estimated  useful life of 25 years from the date the vessel was
originally  delivered  from  the  shipyard.  In the  shipping  industry,  use of a  25-year  life has  become  the
prevailing  standard.  However, the actual life of a vessel may be different from the 25-year life, with a shorter
life potentially  resulting in an impairment loss.  Regulations of the  International  Maritime  Organization that
became effective in April 2001 require the accelerated phase-out of certain single-hull vessels.<BR>
<BR>
In response to the sinking of the tanker Prestige,  on March 27, 2003, the European Transport  Commission approved
proposed  regulations  that would  immediately  ban the carriage of "heavy oil" on single-hull vessels in European
waters and  accelerate  the phase-out of single-hull tonnage.  The proposed  regulations  are scheduled for review
in early June 2003 by the European Union Parliament,  and if approved as proposed,  it is expected that the regulations  would
come into effect on July 1, 2003. In addition,  the European Union has submitted  regulations  to the  International
Maritime Organization for review at the Maritime Environment Protection Committee meeting in July 2003.<BR>
<BR>
If these  regulations  are adopted in their  current  form,  they could  result in an  impairment  loss and higher
depreciation  expense for the Company related to a reduction of the estimated  useful life of its single-hull  vessels for accounting
purposes.  However,  the Company  believes that these  regulations  could also result in a tightening in the world
tanker supply and a  reallocation  of affected  tonnage.  This could result in firm tanker market  conditions  and
increased  tanker freight rates for modern  vessels.  The Company has not determined the impact,  if any, that the
adoption of these regulations will have on the Company's results of operation or financial position.<BR>
<BR>
The  carrying  values of the  Company's  vessels may not  represent  their fair market  value at any point in time
since the market  prices of  secondhand  vessels tend to fluctuate  with changes in charter  rates and the cost of
newbuildings.  Both  charter  rates and  newbuilding  costs tend to be  cyclical in nature.  The  Company  reviews
vessels and equipment for impairment  whenever events or changes in circumstances  indicate the carrying amount of
an asset may not be  recoverable.  Recoverability  of these assets is measured by comparing  their carrying amount
to future  undiscounted  cash flows that the assets are expected to generate  over the useful  remaining  life. If
vessels and equipment are considered to be impaired,  the  impairment to be recognized  equals the amount by which
the carrying value of the assets exceeds their fair market value.</P>

<P><I>Goodwill</I></P>

<P>The Company  adopted  Statement  of Financial  Accounting  Standards  No. 142 ("SFAS  142"),  "Goodwill  and Other
Intangible Assets" and as a result has discontinued  amortization of goodwill effective January 1, 2002.  Goodwill
and other  intangible  assets with indefinite  lives are tested for impairment  annually or whenever an impairment
indicator  arises.  An impairment  test requires the Company to make estimates of future cash flows.  If events or
circumstances  change,  including  reductions in anticipated  cash flows  generated by operations,  goodwill could
become impaired and result in a charge to earnings.</P>

<P><B>Results of Operations</B></P>

<P>Bulk  shipping  industry  freight  rates  are  commonly  measured  at the net  voyage  revenue  level  in terms of
"time-charter   equivalent"   ("TCE")  rates,   defined  as  voyage  revenues  less  voyage  expenses   (excluding
commissions),  divided by voyage  ship-days for the round-trip  voyage.  Voyage revenues and voyage expenses are a
function of the type of charter,  either spot charter or  time-charter,  and port,  canal and fuel costs depending
on the trade  route upon which a vessel is  sailing,  in  addition  to being a function  of the level of  shipping
freight  rates.  For this reason,  shipowners  base economic  decisions  regarding the deployment of their vessels
upon anticipated TCE rates, and industry  analysts  typically  measure bulk shipping freight rates in terms of TCE
rates. Therefore, the discussion of revenue below focuses on net voyage revenues and TCE rates.<BR>
<BR>
TCE rates are primarily  dependent on oil production and consumption  levels, the number of vessels scrapped,  the
number of  newbuildings  delivered and  charterers'  preference for modern  tankers.  As a result of the Company's
dependence on the tanker spot market,  any  fluctuations  in Aframax TCE rates will impact the Company's  revenues
and earnings.<BR>
<BR>
The  Company's  average  fleet size  increased  1.2% in the  quarter  ended March 31,  2003,  compared to the same
quarter one year ago,  primarily due to the purchase of a 2001-built  Suezmax tanker in June 2002 and the delivery
of two  shuttle  tanker  newbuildings  in  November  2002 and March 2003,  respectively,  partially  offset by the
disposal of one Aframax tanker in February 2003.<BR>
<BR>
Tanker  rates  continued  to  strengthen  during the first  quarter of 2003,  primarily  driven by  increased  oil
production,  shifts in oil production sources, and continuing  heightened charterer  discrimination  against older
tonnage.  As a result,  the Company's  average TCE rate increased 60.4% to $31,081 for the quarter ended March 31,
2003, from $19,381 for the quarter ended March 31, 2002.<BR>
<BR>
Net voyage  revenues  increased  56.4% to $212.9 million in the quarter ended March 31, 2003,  from $136.2 million
in the same  period last year.  The  increase  was due  primarily  to the  substantial  increase in the  Company's
average TCE rate.<BR>
<BR>
Vessel operating  expenses,  which include  crewing,  repairs and  maintenance,  insurance,  stores and lubes, and
communication  expenses,  increased 5.6% to $42.6 million in the quarter ended March 31, 2003,  from $40.4 million
in the same  period  last year.  The  increase  was  primarily a result of higher repair, maintenance and
crewing costs, and the weakening of the U.S. Dollar.<BR>
<BR>
Time-charter  hire  expense  increased  1.5% to $12.9  million in the  quarter  ended March 31,  2003,  from $12.7
million in the same period  last year.  The  increase  was due  primarily  to  increases  in the average TCE rates
earned by the 11  vessels  in the  oil/bulk/ore  ("O/B/O")  pool  managed by the  Company,  partially  offset by a
decrease in the number of vessels owned by minority  participants  in the O/B/O pool.  The minority  participants'
share of the O/B/O pool's net voyage  revenues,  which is  reflected  as a  time-charter  hire  expense,  was $5.2
million in the quarter  ended March 31, 2003,  compared to $4.5 million in the same period last year.  The average
number of vessels  time-chartered-in  by the Company,  excluding  the O/B/Os,  was five in the quarter ended March
31, 2003, unchanged from the same quarter last year.<BR>
<BR>
Depreciation  and amortization  expense  increased 8.5% to $39.1 million in the quarter ended March 31, 2003, from
$36.1 million in the same period last year. The increase was mainly due to increased  vessel cost  amortization as
a result of the increase in the Company's average fleet size and an increase in drydock amortization expense.
Depreciation  and  amortization  expense  included  amortization  of
drydocking  costs of $6.4  million in the quarter  ended  March 31,  2003,  compared  to $4.7  million in the same
period last year.  The  increase  in drydock  amortization  is  primarily  due to the  Company's  acceleration  of
drydock  maintenance  on certain  vessels  during 2002 and the increase in frequency of required  drydockings  for
vessels older than 15 years of age.<BR>
<BR>
General and  administrative  expenses  increased  4.0% to $14.7 million in the quarter ended March 31, 2003,  from
$14.2  million in the same period last year.  This increase was primarily a result of an increase in the number of
shore staff.<BR>
<BR>
Interest  expense  decreased 2.1% to $14.4 million in the quarter ended March 31, 2003,  from $14.7 million in the
same period last year. The decrease  reflects  lower  interest  rates,  partially  offset by additional  debt from
capital expenditures for vessel purchases.<BR>
<BR>
Interest  income for the quarter  ended March 31, 2003 was $0.8  million,  substantially  unchanged  from the same
quarter last year.<BR>
<BR>
During April 2003, the Company sold the Teekay Fulmar (1983-built Aframax-size O/B/O),  the
Clare Spirit (1986-built Aframax tanker),  and the Shannon Spirit (1987-built  Aframax tanker).  In addition,  the
Company  anticipates  selling four  additional  older vessels  during the  remainder of 2003.  The disposal of the
three  vessels  identified  above and the  anticipated  disposal  of the four  additional  vessels are part of the
Company's  current  fleet  renewal  program.  The vessels  sold in April 2003 have been written down to their fair
market value in the three-month period ended March 31, 2003,  which was  determined  using the net proceeds
received from the sales.  The total  write-down  for
these three vessels was $13.9 million.  Subsequent to the Company's  review of estimated  future cash flows of the
four  additional  vessels  the  Company anticipates selling during the remainder of 2003,  the  Company  recorded a $12.9  million
write-down in their carrying value in the quarter ended March 31, 2003.<BR>
<BR>
Other loss in the quarter  ended March 31, 2003 was $9.6  million,  and was  primarily  comprised of write-down of
marketable  securities,  deferred income taxes,  foreign exchange loss and minority  interest  expense,  partially
offset by gain on sale of vessels and equipment,  equity income from 50%-owned  joint ventures and dividend income
on shares of Nordic American  Tankers  Shipping Ltd.  (AMEX:  NAT) owned by UNS. Other loss of $3.2 million in the
quarter  ended  March  31,  2002,  was  comprised   primarily  of  deferred income  taxes,   loss  on  the  disposition  of
available-for-sale  securities,  and minority interest expense, partially offset by equity income from 50%-owned joint
ventures, dividend income from NAT, and foreign exchange gains.<BR>
<BR>
As a result of the foregoing factors,  net income was $53.6 million in the quarter ended March 31, 2003,  compared
to $15.7 million in the same period last year.</P>

<P><B>LIQUIDITY AND CAPITAL RESOURCES</B></P>

<P>As at March 31,  2003,  the  Company's  total cash and cash  equivalents  was $247.6  million,  compared to $284.6
million at December 31, 2002. The Company's total  liquidity,  including cash,  short-term  marketable  securities
and undrawn long-term  borrowings,  was $688.3 million as at March 31, 2003, up from $525.3 million as at December
31, 2002.  The increase in liquidity  was mainly the result of net proceeds  from the Equity Units used to pre-pay
a portion of the outstanding balance of the Company's Revolvers  and the net cash flow from  operating  activities
generated  during the first three months of 2003,  partially  offset by cash used for capital  expenditures,  debt
repayments,  and payment of dividends.  In the Company's opinion,  working capital is sufficient for the Company's
present requirements.<BR>
<BR>
Net cash flow from  operating  activities  increased  to $89.1  million in the three  months ended March 31, 2003,
from $49.1  million in the same period last year,  mainly  reflecting  the  significant  increase in the Company's
average TCE rates.<BR>
<BR>
Scheduled  debt  repayments  were $19.3  million  during the three months  ended March 31, 2003,  compared to $8.8
million  during the same period last year.  Debt  prepayments  were $200.0  million  during the three months ended
March 31, 2003.  There were no debt prepayments during the same period last year.<BR>
<BR>
As at March 31, 2003, the Company's total debt was $1,071.9  million,  compared to $1,130.8 million as at December
31, 2002. The Company's  Revolvers  provided for additional  borrowings of $440.7 million,  and the entire balance
was undrawn.  The amount available under the Revolvers  reduces  semi-annually,  with final balloon  reductions in
2006 and 2008.  The Company's  8.32% First  Preferred Ship Mortgage Notes are due February 1, 2008 and are subject
to a sinking  fund which will  retire  $45.0  million  principal  amount of the 8.32%  Notes on February 1 of each
year,  commencing  2004.  The Company's  Equity Units and  unsecured  8.875% Senior Notes are due May 18, 2006 and
July 15, 2011,  respectively.  The Company's  outstanding  term loans reduce in quarterly or semi-annual  payments
with varying maturities through 2009.<BR>
<BR>
Among other matters,  the Company's long-term debt agreements  generally provide for maintenance of certain vessel
market  value-to-loan ratios and minimum consolidated  financial covenants,  prepayment  privileges (in some cases
with  penalties),  and  restrictions  against the incurrence of new  investments  by the  individual  subsidiaries
without  prior  lender  consent.  The amount of  Restricted  Payments,  as  defined,  that the  Company  can make,
including  dividends and purchases of its own capital  stock,  was limited to $461.0 million as of March 31, 2003.
Certain of the loan  agreements  require that a minimum  level of free cash be  maintained.  As at March 31, 2003,
this amount was $80.4 million.<BR>
<BR>
Dividends declared during the three months ended March 31, 2003 were $8.5 million, or 21.5 cents per share.<BR>
<BR>
During the three  months  ended  March 31,  2003,  the  Company  incurred  capital  expenditures  for  vessels and
equipment of $62.9 million.  These capital expenditures  primarily represented the installment payments on four of
the  Company's  newbuildings.  Cash  expenditures  for  drydocking  increased  to $5.0 million in the three months
ended March 31, 2003,  from $3.9 million during the same period last year.  This increase was primarily due to the
above average number of vessels in drydock during the latter part of 2002,  and the timing of cash  payments of these  capital
expenditures.<BR>
<BR>
As at March 31,  2003,  the Company was  committed  to the  construction  of one  shuttle,  three  Suezmax and ten
Aframax  tankers.  See  Item  1  -  Notes  to  Consolidated  Financial  Statements:   Note  6  -  Commitments  and
Contingencies.<BR>
<BR>
The Company is also committed to a capital lease on an Aframax  tanker that is currently  under  construction  and
is expected to deliver in the fourth  quarter of 2003.  The lease will require  minimum  payments of $66.9 million
(including a purchase obligation payment) over the 15-year term of the lease.<BR>
<BR>
The following table summarizes the Company's long-term contractual  obligations  (excluding  commitments of Navion
ASA and the  Company's  operating  and  capital  lease  obligations)  as at March 31,  2003 (in  millions  of U.S.
dollars).  For a schedule of the lease  obligations,  please refer to Item 5.  Operating and Financial  Review and
Prospects contained in the Company's Annual Report on Form 20-F for the year ended December 31, 2002.</P>

<PRE>
- --------------------------------------------------- -------- ------- -------- -------- -------- --------- ----------

                                                       2003    2004     2005     2006     2007  Thereafter   Total
- --------------------------------------------------- -------- ------- -------- -------- -------- --------- ----------
Long-term debt                                         42.6    95.6    111.1    275.6     84.8     462.2    1,071.9
- --------------------------------------------------- -------- ------- -------- -------- -------- --------- ----------
Newbuilding installments                              164.3   188.5    118.2        -        -         -      471.0
- --------------------------------------------------- -------- ------- -------- -------- -------- --------- ----------
  Total                                               206.9   284.1    229.3    275.6     84.8     462.2    1,542.9
- --------------------------------------------------- -------- ------- -------- -------- -------- --------- ----------
</PRE>

<P>The Company and certain  subsidiaries of the Company have guaranteed their share of the outstanding  mortgage debt
in three 50%-owned joint venture  companies.  See Item 1 - Notes to Consolidated  Financial  Statements:  Note 6 -
Commitments and Contingencies.<BR>
<BR>
In February 2003, the Company  completed its offering of Equity Units for gross proceeds of $143.75  million.  See
Item 1 - Notes to Consolidated Financial Statements:  Note 4 - Long-Term Debt.<BR>
<BR>
As part of its growth  strategy,  the Company will  continue to consider  strategic  opportunities,  including the
acquisition  of  additional  vessels  and  expansion  into new  markets.  The  Company  may choose to pursue  such
opportunities  through internal growth, joint ventures, or business  acquisitions.  The Company intends to finance
any future acquisitions  through various sources of capital,  including  internally-generated  cash flow, existing
credit lines, additional debt borrowings, and the issuance of additional shares of capital stock.</P>

<P><B>FORWARD-LOOKING STATEMENTS</B></P>

<P>This  Report  on Form  6-K for the  quarterly  period  ended  March  31,  2003  contains  certain  forward-looking
statements (as such term is defined in Section 27A of the  Securities Act of 1933, as amended,  and Section 21E of
the  Securities  Exchange  Act of 1934,  as  amended)  concerning  future  events  and the  Company's  operations,
performance and financial condition,  including,  in particular,  statements regarding:  TCE rates; future capital
expenditures;  the Company's acquisition of Navion and its impact on the Company's  operations;  and the Company's
growth  strategy and measures to implement such  strategy.  These  statements  involve known and unknown risks and
are based upon a number of  assumptions  and estimates that are  inherently  subject to significant  uncertainties
and  contingencies,  many of which are beyond the control of the  Company.  Actual  results may differ  materially
from those  expressed or implied by such  forward-looking  statements.  Important  factors that could cause actual
results to differ  materially  include,  but are not limited to:  changes in  production  of or demand for oil and
petroleum  products,  either generally or in particular  regions;  changes in the offshore  production of oil; the
cyclical  nature of the tanker  industry and its  dependence  on oil markets;  the supply of tankers  available to
meet the demand for  transportation of petroleum  products;  changes in trading patterns  significantly  impacting
overall  tanker  tonnage  requirements;  changes in typical  seasonal  variations  in tanker  charter  rates;  the
Company's  dependence  on spot oil  voyages;  competitive  factors in the markets in which the  Company  operates;
environmental  and other  regulation,  including  without  limitation,  the imposition of freight taxes and income
taxes; the Company's  potential  inability to achieve and manage growth;  risks associated with operations outside
the United States,  including political  instability;  the Company's potential inability to successfully integrate
and operate Navion,  the potential  inability of the Company to generate  internal cash flow and obtain additional
debt or equity financing to fund capital  expenditures or Company expansion;  and other factors detailed from time
to time in the Company's  periodic  reports,  including its Form 20-F for the year ended December 31, 2002,  filed
with the U.S.  Securities and Exchange  Commission.  The Company expressly disclaims any obligation or undertaking
to release  publicly any updates or revisions to any  forward-looking  statements  contained herein to reflect any
change in the Company's  expectations  with respect thereto or any change in events,  conditions or  circumstances
on which any such statement is based.</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER>
<b>                                   TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
                                                  MARCH 31, 2003<BR>
                                          PART I - FINANCIAL INFORMATION</B></P>

<P><B>ITEM 3 &#150;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</B></P>

<P>The Company is exposed to market risk from foreign  currency  fluctuations,  changes in interest rates, and bunker
fuel prices.  The Company uses forward currency  contracts,  interest rate swap  agreements,  and bunker fuel swap
contracts  to manage  currency,  interest  rate,  and bunker fuel price  risks,  but does not use these  financial
instruments for trading or speculative purposes.  See Item 1 - Notes to Consolidated  Financial  Statements:  Note
9 - Derivative Instruments and Hedging Activities.<BR>
<BR>
The following  table sets forth the  magnitude of these foreign  exchange  forward  contracts,  interest rate swap
agreements, and bunker fuel swap contracts:</P>

<PRE>
                                                Contract               Carrying Amount                 Fair
(in USD 000's)                                   Amount            Asset         Liability             Value
- ------------------------------------------- ------------------ -------------- ----------------- --------------------
<U>March 31, 200</U>3 - unaudited
Foreign Exchange Forward Contracts            $    80,473        $   2,233      $         -         $     2,233
Interest Rate Swap Agreements                     710,000                -           12,008             (12,008)
Bunker Fuel Swap Contracts                          2,404              253                -                 253
Debt                                            1,071,887                -        1,071,887          (1,113,839)

<U>December 31, 2002</U>
Foreign Exchange Forward Contracts            $    65,821        $     545      $         -         $       545
Interest Rate Swap Agreements                      20,000                -              802                (802)
Bunker Fuel Swap Contracts                          2,366              254                -                 254
Debt                                            1,130,822                -        1,130,822          (1,143,753)
- ------------------------------------------- ------------------ -------------- ----------------- --------------------
</PRE>

<P>For a more  comprehensive  discussion  related to the general  characteristics  of  Quantitative  and  Qualitative
Disclosures  about Market Risk,  please refer to Item 11.  Quantitative and Qualitative  Disclosures  about Market
Risk contained in the Company's Annual Report on Form 20-F for the year ended December 31, 2002.</P>
<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=CENTER><b>                                     TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
                                                   MARCH 31, 2003<BR>
                                            PART II &#150; OTHER INFORMATION</b><BR></P>

<P><U>Item 1 - Legal Proceedings</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 2 - Changes in Securities</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 3 - Defaults Upon Senior Securities</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 4 - Submission of Matters to a Vote of Security Holders</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><U>Item 5 - Other Information</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</P>

<P><u>Item 6 - Exhibits and Reports on Form 6-K</u></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% ALIGN=CENTER>a.</TD>
<TD WIDTH=90%>Exhibits</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>10.1</TD>
<TD WIDTH=85%>Agreement, dated March 10, 2003, for a U.S. $180,000,000 Secured Credit Facility to be made available
                         to Cork Spirit LLC, Donegal Spirit LLC, Limerick Spirit LLC, Shannon Spirit LLC and
                         Galway Spirit LLC by Den Norske Bank ASA, Deutsche Bank AG, DVB Bank AG and Nordea Bank
                         Finland Plc and various other banks.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>10.2</TD>
<TD WIDTH=85%>Agreement, dated March 27, 2003, for a U.S. $500,000,000 Revolving Credit
                         Facility between Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various
                         other banks.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>15.1</TD>
<TD WIDTH=85%>Letter from Ernst &amp; Young LLP, as independent chartered accountants, dated May 12,
                         2003, regarding unaudited interim financial information.
</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% ALIGN=CENTER>b.</TD>
<TD WIDTH=90%>Reports on Form 6-K</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(i)</TD>
<TD WIDTH=85%>On January  16,  2003,  the  Company  filed a copy of its press  release on Form 6-K with  respect to the
                         announcement of its acquisition of Navion ASA.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(ii)</TD>
<TD WIDTH=85%>On February  10,  2003,  the Company  filed a copy of its press  release on Form 6-K with  respect to its
                         preliminary fiscal 2002 operating results.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(iii)</TD>
<TD WIDTH=85%>On February  12,  2003,  the Company  filed a copy of its press  release on Form 6-K with  respect to the
                         pricing of its 7.25% Premium Equity Participating Security Units.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(iv)</TD>
<TD WIDTH=85%>On  February  12,  2003,  the  Company  filed a copy of certain of its legal  documents  as exhibits to Form 6-K with
                         respect to the offering of its 7.25% Premium Equity Participating Security Units.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(v)</TD>
<TD WIDTH=85%>On February  19,  2003,  the Company  filed a copy of its press  release on Form 6-K with  respect to the
                         completion of the offering of its 7.25% Premium Equity Participating Security Units.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(vi)</TD>
<TD WIDTH=85%>On February  21,  2003,  the Company  filed a copy of its press  release on Form 6-K with  respect to its
                         results for the quarter ended December 31, 2002.</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=5%>(vii)</TD>
<TD WIDTH=85%>On March 28, 2003,  the Company  filed a copy of its press release on Form 6-K with respect to its notice
                         of annual meeting of shareholders.</TD>
</TR>
</TABLE>

<P><B>THIS REPORT ON FORM 6-K IS HEREBY  INCORPORATED  BY REFERENCE  INTO THE FOLLOWING  REGISTRATION  STATEMENTS OF THE
COMPANY.</B></P>
<P><B>&#149;        REGISTRATION STATEMENT ON FORM F-3 (NO. 33-97746) FILED WITH THE SEC ON OCTOBER 4, 1995;<BR>
&#149;        REGISTRATION STATEMENT ON FORM S-8 (NO. 333-42434) FILED WITH THE SEC ON JULY 28, 2000; AND<BR>
&#149;        REGISTRATION STATEMENT ON FORM F-3 (NO. 333-102594) FILED WITH THE SEC ON JANUARY 17, 2003.</B></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SIGNATURES</FONT></H1>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</P>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=45% VALIGN=MIDDLE>
Date:    May 15, 2003
</TD>
<TD WIDTH=55% VALIGN=TOP>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TEEKAY SHIPPING CORPORATION
<BR>
<BR>
<BR>
<BR>
By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>/s/ Bjorn Moller&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bjorn Moller<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President and Chief Executive Officer<BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>


<P ALIGN=RIGHT><B>Exhibit 15.1</B></P>

<P ALIGN=CENTER><B>ACKNOWLEDGEMENT OF INDEPENDENT CHARTERED ACCOUNTANTS</B></P>


<BR>
<BR>

<P>We  are  aware  of the  incorporation  by  reference in the  Registration  Statement  (Form  S-8  No.  333-42434)
pertaining to the Amended 1995 Stock Option Plan of Teekay Shipping Corporation ("Teekay"),  in the Registration
Statement (Form F-3 No.  333-102594) and related  Prospectus of 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 in the  Registration  Statement  (Form F-3 No.  33-97746) and related  prospectus of Teekay for the
registration of 2,000,000 shares of Teekay common stock under its Dividend  Reinvestment  Plan of our report dated
April 22, 2003,  relating to the unaudited  consolidated  interim financial  statements and the financial schedule
listed in Index:  Item 1 of Teekay and its subsidiaries  that is included in its interim report (Form 6-K) for the
quarter ended March 31, 2003.</P>

<P>Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part of the registration statement
prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933.</P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
        <TD WIDTH=45%>Vancouver, Canada,<BR>
        May 12, 2003</TD>
        <TD WIDTH=55%>/s/ ERNST &amp; YOUNG LLP<BR>
        Chartered Accountants</TD>
</TR>
</TABLE>



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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>tosco_creditfacility.htm
<DESCRIPTION>TOSCO CREDIT FACILITY AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

<HR SIZE=1 NOSHADE>

<BR>

<P ALIGN=CENTER>                                        CREDIT FACILITY PROVIDING FOR A<BR>
                                                US$180,000,000<BR>
                                            SECURED CREDIT FACILITY</P>

<P ALIGN=CENTER>                                            TO BE MADE AVAILABLE TO<BR>
                                              CORK SPIRIT L.L.C.,<BR>
                                            DONEGAL SPIRIT L.L.C.,<BR>
                                            LIMERICK SPIRIT L.L.C.,<BR>
                                             SHANNON SPIRIT L.L.C.<BR>
                                                      AND<BR>
                                             GALWAY SPIRIT L.L.C.,<BR>
                                        as Joint and Several Borrowers</P>

<P ALIGN=CENTER>                                                      BY<BR>
                                             DEN NORSKE BANK ASA,<BR>
                                               as Lead Arranger</P>

<P ALIGN=CENTER>                                         DEUTSCHE BANK AG IN HAMBURG,<BR>
                           as Lead Arranger, Documentation Agent and Security Agent,</P>

<P ALIGN=CENTER>                                                 DVB BANK AG,<BR>
                                               as Lead Arranger,</P>

<P ALIGN=CENTER>                                          DVB NEDSHIPBANK AMERICA NV,<BR>
                                              as Facility Agent,</P>

<P ALIGN=CENTER>                                   NORDEA BANK FINLAND PLC, NEW YORK BRANCH,<BR>
                                               as Lead Arranger,</P>
<BR>

<P ALIGN=CENTER>                                   and the Banks and Financial Institutions<BR>
                                     identified on Schedule 1, as Lenders</P>

<BR>

<HR SIZE=1 NOSHADE>
<BR>
<BR>
<P ALIGN=CENTER>                                             as of March 10, 2003</P>
<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=CENTER>CONTENTS</P>
<BR>
<BR>
<pre>
                                                                                                                  PAGE

1.       DEFINITIONS.................................................................................................1
         1.1      Specific Definitions...............................................................................1
         1.2      Computation of Time Periods; Other Definitional Provisions........................................17
         1.3      Accounting Terms..................................................................................17
         1.4      Certain Matters Regarding Materiality.............................................................17
         1.5      Forms of Documents................................................................................17
2.       REPRESENTATIONS AND WARRANTIES.............................................................................17
         2.1      Representations and Warranties....................................................................17
           (a)    Due Organization and Power........................................................................17
           (b)    Authorization and Consents........................................................................18
           (c)    Binding Obligations...............................................................................18
           (d)    No Violation......................................................................................18
           (e)    Litigation........................................................................................18
           (f)    No Default........................................................................................18
           (g)    Vessels...........................................................................................18
           (h)    Insurance.........................................................................................19
           (i)    Financial Information.............................................................................19
           (j)    Tax Returns.......................................................................................19
           (k)    Records...........................................................................................19
           (l)    Foreign Trade Control Regulations.................................................................19
           (m)    Equity Ownership..................................................................................20
           (n)    Environmental Matters and Claims..................................................................20
           (o)    Past Environmental Matters........................................................................21
           (p)    Compliance with ISM Code..........................................................................21
           (q)    Threatened Withdrawal of DOC or SMC...............................................................21
           (r)    Liens.............................................................................................21
           (s)    Indebtedness......................................................................................21
           (t)    Compliance With Laws..............................................................................21
3.       THE ADVANCES...............................................................................................21
         3.1      ..................................................................................................21
           (a)    Purpose...........................................................................................21
           (b)    Making of the Advances............................................................................21
         3.2      Drawdown Notice...................................................................................22
         3.3      Effect of Drawdown Notice.........................................................................22
         3.4      Additional Notes..................................................................................22
         3.5      Notation of Advances..............................................................................22
4.       CONDITIONS.................................................................................................22
         4.1      Conditions Precedent to the Effectiveness of this Agreement.......................................22
           (a)    Corporate Authority...............................................................................22
           (b)    The Agreement, the Note and Security Documents....................................................23
           (c)    Guarantor Documents...............................................................................24
           (d)    Charterer Documents...............................................................................24
           (e)    Charter Guarantor Documents.......................................................................24
           (f)    Head Charterer Documents..........................................................................24
           (g)    Manager Documents.................................................................................24
           (h)    Builder Documents.................................................................................24
           (i)    Environmental Claims..............................................................................24
           (j)    Indebtedness......................................................................................24
           (k)    Fees..............................................................................................24
           (l)    Balance Sheets....................................................................................24
           (m)    Building Contracts and Refund Guarantees etc......................................................25
           (n)    Charters..........................................................................................25
           (o)    Legal Opinions....................................................................................25
         4.2      Conditions Precedent re Pre-Delivery Advances.....................................................25
         4.3      Conditions Precedent re Delivery Advances.........................................................25
           (a)    The Vessels.......................................................................................25
           (b)    Mortgage Documents................................................................................26
           (c)    Vessel Liens......................................................................................26
           (d)    Legal Opinions....................................................................................26
         4.4      Further Conditions Precedent......................................................................26
           (a)    Drawdown Notice...................................................................................26
           (b)    Representations and Warranties....................................................................26
           (c)    No Event of Default...............................................................................26
           (d)    No Change in Laws.................................................................................26
           (e)    No Material Adverse Effect........................................................................26
         4.5      Breakfunding Costs................................................................................27
         4.6      Satisfaction after Drawdown.......................................................................27
5.       REPAYMENT AND PREPAYMENT...................................................................................27
         5.1      Repayment.........................................................................................27
         5.2      Voluntary Prepayment..............................................................................27
         5.3      Mandatory Prepayment..............................................................................27
           (a)    Sale or Loss of Vessel............................................................................27
           (b)    Non-delivery of Vessel............................................................................27
           (c)    Charter Cancellation..............................................................................28
           (d)    Timing of Mandatory Prepayments...................................................................28
         5.4      Interest and Costs with Prepayments/Application of Prepayments....................................28
6.       INTEREST AND RATE..........................................................................................28
         6.1      Applicable Rate...................................................................................28
         6.2      Default Rate......................................................................................28
         6.3      Interest Periods..................................................................................29
         6.4      Interest Payments.................................................................................29
7.       PAYMENTS ..................................................................................................29
         7.1      Place of Payments, No Set Off.....................................................................29
         7.2      Tax Credits.......................................................................................30
         7.3      Sharing of Setoffs................................................................................30
         7.4      Computations; Banking Days........................................................................30
8.       EVENTS OF DEFAULT..........................................................................................31
         8.1      Events of Default.................................................................................31
           (a)    Non-Payment of Principal and Interest.............................................................31
           (b)    Non-Payment of Other Amounts......................................................................31
           (c)    Representations...................................................................................31
           (d)    Mortgage and Security Documents...................................................................31
           (e)    Covenants. .......................................................................................31
           (f)    Impossibility, Illegality.........................................................................31
           (g)    Indebtedness......................................................................................31
           (h)    Ownership of Borrowers, Head Charterer or Manager.................................................32
           (i)    Bankruptcy........................................................................................32
           (j)    Termination of Operations; Sale of Assets.........................................................32
           (k)    Judgments.........................................................................................32
           (l)    Inability to Pay Debts............................................................................32
           (m)    Change in Financial Position......................................................................32
           (n)    Change in Control.................................................................................32
           (o)    Cross-Default.....................................................................................32
         8.2      Indemnification...................................................................................33
         8.3      Application of Moneys.............................................................................33
9.       COVENANTS..................................................................................................34
         9.1      Affirmative Covenants.............................................................................34
           (a)    Performance of Agreements.........................................................................34
           (b)    Notice of Default, etc............................................................................34
           (c)    Obtain Consents...................................................................................34
           (d)    Financial Information.............................................................................34
           (e)    Corporate Existence...............................................................................35
           (f)    Maintenance of Assets.............................................................................35
           (g)    Books and Records.................................................................................35
           (h)    Taxes and Assessments.............................................................................35
           (i)    Inspection........................................................................................35
           (j)    Compliance with Statutes, Agreements, etc.........................................................36
           (k)    Environmental Matters.............................................................................36
           (l)    Brokerage Commissions, etc........................................................................36
           (m)    Insurance.........................................................................................36
           (n)    ISM Code Matters..................................................................................37
           (o)    Vessel Classification.............................................................................37
           (p)    Charterer and Charter Guarantor Information.......................................................37
         9.2      Negative Covenants................................................................................37
           (a)    Liens.............................................................................................37
           (b)    Change in Business................................................................................38
           (c)    Sale or Pledge of Shares..........................................................................38
           (d)    Sale of Assets....................................................................................38
           (e)    Changes in Offices or Names.......................................................................38
           (f)    Consolidation and Merger..........................................................................38
           (g)    Change of Flag or Classification Society..........................................................38
           (h)    Capital Expenditures..............................................................................38
           (i)    Change of Vessel Management.......................................................................38
           (j)    Use of Corporate Funds............................................................................38
           (k)    Issuance of Shares................................................................................38
           (l)    Transactions with Affiliates......................................................................39
           (m)    Indebtedness......................................................................................39
           (n)    No Money Laundering...............................................................................39
           (o)    Material Contract.................................................................................39
           (p)    Domicile..........................................................................................39
         9.3      Financial Covenant................................................................................39
         9.4      Asset Maintenance.................................................................................39
         9.5      Charter Cancellation..............................................................................40
10.      ASSIGNMENT.................................................................................................40
11.      ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC..........................................................40
         11.1     Illegality........................................................................................40
         11.2     Increased Costs...................................................................................41
         11.3     Replacement of Lender or Participant..............................................................41
         11.4     Nonavailability of Funds..........................................................................42
         11.5     Lender's Certificate Conclusive...................................................................42
         11.6     Compensation for Losses...........................................................................43
12.      CURRENCY INDEMNITY.........................................................................................43
         12.1     Currency Conversion...............................................................................43
         12.2     Change in Exchange Rate...........................................................................43
         12.3     Additional Debt Due...............................................................................43
         12.4     Rate of Exchange..................................................................................43
13.      FEES AND EXPENSES..........................................................................................43
         13.1     Fees..............................................................................................43
         13.2     Expenses..........................................................................................44
14.      APPLICABLE LAW, JURISDICTION AND WAIVER....................................................................44
         14.1     Applicable Law....................................................................................44
         14.2     Jurisdiction......................................................................................44
         14.3     WAIVER OF JURY TRIAL..............................................................................45
15.      THE AGENTS.................................................................................................45
         15.1     Appointment of Agents.............................................................................45
         15.2     Security Agent as Trustee.........................................................................45
         15.3     Distribution of Payments..........................................................................45
         15.4     Holder of Interest in Note........................................................................45
         15.5     No Duty to Examine, Etc...........................................................................45
         15.6     Agents as Lenders.................................................................................46
         15.7     Acts of the Agents................................................................................46
         15.8     Certain Amendments................................................................................46
         15.9     Assumption re Event of Default....................................................................47
         15.10    Limitations of Liability..........................................................................47
         15.11    Indemnification of the Agents.....................................................................47
         15.12    Consultation with Counsel.........................................................................48
         15.13    Resignation.......................................................................................48
         15.14    Representations of Lenders........................................................................48
         15.15    Notification of Event of Default..................................................................48
16.      NOTICES AND DEMANDS........................................................................................48
         16.1     Notices...........................................................................................48
17.      MISCELLANEOUS..............................................................................................49
         17.1     Time of Essence...................................................................................49
         17.2     Unenforceable, etc., Provisions - Effect..........................................................49
         17.3     References........................................................................................49
         17.4     Further Assurances................................................................................49
         17.5     Prior Agreements, Merger..........................................................................49
         17.6     Amendments; Counterparts..........................................................................50
         17.7     Indemnification...................................................................................50
         17.8     Headings..........................................................................................50
</pre>
<BR>
<BR>
<BR>
<P><U>SCHEDULE</U></P>

<TABLE>
<TR>
<TD WIDTH=10% VALIGN=TOP>1<BR>
2<BR>
3<BR>
4</TD>
<TD WIDTH=90%>The Lenders and the Initial Commitments<BR>
The Borrowers and Vessels<BR>
Disclosure<BR>
Approved Ship Brokers</TD>
</TR>
</TABLE>


<P><U>EXHIBITS</U></P>


<TABLE>
<TR>
<TD WIDTH=10%></TD>
<TD WIDTH=20% VALIGN=TOP>A<BR>
B<BR>
C<BR>
D<BR>
E<BR>
F<BR>
G<BR>
H<BR>
I<BR>
J<BR>
K<BR>
L<BR>
M<BR>
N<BR>
O<BR>
P<BR>
Q</TD>
<TD WIDTH=70% VALIGN=TOP>
Form of Note<BR>
Form of Guaranty<BR>
Form of Pledge Agreement<BR>
Form of  Mortgage<BR>
Form of Charter Assignment<BR>
Form of Earnings Assignment<BR>
Form of Insurances Assignment<BR>
Form of Building Contract Assignment<BR>
Form of Refund Guarantee Assignment<BR>
Form of Assignment and Assumption Agreement<BR>
Form of Head Charter Assignment<BR>
Form of Charter Guaranty Assignment<BR>
Form of Management Contract Assignment<BR>
Form of Compliance Certificate<BR>
Form of Drawdown Notice<BR>
Form of Interest Notice<BR>
Form of Quiet Enjoyment Letter
</TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER>                                            <U>SECURED CREDIT FACILITY</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS SECURED CREDIT FACILITY AGREEMENT (this "Agreement") is made as of the 10th day of March, 2003,
by and among (1) CORK SPIRIT L.L.C., DONEGAL SPIRIT L.L.C., LIMERICK SPIRIT L.L.C., SHANNON SPIRIT L.L.C. and
GALWAY SPIRIT L.L.C., each a limited liability company organized under the laws of the Republic of the
Marshall Islands (each a "Borrower", and collectively, the "Borrowers"), as joint and several borrowers,
(2) the banks and financial institutions listed on Schedule 1, as lenders (together with any bank or financial
institution which becomes a Lender pursuant to Article 10, the "Lenders"), (3) DEN NORSKE BANK ASA ("DnB"),
as lead arranger (in such capacity, an "Arranger"), (4) DEUTSCHE BANK AG IN HAMBURG ("Deutsche Bank"), as
lead arranger (in such capacity, an "Arranger"), documentation agent (in such capacity, the "Documentation
Agent") and security agent (in such capacity and any successor thereto the "Security Agent"), (5) DVB BANK AG
("DVB"), as lead arranger (in such capacity, an "Arranger"), (6) DVB NEDSHIPBANK AMERICA NV (&#147;DVB Nedship&#148;),
as facility agent for the Lenders (in such capacity and any successor thereto, the "Facility Agent"), and (7)
NORDEA BANK FINLAND PLC, New York Branch ("Nordea"), as lead arranger (in such capacity, an "Arranger" and
together with each other Arranger, the "Arrangers").</P>

<P ALIGN=CENTER>                                               <U>WITNESSETH THAT:</U></P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Borrowers wish to partially finance the pre-delivery installments and expenses,
delivery installments and acquisition costs of three (3) 152,000 dwt Suezmax oil tankers and two (2) 112,000
dwt Aframax oil tankers currently under construction or to be constructed by Hyundai Corporation and Hyundai
Heavy Industries Co. Ltd. pursuant to five separate shipbuilding contracts to which each Borrower is
separately a party;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, at the request of the Borrowers, the Agents have agreed to serve in capacities provided for
under the terms of this Agreement and the Lenders have agreed to provide to the Borrowers a secured credit
facility in the amount of up to US$180,000,000;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements
hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as set forth below:</P>
<BR>
<BR>

<P>1.&nbsp;&nbsp;&nbsp;<U>DEFINITIONS</U></P>

<P>1.1&nbsp;&nbsp;&nbsp;<U>Specific Definitions</U>.  In this Agreement the words and expressions specified below shall, except
where the context otherwise requires, have the meanings attributed to them below:</P>

<pre>
"Acceptable Accounting Firm"                  means  Ernst  &amp;  Young  LLP,  or such  other  recognized  international
                                              accounting  firm as shall  be  approved  by the  Facility  Agent,  such
                                              approval not to be unreasonably withheld;

"Acquisition Price "                          means, with respect to a Vessel, that amount (expressed in thousands
                                              of Dollars) set forth opposite such Vessel's name under the column
                                              entitled "Acquisition Price" in Schedule 2;

"Advance(s)"                                  means any amount advanced to a Borrower with respect to the Facility
                                              or (as the context may require) the aggregate amount of all such
                                              Advances for the time being outstanding;

"Affiliate"                                   means  with  respect  to any  Person,  any  other  Person  directly  or
                                              indirectly  controlled  by or under  common  control  with such Person.
                                              For  the  purposes  of  this  definition,  "control"  (including,  with
                                              correlative  meanings,  the terms  "controlled  by" and  "under  common
                                              control with") as applied to any Person means the  possession  directly
                                              or  indirectly  of the power to direct  or cause the  direction  of the
                                              management  and policies of that Person  whether  through  ownership of
                                              voting securities or by contract or otherwise;

"Agents"                                      means  each of the  Facility  Agent,  the  Documentation  Agent and the
                                              Security Agent;

"Agreement"                                   means  this  agreement,  as the same  shall  be  amended,  modified  or
                                              supplemented from time to time;

"Applicable Margin"                           (i) means, with respect to any Tranche:

                                              during the Pre-Delivery Period, that rate per annum equal to 1.25%; and

                                              (ii)  during  the  Post-Delivery  Period,  subject  to any  adjustments
                                              pursuant  to  Section  6.1  hereof,  that  rate  per  annum  determined
                                              according to the Charter  Guarantor's Rating as of the relevant date in
                                              accordance with the following:

                                              <U>Rating (S&amp;P/Moody's)</U>                 <U>Applicable Margin</U>
                                              A-/A3 or higher                      1.00% per annum
                                              BBB+/Baa1                            1.05% per annum
                                              BBB/Baa2                             1.15% per annum
                                              BBB-/Baa3                            1.25% per annum

                                              <U>provided</U>,  in the event that the Charter  Guarantor's Rating is BB+/Ba1
                                              (S&amp;P/Moody's)  or lower  or no  Rating  is  available  for the  Charter
                                              Guarantor,   the   Applicable   Margin  shall  be   determined  by  the
                                              Guarantor's  Rating  as of the  relevant  date in  accordance  with the
                                              following:

                                              <U>Rating (S&amp;P/Moody's)</U>                 <U>Applicable Margin</U>
                                              A-/A3 or higher                      1.00% per annum
                                              BBB+/Baa1                            1.05% per annum
                                              BBB/Baa2                             1.15% per annum
                                              BBB-/Baa3                            1.25% per annum
                                              BB+/Ba1                              1.25% per annum
                                              BB/Ba2                               1.35% per annum
                                              BB-/Ba3                              1.50% per annum
                                              B+/B1 or lower                       1.75% per annum

                                              <U>provided</U>,  <U>further</U>, in the event that the Charter Guarantor's Rating is
                                              BB+/Ba1 or lower or no Rating is  available  for the Charter  Guarantor
                                              and no Rating is available for the  Guarantor,  the  Applicable  Margin
                                              shall be  determined by the  Guarantor's  Total Debt to EBITDA ratio as
                                              determined  by the most recent  Compliance  Certificate  in  accordance
                                              with the following:

                                              <U>Total Debt/EBITDA</U>                    <U>Applicable Margin</U>
                                              &#139; 4.5                                1.25% per annum
                                              &gt; 4.5 but &#139; 5.25                     1.35% per annum
                                              &gt; 5.25 but &#139; 5.50                    1.50% per annum
                                              &gt; 5.50                               1.75% per annum

"Applicable Rate"                             means any rate of interest  applicable to any Tranche from time to time
                                              pursuant to Section 6.1;

"Approved Shipbrokers"                        means any of the shipbrokers set out on Schedule 4;

"Arranger(s)"                                 shall have the meaning ascribed thereto in the preamble;

"Assigned Moneys"                             means sums  assigned to or received by the Security  Agent  pursuant to
                                              any Security Document;

"Assignment and Assumption Agreement(s)"      means the Assignment and Assumption  Agreement(s)  executed pursuant to
                                              Section 10 substantially in the form set out in Exhibit J;

"Assignment Notices"                          means

                                              (i)      notices   with    respect   to   the   Earnings    Assignments
                                                       substantially in the form set out in Exhibit 1 thereto;

                                              (ii)     notices with respect to the Charter Assignments  substantially
                                                       in the form set out in Exhibit 1 thereto;

                                              (iii)    notices  with  respect  to the  Charter  Guaranty  Assignments
                                                       substantially in the form set out in Exhibit 1 thereto;

                                              (iv)     notices   with   respect   to   the   Insurances   Assignments
                                                       substantially in the form set out in Exhibit 3 thereto;

                                              (v)      notices  with  respect to the  Building  Contract  Assignments
                                                       substantially in the form set out in Exhibit 1 thereto;

                                              (vi)     notices  with  respect  to the  Refund  Guarantee  Assignments
                                                       substantially in the form set out in Exhibit 1 thereto;

                                              (vii)    notices  with   respect  to  the  Head   Charter   Assignments
                                                       substantially in the form set out in Exhibit 1 thereto; and

                                              (viii)   notices with respect to the  Management  Contract  Assignments
                                                       substantially in the form set out in Exhibit 1 thereto;

"Assignments"                                 means the Charter Assignments,  the Charter Guaranty  Assignments,  the
                                              Earnings  Assignments,  the  Insurances  Assignments,  the Head Charter
                                              Assignments,  the Building Contract  Assignments,  the Refund Guarantee
                                              Assignments and the Management Contract Assignments;

"Banking Day(s)"                              means  day(s) on which banks are open for the  transaction  of business
                                              in Oslo, Norway,  Amsterdam,  The Netherlands,  London, England and New
                                              York, New York;

"Borrower(s)"                                 shall have the meaning ascribed thereto in the preamble;

"Builder"                                     means,  collectively,  Hyundai Corporation and Hyundai Heavy Industries
                                              Co., Ltd., each a corporation  organized under the laws of the Republic
                                              of Korea;

"Building Contract(s)"                        means each of the following:

                                              1) that  certain  contract  for the  construction  and sale of the CORK
                                              SPIRIT dated  December 19, 2000 by and between Cork  Shipping  Inc. and
                                              the  Builder  as novated in favor of Cork  Spirit  L.L.C.  on August 9,
                                              2001;

                                              2) that certain  contract for the  construction and sale of the DONEGAL
                                              SPIRIT dated  December 19, 2000 by and between  Donegal  Shipping  Inc.
                                              and the Builder as novated in favor of Donegal Spirit L.L.C.  on August
                                              9, 2001;

                                              3) that certain  contract for the construction and sale of the LIMERICK
                                              SPIRIT dated  December 19, 2000 by and between  Limerick  Shipping Inc.
                                              and the  Builder as  novated  in favor of  Limerick  Spirit  L.L.C.  on
                                              August 9, 2001;

                                              4) that certain  contract for the  construction and sale of the SHANNON
                                              SPIRIT dated  December 19, 2000 by and between  Shannon  Shipping  Inc.
                                              and the Builder as novated in favor of Shannon Spirit L.L.C.  on August
                                              9, 2001; and

                                              5) that certain  contract for the  construction  and sale of the GALWAY
                                              SPIRIT dated January 31, 2001 by and between  Galway  Shipping Inc. and
                                              the Builder as novated in favor of Galway  Spirit  L.L.C.  on August 9,
                                              2001;

"Building Contract Assignments"               means the  assignments  in respect  of the  Building  Contracts,  to be
                                              executed  by the  relevant  Borrower  in  favor of the  Security  Agent
                                              pursuant  to  Section  4.1(b)  substantially  in the  form  set  out in
                                              Exhibit H;

"Cash and Cash Equivalents"                   means as of the date of any determination  thereof, the total amount of
                                              all cash and cash  equivalents,  as determined in accordance with GAAP,
                                              and as shown on the balance sheet of the Guarantor;

"Change of Control"                           means,  with  respect to any Person,  (a) any "person" (as such term is
                                              used in  Sections  13(d)  and 14(d) of the  Exchange  Act)  other  than
                                              Resolute  Investments  Inc.  becomes the ultimate  beneficial owner (as
                                              defined  in  Rules  13d-3  under  the   Exchange   Act),   directly  or
                                              indirectly,  of more than 50% of the total  voting power of such Person
                                              or  (b) individuals   who  at  the  beginning  of  any  period  of  two
                                              consecutive years constitute the Board of Directors  (together with any
                                              new  directors  whose  election  by the  Board  of  Directors  or whose
                                              nomination  by the Board of  Directors  for  election by such  Person's
                                              stockholders  was  approved  by a vote of at  least  two-thirds  of the
                                              members of the Board of Directors  who either were members of the Board
                                              of Directors  on the date hereof or whose  election or  nomination  for
                                              election  was   previously  so  approved)   cease  for  any  reason  to
                                              constitute  at least fifty percent (50%) of the members of the Board of
                                              Directors then in office;

"Charter Assignment(s)"                       means the  assignments  in respect of the Time  Charters to be executed
                                              by the Head  Charterer  in  favor of the  Security  Agent  pursuant  to
                                              Section 4.1(b) substantially in the form set out in Exhibit E;

"Charter Guarantor"                           means  ConocoPhillips,  a  corporation  existing  under the laws of the
                                              State of Delaware;

"Charter Guarantor                            means that certain  consent and  agreement of the Charter  Guarantor to
Consent and Agreement"                        the Charter Guaranty Assignments  substantially in the form attached as
                                              Exhibit 2 thereto;

"Charter Guaranty(ies)"                       means those  certain  guaranties  each dated as of February 14, 2002 in
                                              respect of the Time Charters  issued by the Charter  Guarantor in favor
                                              of the Head Charterer;

"Charter Guaranty Assignment(s)"              means the  assignments in respect of Charter  Guaranties to be executed
                                              by the Head  Charterer  in  favor of the  Security  Agent  pursuant  to
                                              Section 4.1(b) substantially in the form set out in Exhibit L;

"Charterer"                                   means  Emerald  Shipping  Company,  a  wholly-owned  Subsidiary  of the
                                              Charter Guarantor;

"Charterer Consent and Agreement"             means that  certain  consent  and  agreement  of the  Charterer  to the
                                              Charter  Assignment with respect to a Vessel  substantially in the form
                                              attached as Exhibit 2 thereto;

"Classification Society"                      means American Bureau of Shipping,  Bureau Veritas, Det Norske Veritas,
                                              Germanischer  Lloyd,  Lloyd's Register of Shipping or such other member
                                              of  the   International   Association   of   Classification   Societies
                                              acceptable  to the  Majority  Lenders with whom the Vessels are entered
                                              and who conducted  periodic physical surveys and/or  inspections of the
                                              Vessel;

"Code"                                        means the Internal Revenue Code of 1986, as amended,  and any successor
                                              statute and regulation promulgated thereunder;

"Collateral"                                  means all  property  or other  assets,  real or  personal,  tangible or
                                              intangible,  whether now owned or hereafter acquired in which any Agent
                                              or any  Lender  has been  granted a  security  interest  pursuant  to a
                                              Security Document;

"Commitment(s)"                               means in relation  to a Lender,  the  portion of the  Facility  set out
                                              opposite  its  name in  Schedule 1  or,  as the  case  may  be,  in any
                                              relevant  Assignment  and  Assumption  Agreement  or  amendment to this
                                              Agreement;

"Compliance Certificate"                      means a certificate  certifying the compliance by each of the Borrowers
                                              and the  Guarantor  with  all of its  covenants  contained  herein  and
                                              showing the calculations  thereof in reasonable detail delivered by the
                                              chief  financial  officer of the  Guarantor to the Facility  Agent from
                                              time  to  time  pursuant  to  Section 9.1(d)  in the  form  set  out in
                                              Exhibit N, or in such other form as the Majority Lenders may agree;

"CORK SPIRIT"                                 means the  152,000 dwt Suezmax  oil tanker  under  construction  by the
                                              Builder and designated as Hull No. 1431;

"Default Rate"                                shall have the meaning ascribed thereto in Section 6.2;

"Delivered Cost"                              means,  with respect to a Vessel,  the sum of (i) the Acquisition Price
                                              and (ii) the Pre-Delivery Construction Expenses;

"Delivery Advance"                            means the Advance to be made to a Borrower  in respect of the  delivery
                                              of a Vessel to such Borrower by the Builder under a Building Contract;

"Delivery Date"                               means the date on which a Vessel is  delivered  from the Builder to the
                                              respective Borrower;

"Deutsche Bank"                               shall have the meaning ascribed thereto in the preamble;

"DnB"                                         shall have the meaning ascribed thereto in the preamble;

"DOC"                                         means a document of  compliance  issued to an  Operator  in  accordance
                                              with rule 13 of the ISM Code;

"Documentation Agent"                         shall have the meaning attributed thereto in the preamble;

"Dollars" and the sign "$"                    means  the legal  currency,  at any  relevant  time  hereunder,  of the
                                              United  States of America and, in relation to all  payments  hereunder,
                                              in  same  day  funds  settled  through  the  New  York  Clearing  House
                                              Interbank  Payment  System  (or  such  other  Dollar  funds  as  may be
                                              determined by the Facility  Agent to be customary for the settlement in
                                              New York City of banking transactions of the type herein involved);

"DONEGAL SPIRIT"                              means the  152,000 dwt Suezmax  oil tanker  under  construction  by the
                                              Builder and designated as Builder's Hull 1432;

"Drawdown Date(s)"                            means the dates,  each being a Banking  Day,  upon which a Borrower has
                                              requested that an Advance be made available to such Borrower,  and such
                                              Advance is made, as provided in Section 3; <U>provided</U>,  <U>however</U>,  that in
                                              any event no  Drawdown  Date  shall  occur  later  than the  earlier of
                                              (i) March  31, 2004 or (ii) the  Delivery  Date for the last  delivered
                                              Vessel;

"Drawdown Notice"                             shall have the meaning ascribed thereto in Section 3.2;

"EBITDA"                                      means,  with  respect to any Person for any  period,  the  consolidated
                                              earnings before  interest,  taxes,  depreciation and  amortization,  as
                                              measured on a trailing four-quarter basis;

"Earnings Assignment(s)"                      means the  assignments  in respect of the  earnings of each Vessel from
                                              any and all  sources  to be  executed  by the  Head  Charterer  and the
                                              relevant   Borrower  in  favor  of  the  Security   Agent  pursuant  to
                                              Sections 4.1(b)  and  4.1(f)  substantially  in  the  form  set  out in
                                              Exhibit F;

"Environmental Affiliate(s)"                  means any person or entity,  the  liability of which for  Environmental
                                              Claims any Security  Party may have assumed by contract or operation of
                                              law;

"Environmental Approval(s)"                   shall have the meaning ascribed thereto in Section 2.1(n);

"Environmental Claim(s)"                      shall have the meaning ascribed thereto in Section 2.1(n);

"Environmental Law(s)"                        shall have the meaning ascribed thereto in Section 2.1(n);

"Event(s) of Default"                         means any of the events set out in Section 8.1;

"Exchange Act"                                shall mean the Securities and Exchange Act of 1934, as amended;

"Facility"                                    means the credit  facility to be made  available  by the Lenders to the
                                              Borrowers  hereunder  in  five  (5)  Tranches  with  multiple  Advances
                                              pursuant to Section 3 in the maximum aggregate  principal amount of One
                                              Hundred Eighty Million Dollars ($180,000,000);

"Facility Agent"                              shall have the meaning attributed thereto in the preamble;

"Fair Market Value"                           means,  in  respect of any  vessel,  the  average  of two  charter-free
                                              appraisals  on an "as is",  "willing  seller,  willing  buyer" basis of
                                              such vessel from an Approved  Shipbroker or such other independent ship
                                              brokers  approved by the  Majority  Lenders,  no such  appraisal  to be
                                              dated  more  than  thirty  (30)  days  prior to the date on which  such
                                              appraisal is required  pursuant to this Agreement,  <U>provided</U>,  <U>however</U>,
                                              if the  average  of such  appraisals  shall  be  unacceptable,  for any
                                              reason,  to the Majority  Lenders or the Borrowers,  the Facility Agent
                                              and  the  Borrowers  shall  each  obtain  one  additional  charter-free
                                              appraisal,  each at the  expense of the  Borrowers,  and the average of
                                              all four appraisals shall constitute the Fair Market Value;

"Fee Letter"                                  means that certain letter  agreement  dated October 7, 2002 and entered
                                              into among the Guarantor and the Arrangers;

"Final Payment Date"                          means, with respect to any Tranche,  that date occurring ten (10) years
                                              after  the  Delivery  Date with  respect  to the  Vessel to which  such
                                              Tranche  is  attributable;  <U>provided</U>,  <U>however</U>,  in any event the Final
                                              Payment Date for any Tranche shall not be later than December 15, 2013;

"GAAP"                                        shall have the meaning ascribed thereto in Section 1.3;

"GALWAY SPIRIT"                               means the  152,000 dwt Suezmax  oil tanker  under  construction  by the
                                              Builder and designated as Hull No. 1435;

"Guarantor"                                   means Teekay  Shipping  Corporation,  a corporation  existing under the
                                              laws of the Republic of the Marshall Islands;

"Guaranty"                                    means the  guaranty  to be executed  by the  Guarantor  in favor of the
                                              Lenders  pursuant to Section 4.1(c)  substantially  in the form set out
                                              as Exhibit B;

"Head Charterer"                              means Teekay Chartering Limited, a corporation  existing under the laws
                                              of the Republic of the Marshall Islands;

"Head Charterer Consent and Agreement(s)"     means that certain  consent and agreement of the Head Charterer to each
                                              of the Head Charter  Assignments  substantially  in the form set out in
                                              Exhibit 2 thereto;

"Head Charter(s)"                             means each of those five (5)  certain  timecharters  dated as of August
                                              1, 2001 in  respect  of each of the  Vessels  by and  between  the Head
                                              Charterer and the relevant Borrower;

"Head Charter Assignment(s)"                  means the  assignments  in respect of the Head Charters with respect to
                                              each Vessel from to be  executed by the  relevant  Borrower in favor of
                                              the Security  Agent  pursuant to  Section 4.1(b)  substantially  in the
                                              form set out in Exhibit K;

"Indebtedness"                                means,  with  respect  to any  Person  at  any  date  of  determination
                                              (without   duplication),   (i) all  indebtedness  of  such  Person  for
                                              borrowed  money,  (ii) all  obligations  of such  Person  evidenced  by
                                              bonds,  debentures,  notes  or  other  similar  instruments,  (iii) all
                                              obligations  of such  Person in  respect  of letters of credit or other
                                              similar instruments (including  reimbursement  obligations with respect
                                              thereto),  (iv) all  obligations of such Person to pay the deferred and
                                              unpaid purchase price of property or services,  which purchase price is
                                              due more than six months  after the date of placing  such  property  in
                                              service or taking delivery  thereof or the completion of such services,
                                              except trade payables,  (v) all  obligations on account of principal of
                                              such Person as lessee under capitalized leases,  (vi) all  indebtedness
                                              of  other  Persons  secured  by a lien on any  asset  of  such  Person,
                                              whether or not such  indebtedness  is assumed by such Person,  <U>provided</U>
                                              that the  amount of such  indebtedness  shall be the  lesser of (a) the
                                              fair  market  value of such  asset at such  date of  determination  and
                                              (b) the amount of such  indebtedness,  (vii) all  indebtedness of other
                                              Persons guaranteed by such Person to the extent guaranteed;  the amount
                                              of  Indebtedness  of any  Person at any date  shall be the  outstanding
                                              balance  at such date of all  unconditional  obligations  as  described
                                              above  and,  with  respect  to  contingent  obligations,   the  maximum
                                              liability  upon the  occurrence of the  contingency  giving rise to the
                                              obligation;  <U>provided</U>  that the amount  outstanding  at any time of any
                                              indebtedness  issued with original issue discount is the face amount of
                                              such  indebtedness  less  the  remaining  unamortized  portion  of  the
                                              original  issue  discount  of  such   indebtedness   at  such  time  as
                                              determined  in  conformity   with  GAAP;  and  provided   further  that
                                              Indebtedness  shall not include any  liability  for current or deferred
                                              federal, state, local or other taxes, or any trade payables;

"Indemnitee"                                  shall have the meaning ascribed thereto in Section 17.7;

"Initial Advance"                             means the  initial  Advance  extended  or to be  extended to a Borrower
                                              hereunder;

 "Insurances Assignments"                      means the  assignments in respect of the insurances over the Vessels to
                                              be executed by the relevant  Borrowers  in favor of the Security  Agent
                                              pursuant  to  Section  4.1(b)  substantially  in the  form  set  out in
                                              Exhibit G;

"Interest Expense"                            means for any period,  all  interest  charges,  including  the interest
                                              component of capitalized leases;

"Interest Notice"                             means a notice from the Borrowers to the Facility Agent  specifying the
                                              duration of any relevant  Interest Period  substantially in the form of
                                              Exhibit P;

"Interest Payment Date"                       means each date on which  accrued  interest  on the  Facility  shall be
                                              payable pursuant to Section 6.4;

"Interest Period(s)"                          means  period(s) of one,  three or six months (or such other periods as
                                              the  Lenders  may  agree)  as  selected  by  the  Borrower  (as  may be
                                              consolidated pursuant to Section 6.3);

"ISM Code"                                    means the  International  Safety Management Code for the Safe Operating
                                              of  Ships  and  for  Pollution   Prevention   constituted  pursuant  to
                                              Resolution  A.741(18) of the  International  Maritime  Organization and
                                              incorporated  into the Safety of Life at Sea  Convention  and  includes
                                              any  amendments  or  extensions   thereto  and  any  regulation  issued
                                              pursuant thereto;

"Lender(s)"                                   shall have the meaning ascribed thereto in the preamble;

"LIBOR"                                       means the rate  (rounded  upward to the nearest  1/16th of one percent)
                                              for  deposits  of  Dollars  for a  period  equivalent  to the  relevant
                                              Interest  Period or, to the  extent  applicable  following  an Event of
                                              Default,  overnight or weekends,  at or about 11:00 a.m.  (London time)
                                              on the second  London  Banking  Day before the first day of such period
                                              as  displayed  on  Telerate  page 3750  (British  Bankers'  Association
                                              Interest  Settlement  Rates) (or such other  page as may  replace  such
                                              page  3750 on such  system or on any  other  system of the  information
                                              vendor  for  the  time  being   designated  by  the  British   Bankers'
                                              Association to calculate the BBA Interest  Settlement  Rate (as defined
                                              in the British Bankers' Association's  Recommended Terms and Conditions
                                              ("BBAIRS" terms) dated August 1985)),  provided that if on such date no
                                              such rate is so displayed for the relevant  Interest Period,  LIBOR for
                                              such period shall be the arithmetic  mean (rounded  upward if necessary
                                              to  four  decimal  places)  of the  rates  respectively  quoted  to the
                                              Facility  Agent by the  Reference  Banks at the request of the Facility
                                              Agent  as the  offered  rate  for  deposits  of  Dollars  in an  amount
                                              approximately  equal to the amount in  relation to which LIBOR is to be
                                              determined for a period  equivalent to the relevant  Interest Period to
                                              prime  banks in the  London  Interbank  Market  at or about  11:00 a.m.
                                              (London  time) on the second  Banking  Day before the first day of such
                                              period;

"LIMERICK SPIRIT"                             means the  112,000 dwt Aframax  oil tanker  under  construction  by the
                                              Builder and designated as Hull 1433;

"Majority Lenders"                            at any time means  Lenders  holding an aggregate of more than 66.67% of
                                              the funded and unfunded Commitments;

"Management Contract(s)"                      means each of those certain  management  agreements  dated as of August
                                              1, 2002 in respect of each of the  Vessels by and between the Owner and
                                              Manager;

"Management Contract Assignment(s)"           means the  assignments  in respect  of the  Management  Contracts  with
                                              respect to each Vessel to be executed by the each  Borrower in favor of
                                              the Security  Agent  pursuant to  Section 4.1(b)  substantially  in the
                                              form set out in Exhibit M;

"Manager"                                     means  Teekay  Shipping  Limited,   a  Bahamas   corporation,   or  any
                                              substitute entity thereof which is directly or indirectly  wholly-owned
                                              by the  Guarantor and which has assumed all of the  obligations  of the
                                              Manager in  connection  herewith  including,  but not  limited  to, the
                                              Management Contracts;

"Manager Consent and Agreement(s)"            means that certain  consent and agreement of the Manager to each of the
                                              Management  Contract  Assignment  substantially  in the form set out in
                                              Exhibit 2 thereto;

"Mandate Letter"                              means  the  letter  dated  October  7, 2002  and  entered  into  by the
                                              Borrowers,  the  Guarantor,  DnB,  Deutsche  Bank,  DVB and  Nordea  in
                                              respect of this facility;

"Marketable Securities"                       means as of the date of any determination  thereof, the total amount of
                                              all marketable  securities,  as determined in accordance with GAAP, and
                                              as shown on the balance sheet of the Guarantor;

"Material Adverse Effect"                     shall mean a material  adverse effect on (i) the  ability of a Borrower
                                              to repay the  Advances or perform any of its  obligations  hereunder or
                                              under the Note,  (ii) the  ability of any Security Party to perform its
                                              obligations  under  any  of  the  Transaction  Documents  or  (iii) the
                                              business,   property,  assets,   liabilities,   operations,   condition
                                              (financial  or  otherwise)  or  prospects  of (x) a Borrower or (y) the
                                              Guarantor and its subsidiaries taken as a whole;

"Materials of Environmental Concern"          shall have the meaning ascribed thereto in Section 2.1(n);

"Moody's"                                     means Moody's Investor Service;

"Mortgages"                                   means,  collectively,   the  first  priority  Bahamian  statutory  ship
                                              mortgages on the Vessels and Deeds of Covenants  collateral thereto, to
                                              be executed by the respective  Borrowers in favor of the Security Agent
                                              (as trustee for the Lenders) pursuant to Section 4.3(b),  substantially
                                              in the form set out in Exhibit D;

"Note"                                        means the promissory  note to be executed by the Borrowers to the order
                                              of the  Facility  Agent  pursuant to  Section 4.1(b),  to evidence  the
                                              Facility  substantially  in the form  set out in  Exhibit A  and  shall
                                              include  any  promissory  note  issued  by the  Borrowers  pursuant  to
                                              Section 3.4;

"Operator"                                    means,  in respect of any Vessel,  the Person who is concerned with the
                                              operation of such Vessel and falls within the  definition  of "Company"
                                              set out in rule 1.1.2 of the ISM Code;

"Payment Date(s)"                             means the  Banking  Days on which the  payment of  installments  of the
                                              Facility are due to the Lenders pursuant to Section 5;

"Person"                                      means any individual,  sole  proprietorship,  corporation,  partnership
                                              (general or limited),  limited liability company, business trust, bank,
                                              trust company, joint venture,  association,  joint stock company, trust
                                              or other  unincorporated  organization,  whether or not a legal entity,
                                              or any government or agency or political subdivision thereof;

"Pledge Agreement"                            means the pledge  agreement to be executed by the Guarantor in favor of
                                              the Security  Agent  pursuant to  Section 4.1(c)  substantially  in the
                                              form set out in Exhibit C;

"Pledged Shares"                              means  the  limited   liability   company  interests  or  other  equity
                                              interests of any  Borrower,  owned by the  Guarantor and pledged to the
                                              Security Agent pursuant to the Pledge Agreement;

"Pre-Delivery Advance"                        means an Advance made to a Borrower during the Pre-Delivery Period;

"Pre-Delivery Period"                         means,  with  respect to a Vessel,  that period  beginning  on the date
                                              hereof and ending on the day  immediately  preceding  the Delivery Date
                                              with respect to such Vessel;

"Post-Delivery Period"                        means, with respect to a Vessel,  that period beginning on the Delivery
                                              Date with  respect to such Vessel and ending on the Final  Payment Date
                                              with respect to such Vessel;

"Pre-Delivery Construction Expenses"          means,  with  respect  to a  Vessel,  the  aggregate  of  all  shipyard
                                              supervisory  costs and  pre-delivery  interest  expense  incurred  by a
                                              Borrower prior to the delivery of its Vessel;

"Proceeding"                                  shall have the meaning ascribed thereto in Section 8.1(i);

"Quiet Enjoyment Letter"                      means that certain letter  agreement  substantially in the form set out
                                              in Exhibit Q by and among the Charterer,  the Charter Guarantor and the
                                              Arrangers in respect of the  Charterer's  right of quiet enjoyment with
                                              respect to the Vessels;

"Rating"                                      means,  (i) with respect to any Person (other than the Guarantor),  the
                                              lower of the long-term  senior  unsecured debt ratings as determined by
                                              S&amp;P and Moody's and (ii) with  respect to the  Guarantor,  the lower of
                                              the long term senior  secured  ratings as determined by S&amp;P and Moody's
                                              and in either  case,  if such  long-term  senior  debt  ratings are not
                                              available,  the lower of S&amp;P's  long-term  Issuer  Rating  and  Moody's
                                              Senior Implied Rating;

"Reference Banks"                             means each of DnB, Deutsche Bank, DVB and Nordea;

"Refund Guarantee(s)"                         means each of those certain refund  guaranties issued in respect of the
                                              Vessels;

"Refund Guarantee Assignments"                means  the  assignments  in  respect  of the  Refund  Guarantees  to be
                                              executed  by the  relevant  Borrower  in  favor of the  Security  Agent
                                              pursuant  to  Section  4.1(b)  substantially  in the  form  set  out in
                                              Exhibit I;

"Required Percentage"                         shall have the meaning set forth for such term in Section 9.4;

"S&amp;P"                                         means  Standard &amp; Poor's Rating  Services,  a division of  McGraw-Hill,
                                              Inc.;

"Security Agent"                              shall have the meaning attributed thereto in the preamble;

"Security Document(s)"                        means  the  Guaranty,   the  Pledge  Agreement,   the  Mortgages,   the
                                              Assignments  and any other  documents  that may be executed as security
                                              for  the  Facility  and  the   Borrowers'   obligations  in  connection
                                              therewith;

"Security Party(ies)"                         each of the  Borrowers,  the  Guarantor,  the  Head  Charterer  and the
                                              Manager;

"SHANNON SPIRIT"                              means the  112,000 dwt Aframax  oil tanker  under  construction  by the
                                              Builder and designated as Hull No. 1434;

"SMC"                                         means the safety management  certificate  issued in respect of a Vessel
                                              in accordance with rule 13 of the ISM code;

"Subsidiary(ies)"                             means,  with respect to any Person,  any business  entity of which more
                                              than 50% of the  outstanding  voting stock or other equity  interest is
                                              owned  directly or  indirectly  by such Person and/or one or more other
                                              Subsidiaries of such Person;

"Taxes"                                       means any  present or future  income or other  taxes,  levies,  duties,
                                              charges,  fees,  deductions  or  withholdings  of  any  nature  now  or
                                              hereafter  imposed,  levied,  collected,  withheld  or  assessed by any
                                              taxing  authority  whatsoever,  except for taxes on or  measured by the
                                              overall  net  income of each  Lender  imposed  by its  jurisdiction  of
                                              incorporation  or  applicable  lending  office,  the  United  States of
                                              America, the State or City of New York or any governmental  subdivision
                                              or taxing  authority  of any thereof or by any other  taxing  authority
                                              having  jurisdiction  over such Lender  (unless  such  jurisdiction  is
                                              asserted  by reason of the  activities  of the  Borrower  or any of the
                                              Subsidiaries);

"Time Charter(s)"                             means each of those five (5) certain time  charters  dated as of August
                                              1, 2001 in  respect  of each of the  Vessels  by and  between  the Head
                                              Charterer  and the  Charterer,  each as  amended by an  Addendum  No. 1
                                              thereto dated as of May 21, 2002;

"Total Debt"                                  means for the  Guarantor  those  portions,  as determined in accordance
                                              with GAAP,  of the  Indebtedness  shown as either  "long-term  debt" or
                                              "current  portion of long-term debt" on the  consolidated  debt balance
                                              sheet of the Guarantor  which shall include,  without  limitation,  the
                                              current and long term portions of capital leases;

"Total Loss"                                  shall have the meaning ascribed thereto in the Mortgages;

"Tranche(s)"                                  means any, all or any combination,  as the context requires, of Tranche
                                              1, Tranche 2, Tranche 3, Tranche 4 and Tranche 5;

"Tranche 1"                                   means the portion of the  Facility  attributable  to the CORK SPIRIT to
                                              be made available by the Lenders  pursuant to Section 3.1 hereof to the
                                              Borrowers in one or more Advances;

"Tranche 2"                                   means the portion of the Facility  attributable to DONEGAL SPIRIT to be
                                              made  available  by the  Lenders  pursuant to Section 3.1 hereof to the
                                              Borrowers in one or more Advances;

"Tranche 3"                                   means the portion of the Facility  attributable  to LIMERICK  SPIRIT to
                                              be made available by the Lenders  pursuant to Section 3.1 hereof to the
                                              Borrowers in one or more Advances;

"Tranche 4"                                   means the portion of the Facility  attributable to SHANNON SPIRIT to be
                                              made  available  by the  Lenders  pursuant to Section 3.1 hereof to the
                                              Borrowers in one or more Advances;

"Tranche 5"                                   means the portion of the Facility  attributable  to GALWAY SPIRIT to be
                                              made  available  by the  Lenders  pursuant to Section 3.1 hereof to the
                                              Borrowers in one or more Advances;

"Transaction Document(s)"                     means  the  Security  Documents,   the  Head  Charters,   the  Building
                                              Contracts, the Time Charters and the Management Contracts; and

"Vessel(s)"                                   means any or all,  as the context  requires,  of the CORK  SPIRIT,  the
                                              DONEGAL SPIRIT,  the LIMERICK SPIRIT, the SHANNON SPIRIT and the GALWAY
                                              SPIRIT.
</pre>

<P>1.2&nbsp;&nbsp;&nbsp;<U>Computation of Time Periods; Other Definitional Provisions</U>.  In this Agreement, the Note and the
Security Documents, in the computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding"; words
importing either gender include the other gender; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible visible form; the words "including,"
"includes" and "include" shall be deemed to be followed by the words "without limitation"; references to
articles, sections (or subdivisions of sections), exhibits, annexes or schedules are to this Agreement, the
Note or such Security Document, as applicable; references to agreements and other contractual instruments
(including this Agreement, the Note and the Security Documents) shall be deemed to include all subsequent
amendments, amendments and restatements, supplements, extensions, replacements and other modifications to
such instruments (without, however, limiting any prohibition on any such amendments, extensions and other
modifications by the terms of this Agreement, the Note or any Security Document); references to any matter
that is "approved" or requires "approval" of a party shall mean approval given in the sole and absolute
discretion of such party unless otherwise specified.</P>

<P>1.3&nbsp;&nbsp;&nbsp;<U>Accounting Terms</U>.  Unless otherwise specified herein, all accounting terms used in this Agreement,
the Note and in the Security Documents shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Facility Agent or to the Lenders under
this Agreement shall be prepared, in accordance with generally accepted accounting principles for the United
States ("GAAP").</P>

<P>1.4&nbsp;&nbsp;&nbsp;<U>Certain Matters Regarding Materiality</U>.  To the extent that any representation, warranty, covenant or
other undertaking of the Borrower in this Agreement is qualified by reference to those which are not
reasonably expected to result in a "Material Adverse Effect" or language of similar import, no inference
shall be drawn therefrom that any Agent or Lender has knowledge or approves of any noncompliance by the
Borrower with any governmental rule.</P>

<P>1.5&nbsp;&nbsp;&nbsp;<U>Forms of Documents</U>.  Except as otherwise expressly provided in this Agreement, references to
documents or certificates "substantially in the form" of Exhibits to another document shall mean that such
documents or certificates are duly completed in the form of the related Exhibits with substantive changes
subject to the provisions of Section 17.6 of this Agreement, as the case may be, or the correlative
provisions of the Security Documents.</P>

<P>2.&nbsp;&nbsp;&nbsp;<U>REPRESENTATIONS AND WARRANTIES</U></P>

<P>2.1&nbsp;&nbsp;&nbsp;<U>Representations and Warranties</U>.  In order to induce the Agents and the Lenders to enter into this
Agreement and to induce the Lenders to make the Facility available, each of the Borrowers hereby represents
and warrants to the Agents and the Lenders (which representations and warranties shall survive the execution
and delivery of this Agreement and the Note and the drawdown of each Advance hereunder) that:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Due Organization and Power</U>.  each Security Party is duly formed and is validly existing in good
standing under the laws of its jurisdiction of incorporation or formation, has full power to carry on its
business as now being conducted and to enter into and perform its obligations under this Agreement, the Note
and the Security Documents to which it is a party, and has complied with all statutory, regulatory and other
requirements relative to such business and such agreements;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Authorization and Consents</U>.  all necessary corporate action has been taken to authorize, and all
necessary consents and authorities have been obtained and remain in full force and effect to permit, each
Security Party to enter into and perform its obligations under this Agreement, the Note and the Security
Documents and, in the case of each of the Borrowers, to borrow, service and repay the Advances and, as of the
date of this Agreement, no further consents or authorities are necessary for the service and repayment of the
Advances or any part thereof;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Binding Obligations</U>.  this Agreement, the Note and the Security Documents constitute or will, when
executed and delivered, constitute the legal, valid and binding obligations of each Security Party as is a
party thereto enforceable against such Security Party in accordance with their respective terms, except to
the extent that such enforcement may be limited by equitable principles, principles of public policy or
applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting generally the
enforcement of creditors' rights;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>No Violation</U>.  the execution and delivery of, and the performance of the provisions of, this
Agreement, the Note and those of the Security Documents to which it is to be a party by each Security Party
do not contravene any applicable law or regulation existing at the date hereof or any contractual restriction
binding on such Security Party or the certificate of incorporation or by-laws (or equivalent instruments)
thereof and that the Borrowers are each acting for their own account in connection with the performance of
their obligations under, and their entry into, this Agreement, the Note and the Security Documents to which
they are party and in borrowing of the Advances hereunder;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;<U>Litigation</U>.  no action, suit or proceeding is pending or threatened against any Security Party
thereof before any court, board of arbitration or administrative agency which could or might result in any
Material Adverse Effect;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;<U>No Default</U>.  neither the Guarantor nor any Borrower and, to the extent that it would have a Material
Adverse Effect, no other Security Party is in default under any material agreement by which it is bound, or
is in default in respect of any material financial commitment or obligation and no circumstances exist which
but for the passage of time or the giving of notice or both would constitute a default under any such
material agreement or in respect of any such material financial commitment or obligation;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;<U>Vessels</U>.  upon the date of the making of each Advance each of the Vessels being delivered in
connection with such Advance or having been theretofore delivered in connection with this Agreement:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;will be in the sole and absolute ownership of the respective Borrower as set forth in Schedule 2 and
duly registered in such Borrower's name under Bahamian flag, unencumbered, save and except for the Mortgage
recorded against it and as permitted thereby;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;will be classed in the highest classification and rating for vessels of the same age and type with
the respective Classification Society as set forth in Schedule 2 without any material outstanding
recommendations;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;will be operationally seaworthy and in every way fit for its intended service;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;will be insured in accordance with the provisions of the Mortgage recorded against it and the
requirements thereof in respect of such insurances will have been complied with; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;will be in compliance in all material respects with all relevant laws, regulations and requirements
(including Environmental Laws), statutory or otherwise, as are applicable to (A) vessels documented under
Bahamian flag and (B) vessels engaged in trade similar to that to be performed by the Vessel, except where
the failure to so comply would not have a material adverse effect on the operation of the Vessel in its
intended trade or the financial condition of the Borrowers;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;<U>Insurance</U>.  each Security Party has insured its properties and assets against such risks and in such
amounts as are customary for companies engaged in similar businesses;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;<U>Financial Information</U>.  except as otherwise disclosed in writing to the Facility Agent on or prior
to the date hereof, all information and other data furnished by the Guarantor and/or the Borrowers to the
Facility Agent are complete and correct, and the financial statements have been prepared in accordance with
GAAP and accurately and fairly present the financial condition of the parties covered thereby as of the
respective dates thereof and the results of the operations thereof for the period or respective periods
covered by such financial statements, and since the date of the Guarantor's financial statements most
recently delivered to the Facility Agent there has been no Material Adverse Effect as to any of such parties
and none thereof has any contingent obligations, liabilities for taxes or other outstanding financial
obligations which are material in the aggregate except as disclosed in such statements, information and data;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;<U>Tax Returns</U>.  each Security Party has filed all material tax returns required to be filed thereby
and has paid all taxes payable thereby which have become due, other than those not yet delinquent or the
nonpayment of which would not have a Material Adverse Effect on such Security Party and except for those
taxes being contested in good faith and by appropriate proceedings or other acts and for which adequate
reserves shall have been set aside on its books;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;<U>Records</U>. the records relating to the earnings and other receivables of each Security Party are , and
will continue to be, kept at Bentall 5 Center, Suite 2000, 550 Burrard Street, Vancouver, Canada;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;<U>Foreign Trade Control Regulations</U>.  to the best of each Security Party's knowledge, none of the
transactions contemplated herein will violate any of the provisions of the Foreign Assets Control Regulations
of the United States of America (Title 31, Code of Federal Regulations, Chapter V, Part 500, as amended), any
of the provisions of the Cuban Assets Control Regulations of the United States of America (Title 31, Code of
Federal Regulations, Chapter V, Part 515, as amended), any of the provisions of the Libyan Assets Control
Regulations of the United States of America (Title 31, Code of Federal Regulations, Chapter V, Part 550, as
amended), any of the provisions of the Iranian Transaction Regulations of the United States of America (Title
31, Code of Federal Regulations, Chapter V, Part 560, as amended), any of the provisions of the Iraqi
Sanctions Regulations (Title 31, Code of Federal Regulations, Chapter V, Part 575, as amended), any of the
provisions of the Federal Republic of Yugoslavia (Serbia and Montenegro) and Bosnia Serb-controlled areas of
the Republic of Bosnia and Herzegovina Assets Control Regulations (Title 31, Code of Federal Regulations,
Chapter V, Part 585 as amended) or any of the provisions of the Regulations of the United States of America
Governing Transactions in Foreign Shipping of Merchandise (Title 31, Code of Federal Regulations, Chapter V,
Part 505, as amended);</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;<U>Equity Ownership</U>.  each of the Borrowers is a wholly owned direct subsidiary of the Guarantor and
no Borrower has any subsidiaries;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;<U>Environmental Matters and Claims</U>.  (a) except as heretofore disclosed in writing to the Facility
Agent (i) each Security Party and each of its respective Environmental Affiliates will, when required to
operate their business as then being conducted, be in compliance with all applicable federal and state,
local, foreign and international laws, regulations, requirements, conventions and agreements relating to
pollution prevention or protection of human health or the environment (including, without limitation, ambient
air, surface water, ground water, navigable waters, waters of  the contiguous zone, ocean waters and
international waters), including, without limitation, laws, regulations, conventions and agreements relating
to (1) emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes,
toxic substances, hazardous materials, oil, hazardous substances, petroleum and petroleum products and
by-products ("Materials of Environmental Concern"), or (2) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Materials of Environmental Concern ("Environmental
Laws"); (ii) each Security Party and each of its respective Environmental Affiliates will, when required,
have all permits, licenses, approvals, rulings, variances, exemptions, clearances, consents or other
authorizations required under applicable Environmental Laws ("Environmental Approvals") and will, when
required, be in compliance with all Environmental Approvals required to operate their business as then being
conducted; (iii) neither any Security Party nor any Environmental Affiliate thereof has received any notice
of any claim, action, cause of action, investigation or demand by any person, entity, enterprise or
government, or any political subdivision, intergovernmental body or agency, department or instrumentality
thereof, alleging potential liability for, or a requirement to incur, material investigator costs, cleanup
costs, response and/or remedial costs (whether incurred by a governmental entity or otherwise), natural
resources damages, property damages, personal injuries, attorneys' fees and expenses, or fines or penalties,
in each case arising out of, based on or resulting from (1) the presence, or release or threat of release
into the environment, of any Materials of Environmental Concern at any location, whether or not owned by such
person, or (2) circumstances forming the basis of any violation, or alleged violation, of any Environmental
Law or Environmental Approval ("Environmental Claim") (other than Environmental Claims that have been fully
and finally adjudicated or otherwise determined and all fines, penalties and other costs, if any, payable by
the Security Parties in respect thereof have been paid in full or which are fully covered by insurance
(including permitted deductibles)); and (iv) there are no circumstances that may prevent or interfere with
such full compliance in the future; and (b) except as heretofore disclosed in writing to the Facility Agent
there is no Environmental Claim pending or threatened against any Security Party or any Environmental
Affiliate thereof and there are no past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge or disposal of any Materials of
Environmental Concern, that could form the basis of any Environmental Claim against such persons the adverse
disposition of which may result in a Material Adverse Effect;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;<U>Past Environmental Matters</U>.  to the best of each Security Party's knowledge, there are no past or
present actions, activities, circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge or disposal of any Materials of Environmental Concern, that could form the
basis of any Environmental Claim against any thereof;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;<U>Compliance with ISM Code</U>.  each Vessel complies or, when applicable, will comply and each Operator
complies with the requirements of the ISM Code including (but not limited to) the maintenance and renewal of
valid certificates pursuant thereto;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)&nbsp;&nbsp;<U>Threatened Withdrawal of DOC or SMC</U>.  there is no threatened or actual withdrawal of any Operator's
DOC or SMC in respect of any Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)&nbsp;&nbsp;<U>Liens</U>.  other than the liens created by the Security Documents (or permitted thereby) and as
otherwise disclosed on Schedule 3, there are no liens, charges or encumbrances of any kind whatsoever on (i)
any property owned by any Borrower or (ii) any property owned by any Security Party subject to a security
interest granted to the Security Agent under any Security Document;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)&nbsp;&nbsp;<U>Indebtedness</U>.  other than as disclosed in Schedule 3, no Borrower has any long-term Indebtedness and
has not entered into any negotiations with respect to any debt facilities other than those undertaken in
connection with this Agreement; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)&nbsp;&nbsp;<U>Compliance With Laws</U>.  each Security Party is in compliance with all material laws, and the rules
and regulations thereunder, applicable to it and its properties including, without limitation, those laws,
rule and regulations relating to employee benefit plans and environmental matters.</P>

<P>3.&nbsp;&nbsp;&nbsp;<U>THE ADVANCES</U></P>

<P>3.1&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Purpose</U>.  The Lenders shall make the Facility available to the Borrowers for the
purpose of partially financing the Delivered Costs of the Vessels.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Making of the Advances</U>.  Each of the Lenders, relying upon each of the representations and
warranties set out in Section 2, hereby severally and not jointly agrees with the Borrowers that, subject to
and upon the terms of this Agreement, it will on the Drawdown Dates make its portion of the relevant Advance
available through the Facility Agent to the Borrower in an amount not to exceed its Commitment ratably with
the other Lenders according to their respective Commitments.  During the Pre-Delivery Period, all Advances
shall be in amounts equal to or less than such amounts (singly or in the aggregate) identified as the third
and fourth pre-delivery installments for each Vessel, delivery installments or acquisition costs in relation
to the Vessels in the evidence provided to the Facility Agent pursuant to Section 4.2; provided, however,
that any such Advance which is less than the amounts identified as pre-delivery installments, delivery
installments or acquisition costs shall be in a minimum amount of One Million Dollars ($1,000,000) and in
multiples of One Million Dollars ($1,000,000).  The aggregate Advances for any Tranche shall not exceed the
lesser of: (i) 80% of the Delivered Cost with respect to the Vessel attributable to such Tranche, and (ii)
80% of the Fair Market Value of the Vessel attributable to such Tranche.  The Facility shall be repayable as
provided in Section 5.  The Lender's Commitments hereunder shall terminate on the earlier of (i) March 31,
2004 and (ii) the Delivery Date for the last delivered Vessel.</P>

<P>3.2&nbsp;&nbsp;&nbsp;<U>Drawdown Notice</U>.  The Borrowers shall, at least four (4) Banking Days before a Drawdown Date, serve
a notice (a "Drawdown Notice") substantially in the form of Exhibit O on the Facility Agent which notice
shall (a) be in writing addressed to the Facility Agent, (b) be effective on receipt by the Facility Agent,
(c) specify the amount of each Advance to be drawn and the Tranche to which such Advance corresponds,
(d) specify the Banking Day on which such Advance is to be drawn, (e) specify the Interest Period, (f) during
the Pre-Delivery Period, attach the shipyard invoice(s) or other applicable documents in respect of the
installments under the Building Contracts to which such Advance relates, which invoices or documents, as the
case may be, shall clearly identify the Building Contract and Vessel to which it relates, (g) specify the
disbursement instructions, and (h) be irrevocable.</P>

<P>3.3&nbsp;&nbsp;&nbsp;<U>Effect of Drawdown Notice</U>.  Such Drawdown Notice shall be deemed to constitute a warranty by each of
the Borrowers  (a) that the representations and warranties stated in Section 2 (updated mutatis mutandis) are
true and correct on and as of the date of such Drawdown Notice and will be true and correct on and as of the
relevant Drawdown Date as if made on such date, and (b) that no Event of Default nor any event which with the
giving of notice or lapse of time or both would constitute an Event of Default has occurred and is continuing.</P>

<P>3.4&nbsp;&nbsp;&nbsp;<U>Additional Notes</U>.  At the direction of the Facility Agent, the Borrowers shall duly execute and
deliver to a Lender a promissory note in favor of such Lender evidencing the portion of the Facility owing by
the Borrowers to such Lender pursuant to this Agreement; provided, however, that such note shall be deemed to
be part of the Note and shall not in any way increase the obligations of the Borrowers under this Agreement
or the Note.</P>

<P>3.5&nbsp;&nbsp;&nbsp;<U>Notation of Advances</U>.  Each Advance made by the Lenders to the Borrowers may be evidenced by a
notation of the same made by Facility Agent on the grid attached to the Note, which notation, absent manifest
error, shall be prima facie evidence of the amount of the relevant Advance.</P>

<P>4.&nbsp;&nbsp;&nbsp;<U>CONDITIONS</U></P>

<P>4.1&nbsp;&nbsp;&nbsp;<U>Conditions Precedent to the Effectiveness of this Agreement</U>.  The obligation of the Lenders to make
the Initial Advance  available to the Borrowers under this Agreement shall be expressly subject to the
following conditions precedent:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Corporate Authority</U>.  The Facility Agent shall have received the following documents in form and
substance satisfactory to the Facility Agent:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;copies, certified as true and complete by an officer of each Security Party, of the resolutions of
the board of directors or members, as the case may be, and, to the extent required by applicable law,
shareholders of such Security Party evidencing approval of this Agreement, the Note and the Transaction
Documents to which it is or is to be a party and authorizing an appropriate officer or officers or
attorney-in-fact or attorneys-in-fact to execute the same on its behalf, or other evidence of such approvals
and authorizations as shall be acceptable to the Lenders and their legal advisors;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;copies, certified as true and complete by an officer of each Security Party, of all documents
evidencing any other necessary action, approvals or consents (including such actions, approvals or consents
by parties thereto other than such Security Party as may be reasonably required by the Facility Agent) with
respect to this Agreement, the Note and the Transaction Documents to which it is a party;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;copies, certified as true and complete by an officer of each Security Party of the certificate of
incorporation and by-laws or, as applicable, the certificate of formation and limited liability company
agreement or equivalent instruments thereof;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;certificate of an officer of each Security Party (other than the Guarantor) certifying and
identifying the legal and beneficial owner of all authorized, issued and outstanding capital stock or limited
liability company interests, as the case may be, and that such capital stock is or such limited liability
company interests are free and clear of any liens, claims, pledges or other encumbrances whatsoever;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;certificates of the jurisdiction of incorporation, as the case may be, of each Security Party as to
the good standing thereof;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>The Agreement, the Note and Security Documents</U>.  Each of the Borrowers shall have delivered to the
Facility Agent copies of the following as duly executed by each party thereto (other than the Lenders or the
Agents):</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;this Agreement;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;the Note;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the Building Contract Assignment with respect to its Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;the Charter Assignment with respect to its Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;the Earnings Assignment with respect to its Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)&nbsp;&nbsp;&nbsp;the Insurances Assignment with respect to its Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)&nbsp;&nbsp;the Head Charter Assignment with respect to its Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)&nbsp;the Charter Guaranty Assignments;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)&nbsp;&nbsp;&nbsp;the Charter Guarantor Consent and Agreement;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)&nbsp;&nbsp;&nbsp;&nbsp;the Management Contract Assignments;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi)&nbsp;&nbsp;&nbsp;the Refund Guarantee Assignment with respect to its Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii)&nbsp;&nbsp;its Assignment Notices;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii)&nbsp;Uniform Commercial Code Financing Statements for filing with the District of Columbia and in such
other jurisdictions as the Facility Agent may reasonably require;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Guarantor Documents</U>.  The Guarantor shall have duly executed and delivered to the Facility Agent:
</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;the Guaranty; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp; the Pledge Agreement (together with the Pledged Shares relating to each of the Borrowers);</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Charterer Documents</U>.  The Charterer shall have duly executed and delivered the Charterer Consent and
Agreements and the Quiet Enjoyment Letter to the Facility Agent;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;<U>Charter Guarantor Documents</U>.  The Charter Guarantor shall have duly delivered the Charterer Consent
and Agreements to the Facility Agent;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;<U>Head Charterer Documents</U>.  The Head Charterer shall have executed and delivered to the Facility
Agent the Head Charterer Consent and Agreements and the Earnings Assignments;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;<U>Manager Documents</U>.  The Manager shall have executed and delivered to the Facility Agent the Manager
Consent and Agreements;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;<U>Builder Documents</U>.  The Facility Agent shall have received executed acknowledgements to the Building
Contract Assignments from the Builder and any issuer of a Refund Guarantee;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;<U>Environmental Claims</U>.  The Facility Agent shall be satisfied that neither the Guarantor, nor any
Borrower is subject to any Environmental Claim which could have a Material Adverse Effect;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;<U>Indebtedness</U>.  The Facility Agent shall have received evidence satisfactory to it that none of the
Borrowers has incurred any indebtedness of any kind whatsoever other than as contemplated hereby;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;<U>Fees</U>.  The Facility Agent shall have received payment in full of all fees and expenses then due to
the Agents and/or the Lenders under Section 13 and the Mandate Letter;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;<U>Balance Sheets</U>.  The Facility Agent having received pro forma balance sheets for each of the
Borrowers;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;<U>Building Contracts and Refund Guarantees etc</U>.  The Facility Agent having received copies of all
Building Contracts and each Refund Guarantee, each Management Contract and the Charter Guaranty, certified as
true and complete by an officer of the respective Borrower, which contracts shall be satisfactory to the
Facility Agent and its counsel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;<U>Charters</U>.  The Borrowers shall have delivered to the Facility Agent true and complete copies of each
of the Head Charters and each of the Time Charters; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;<U>Legal Opinions</U>.  The Facility Agent, on behalf of the Agents and the Lenders, shall have received
legal opinions addressed to the Facility Agent from (i)  Watson, Farley &amp; Williams, special counsel for the
Security Parties, (ii) Seward &amp; Kissel LLP, special counsel to the Agents and Lenders, and (iii) Higgs &amp;
Johnson, special Bahamian counsel to the Agents and Lenders, in each case in such form as the Facility Agent
may require, as well as such other legal opinions as the Facility Agent shall have required as to all or any
matters under the laws of the United States of America, the State of New York, the Commonwealth of The
Bahamas and the Republic of the Marshall Islands covering the representations and conditions which are the
subjects of Sections 2 and 4.1.</P>

<P>4.2&nbsp;&nbsp;&nbsp;<U>Conditions Precedent re Pre-Delivery Advances</U>.  The obligation of the Lenders to make any
Pre-Delivery Advance available to a Borrower under this Agreement shall be expressly and separately subject
to the condition precedent on the relevant Drawdown Date that the Facility Agent shall have received
satisfactory evidence that the first two pre-delivery installments with respect to the Vessel or Vessels to
which such Advance relates have been paid and that any Pre-Delivery Construction Expenses covered by such
Advance have been paid or are then due.</P>

<P>4.3&nbsp;&nbsp;&nbsp;<U>Conditions Precedent re Delivery Advances</U>.  The obligation of the Lenders to make any Delivery
Advance available to a Borrower under this Agreement shall be expressly and separately subject to the
following further conditions precedent on the relevant Drawdown Date:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>The Vessels</U>.  the Facility Agent shall have received evidence satisfactory to it that the Vessel to
which the Delivery Advance relates:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;is in the sole and absolute ownership of the relevant Borrower as set forth in Schedule 2 and duly
registered in such Borrower's name under Bahamian flag, unencumbered, save and except for the Mortgage,
recorded against it and as otherwise permitted thereby;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;is classed in the highest classification and rating for vessels of the same age and type with the
respective classification society as set forth in Schedule 2 without any material outstanding recommendations;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;is operationally seaworthy and in every way fit for its intended service;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;is insured in accordance with the provisions of the Mortgage (including the obtaining by the
Security Agent of mortgagee's interest additional perils (pollution) insurance) recorded against it and the
requirements thereof in respect of such insurances have been complied with and the Facility Agent shall have
received a report of its independent insurance advisors confirming same; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;is in compliance with all relevant laws, regulations and requirements (including Environmental
Laws), statutory or otherwise, as are applicable to (A) vessels documented under Bahamian flag and (B)
vessels engaged in trade similar to that to be performed by the Vessel, except where the failure to so comply
would not have a material adverse effect on the operation of the Vessel in its intended trade or the
financial condition of the Borrowers;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Mortgage Documents</U>.  the relevant Borrower shall have duly executed and delivered to the Facility
Agent the Mortgage over such Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Vessel Liens</U>.  the Facility Agent shall have received evidence satisfactory to it and to its legal
advisor that, save for the liens created by the Mortgages and the Assignments, there are no liens, charges or
encumbrances of any kind whatsoever on each of the Vessels owned by the Borrower or on their respective
earnings except as permitted hereby or by any of the Security Documents; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Legal Opinions</U>.  the Facility Agent, on behalf of the Agents and the Lenders, shall have received
legal opinions addressed to the Facility Agent from (i) Watson, Farley &amp; Williams counsel for the Security
Parties, (ii) Seward &amp; Kissel LLP, special counsel to the Agents and Lenders, and, to the extent applicable,
(iii) Higgs &amp; Johnson, special Bahamian counsel to the Agents and Lenders, in each case in such form as the
Facility Agent may require, as well as such other legal opinions as the Facility Agent shall have required as
to all or any matters under the laws of the United States of America, the State of New York, the Commonwealth
of The Bahamas and the Republic of the Marshall Islands covering the representations and conditions which are
the subjects of this Section 4.4.</P>

<P>4.4&nbsp;&nbsp;&nbsp;<U>Further Conditions Precedent</U>.  The obligation of the Lenders to make any Advance available under
this Agreement shall be expressly and separately subject to the following further  conditions precedent on
the relevant Drawdown Date:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Drawdown Notice</U>.  The Facility Agent having received a Drawdown Notice in accordance with the terms
of Section 3.2;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Representations and Warranties</U>.  The representations stated in Section 2  (updated mutatis mutandis
to such date) being true and correct as if made on and as of that date;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>No Event of Default</U>.  no Event of Default having occurred and being continuing and no event having
occurred and being continuing which, with the giving of notice or lapse of time, or both, would constitute an
Event of Default (including, without limitation, the Borrowers being in compliance with, if applicable,
Section 9.4 of this Agreement);</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>No Change in Laws</U>.  the Facility Agent being satisfied that no change in any applicable laws,
regulations, rules or in the interpretation thereof shall have occurred which make it unlawful for any
Security Party to make any payment as required under the terms of this Agreement, the Note, the Transaction
Documents or any of them; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;<U>No Material Adverse Effect</U>.  there having been no Material Adverse Effect since the date hereof.</P>

<P>4.5&nbsp;&nbsp;&nbsp;<U>Breakfunding Costs</U>.  In the event that, on the date specified for the making of an Advance in any
Drawdown Notice, the Lenders shall not be obliged under this Agreement to make such Advance available, each
of the Borrowers shall indemnify and hold the Lenders fully harmless against any losses which the Lenders (or
any thereof) may sustain as a result of borrowing or agreeing to borrow funds to meet the drawdown
requirement of such Drawdown Notice and the certificate of the relevant Lender or Lenders shall, absent
manifest error, be conclusive and binding on the Borrowers as to the extent of any such losses.</P>

<P>4.6&nbsp;&nbsp;&nbsp;<U>Satisfaction after Drawdown</U>.  Without prejudice to any of the other terms and conditions of this
Agreement, in the event the Lenders, in their sole discretion, make any Advance prior to the satisfaction of
all or any of the conditions referred to in Sections 4.1, 4.2, 4.3 or 4.4 the Borrower hereby covenants and
undertakes to satisfy or procure the satisfaction of such condition or conditions within fourteen (14) days
after the relevant Drawdown Date (or such longer period as the Lenders, in their sole discretion, may agree).</P>

<P>5.&nbsp;&nbsp;&nbsp;<U>REPAYMENT AND PREPAYMENT</U></P>

<P>5.1&nbsp;&nbsp;&nbsp;<U>Repayment</U>.  The Borrowers shall repay the principal amount of that portion of the Facility
attributable to each Tranche in twenty (20) consecutive installments commencing on the earlier of: (i) the
date occurring six (6) months after the Delivery Date for the last delivered Vessel or (ii) June 15, 2004;
the first nineteen (19) installments shall be paid semi-annually in arrears in an amount equal to
one-thirtieth (1/30th) of the aggregate amount drawndown with respect to such Tranche and the final and
twentieth (20th) installment shall be paid on the Final Payment Date with respect to such Tranche in the
amount necessary to repay the principal amount outstanding under such Tranche in full together with accrued
but unpaid interest thereon and any other amounts owing hereunder; provided, however, any installment which
would otherwise occur after the Final Payment Date with respect to any Tranche shall be deemed to be payable
on the Final Payment Date for such Tranche.</P>

<P>5.2&nbsp;&nbsp;&nbsp;<U>Voluntary Prepayment</U>.  The Borrowers may prepay, upon five (5) Banking Days' written notice, any
outstanding Advance or any portion thereof; provided, however, that any prepayment made on the last day of
the Interest Period with respect to such Advance shall be without penalty.  Each prepayment shall be in a
minimum amount of Five Million Dollars ($5,000,000) plus any One Million Dollars ($1,000,000) multiple
thereof or the full amount of the then outstanding Advances.</P>

<P>5.3&nbsp;&nbsp;&nbsp;<U>Mandatory Prepayment</U>.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Sale or Loss of Vessel</U>.  Upon (i) any sale of a Vessel and (ii) the earlier of (x) one hundred
eighty (180) days after the Total Loss of a Vessel or (y) the date on which the insurance proceeds in respect
of such loss are received by a Security Party or the Facility Agent as assignee thereof, the Tranche
attributable to such Vessel shall be prepaid.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Non-delivery of Vessel</U>. Upon the cancellation of a Building Contract by a Borrower or should a
Vessel not be delivered to the Borrower to be the Owner thereof by March 31, 2004, the Tranche attributable
to such Vessel shall be repaid upon such cancellation or March 31, 2004, as the case may be.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Charter Cancellation</U>.  Upon the cancellation of a Time Charter by the Charterer, the cancellation
penalty payment payable under such Time Charter shall be applied, in inverse order of maturity, to the
remaining scheduled repayment installments set forth in Section 5.1 with respect to the applicable Tranche.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Timing of Mandatory Prepayments</U>.   At the written request of the Borrowers, any prepayment required
to be made pursuant to this Section 5.3 may be paid to the Security Agent to be placed in an interest bearing
cash collateral account until the next Interest Payment Date or if earlier a date on which a prepayment could
occur without any break funding costs.  The Security Agent shall hold the funds in the cash collateral
account for the benefit of the Lenders, but any interest accrued on the account (which shall accrue at LIBOR
minus 0.25% per annum) less costs for minimum reserve requirements shall be credited to the Borrowers.  All
moneys (including accrued interest) held in the cash collateral account shall serve as collateral for the
prepayment(s) required under this Section 5.3 and shall be subject to a security interest in favor of the
Security Agent.</P>

<P>5.4&nbsp;&nbsp;&nbsp;<U>Interest and Costs with Prepayments/Application of Prepayments</U>.  Any prepayment of the Advances made
hereunder (including, without limitation, those made pursuant to Sections 5 and 9.4) shall be subject to the
condition that on the date of prepayment all accrued interest to the date of such prepayment shall be paid in
full with respect to the Advances or portions thereof being prepaid, together with any and all costs or
expenses incurred by any Lender in connection with any breaking of funding (as certified by such Lender,
which certification shall, absent any manifest error, be conclusive and binding on the Borrowers).  All
prepayments of Advances under Section 5.2 shall be applied towards the installments of the Advances on a pro
rata basis.  All prepayments of the Advances under Section 5.3 shall be applied towards the installments of
the Advances in the inverse order of their due dates for payment.  No payments made in prepayment or
repayment of the Facility shall be available for reborrowing.</P>
<BR>

<P>6.&nbsp;&nbsp;&nbsp;<U>INTEREST AND RATE</U></P>

<P>6.1&nbsp;&nbsp;&nbsp;<U>Applicable Rate</U>.  Each Advance shall bear interest at the Applicable Rate, which shall be the rate
per annum which is equal to the aggregate of (a) LIBOR for the relevant Interest Period plus (b) the
Applicable Margin.  The Applicable Rate shall be determined by the Facility Agent two (2) Banking Days prior
to the first (1st) day of the relevant Interest Period, provided, however, that the Applicable Margin shall
be adjusted, as applicable, (i) on a same-day basis to reflect changes in the Ratings of the Charter
Guarantor or Guarantor, as the case may be, or (ii) effective as of the first day of the fiscal quarter
immediately following the last fiscal quarter to which a Compliance Certificate relates to reflect changes in
the Guarantor's Total Debt to EBITDA ratio.  If the Applicable Margin is so adjusted during any Interest
Period, the Applicable Rate shall be re-calculated to reflect the then current Applicable Margin.  The
Facility Agent shall promptly notify the Borrowers in writing of the Applicable Rate as and when determined.
Each such determination, absent manifest error, shall be conclusive and binding upon the Borrowers.</P>

<P>6.2&nbsp;&nbsp;&nbsp;<U>Default Rate</U>.  Any amounts due under this Agreement, not paid when due, whether by acceleration or
otherwise, shall bear interest thereafter from the due date thereof until the date of payment at a rate per
annum equal to (i) the Applicable Rate plus (ii)  two percent (2%) (the "Default Rate").  In addition,
following the occurrence of any Event of Default, the Facility Agent may, and upon instruction of the
Majority Lenders shall, deliver a notice to the Borrowers advising the Borrowers that an Event of Default has
occurred.  From the date of any such notice, or in the case of the occurrence of an Event of Default of the
type described in Sections 8.1(a) or 8.1(b), from the date such Event of Default first occurred, until each
such Event of Default is cured to the satisfaction of the Majority Lenders, the Facility shall bear interest
at the Default Rate.</P>

<P>6.3&nbsp;&nbsp;&nbsp;<U>Interest Periods</U>.  The Borrower shall give the Facility Agent an Interest Notice specifying the
Interest Period selected by 11 a.m. New York time at least four (4) Banking Days prior to the end of any then
existing Interest Period.  If at the end of any then existing Interest Period the Borrower fails to give an
Interest Notice the relevant Interest Period shall be three (3) months.  The Borrower's right to select an
Interest Period shall be subject to the restriction that no selection of an Interest Period shall be
effective unless each Lender is satisfied that the necessary funds will be available to such Lender for such
period and that no Event of Default or event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default shall have occurred and be continuing.  Interest Periods for each
Advance made hereunder shall be consolidated at the earlier of (i) the end of the Interest Period immediately
following the Delivery Date for the last delivered Vessel and (ii) June 15, 2004.  The Borrowers shall
reimburse the Lenders for any and all costs or expenses incurred by any Lender in connection with any
breaking of funding (as certified by such Lender, which certification shall, absent any manifest error, be
conclusive and binding on the Borrowers) as a consequence of such consolidation or otherwise.</P>

<P>6.4&nbsp;&nbsp;&nbsp;<U>Interest Payments</U>.  Accrued interest on the Facility shall be payable in arrears on the last day of
each Interest Period, except that if the Borrower shall select an Interest Period in excess of three (3)
months, accrued interest shall be payable during such Interest Period on each three (3) month anniversary of
the commencement of such Interest Period and upon the end of such Interest Period.</P>

<P>7.&nbsp;&nbsp;&nbsp;<U>PAYMENTS</U></P>

<P>7.1&nbsp;&nbsp;&nbsp;<U>Place of Payments, No Set Off</U>.  All payments to be made hereunder by the Borrowers shall be made to
the Facility Agent, not later than the due date and by such time as is required for same day funds in New
York (any payment received after the time for same day funds in New York shall be deemed to have been paid on
the next Banking Day) on the due date of such payment, by remitting the same to the account of the Facility
Agent with HSBC Bank USA, Account No. 000.129.879 (ABA No. 021 001 088, SWIFT Address:  MRMDUS33) with
reference: Teekay USD180 Mio Loan project &#150; No. 3016851 or to such other account of the Facility Agent as the
Facility Agent may direct, without set-off or counterclaim and free from, clear of, and without deduction
for, any Taxes, provided, however, that if the Borrower shall at any time be compelled by law to withhold or
deduct any Taxes from any amounts payable to the Lenders hereunder, then the Borrowers shall pay such
additional amounts in Dollars as may be necessary in order that the net amounts received after withholding or
deduction shall equal the amounts which would have been received if such withholding or deduction were not
required and, in the event any withholding or deduction is made, whether for Taxes or otherwise, the
Borrowers shall promptly send to the Facility Agent such documentary evidence with respect to such
withholding or deduction as may be required from time to time by the Lenders.</P>

<P>7.2&nbsp;&nbsp;&nbsp;<U>Tax Credits</U>.  If any Lender obtains the benefit of a credit against the liability thereof for
federal income taxes imposed by any taxing authority for all or part of the Taxes as to which the Borrowers
have paid additional amounts as aforesaid, then such Lender shall pay an amount to the Borrowers which that
Lender determines will leave it (after such payment) in the same position as it would have been had the Tax
payment not been made by the Borrowers.  Each Lender agrees that in the event that Taxes are imposed on
account of the situs of its loans hereunder, such Lender, upon acquiring knowledge of such event, shall, if
commercially reasonable and if, in the opinion of that Lender, is not prejudicial to it, shift such loans on
its books to another office of such Lender so as to avoid the imposition of such Taxes.  Nothing contained in
this clause shall in any way prejudice the right of the Lenders to arrange their tax affairs in such way as
they, in their sole discretion, deem appropriate.  In particular, no Lender shall be required to obtain such
tax credit, if this interferes with the way such Lender normally deals with its tax affairs.</P>

<P>7.3&nbsp;&nbsp;&nbsp;<U>Sharing of Setoffs</U>.  Each Lender agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim or pursuant to a secured claim under Section 506 of the Federal
Bankruptcy Code or other security or interest arising from, or in lieu of, such secured claim, exercised or
received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any Advance or Advances as a result
of which its funded Commitment shall be proportionately less than the funded Commitment of any other Lender,
it shall be deemed simultaneously to have purchased from such other Lender at face value, and shall promptly
pay to such other Lender the purchase price for, a participation in the funded Commitment of such other
Lender so that the aggregate funded Commitment of each Lender shall be in the same proportion to the
aggregate funded Commitments then outstanding as its funded Commitment prior to such exercise of banker's
lien, setoff or counterclaim or other event was to the principal amount of all funded Commitments outstanding
prior to such exercise of banker's lien, setoff or counterclaim or other event; provided, however, that, if
any such purchase or purchases or adjustments shall be made pursuant to this Section 7.3 and the payment
giving rise thereto shall thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or adjustment restored without
interest.  Any Lender holding a participation in a funded Commitment deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with respect to any and all moneys owing
to such Lender by reason thereof as fully as if such Lender had made an Advance in the amount of such
participation.  Each of the Borrowers expressly consents to the foregoing arrangement.</P>

<P>7.4&nbsp;&nbsp;&nbsp;<U>Computations; Banking Days.</U>&nbsp;&nbsp;(a)&nbsp;&nbsp;All computations of interest and fees shall be made by the
Facility Agent or the Lenders, as the case may be, on the basis of a 360-day year, in each case for the
actual number of days (including the first day but excluding the last day) occurring in the period for which
interest or fees are payable.  Each determination by the Facility Agent or the Lenders of an interest rate or
fee hereunder shall be conclusive and binding for all purposes, absent manifest error.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;Whenever any payment hereunder or under the Note shall be stated to be due on a day other than a
Banking Day, such payment shall be due and payable on the next succeeding Banking Day unless the next
succeeding Banking Day falls in the following calendar month, in which case it shall be payable on the
immediately preceding Banking Day.</P>

<P>8.&nbsp;&nbsp;&nbsp;<U>EVENTS OF DEFAULT</U></P>

<P>8.1&nbsp;&nbsp;&nbsp;<U>Events of Default.</U>&nbsp;&nbsp;The occurrence of any of the following events shall be an Event of Default:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Non-Payment of Principal and Interest</U>.  any payment of principal or interest is not made when due; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Non-Payment of Other Amounts</U>.  any other amount becoming payable to the Facility Agent or any Lender
under this Agreement, under the Note or under any of the Security Documents is not paid on the due date or
date of demand (as the case may be), and such default continues unremedied for a period of three (3) Banking
Days; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Representations</U>.  any representation, warranty or other statement made by the Borrower in this
Agreement or by any Security Party or in any of the Security Documents or in any other instrument, document
or other agreement delivered in connection herewith or therewith proves to have been untrue or misleading in
any material respect as at the date as of which made or confirmed; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Mortgage and Security Documents</U>.  there is an event of default under any Mortgage or under any other
Security Document; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;<U>Covenants</U>.   any Security Party (i) defaults in the due and punctual observance or performance of
any covenant applicable to it contained in Section 9.1(b)(a), 9.2, 9.3, 9.4 or 9.5 or (ii) defaults in the
due and punctual observance or performance of any other term, covenant or agreement applicable to it
contained in this Agreement, in the Note, in any Security Document or in any other instrument, document or
other agreement delivered in connection herewith or therewith and, in the case of this clause (ii), such
default shall continue unremedied for a period of thirty (30) days after written notice to the Borrowers by
the Facility Agent or any of the Lenders; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;<U>Impossibility, Illegality</U>.  it becomes impossible or unlawful for any Security Party to fulfill any
of the covenants and obligations contained herein, under the Note or under any of the Security Documents, or
for any Lender to exercise any of the rights vested in it hereunder, under the Note or under any of the
Security Documents, and such impossibility or illegality in the opinion of the Majority Lenders will give
rise to a Material Adverse Effect; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;<U>Indebtedness</U>.  any Security Party shall default in the payment when due (subject to any applicable
grace period) of any Indebtedness or of any other indebtedness, in either case, in the outstanding principal
amount equal to or exceeding, with respect to any Security Party other than the Guarantor, Five Hundred
Thousand Dollars ($500,000) or, with respect to the Guarantor, Five Million Dollars ($5,000,000) or such
Indebtedness or indebtedness is, or by reason of such default is subject to being, accelerated or any party
becomes entitled to enforce the security for any such Indebtedness or indebtedness and such party shall take
steps to enforce the same, unless such default or enforcement is being contested in good faith and by
appropriate proceedings or other acts and the Security Party shall set aside on its books adequate reserves
with respect thereto; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;<U>Ownership of Borrowers, Head Charterer or Manager</U>.  the Guarantor shall cease to own, directly or
indirectly, one hundred percent (100%) of each of the Borrowers, the Head Charterer or the Manager; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;<U>Bankruptcy</U>.  any Security Party thereof commences any proceeding under any reorganization,
arrangement or readjustment of debt, dissolution, winding up, adjustment, composition, bankruptcy or
liquidation law or statute of any jurisdiction, whether now or hereafter in effect (a "Proceeding"), or there
is commenced against any thereof any Proceeding and such Proceeding remains undismissed or unstayed for a
period of thirty (30) days or any receiver, trustee, liquidator or sequestrator of, or for, any thereof or
any substantial portion of the property of any thereof is appointed and is not discharged within a period of
thirty (30) days or any thereof by any act indicates consent to or approval of or acquiescence in any
Proceeding or the appointment of any receiver, trustee, liquidator or sequestrator of, or for, itself or of,
or for, any substantial portion of its property; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;<U>Termination of Operations; Sale of Assets</U>.  except as expressly permitted under this Agreement, any
Security Party ceases its operations or any Borrower or the Guarantor sells or otherwise disposes of all or
substantially all of its assets (other than such a sale by one Security Party to another) or all or
substantially all of the assets of any Borrower or the Guarantor are seized or otherwise appropriated; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;<U>Judgments</U>.  any judgment or order is made the effect whereof would be to render ineffective or
invalid this Agreement, the Note or any of the Security Documents or any material provision thereof, or any
Security Party asserts that any such agreement or provision thereof is invalid unless (i) such judgment or
order is under appeal and (ii) enforcement of any such judgment is stayed pending appeal; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;<U>Inability to Pay Debts</U>.  any Security Party is unable to pay or admits its inability to pay its
debts as they fall due or a moratorium shall be declared in respect of any material indebtedness of any
Security Party; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;<U>Change in Financial Position</U>.  any change in the financial position of any Security Party which, in
the reasonable opinion of the Majority Lenders, shall have a Material Adverse Effect; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;<U>Change in Control</U>.  a Change of Control shall occur with respect to the Guarantor; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;<U>Cross-Default</U>.  any Security Party defaults under any other material contract or agreement to which
it is a party or by which it is bound (including, without limitation, any Time Charter) and such default is
not cured within any applicable cure period.</P>

<P>Upon and during the continuance of any Event of Default, the Lenders' obligation to make any Advance
available shall cease and the Facility Agent upon the instructions of the Majority Lenders shall, by notice
to the Borrowers, declare the entire unpaid balance of the then outstanding Advances, accrued interest and
any other sums payable by the Borrowers hereunder or under the Note due and payable, whereupon the same shall
forthwith be due and payable without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived; provided that upon the happening of an event specified in subsections (i) or (l) of
this Section 8.1 with respect to any Security Party, the outstanding Advances, accrued interest and other
sums payable by the Borrowers hereunder or under the Note shall be immediately due and payable without
declaration or other notice to the Borrowers.  In such event, the Lenders may proceed to protect and enforce
their rights by action at law, suit in equity or in admiralty or other appropriate proceeding, whether for
specific performance of any covenant contained in this Agreement, in the Note or in any Security Document, or
in aid of the exercise of any power granted herein or therein, or the Lenders may proceed to enforce the
payment of the Note or to enforce any other legal or equitable right of the Lenders, or proceed to take any
action authorized or permitted under the terms of any Security Document or by applicable law for the
collection of all sums due, or so declared due, on the Note.  Without limiting the foregoing, each of the
Borrowers agrees that during the continuance of any Event of Default each of the Lenders shall have the right
to appropriate and hold or apply (directly, by way of set-off or otherwise) to the payment of the obligations
of the Borrower to the Lenders hereunder and/or under the Note (whether or not then due) all moneys and other
amounts of the Borrowers then or thereafter in possession of any Lender, the balance of any deposit account
(demand or time, mature or unmatured) of the Borrowers then or thereafter with any Lender and every other
claim of the Borrowers then or thereafter against any of the Lenders.</P>

<P>8.2&nbsp;&nbsp;&nbsp;<U>Indemnification</U>.  Each of the Borrowers agrees to, and shall, indemnify and hold the Agents and the
Lenders harmless against any loss, as well as against any reasonable costs or expenses (including reasonable
legal fees and expenses), which any of the Agents or the Lenders sustains or incurs as a consequence of any
default in payment of the principal amount of the Facility, interest accrued thereon or any other amount
payable hereunder, under the Note or under any Security Documents including, but not limited to, all actual
losses incurred in liquidating or re-employing fixed deposits made by third parties or funds acquired to
effect or maintain the Facility or any portion thereof.  Any Lenders' certification of such costs and
expenses shall, absent any manifest error, be conclusive and binding on the Borrowers.</P>

<P>8.3&nbsp;&nbsp;&nbsp;<U>Application of Moneys</U>.  Except as otherwise provided in any Security Document, all moneys received
by the Agents or the Lenders under or pursuant to this Agreement, the Note or any of the Security Documents
after the happening of any Event of Default (unless cured to the satisfaction of the Majority Lenders) shall
be applied by the Facility Agent in the following manner:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;first,    in or towards the payment or reimbursement of any expenses or liabilities incurred by the
Agents, or the Lenders in connection with the ascertainment, protection or enforcement of their rights and
remedies hereunder, under the Note and under any of the Security Documents,</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;secondly,   in or towards payment of any interest owing in respect of the Facility,</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;thirdly,   in or towards repayment of principal of the Facility,</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;fourthly,   in or towards payment of all other sums which may be owing to the Agents, or any of
them, or the Lenders under this Agreement, under the Note, under the Mandate Letter or under any of the
Security Documents,</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;fifthly,   the surplus (if any) shall be paid to the Borrowers or to whosoever else may be entitled
thereto.</P>

<P>9.&nbsp;&nbsp;&nbsp;<U>COVENANTS</U></P>

<P>9.1&nbsp;&nbsp;&nbsp;<U>Affirmative Covenants</U>.  Each of the Borrowers hereby covenants and undertakes with the Lenders that,
from the date hereof and so long as any principal, interest or other moneys are owing in respect of this
Agreement, under the Note or under any of the Security Documents, each of the Borrowers will, and will
procure that the Guarantor, to the extent applicable, will:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Performance of Agreements</U>.  duly perform and observe, and procure the observance and performance by
all other parties thereto (other than the Agents and the Lenders) of, the terms of this Agreement, the Note
and the Security Documents and cause the Vessels to be constructed in accordance with the terms of the
Building Contracts;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Notice of Default, etc.</U>  promptly upon obtaining knowledge thereof, inform the Facility Agent of the
occurrence of (a) any Event of Default or of any event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, (b) any litigation or governmental proceeding pending or
threatened against it or against any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, (c) the withdrawal of any Vessel's classification or rating by its Classification
Society or the issuance by the Classification Society of any material recommendation or notation affecting
class and (d) any other event or condition which is reasonably likely to have a Material Adverse Effect;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Obtain Consents</U>.  without prejudice to Section 2.1 and this Section 9.1, obtain every consent and do
all other acts and things which may from time to time be necessary or advisable for the continued due
performance of all its and the other Security Parties' respective obligations under this Agreement, under the
Note and under the Security Documents;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Financial Information</U>.  deliver to the Facility Agent:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;as soon as available but not later than one hundred twenty (120) days after the end of each fiscal
year of the Guarantor, complete copies (certified to be true and complete by the chief financial officer of
the Guarantor) of the consolidated annual audited financial statements of the Guarantor, as certified by an
Acceptable Accounting Firm, and unconsolidated and unaudited financial statements of each of the Borrowers
together with a Compliance Certificate, all in reasonable detail, which shall include at least the
consolidated balance sheet of the Guarantor and the Borrowers as of the end of such year and the related
consolidated statements of income and sources and uses of funds for such year;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;as soon as available but not later than forty-five (45) days after the end of each of the first
three quarters of each fiscal year of the Guarantor, quarterly interim consolidated balance sheets of the
Guarantor and each of the Borrowers and the related profit and loss statements and sources and uses of funds
which are, in the case of the Guarantors to be consolidated together with a Compliance Certificate, all in
reasonable detail, unaudited, but certified to be fairly presented by the chief financial officer of the
Guarantor;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;promptly upon the mailing thereof to the shareholders of the Guarantor, copies of all financial
statements, reports, proxy statements and other communications provided to the Guarantor's shareholders;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;within ten (10) days of the filing thereof, copies of all registration statements and reports on
Forms 20-F and 6-K (or their equivalents) and other material filings which the Guarantor shall have filed
with the United States Securities and Exchange Commission or any similar governmental authority;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;such other statements (including, without limitation, annual projections), reports and other
financial information with respect to its business as the Facility Agent (or any Lender through the Facility
Agent) may from time to time reasonably request;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;<U>Corporate Existence</U>.  do or cause to be done, and procure that each Security Party shall do or cause
to be done, all things necessary to preserve and keep in full force and effect its corporate or limited
liability company, as the case may be, existence and all licenses, franchises, permits and assets necessary
to the conduct of its business;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;<U>Maintenance of Assets</U>.  maintain and keep all properties used or useful in the conduct of its
respective business in good condition, repair and working order (ordinary wear and tear excepted) and
supplied with all necessary equipment and will make, or cause to be made, all necessary repairs, renewals and
replacements thereof so that the business carried on in connection therewith and every material portion
thereof may be properly conducted at all times except where the failure to do so would not be reasonably
likely to result in a Material Adverse Change;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;<U>Books and Records</U>.  at all times keep, and cause the Guarantor to keep, proper books of record and
account into which full and correct entries shall be made in accordance with GAAP;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;<U>Taxes and Assessments</U>.  pay and discharge, and cause each other Security Party to pay and discharge,
all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or
property prior to the date upon which penalties attach thereto; provided, however, that it shall not be
required to pay and discharge, or cause to be paid and discharged, any such tax, assessment, charge or levy
so long as the legality thereof shall be contested in good faith and by appropriate proceedings or other acts
and it shall set aside on its books adequate reserves with respect thereto;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;<U>Inspection</U>.  allow, and cause the Guarantor and the Head Charterer to allow, any representative or
representatives designated by the Facility Agent or the Security Agent, subject to applicable laws and
regulations, to visit and inspect any of its properties (including, without limitation, the Vessels;
provided, however, that any such inspection of the Vessels shall be without undue interference with the
operation of the Vessels and the first inspection of each Vessel in any calendar year shall be at the
Borrowers' cost), and, on request, to examine its books of account, records, reports and other papers
(including all class records and all inspection or survey reports on the Vessels) and to discuss its affairs,
finances and accounts with its officers, all at such reasonable times and as often as the Facility Agent
reasonably requests;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;<U>Compliance with Statutes, Agreements, etc.</U>  do or cause to be done, and cause each other Security
Party to do and cause to be done, all things necessary to comply with all material contracts or agreements to
which it, or any other Security Party is a party, and all material laws, and the rules and regulations
thereunder, applicable to any Security Party, including, without limitation, those laws, rules and
regulations relating to employee benefit plans and environmental matters;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;<U>Environmental Matters</U>.  promptly upon the occurrence of any of the following conditions, provide to
the Facility Agent a statement of an officer thereof having actual knowledge of any such condition,
specifying in detail the nature of such condition and its proposed response or the response of its
Environmental Affiliates:  (a) its receipt or the receipt by any other Security Party or any Environmental
Affiliates of such Borrower or any other Security Party of any written communication whatsoever that alleges
that such person is not in compliance with any applicable Environmental Law or Environmental Approval, if
such noncompliance could reasonably be expected to have a Material Adverse Effect, (b) knowledge by it, or by
any other Security Party or any Environmental Affiliates of such Borrower or any other Security Party that
there exists any Environmental Claim pending or threatened against any such person, which could reasonably be
expected to have a Material Adverse Effect, or (c) any release, emission, discharge or disposal of any
material that could form the basis of any Environmental Claim against it, any other Security Party or against
any Environmental Affiliates of such Borrower or any other Security Party, if such Environmental Claim could
reasonably be expected to have a Material Adverse Effect.  Upon the written request by the Facility Agent, it
will submit to the Facility Agent at reasonable intervals, a report providing an update of the status of any
issue or claim identified in any notice or certificate required pursuant to this subsection;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;<U>Brokerage Commissions, etc.</U>  indemnify and hold each of the Agents and the Lenders harmless from any
claim for any brokerage commission, fee, or compensation from any broker or third party resulting from the
transactions contemplated hereby;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;<U>Insurance</U>.  maintain, and cause each other Security Party to maintain, with financially sound and
reputable insurance companies insurance on all their respective properties and against all such risks and in
at least such amounts as are usually insured against by companies of established reputation engaged in the
same or similar business from time to time (including, without limitation, mortgagee's interest insurance
additional perils (pollution) to be taken out by such mortgagee with costs to be born by the Borrowers);</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;<U>ISM Code Matters</U>.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;procure that the relevant Operator will comply with and ensure that each Vessel will comply with the
requirements of the ISM Code in accordance with the implementation schedule thereof, including (but not
limited to) the maintenance and renewal of valid certificates pursuant thereto throughout the duration of
this Agreement;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;procure that any Operator will immediately inform the Facility Agent if there is any threatened or
actual withdrawal of its DOC or the SMC in respect of any Vessel; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;procure that the relevant Operator will promptly inform the Facility Agent upon the issue to the
relevant Borrower or Operator of a DOC and to any Vessel of an SMC;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;<U>Vessel Classification</U>.  do or cause to be done all things necessary to ensure that each of the
Vessels is classed in the highest classification and rating for vessels of the same age and type with the
respective Classification Society as set forth in Schedule 2 without any material outstanding
recommendations; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;<U>Charterer and Charter Guarantor Information</U>.  deliver to the Lenders all financial information of
the Charterer or the Charter Guarantor available to any Security Party as the Facility Agent may from time to
time reasonably request.</P>

<P>9.2&nbsp;&nbsp;&nbsp;<U>Negative Covenants</U>.  Each of the Borrowers hereby covenants and undertakes with the Lenders that,
from the date hereof and so long as any principal, interest or other moneys are owing in respect of this
Agreement, under the Note or under any of the Security Documents, each of the Borrowers will not, without the
prior written consent of the Majority Lenders (or all of the Lenders if required by Section 15.8):</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Liens</U>.  create, assume or permit to exist, any mortgage, pledge, lien, charge, encumbrance or any
security interest whatsoever upon any Collateral or other property except:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;liens disclosed in Schedule 3;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;liens for taxes not yet payable for which adequate reserves have been maintained;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;the Mortgages, the Assignments  and other liens in favor of the Security Agent;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)&nbsp;&nbsp;&nbsp;liens, charges and encumbrances against their respective Vessels permitted to exist under the terms
of the Mortgages; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)&nbsp;&nbsp;&nbsp;&nbsp;other liens, charges and encumbrances incidental to the conduct of the business of each such party,
the ownership of any such party's property and assets and which do not in the aggregate materially detract
from the value of each such party's property or assets or materially impair the use thereof in the operation
of its business;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>Change in Business</U>.  and will procure that no Security Party will materially change the nature of
its business;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Sale or Pledge of Shares</U>.  sell, assign, transfer, pledge or otherwise convey or dispose of any of
the shares (including by way of spin-off, installment sale or otherwise) of the capital stock, or limited
liability company interests, as the case may be, of any Borrower other than as may be allowed in accordance
with the Pledge Agreement;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Sale of Assets</U>.  sell, or otherwise dispose of, any Vessel (unless otherwise in accordance with this
Agreement) or, with respect to the Guarantor, will procure that the Guarantor shall not sell or otherwise
dispose of all or substantially all of its assets other than such sales to another Security Party;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;<U>Changes in Offices or Names</U>.  and will procure that no Security Party shall change the location of
the chief executive office of any Security Party, the office of the chief place of business of any such
parties, the office of the Security Parties in which the records relating to the earnings or insurances of
the Vessels are kept unless the Lenders shall have received thirty (30) days prior written notice of such
change;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;<U>Consolidation and Merger</U>.   and will procure that no Security Party will consolidate with, or merge
into, any corporation or other entity, or merge any corporation or other entity into it; provided, however
that any Security Party shall be permitted to merge into or consolidate with any other Security Party and the
Guarantor shall be permitted to consolidate with any other entity so long as the Guarantor is the surviving
entity, in each case so long as no Event of Default would result therefrom and each such party's respective
obligations hereunder or under any Security Document are not otherwise affected;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;&nbsp;<U>Change of Flag or Classification Society</U>.  change the flag, class or Classification Society of any
Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;&nbsp;<U>Capital Expenditures</U>.  make any investment or material capital expenditures, excluding expenditures
for dry-docking and repairs for the Vessels;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;<U>Change of Vessel Management</U>.  change the Operator or otherwise change the technical or commercial
management of any Vessel;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;&nbsp;<U>Use of Corporate Funds</U>.  permit any Borrower to pay out any funds to any company or person except
(i) in the ordinary course of business in connection with the management of the business of such Borrower,
including the operation and/or repair of the Vessels and other vessels owned or operated by such parties and
(ii) the servicing of the Indebtedness permitted hereunder (but excluding, any prepayments of any
Indebtedness other than the Facility);</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;&nbsp;<U>Issuance of Shares</U>.  permit any Security Party (other than the Guarantor) to issue or dispose of any
shares of its own capital stock or limited liability company interests, as the case may be, to any Person;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;&nbsp;<U>Transactions with Affiliates</U>.  enter into any transactions with any Affiliate unless on an arm's
length basis;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;&nbsp;<U>Indebtedness</U>.  incur any Indebtedness excluding Indebtedness hereunder to the Agents or the Lenders
and any Indebtedness existing (or for which a written commitment has been made on or before the date hereof)
on the date hereof;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;&nbsp;<U>No Money Laundering</U>.  in connection with this Agreement or any of the Security Documents, contravene
or permit any Security Party to contravene any law, official requirement or other regulatory measure or
procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of
the Council of the European Communities);</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;&nbsp;<U>Material Contract</U>.  amend or permit the amendment of any material provision of the Head Charters,
Building Contracts, Refund Guarantees or the Management Contracts; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)&nbsp;&nbsp;<U>Domicile</U>.  change the domicile or jurisdiction of organization of any Security Party;</P>

<P><U>provided</U>, <U>however</U>, that with respect to subsections 9.2(g), 9.2(i) and 9.2(p), the consent of the Lenders
shall not be unreasonably withheld.</P>

<P>9.3&nbsp;&nbsp;&nbsp;<U>Financial Covenant</U>.  Each of the Borrowers hereby covenants and undertakes with the Lenders that,
from the date hereof and so long as any principal, interest or other moneys are owing in respect of this
Agreement, under the Note or under any of the Security Documents, the Borrowers will procure that the
Guarantor will maintain at all times on a consolidated basis Cash and Cash Equivalents and Marketable
Securities in amount not less than the greater of (i) Seventy-Five Million Dollars ($75,000,000) and (ii)
7.5% of the Guarantor's Total Debt.</P>

<P>9.4&nbsp;&nbsp;&nbsp;<U>Asset Maintenance</U>.  If at any time during the term of this Agreement  (i) the Charter Guarantor's
Rating is below BBB- for S&amp;Por Baa3 for Moody's, or (ii) the Guarantor's Rating is below BB- for S&amp;Por Ba3
for Moody's, or (iii) no Rating is available for the Guarantor, each of the Borrowers shall ensure that the
Fair Market Value of its Vessel is more than one hundred thirty percent (130%) (the "Required Percentage") of
the outstanding principal amount of the Tranche attributable to such Vessel.  If at any time an event
described in the first sentence of this Section 9.4 shall occur and the Fair Market Value of any Vessel is
less than the Required Percentage of the relevant Tranche, the Borrowers shall within a period of thirty (30)
days following receipt by the Borrowers of written notice from the Facility Agent notifying the Borrowers of
such shortfall and specifying the amount thereof (which amount shall, in the absence of manifest error, be
deemed to be conclusive and binding on the Borrowers), either (x) deliver to the Security Agent, upon the
Facility Agent's request, such additional collateral as may be satisfactory to the Lenders in their sole
discretion of sufficient value to restore compliance with the Required Percentage or (y) the Borrowers shall
prepay such amount of the Facility (together with interest thereon and any other monies payable in respect of
such prepayment pursuant to Section 5.4) as shall result in the Fair Market Value of the Vessels then
mortgaged to the Security Agent being not less than the Required Percentage.  The Borrowers jointly and
severally agree to reimburse the Agent for the costs of any appraisals obtained thereby in order to determine
the Fair Market Value of the Vessels for purposes of this Section 9.4; <U>provided</U>, <U>however</U>, that the Borrowers
shall not be required to reimburse the Agent for more than two such appraisals per annum if no Event of
Default has occurred.</P>

<P>9.5&nbsp;&nbsp;&nbsp;<U>Charter Cancellation</U>. In the event of a cancellation or termination of a Time Charter for any reason
whatsoever, the relevant Borrower and the Guarantor shall have the option to pursue one of the following
courses of action:  within thirty (30) days of such cancellation/termination, (i) granting the Security
Agent, on behalf of the Lenders, a security interest in a replacement charter with a party of the same
creditworthiness as the Charter Guarantor as evidenced by the Rating thereof, and with similar terms and
conditions as the cancelled/terminated Time Charter and otherwise in form and substance acceptable to the
Majority Lenders in their reasonable discretion, (ii) prepaying the Tranche attributable to the relevant
Vessel, in which case the Lenders shall release the relevant Security Documents with respect to the relevant
Vessel, failing satisfaction of either (i) or (ii) above, such Tranche shall be covered by the Guaranty (as
provided therein) and the Borrowers shall ensure that the Fair Market Value of the relevant Vessel is at
least equal to the Required Percentage of its respective Tranche or otherwise comply with the provisions of
Section 9.4(x) or 9.4(y).</P>

<P>10.&nbsp;&nbsp;&nbsp;<U>ASSIGNMENT</U>.  This Agreement shall be binding upon, and inure to the benefit of, the Borrowers, the
Lenders, the Agents and their respective successors and assigns, except that no Borrower may assign any of
its rights or obligations hereunder.  Each Lender having a Commitment aggregating at least $10,000,000
(unless otherwise agreed by the Borrowers, the Guarantor and the Facility Agent) shall be entitled to assign
its rights and obligations under this Agreement or grant participation(s) in the Facility to any subsidiary,
holding company or other affiliate of such Lender, to any subsidiary or other affiliate company of any
thereof or to any other bank or financial institution (in a minimum amount of not less than $5,000,000), and
such Lender shall forthwith give notice of any such assignment or participation to the Borrower and pay the
Facility Agent an assignment fee of $1,500 for each such assignment or participation; provided, however, that
any such assignment must be made pursuant to an Assignment and Assumption Agreement.  Each of the Borrowers
will take all reasonable actions requested by the Agents or any Lender to effect such assignment, including,
without limitation, the execution of a written consent to any Assignment and Assumption Agreement.</P>

<P>11.&nbsp;&nbsp;&nbsp;<U>ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.</U></P>

<P>11.1&nbsp;&nbsp;&nbsp;<U>Illegality</U>.  In the event that by reason of any change in any applicable law, regulation or
regulatory requirement or in the interpretation thereof, a Lender has a reasonable basis to conclude that it
has become unlawful for any Lender to maintain or give effect to its obligations as contemplated by this
Agreement, such Lender shall inform the Facility Agent and the Borrowers to that effect, whereafter the
liability of such Lender to make its Commitment available shall forthwith cease and the Borrowers shall be
required either to repay immediately to such Lender that portion of the Facility advanced by such Lender or,
if such Lender so agrees, to repay such portion of the Facility to such Lender on the last day of any then
current Interest Period in accordance with and subject to the provisions of Section 11.5.  In any such event,
but without prejudice to the aforesaid obligations of the Borrowers to repay such portion of the Facility,
the Borrowers and the relevant Lender shall negotiate in good faith with a view to agreeing on terms for
making such portion of the Facility available from another jurisdiction or otherwise restructuring such
portion of the Facility on a basis which is not unlawful.</P>

<P>11.2&nbsp;&nbsp;&nbsp;<U>Increased Costs</U>.   If any change in applicable law, regulation or regulatory requirement, or in the
interpretation or application thereof by any governmental or other authority, shall:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;subject any Lender to any Taxes with respect to its income from the Facility, or any part thereof, or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;change the basis of taxation to any Lender of payments of principal  or interest or any other  payment
due  or to  become  due  pursuant  to  this  Agreement  (other  than a  change  in the  basis  effected  by the
jurisdiction  of  organization  of such Lender,  the  jurisdiction  of the principal  place of business of such
Lender,  the United States of America,  the State or City of New York or any governmental  subdivision or other
taxing authority having  jurisdiction  over such Lender (unless such  jurisdiction is asserted by reason of the
activities of any Security Party) or such other jurisdiction where the Facility may be payable), or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;impose,  modify or deem  applicable  any  reserve  requirements  or require  the making of any special
deposits  against or in respect of any assets or liabilities  of, deposits with or for the account of, or loans
by, a Lender, or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;impose on any Lender any other  condition  affecting the Facility or any part thereof,  and the result
of the  foregoing  is either  to  increase  the cost to such  Lender of making  available  or  maintaining  its
Commitment  or any part  thereof or to reduce the amount of any payment  received by such  Lender,  then and in
any such case if such increase or reduction in the opinion of such Lender  materially  affects the interests of
such Lender under or in connection with this Agreement, or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;&nbsp;the Lender shall notify the Facility Agent and the Borrowers of the happening of such event, or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;&nbsp;each of the Borrowers  agrees  forthwith  upon demand to pay to such Lender such amount as such Lender
certifies to be necessary to  compensate  such Lender for such  additional  cost or such  reduction;  PROVIDED,
however,  that the  foregoing  provisions  shall not be  applicable  in the event that  increased  costs to the
Lender  result  solely from the exercise by the Lender of its right to assign its rights or  obligations  under
Section 10.</P>

<P>11.3&nbsp;&nbsp;&nbsp;<U>Replacement of Lender or Participant</U>.  If the obligation of any Lender to make its pro rata share of
any Advance has been suspended or terminated pursuant to Section 11.1, or if any Lender shall notify the
Borrower of the happening of any event leading to increased costs as described in Section 11.2, the Borrower
shall have the right, upon twenty (20) Banking Days' prior written notice to such Lender, to cause one or
more banks (a "Replacement Lender(s)") (which may be one or more of the Lenders), each such Replacement
Lender to be satisfactory to the Majority Lenders (determined for this purpose as if such transferor Lender
had no Commitment and held no interest in the Note issued to it hereunder) and, in each case, with the
written acknowledgment of the Facility Agent, to purchase such Lender's pro rata share of the Advances and
assume the Commitment of such Lender pursuant to an Assignment and Assumption Agreement.  If one or more such
banks are identified by the Borrower and approved as being reasonably satisfactory to the Majority Lenders
(determined as provided above), the transferor Lender shall consent to such sale and assumption by executing
and delivering an Assignment and Assumption Agreement.  Upon execution and delivery of an Assignment and
Assumption Agreement by the Borrower, the transferor Lender, the Replacement Lender and the Facility Agent,
and payment by the Replacement Lender to the transferor Lender of an amount equal to the purchase price
agreed between such transferor Lender and such Replacement Lender, such Replacement Lender shall become a
Lender party to this Agreement (if it is not already a party hereto as applicable) and shall have all the
rights and obligations of a Lender with a Commitment (which, if such Replacement Lender is already a party
hereto, shall take into account such Replacement Lender's then existing Commitment hereunder) as set forth in
such Assignment and Assumption Agreement and the transferor Lender shall be released from its obligations
hereunder and no further consent or action by any other Person shall be required.  In the event no
Replacement Lender is found or is satisfactory to the Majority Lenders, the Borrower shall have the right to
request a permanent reduction of the Facility by reducing the whole of such Lender's commitment, provided
that (a) the Facility Agent and the Lender's whose Commitment the Borrower seeks to reduce receive ten (10)
Banking Days prior written notice of such request and (b) such reduction occurs on the last day of the
applicable Interest Period(s) for Advances (or portions thereof) outstanding under this Agreement. Upon such
reduction, the reduced Lender shall be released from its obligations hereunder and no further action by any
Person shall be required and the new participation percentages (as designated in Schedule 1 hereto) shall be
assigned to the remaining Lenders on a pro rata basis based on their respective Commitments.  In the event
that the Facility Agent, in its capacity as a Lender, is required to sell its pro rata share of the Advances
and its Commitment hereunder pursuant to this Section 11.3, the Facility Agent shall, promptly upon the
consummation of any assignment pursuant to this Section 11.3, resign as Facility Agent hereunder and the
Borrowers shall (subject to the consent of the Majority Lenders) have the right to appoint another Agent as
successor Facility Agent, all in accordance with Section 15.13.</P>

<P>11.4&nbsp;&nbsp;&nbsp;<U>Nonavailability of Funds</U>.  If the Facility Agent shall determine that, by reason of circumstances
affecting the London Interbank Market generally, adequate and reasonable means do not or will not exist for
ascertaining the Applicable Rate for the Facility for any Interest Period, the Facility Agent shall give
notice of such determination to the Borrowers.  The Borrowers, the Facility Agent and the Lenders shall then
negotiate in good faith in order to agree upon a mutually satisfactory interest rate and/or Interest Period
to be substituted for those which would otherwise have applied under this Agreement.  If the Borrowers, the
Facility Agent and the Lenders are unable to agree upon such a substituted interest rate and/or Interest
Period within thirty (30) days of the giving of such determination notice, the Facility Agent shall set an
interest rate and Interest Period to take effect from the expiration of the Interest Period in effect at the
date of determination, which rate shall be equal to the Applicable Margin plus the cost to the Lenders (as
certified by each Lender) of funding the Facility.  In the event the state of affairs referred to in this
Section 11.3 shall extend beyond the end of the Interest Period, the foregoing procedure shall continue to
apply until circumstances are such that the Applicable Rate may be determined pursuant to Section 6.</P>

<P>11.5&nbsp;&nbsp;&nbsp;<U>Lender's Certificate Conclusive</U>.  A certificate or determination notice of any Lender as to any of
the matters referred to in this Section 11 shall, absent manifest error, be conclusive and binding on the
Borrowers.</P>

<P>11.6&nbsp;&nbsp;&nbsp;<U>Compensation for Losses</U>.  Where the Facility or any portion thereof is to be repaid by the Borrowers
pursuant to this Section 11, the Borrowers agree simultaneously with such repayment to pay to the relevant
Lender all accrued interest to the date of actual payment on the amount repaid and all other sums then
payable by the Borrowers to the relevant Lender pursuant to this Agreement, together with such amounts as may
be certified by the relevant Lender to be necessary to compensate such Lender for any actual loss, premium or
penalties incurred or to be incurred thereby on account of funds borrowed to make, fund or maintain its
Commitment or such portion thereof for the remainder (if any) of the then current Interest Period or Interest
Periods, if any, but otherwise without penalty or premium.</P>

<P>12.&nbsp;&nbsp;&nbsp;<U>CURRENCY INDEMNITY</U></P>

<P>12.1&nbsp;&nbsp;&nbsp;<U>Currency Conversion</U>.  If for the purpose of obtaining or enforcing a judgment in any court in any
country it becomes necessary to convert into any other currency (the "judgment currency") an amount due in
Dollars under this Agreement, the Note or any of the Security Documents then the conversion shall be made, in
the discretion of the Facility Agent, at the rate of exchange prevailing either on the date of default or on
the day before the day on which the judgment is given or the order for enforcement is made, as the case may
be (the "conversion date"), provided that the Facility Agent shall not be entitled to recover under this
section any amount in the judgment currency which exceeds at the conversion date the amount in Dollars due
under this Agreement, the Note, and/or any of the Security Documents.</P>

<P>12.2&nbsp;&nbsp;&nbsp;<U>Change in Exchange Rate</U>.  If there is a change in the rate of exchange prevailing between the
conversion date and the date of actual payment of the amount due, the Borrowers shall pay such additional
amounts (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount paid in
the judgment currency when converted at the rate of exchange prevailing on the date of payment will produce
the amount then due under this Agreement, the Note and/or any of the Security Documents in Dollars; any
excess over the amount due received or collected by the Lenders shall be remitted to the Borrowers.</P>

<P>12.3&nbsp;&nbsp;&nbsp;<U>Additional Debt Due</U>.  Any amount due from the Borrowers under this Section 12 shall be due as a
separate debt and shall not be affected by judgment being obtained for any other sums due under or in respect
of this Agreement, the Note and/or any of the Security Documents.</P>

<P>12.4&nbsp;&nbsp;&nbsp;<U>Rate of Exchange</U>.  The term "rate of exchange" in this Section 12 means the rate at which the
Facility Agent in accordance with its normal practices is able on the relevant date to purchase Dollars with
the judgment currency and includes any premium and costs of exchange payable in connection with such purchase.</P>

<P>13.&nbsp;&nbsp;&nbsp;<U>FEES AND EXPENSES</U></P>

<P>13.1&nbsp;&nbsp;&nbsp;<U>Fees</U>.  The Borrower shall pay to the Facility Agent on behalf of the Lenders quarterly in arrears
from the date hereof until the earlier of the last Drawdown Date hereunder and March 31, 2004 a commitment
fee on the average undrawn portion of the Facility equal to four-tenths percent (.40%) per annum. The
Borrower shall also pay to the Agents such fees as the parties have agreed pursuant to the Fee Letter.</P>

<P>13.2&nbsp;&nbsp;&nbsp;<U>Expenses</U>.  Each of the Borrowers agrees, whether or not the transactions hereby contemplated are
consummated, on demand to pay, or reimburse the Agents for their payment of, the reasonable expenses of the
Agents and (after the occurrence and during the continuance of an Event of Default) the Lenders incident to
said transactions (and in connection with any supplements, amendments, waivers or consents requested by or
for the benefit of the Borrowers and relating thereto or incurred in connection with the enforcement or
defense of any of the Agent's and the Lenders' rights or remedies with respect thereto or in the preservation
of the Agent's and the Lenders' priorities under the documentation executed and delivered in connection
therewith) including, without limitation, all reasonable costs and expenses of preparation, negotiation,
execution and administration of this Agreement and the documents referred to herein, the reasonable fees and
disbursements of the Agent's counsel in connection therewith, as well as the reasonable fees and expenses of
any independent appraisers, surveyors, engineers, inspectors and other consultants retained by the Agents in
connection with this Agreement and the transactions contemplated hereby and under the Security Documents, all
costs and expenses, if any, in connection with the enforcement of this Agreement, the Note and the Security
Documents and stamp and other similar taxes, if any, incident to the execution and delivery of the documents
(including, without limitation, the Note) herein contemplated and to hold the Agents and the Lenders free and
harmless in connection with any liability arising from the nonpayment of any such stamp or other similar
taxes.  Such taxes and, if any, interest and penalties related thereto as may become payable after the date
hereof shall be paid immediately by the Borrowers to the Agents or the Lenders, as the case may be, when
liability therefore is no longer contested by such party or parties or reimbursed immediately by the Borrowers
to such party or parties after payment thereof (if the Agents or the Lenders, at their sole discretion,
chooses to make such payment).</P>

<P>14.&nbsp;&nbsp;&nbsp;<U>APPLICABLE LAW, JURISDICTION AND WAIVER</U></P>

<P>14.1&nbsp;&nbsp;&nbsp;<U>Applicable Law</U>.  This Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York.</P>

<P>14.2&nbsp;&nbsp;&nbsp;<U>Jurisdiction</U>.  Each of the Borrowers hereby irrevocably submits to the jurisdiction of the courts of
the State of New York and of the United States District Court for the Southern District of New York in any
action or proceeding brought against it by any of the Lenders or the Agents under this Agreement or under any
document delivered hereunder and hereby irrevocably agrees that valid service of summons or other legal
process on it may be effected by serving a copy of the summons and other legal process in any such action or
proceeding on the Borrowers by mailing or delivering the same by hand to the Borrowers at the address
indicated for notices in Section 16.1.  The service, as herein provided, of such summons or other legal
process in any such action or proceeding shall be deemed personal service and accepted by the Borrowers as
such, and shall be legal and binding upon the Borrowers for all the purposes of any such action or
proceeding.  Final judgment (a certified or exemplified copy of which shall be conclusive evidence of the
fact and of the amount of any indebtedness of the Borrowers to the Lenders or the Agent) against the
Borrowers in any such legal action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment.  The Borrowers will advise the Facility Agent promptly of any change
of address for the purpose of service of process.  Notwithstanding anything herein to the contrary, the
Lenders may bring any legal action or proceeding in any other appropriate jurisdiction.</P>

<P>14.3&nbsp;&nbsp;&nbsp;<B><U>WAIVER OF JURY TRIAL</U>.  IT IS MUTUALLY AGREED BY AND AMONG THE BORROWERS, THE GUARANTOR, THE AGENT
AND THE LENDERS THAT EACH OF THEM HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THIS AGREEMENT, THE NOTE OR THE SECURITY DOCUMENTS.</B></P>

<P>15.&nbsp;&nbsp;&nbsp;<U>THE AGENTS</U></P>

<P>15.1&nbsp;&nbsp;&nbsp;<U>Appointment of Agents</U>.  Each of the Lenders irrevocably appoints and authorizes the Agents severally
each to take such action as agent on its behalf and to exercise such powers under this Agreement, the Note
and the Security Documents as are delegated to such Agent by the terms hereof and thereof.  No Agent nor any
of their respective directors, officers, employees or agents shall be liable for any action taken or omitted
to be taken by it or them under this Agreement, the Note or the Security Documents or in connection
therewith, except for its or their own gross negligence or willful misconduct.</P>

<P>15.2&nbsp;&nbsp;&nbsp;<U>Security Agent as Trustee</U>.  Each of the Lenders irrevocably appoints the Security Agent as trustee
on its behalf with regard to (i) the security, powers, rights, titles, benefits and interests (both present
and future) constituted by and conferred on the Lenders or any of them or for the benefit thereof under or
pursuant to this Agreement, the Note or any of the Security Documents (including, without limitation, the
benefit of all covenants, undertakings, representations, warranties and obligations given, made or undertaken
to any Lender in the Agreement, the Note or any Security Document),  (ii) all moneys, property and other
assets paid or transferred to or vested in any Lender or any agent of any Lender or received or recovered by
any Lender or any agent of any Lender pursuant to, or in connection with, this Agreement, the Note or the
Security Documents whether from any Security Party or any other person and (iii) all money, investments,
property and other assets at any time representing or deriving from any of the foregoing, including all
interest, income and other sums at any time received or receivable by any Lender or any agent of any Lender
in respect of the same (or any part thereof).  The Security Agent hereby accepts such appointment.</P>

<P>15.3&nbsp;&nbsp;&nbsp;<U>Distribution of Payments</U>.  Whenever any payment is received by the Facility Agent from the Borrowers
or any other Security Party for the account of the Lenders, or any of them, whether of principal or interest
on the Note, commissions, fees under Section 13 or otherwise, it will thereafter cause to be distributed on
the same day if received before 3 p.m. New York time, or on the next day if received thereafter, like funds
relating to such payment ratably to the Lenders according to their respective Commitments, in each case to be
applied according to the terms of this Agreement.</P>

<P>15.4&nbsp;&nbsp;&nbsp;<U>Holder of Interest in Note</U>.  The Agents may treat each Lender as the holder of all of the interest
of such Lender in the Note.</P>

<P>15.5&nbsp;&nbsp;&nbsp;<U>No Duty to Examine, Etc.</U>  The Agents shall not be under a duty to examine or pass upon the validity,
effectiveness or genuineness of any of this Agreement, the Note, the Security Documents or any instrument,
document or communication furnished pursuant to this Agreement or in connection therewith or in connection
with the Note or any Security Document, and the Agents shall be entitled to assume that the same are valid,
effective and genuine, have been signed or sent by the proper parties and are what they purport to be.</P>

<P>15.6&nbsp;&nbsp;&nbsp;<U>Agents as Lenders</U>.  With respect to that portion of the Facility made available by it, each Agent
shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it
were not an Agent, and the term "Lender" or "Lenders" shall include each Agent in its capacity as a Lender.
Each Agent and its affiliates may accept deposits from, lend money to and generally engage in any kind of
business with, the Borrower and the other Security Parties as if it were not an Agent.</P>

<P>15.7&nbsp;&nbsp;&nbsp;<U>Acts of the Agents</U>.  Each Agent shall have duties and reasonable discretion, and shall act as
follows:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;<U>Obligations  of the Agents</U>.  The  obligations of each Agent under this  Agreement,  under the Note and
under the Security Documents are only those expressly set forth herein and therein.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;<U>No Duty to  Investigate</U>.  No  Agent  shall at any time be under  any duty to  investigate  whether  an
Event of Default,  or an event which with the giving of notice or lapse of time, or both,  would  constitute an
Event of Default,  has occurred or to investigate the  performance of this Agreement,  the Note or any Security
Document by any Security Party.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;<U>Discretion  of the  Agents</U>.  Each  Agent  shall be  entitled  to use its  discretion  with  respect to
exercising or refraining  from  exercising  any rights which may be vested in it by, and with respect to taking
or  refraining  from  taking any action or actions  which it may be able to take under or in respect  of,  this
Agreement,  the Note and the Security  Documents,  unless the Facility Agent shall have been  instructed by the
Majority  Lenders to exercise  such rights or to take or refrain  from taking such action;  provided,  however,
that no Agent shall be required to take any action which  exposes such Agent to personal  liability or which is
contrary to this Agreement or applicable law.</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;<U>Instructions  of  Majority  Lenders</U>.  Each Agent  shall in all cases be fully  protected  in acting or
refraining  from acting under this  Agreement,  under the Note,  or under any Security  Document in  accordance
with the  instructions  of the  Majority  Lenders,  and any action  taken or failure  to act  pursuant  to such
instructions shall be binding on all of the Lenders.</P>

<P>15.8&nbsp;&nbsp;&nbsp;<U>Certain Amendments</U>.  Neither this Agreement nor the Note nor any of the Security Documents nor any
terms hereof or thereof may be amended unless such amendment is approved by the Borrower and the Majority
Lenders, provided that no such amendment shall, without the written consent of each Lender affected thereby,
(i)  reduce the interest rate or extend the time of a scheduled payment of principal or interest or fees on
the Facility, or reduce the principal amount of the Facility or any fees hereunder, (ii) increase or decrease
the Commitment of any Lender or subject any Lender to any additional obligation (it being understood that a
waiver of any Event of Default or any mandatory repayment of Facility shall not constitute a change in the
terms of any Commitment of any Lender), (iii) amend, modify or waive any provision of this Section 15.8,
(iv) amend the definition of Majority Lenders or any other definition referred to in this Section 15.8,
(v) consent to the assignment or transfer by a Borrower of any of its rights and obligations under this
Agreement, (vi) release any Security Party from any of its obligations under any Security Document except as
expressly provided herein or in such Security Document or (vii) amend any provision relating to the
maintenance of collateral under Section 9.4.  All amendments approved by the Majority Lenders under this
Section 15.8 must be in writing and signed by the Borrowers, each of the Lenders comprising the Majority
Lenders and, if applicable, each Lender affected thereby and any such amendment shall be binding on all the
Lenders.</P>

<P>15.9&nbsp;&nbsp;&nbsp;<U>Assumption re Event of Default</U>.  Except as otherwise provided in Section 15.15, the Facility Agent
shall be entitled to assume that no Event of Default, or event which with the giving of notice or lapse of
time, or both, would constitute an Event of Default, has occurred and is continuing, unless the Facility
Agent has been notified by any Security Party of such fact, or has been notified by a Lender that such Lender
considers that an Event of Default or such an event (specifying in detail the nature thereof) has occurred
and is continuing.  In the event that the Facility Agent shall have been notified by any Security Party or
any Lender in the manner set forth in the preceding sentence of any Event of Default or of an event which
with the giving of notice or lapse of time, or both, would constitute an Event of Default, the Facility Agent
shall notify the Lenders and shall take action and assert such rights under this Agreement, under the Note
and under Security Documents as the Majority Lenders shall request in writing.</P>

<P>15.10&nbsp;&nbsp;&nbsp;<U>Limitations of Liability</U>.  Neither any Agent nor any of the Lenders shall be under any liability or
responsibility whatsoever:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;to any  Security  Party or any other  person or entity as a  consequence  of any  failure  or delay in
performance  by, or any  breach by, any other  Lenders or any other  person of any of its or their  obligations
under this Agreement or under any Security Document;</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;to any Lender or Lenders as a  consequence  of any failure or delay in  performance  by, or any breach
by, any Security Party of any of its respective  obligations under this Agreement,  under the Note or under the
Security Documents; or</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;to any  Lender  or  Lenders  for any  statements,  representations  or  warranties  contained  in this
Agreement,  in any  Security  Document or in any  document  or  instrument  delivered  in  connection  with the
transaction  hereby  contemplated;  or for the validity,  effectiveness,  enforceability or sufficiency of this
Agreement,  the Note,  any Security  Document or any document or instrument  delivered in  connection  with the
transactions hereby contemplated.</P>

<P>15.11&nbsp;&nbsp;&nbsp;<U>Indemnification of the Agents</U>.  The Lenders agree to indemnify each Agent (to the extent not
reimbursed by the Security Parties or any thereof), pro rata according to the respective amounts of their
Commitments, from and against any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including legal fees and
expenses incurred in investigating claims and defending itself against such liabilities) which may be imposed
on, incurred by or asserted against, such Agent in any way relating to or arising out of this Agreement, the
Note or any Security Document, any action taken or omitted by such Agent thereunder or the preparation,
administration, amendment or enforcement of, or waiver of any provision of, this Agreement, the Note or any
Security Document, except that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct.</P>

<P>15.12&nbsp;&nbsp;&nbsp;<U>Consultation with Counsel</U>.  Each of the Facility Agent and the Security Agent may consult with legal
counsel reasonably selected by such Agent and shall not be liable for any action taken, permitted or omitted
by it in good faith in accordance with the advice or opinion of such counsel.</P>

<P>15.13&nbsp;&nbsp;&nbsp;<U>Resignation</U>.  Any Agent may resign at any time by giving sixty (60) days' written notice thereof to
the other Agents, the Lenders and the Borrowers.  Upon any such resignation, the Lenders shall have the right
to appoint a successor Agent.  If no successor Agent shall have been so appointed by the Lenders and shall
have accepted such appointment within sixty (60) days after the retiring Agent's giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent which shall be
a bank or trust company of recognized standing.  Any resignation by an Agent pursuant to this Section 15.13
shall be effective only upon the appointment of a successor Agent.  After any retiring Agent's resignation as
Agent hereunder, the provisions of this Section 15 shall continue in effect for its benefit with respect to
any actions taken or omitted by it while acting as Agent.</P>

<P>15.14&nbsp;&nbsp;&nbsp;<U>Representations of Lenders</U>.  Each Lender represents and warrants to each other Lender and each Agent
that:</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;in making its decision to enter into this  Agreement and to make its Commitment  available  hereunder,
it has  independently  taken  whatever  steps it considers  necessary to evaluate the  financial  condition and
affairs of the Security  Parties,  that it has made an independent  credit  judgment and that it has not relied
upon any statement, representation or warranty by any other Lender or any Agent; and</P>

<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;so long as any  portion  of its  Commitment  remains  outstanding,  it will  continue  to make its own
independent evaluation of the financial condition and affairs of the Security Parties.</P>

<P>15.15&nbsp;&nbsp;&nbsp;<U>Notification of Event of Default</U>.   The Facility Agent hereby undertakes to promptly notify the
Lenders, and the Lenders hereby promptly undertake to notify the Facility Agent and the other Lenders, of the
existence of any Event of Default which shall have occurred and be continuing of which the Facility Agent or
Lender has actual knowledge.</P>

<P>16.&nbsp;&nbsp;&nbsp;<U>NOTICES AND DEMANDS</U></P>

<P>16.1&nbsp;&nbsp;&nbsp;<U>Notices</U>.  All notices, requests, demands and other communications to any party hereunder shall be in
writing (including prepaid overnight courier, facsimile transmission or similar writing) and shall be given
to the Borrowers at the address or telecopy number set forth below and to the Lenders and the Agents at their
address and telecopy numbers set forth in Schedule 1 or at such other address or telecopy numbers as such
party may hereafter specify for the purpose by notice to each other party hereto.  Each such notice, request
or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section and telephonic confirmation of receipt thereof is obtained or
(ii) if given by mail, prepaid overnight courier or any other means, when received at the address specified in
this Section or when delivery at such address is refused.</P>

<P>If to a Security Party:</P>

<TABLE>
<TR>
<TD WIDTH=30% VALIGN=TOP></TD>
<TD WIDTH=70%>c/o Teekay Shipping (Canada) Ltd.<BR>
                           Suite 2000, Bentall 5<BR>
                           550 Burrard Street<BR>
                           Vancouver, British Columbia<BR>
                           Canada V6C 2K2<BR>
<BR>
                           Telecopy No.: +604-681-3011<BR>
                           Attention:  Director Finance
</TD>
</TR>
</TABLE>

<P>17.&nbsp;&nbsp;&nbsp;<U>MISCELLANEOUS</U></P>

<P>17.1&nbsp;&nbsp;&nbsp;<U>Time of Essence</U>.  Time is of the essence with respect to this Agreement but no failure or delay on
the part of any Lender or any Agent to exercise any power or right under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise by any Lender or any Agent of any power or right
hereunder preclude any other or further exercise thereof or the exercise of any other power or right.  The
remedies provided herein are cumulative and are not exclusive of any remedies provided by law.</P>

<P>17.2&nbsp;&nbsp;&nbsp;<U>Unenforceable, etc., Provisions - Effect</U>.  In case any one or more of the provisions contained in
this Agreement, the Note or in any Security Document would, if given effect, be invalid, illegal or
unenforceable in any respect under any law applicable in any relevant jurisdiction, said provision shall not
be enforceable against the relevant Security Party, but the validity, legality and enforceability of the
remaining provisions herein or therein contained shall not in any way be affected or impaired thereby.</P>

<P>17.3&nbsp;&nbsp;&nbsp;<U>References</U>.  References herein to Sections, Exhibits and Schedules are to be construed as references
to sections of, exhibits to, and schedules to, this Agreement, unless the context otherwise requires.</P>

<P>17.4&nbsp;&nbsp;&nbsp;<U>Further Assurances</U>.  Each of the Borrowers agrees that if this Agreement or any Security Document
shall, in the reasonable opinion of the Lenders, at any time be deemed by the Lenders for any reason
insufficient in whole or in part to carry out the true intent and spirit hereof or thereof, it will execute
or cause to be executed such other and further assurances and documents as in the opinion of the Lenders may
be required in order to more effectively accomplish the purposes of this Agreement, the Note or any Security
Document.</P>

<P>17.5&nbsp;&nbsp;&nbsp;<U>Prior Agreements, Merger</U>.  Any and all prior understandings and agreements heretofore entered into
between the Security Parties on the one part, and the Agents or the Lenders, on the other part, whether
written or oral, other than the Mandate Letter, are superseded by and merged into this Agreement and the
other agreements (the forms of which are exhibited hereto) to be executed and delivered in connection
herewith to which the Security Parties, the Agents and/or the Lenders are parties, which alone fully and
completely express the agreements between the Security Parties, the Agents and the Lenders.</P>

<P>17.6&nbsp;&nbsp;&nbsp;<U>Amendments; Counterparts</U>.  Subject to Section 15.8, any provision of this Agreement, the Note or any
Security Document may be amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrowers, the Agents and the Majority Lenders.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all such counterparts together shall
constitute one and the same instrument.</P>

<P>17.7&nbsp;&nbsp;&nbsp;<U>Indemnification</U>.  Each of the Borrowers and, by its execution and delivery of the Consent and
Agreement set forth below, the Guarantor jointly and severally agree to indemnify each Lender and each Agent,
their respective successors and assigns, and their respective officers, directors, employees, representatives
and agents (each an "Indemnitee") from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel for such Indemnitee in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be designated a party thereto) that
may at any time (including, without limitation, at any time following the payment of the obligations of the
Borrowers hereunder) be imposed on, asserted against or incurred by, any Indemnitee as a result of, or
arising out of or in any way related to or by reason of, (a) any violation by any Security Party (or any
charterer or other operator of any Vessel) of any applicable Environmental Law, (b) any Environmental Claim
arising out of the management, use, control, ownership or operation of property or assets by any Security
Party (or, after foreclosure, by any Lender or any Agent or any of their respective successors or assigns),
(c) the breach of any representation, warranty or covenant set forth in Sections 2.1 (n) or 9.1(l), (d) the
Facility (including the use of the proceeds of the Facility and any claim made for any brokerage commission,
fee or compensation from any Person), or (e) the execution, delivery, performance or non-performance of this
Agreement, the Note, any Security Document, or any of the documents referred to herein or contemplated hereby
by any party other than an Indemnitee (whether or not the Indemnitee is a party thereto); provided, however,
that nothing contained in this Section 17.7 shall require the Borrowers or the Guarantor to indemnify an
Indemnitee for any loss, liability, claim, etc. that is found in a final decision by a court of competent
jurisdiction to be solely attributable to the willful misconduct or gross negligence of such Indemnitee.  If
and to the extent that the obligations of the Borrowers and the Guarantor under this Section are
unenforceable for any reason, each of the Borrowers and, by its execution and delivery of the Consent and
Agreement set forth below, the Guarantor jointly and severally agree to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under applicable law.  The obligations of
the Borrowers and the Guarantor under this Section 17.7 shall survive the termination of this Agreement and
the repayment to the Lenders of all amounts owing thereto under or in connection herewith.</P>

<P>17.8&nbsp;&nbsp;&nbsp;<U>Headings</U>.  In this Agreement, Section headings are inserted for convenience of reference only and
shall not be taken into account in the interpretation of this Agreement.</P>

<P ALIGN=CENTER>                                  [Remainder of Page Intentionally Left Blank]</P>
<BR>
<BR>
<BR>
<BR>
<P>IN WITNESS whereof the parties hereto have caused this Agreement to be duly executed by their duly authorized
representatives as of the day and year first above written.</P>

<TABLE>
<TR>
<TD WIDTH=50% VALIGN=TOP></TD>
<TD WIDTH=50%>                      CORK SPIRIT L.L.C.<BR>
<BR>
                                    By:___________________________________<BR>
                                    Name: Roy E. Spires<BR>
                                    Title: Attorney-in-Fact<BR>
<BR>
                                    DONEGAL SPIRIT L.L.C.<BR>
<BR>
                                    By:___________________________________<BR>
                                    Name: Roy E. Spires<BR>
                                    Title: Attorney-in-Fact<BR>
<BR>
                                    LIMERICK SPIRIT L.L.C.<BR>
<BR>
                                    By:___________________________________<BR>
                                    Name: Roy E. Spires<BR>
                                    Title: Attorney-in-Fact<BR>
<BR>
                                    SHANNON SPIRIT L.L.C.<BR>
<BR>
                                    By:___________________________________<BR>
                                    Name: Roy E. Spires<BR>
                                    Title: Attorney-in-Fact<BR>
<BR>
                                    GALWAY SPIRIT L.L.C.<BR>
<BR>
                                    By:___________________________________<BR>
                                    Name: Roy E. Spires<BR>
                                    Title: Attorney-in-Fact<BR>
<BR>
<BR>
<BR>
                                    DEN NORSKE BANK ASA,<BR>
                                    as Arranger<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    DEUTSCHE BANK AG IN HAMBURG,<BR>
                                    as Arranger and Security Agent<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    DVB BANK AG,<BR>
                                    as Arranger<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
<BR>
<BR>
                                    DVB NEDSHIPBANK AMERICA NV,<BR>
                                    as Facility Agent<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
 <BR>
                                    NORDEA BANK FINLAND PLC,<BR>
                                    as Arranger<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
                                    The Lenders:<BR>
<BR>
                                    DEN NORSKE BANK ASA<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    DEUTSCHE BANK AG IN HAMBURG<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    DVB BANK AG<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
<BR>
<BR>
                                    NORDEA BANK FINLAND PLC<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    HSBC BANK PLC<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    ING BANK N.V.<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    LLOYDS TSB BANK PLC<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>

<BR>
<BR>
<BR>
<BR>
                                    SCOTIABANK EUROPE PLC<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    FORTIS INTERNATIONAL FINANCE (DUBLIN)<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
                                    THE ROYAL BANK OF SCOTLAND PLC<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
<BR>
<BR>
                                    By:___________________________________<BR>
                                          Name:<BR>
                                          Title:<BR>
</TD>
</TR>
</TABLE>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>01029.0016 #354944v6</FONT><BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><U>CONSENT AND AGREEMENT</U></P>

<P>The undersigned, referred to in the foregoing Agreement as the "Guarantor", hereby consents and agrees to
said Agreement and to the documents contemplated thereby and to the provisions contained therein relating to
conditions to be fulfilled and obligations to be performed by the undersigned pursuant to or in connection
with said Agreement and agrees particularly to be bound by the representations, warranties and covenants
relating to the undersigned contained in Sections 2 and 9 of said Agreement to the same extent as if the
undersigned were a party to said Agreement.</P>

<TABLE>
<TR>
<TD WIDTH=50% VALIGN=TOP></TD>
<TD WIDTH=50%>                     TEEKAY SHIPPING CORPORATION<BR>
<BR>
<BR>
                                    By:_____________________________________<BR>
                                    Name: Roy E. Spires<BR>
                                    Title: Attorney-in-Fact<BR>
</TD>
</TR>
</TABLE>



<FONT FACE="Times New Roman, Times, Serif" SIZE=2>01029.0016 #354944v6</FONT><BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><B>Schedule 1</B></P>

<PRE>
<B>Lenders and Agents                                            Commitment</B>

Den norske Bank ASA
N-0107 Oslo
Norway
Attn:  Credit Administration Shipping
Facsimile No.:  +47 22 48 28 94
Telephone No.:  +47 22 48 20 20                               $20,000,000


Deutsche Bank AG in Hamburg (Documentation Agent, Security Agent)
Corporate and Investment Bank Shipping
Brandstwiete 1
20457 Hamburg
Germany
Attn:  Joerg Zickermann
Facsimile No.: + 49-(0)-40-3701-4649
Telephone No.: + 49-(0)-40-3701-3281                          $17,000,000



DVB Bank AG
Ballindam 6
20095 Hamburg
Germany
Attn: Gisella Riemer &amp; Maren Bermen
Facsimile No.: + 49-(0)-40-3080042
Telephone No.: + 49-(0)-40-3080040                            $22,500,000



Nordea Bank Finland plc
437 Madison Avenue
New York, New York 10022
Attn: Hans Christian Kjelsrud
Facsimile No.: (212) 421-4420
Telephone No.: (212) 318-9600                                 $22,500,000



DVB NedshipBank America N.V.
(Facility Agent)
Zeelandia Office Park
Kaya WFG Mensing 14
CuracaoNetherlands Antilles
Attn: Richard van Heel/Gershwin Maduro
Facsimile No.: +5-999-465-2366
Telephone No.: +5-999-432-7650

w/copy to:

DVB Bank AG
609 Fifth Avenue
New York, New York 10017-1021
Attn: John Hartigan, Shipping Division
Facsimile No.: +1-212-588-0424
Telephone No.: +-212-572-3041                                       $0.00



HSBC Bank plc
Level 24
8 Canada Square
London E14 5HQ
England
Attn:  Mr. Adam Byrne
Facsimile No.: +44-20 7991 4895
Telephone No.: +44-20 7991 2858                               $17,000,000



ING Bank N.V.
c/o 4th Floor
60 London Wall
London EC2M 5TQ
England
Attn:  Mr. Rory Hussey/Mr. Hugh Baker
Facsimile No.: +44-207-767-7244
Telephone No.: +44-207-767-5586                               $17,000,000



Lloyds TSB Bank plc
25 Gresham Street
London EC2V 7HN
England
Attn: Ms. Kirsten Kaarre Jensen
Facsimile No.: +44-207-922-1890
Telephone No.: +44-207-922-1881                               $17,000,000



Scotiabank Europe plc
Scotia House
33 Finsbury Square
London EC2A 1BB
England
Attn: Mr. Robyn Harrington
Facsimile No.: +44-207-454-9019
Telephone No.: +44-207-826-5784                               $17,000,000



Fortis International Finance (Dublin)
Shipping Finance
Styne House
Upper Hatchstreet
Dublin 2
Ireland
Attn:  Mr. Karel H. Wallien
Facsimile No.:  +353 1 4780629
Telephone No.:  +353 1 4786703                                $15,000,000



The Royal Bank of Scotland plc
Shipping Business Centre
5/10 Great Tower Street
London EC3P 3HX
England
Attn: Mr. Colin Manchester
Facsimile No.: +44-207-615-0119
Telephone No.: +44-207-615-4633                               $15,000,000
</pre>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>01029.0016 #354944</font>


<P ALIGN=CENTER><B>                                 Schedule 2<BR>
<BR>
                                                    Vessels</B></P>

<PRE>
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
Borrower/                    Vessel Name             Hull Number/          Registry/Flag      Classification Society    Acquisition Price
Owner                                                Official Number                                                   (U.S. Dollars)
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
Cork Spirit L.L.C.           CORK SPIRIT             Hull No. 1431         Bahamas            Det Norske Veritas        $51,163,000
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
Donegal Spirit L.L.C.        DONEGAL SPIRIT          Hull No. 1432         Bahamas            Det Norske Veritas        $51,163,000
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
Limerick Spirit L.L.C.       LIMERICK SPIRIT         Hull No. 1433         Bahamas            Det Norske Veritas        $44,495,000
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
Shannon Spirit L.L.C.        SHANNON SPIRIT          Hull No. 1434         Bahamas            Det Norske Veritas        $44,495,000
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
Galway Spirit L.L.C.         GALWAY SPIRIT           Hull No. 1435         Bahamas            Det Norske Veritas        $51,163,000
- ---------------------------- -------------------- ---------------------- ------------------ ------------------------- ---------------------
</PRE>

<FONT FACE="Times New Roman, Times, Serif" SIZE=2>01029.0016 #354944v6</font>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=CENTER><B>                               Schedule 3<BR>
<BR>
                                                  Disclosure</B></P>

<P>Liens:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.<BR>
<BR>
Indebtedness:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</P>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><B>                               Schedule 4<BR>
<BR>
                                             Approved Ship Brokers</B></P>


<P>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Clarkson PLC<BR>
2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;E.A. Gibson Shipbrokers Ltd.<BR>
3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Braemar Shipbrokers Ltd.<BR>
4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fearnleys<BR>
5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;R.S. Platou</P>
<BR>
<BR>
<BR>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>norsktk_creditfacility.htm
<DESCRIPTION>NORSK TEEKAY - CREDIT FACILITY AGREEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>
<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTION COPY</FONT></H1>






<P ALIGN=CENTER>______________________________________________________________</P><BR>

<P ALIGN=CENTER><B>U S D &nbsp;&nbsp;5 0 0 , 0 0 0 , 0 0 0<BR>
R E V O L V I N G &nbsp;&nbsp;C R E D I T &nbsp;&nbsp;F A C I L I T Y &nbsp;&nbsp;A G R E E M E N T</B><BR>
______________________________________________________________</P>

<BR>
<BR>
<BR>
                                                       <P ALIGN=CENTER>between</P>
<BR>
<BR>
                        <P ALIGN=CENTER><B>N O R S K &nbsp;&nbsp;T E E K A Y &nbsp;&nbsp;H O L D I N G S &nbsp;&nbsp;L T D</B><BR>
                                                     as Borrower</P>
<BR>
                                                         <P ALIGN=CENTER>and<BR>
<BR>
                                        <B>T H E &nbsp;&nbsp;B A N K S &nbsp;&nbsp;N A M E D &nbsp;&nbsp;H E R E I N</B><BR>
<BR>
                                                         and<BR>
<BR>
                                           <B>D E N &nbsp;&nbsp;N O R S K E &nbsp;&nbsp;B A N K &nbsp;&nbsp;A S A</B><BR>
                                                       as Agent</P>

<BR>
<BR>
<BR>
<BR>
<BR>
                                                 <P ALIGN=CENTER>Dated... March 2003</P>

<BR>
<BR>
<BR>
<BR>
<BR>
                                                   <P ALIGN=CENTER><B>C O N T E N T S</B></P>
<BR>

<pre>
                                                                                             Page

1.      DEFINITIONS                                                                             4

2.      THE LOAN FACILITY                                                                      10

3.      PURPOSE                                                                                11

4.      CONDITIONS PRECEDENT                                                                   11

5.      USD UNAVAILABILITY                                                                     13

6.      INTEREST                                                                               14

7.      REPAYMENT                                                                              15

8.      VOLUNTARY AND MANDATORY PREPAYMENT                                                     16

9.      REPRESENTATIONS, UNDERTAKINGS AND SECURITY                                             17

10.     CHANGES IN CIRCUMSTANCES                                                               21

11.     FEES AND EXPENSES                                                                      22

12.     PAYMENTS                                                                               23

13.     EVENTS OF DEFAULT                                                                      24

14.     TRANSFER                                                                               27

15.     AGENCY                                                                                 27

16.     NOTICES AND TIME                                                                       29

17.     GOVERNING LAW AND JURISDICTION                                                         30
</pre>

<P>EXHIBIT 1<BR>
BANK COMMITMENTS<BR>
<BR>
EXHIBIT 2<BR>
FORM OF DRAWDOWN NOTICE<BR>
<BR>
EXHIBIT 3<BR>
FORM OF CERTIFICATE OF COMPLIANCE<BR>
<BR>
EXHIBIT 4<BR>
LIST OF RELEVANT VESSELS<BR>
<BR>
EXHIBIT 5<BR>
FORM OF TRANSFER CERTIFICATE<BR>
<BR>
EXHIBIT 6<BR>
FORM OF GUARANTEE AND INDEMNITY AGREEMENT<BR>
<BR>
EXHIBIT 7<BR>
FORM OF DECLARATION OF NEGATIVE PLEDGE<BR>
<BR>
EXHIBIT 8<BR>
FORM OF LETTER RELATING TO EFFECTIVE INTEREST<BR>
<BR>
EXHIBIT 9<BR>
FORM OF ASSIGNMENT AGREEMENT<BR>
<BR>
EXHIBIT 10<BR>
FORM OF PLEDGE OF SHARES</P>

<BR>
<BR>
<BR>
<BR>
<BR>

<P><B>THIS REVOLVING CREDIT FACILITY AGREEMENT</B> (the "<B>Agreement</B>") is made on ... March 2003
between:</P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP>(1)</TD>
<TD WIDTH=90% VALIGN=TOP><B>NORSK TEEKAY HOLDINGS LTD.</B> , a corporation incorporated in the Republic of the Marshall Islands  with an
      office at TK House, Bayside Executive Park, West Bay Street &amp; Blake Road, Nassau, The Bahamas<BR>
      (the <B>"Borrower"</B>); and<BR><BR></TD>
</TR>

<TR>
<TD VALIGN=TOP>(2)</TD>
<TD VALIGN=TOP><B>THE BANKS</B> listed in Exhibit 1 hereto<BR>
      (the <B>"Banks"</B>); and<BR><BR></TD>
</TR>

<TR>
<TD VALIGN=TOP>(3)</TD>
<TD VALIGN=TOP><B>DEN NORSKE BANK ASA</B> (enterprise no. 810 506 482) of Stranden 21, N-0021 Oslo, Norway<BR>
      (as the <B>"Agent"</B>).<BR><BR></TD>
</TR>
</TABLE>

<P><B>1.&nbsp;&nbsp;DEFINITIONS</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=CENTER>1.1</TD>
<TD WIDTH=90% VALIGN=TOP>As used in this Agreement and in any documents delivered pursuant hereto, the following expressions
                shall have the following meanings respectively:<BR>
</TD>
</TR>
</TABLE>

<PRE>
                "<B>Assignment Agreement</B>"                  means the assignment of the Intercompany Facility Agreement
                                                        together with such security as described therein on terms set
                                                        out in Exhibit 10;

                "<B>Availability Date</B>"                     means the date, proposed by the Borrower and confirmed by the
                                                        Agent pursuant to sub-clause 4.2 (b), when Tranche B
                                                        Commitment is made available to the Borrower;

                "<B>Banking Day</B>"                           means a day upon which banks are open for transactions
                                                        contemplated by this Agreement in (a) New York, Oslo and
                                                        London, and (b) additionally in relation to payments
                                                        hereunder the place for provision of funds or due payment;

                "<B>Borrower Group</B>"                        means the Borrower and its Subsidiaries;

                "<B>Change of Control</B>"                     means, with respect to any entity, (a) any entity  other than
                                                        the Resolute Investment Inc. becomes the ultimate beneficial
                                                        owner, directly or indirectly, of more than 50% of the total
                                                        voting power of such entity or (b) individuals who at the
                                                        beginning of any period of two consecutive years constitute
                                                        the Board of Directors (together with any new directors whose
                                                        election by the Board of Directors or whose nomination by the
                                                        Board of Directors for election by such entity&#146;s stockholders
                                                        was approved by a vote of at least two-thirds of the members
                                                        of the Board of Directors who either were members of the
                                                        Board of Directors on the date hereof or whose election or
                                                        nomination for election was previously so approved) cease for
                                                        any reason to constitute at least fifty percent (50%) of the
                                                        members of the Board of Directors then in office;

                "<B>Compliance Certificate</B>"                means a document duly signed by the Guarantor substantially
                                                        as set out in Exhibit 4 to be delivered by the Guarantor
                                                        quarterly simultaneously with the relevant reports pursuant
                                                        to Clause 9.2 (b) providing quarterly information on the
                                                        financial standing of the Group as per 31.03, 30.06, 31.09
                                                        and 31.12 of each calendar year;

                "<B>Declaration of Negative Pledge</B>"        means the declaration in the form set out in Exhibit 7;

                "<B>Drawdown Date</B>"                         means a date upon which a Drawing is advanced to the Borrower;

                "<B>Drawing</B>"                               means an advance to the Borrower in an amount of not less
                                                        than USD 5,000,000 and multiples of USD 1,000,000;

                "<B>Event of Default</B>"                      means any of the events specified in Clause 13;

                "<B>Final Repayment Date</B>"                  means 26 November 2003;

                "<B>Facility</B>"                              means the loan facility, the terms and conditions of which
                                                        are set out in this Agreement;

                "<B>GAAP</B>"                                  means the relevant generally accepted accounting principles;

                "<B>Group</B>"                                 means the Guarantor and its Subsidiaries;

                "<B>Guarantee</B>"                             means an unconditional and irrevocable on-demand guarantee
                                                        from the Guarantor set out in Exhibit 7;

                "<B>Guarantor</B>"                             means Teekay Shipping Corporation a corporation incorporated
                                                        in the Republic of the Marshall Islands with an office at TK
                                                        House, Bayside Executive Park, West Bay Street &amp; Blake Road,
                                                        Nassau, The Bahamas;

                "<B>Indebtedness</B>"                          means any obligation (whether incurred as principal or as
                                                        surety) for the payment or repayment of money, whether
                                                        present or future, actual or contingent;
                "<B>Intercompany Facility
                Agreement</B>"                              means a loan agreement between the Borrower and the Purchaser
                                                        setting out the Lending Terms as approved by the Agent;

                "<B>Interest Payment Date</B>"                 means the last day of each Interest Period;

                "<B>Interest Period</B>"                       means a period calculated in accordance with the provisions
                                                        of Clause 6.1 or Clause 12.2;

                "<B>Lending Terms</B>"                         means the terms on which the aggregate amount of the Total
                                                        Commitment is to be lent by the Borrower to the Purchaser,
                                                        and shall include, but not be limited to, a first preferred
                                                        pledge over the Navion Shares deposited with the Agent;

                "<B>LIBOR</B>"                                 (London Interbank Offered Rate) means in relation to a
                                                        Drawing and in respect of any Interest Period (a) the rate
                                                        per annum equal to the offered quotation for deposits in
                                                        amounts equal to that Drawing or the Loan (and for periods
                                                        equal to the Interest Period of that Drawing or the Loan)
                                                        ascertained by the Agent to be the rate established by the
                                                        British Bankers' Association and appearing on Reuters page
                                                        LIBOR 01, published by Reuters through its monitor service or
                                                        any equivalent successor to such service at or about 11.00
                                                        a.m. (London time) on the applicable Quotation Date; or (b)
                                                        if no such rate is available, the arithmetic mean of the rate
                                                        per annum at which the Banks are able to acquire USD in the
                                                        amount and for the Interest Period equal to such Drawing in
                                                        the London interbank market at or about 11.00 a.m. (London
                                                        time) on the applicable Quotation Date, as (in the absence of
                                                        manifest error) conclusively certified by the Agent to the
                                                        Borrower;

                "<B>Loan</B>"                                  means the aggregate principal amount of the Total Commitment
                                                        for the time being advanced and outstanding hereunder;

                "<B>Majority Banks</B>"                        means if more than one Bank participates in the Facility
                                                        either (i) all the Banks if two Banks participate in the
                                                        Facility (as the case may be), or (ii) if three or more Banks
                                                        participate in the Facility, it means the Banks representing
                                                        more than 50 % of the Loan from time to time, or, if no
                                                        principal amount is outstanding hereunder at that time, Banks
                                                        representing more than 50 % of the Total Commitment from time
                                                        to time;

                "<B>Margin</B>"                                means 1,50 % per annum;

                "<B>month(s)</B>"                              means a period calculated from any specified day to and
                                                        including the day numerically corresponding to such specified
                                                        day (or, if such specified day is the last day or if there
                                                        shall be no day numerically corresponding to such specified
                                                        day, the last day) in the relevant subsequent calendar month;

                "<B>Navion</B>"                                means Navion ASA with enterprise no.  979199325 of Verven 4,
                                                        N-4014 Stavanger;

                "<B>Navion Group</B>"                          means the Purchaser and Navion together with its Subsidiaries.

                "<B>Navion Sale and Purchase
                Agreement</B>"                              means an agreement to be entered into between the Purchaser
                                                        and Statoil ASA regarding the acquisition of the Navion
                                                        Shares;

                "<B>Navion Shares</B>"                         means all issued share capital by Navion at any time;

                "<B>NOK</B>"                                   means the lawful currency of Norway;

                "<B>Permitted Security</B>"                    means (i) security interests permitted by the Majority Banks,
                                                        (ii) the security interests over the assets as provided by
                                                        the Security Documents; (iii) liens for taxes not yet payable
                                                        for which adequate reserves have been maintained; and (iv)
                                                        other liens, charges and encumbrances incidental to the
                                                        conduct of the business of the Borrower and it's
                                                        Subsidiaries, which do not in the aggregate materially
                                                        detract from the value of each such party's property or
                                                        assets or materially impair the use thereof in the operation
                                                        of its business;

                "<B>Purchaser</B>"                             means Norsk Teekay AS with enterprise no. 985 030 235 of
                                                        Haakon VII's gate 10, Postboks 1484 Vika, N-0116 Oslo, Norway;

                "<B>Quotation Date</B>"                        means in relation to any Interest Period for which an
                                                        interest rate is to be determined hereunder (a) the day on
                                                        which quotations would ordinarily be given in the London
                                                        interbank market for deposits in the currency in relation to
                                                        which such rate is to be determined for delivery on the first
                                                        day of that Interest Period, or (b) if such day is not a
                                                        Banking Day the preceding Banking Day;

                "<B>Relevant Vessels</B>"                      means the vessels  set out in Exhibit 5 hereto,  or such other
                                                        vessels as approved in writing by the Agent;

                "<B>Security Document(s)</B>"                  means the documents listed in Clause 9.3;

                "<B>Subisidary (-ies)</B>"                     means any entity of which more than 50% of the outstanding
                                                        voting stock or other equity interest is owned or controlled
                                                        directly or indirectly by such entity and/or one or more
                                                        other Subsidiaries of such entity;

                "<B>Taxes</B>"                                 means any taxes, levies, duties, charges, fees, deductions
                                                        and withholdings levied or imposed by any governmental or
                                                        other taxing authority whatsoever;

                "<B>Term Date</B>"                             means 1 month prior to the Final Repayment Date;

                "<B>Total Commitment</B>"                      means an amount of up to USD 500,000,000, being the aggregate
                                                        of the Tranche A Commitment and, if made available pursuant
                                                        to Clause 4.2, the Tranche B Commitment;

                "<B>Total Debt</B>"                            means for the Guarantor the aggregate of (i) that portion,
                                                        as determined in accordance with US GAAP, of the
                                                        Indebtedness shown as &#147;long term debt&#148; on the consolidated
                                                        balance sheet of the Guarantor  and (ii) that portion, as
                                                        determined in accordance with US GAAP, of the Indebtedness
                                                        shown as "current portion of long term debt" on the
                                                        consolidated balance sheet of the Guarantor.

              "<B>Tranche A Commitment</B>"                  means USD 100,000,000 (as the same may be reduced from time
                                                        to time in compliance with Clause 2.5 and Clause 8);

                "<B>Tranche B Commitment</B>"                  means up to USD 400,000,000 as notified by the Agent to the
                                                        Borrower calculated pursuant to Clause 4.2 (as the same may
                                                        be reduced from time to time in compliance with Clause 2.5
                                                        and Clause 8);

                "<B>US GAAP</B>"                               means the general accepted accounting principles in the
                                                        United States of America;

                "<B>USD</B>"                                   means the lawful currency of the United States of America.
</PRE>

<P><B>2. THE LOAN FACILITY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>2.1</TD>
<TD WIDTH=85% VALIGN=TOP>The Banks shall participate in the Facility on a several basis with the respective percentages of the
                Total Commitment as listed in Exhibit 1 hereto.<BR><BR></TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>2.2</TD>
<TD>No Bank shall have the amount of its participation increased or reduced as a result of the failure of
                any other Bank to provide the amount of its participation.<BR><BR></TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>2.3</TD>
<TD>Upon satisfaction of the conditions set out in Clause 4.1, the Banks shall make the Tranche A
                Commitment available to the Borrower during the period from the date hereof up to and including the
                Term Date. Upon satisfaction of the conditions set out in Clause 4.2, the Banks shall make the
                Tranche B Commitment available to the Borrower from Availability Date up to and including the Term
                Date. No more than 4 Drawings may be outstanding at any one time.<BR><BR></TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>2.4</TD>
<TD>Up to the Term Date the Borrower may utilise the Facility on a revolving credit basis, such that any
                amount repaid prior to the Term Date may be redrawn by the Borrower, subject to the terms and
                conditions of this Agreement, except that such redrawn amounts may be used for general corporate
                purposes of the Borrower.<BR><BR></TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>2.5</TD>
<TD>The Borrower may cancel any undrawn amount of the Total Commitment in whole or in integral parts of
                USD 5,000,000 by giving not less than  five (5) Banking Days irrevocable prior written notice of such
                cancellation to the Agent. Amounts cancelled shall first be allocated to Tranche B Commitment (if
                made available) and thereafter to Tranche A Commitment and may not be subsequently drawn.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>3.&nbsp;&nbsp;PURPOSE</B></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>3.1</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower shall apply the Total Commitment in financing the Purchaser's acquisition of Navion. The
                Borrower shall use the Total Commitment in lending the funds to the Purchaser based on the
                Intercompany Facility Agreement.</TD>
</TR>
</TABLE>

<P><B>4.&nbsp;&nbsp;CONDITIONS PRECEDENT</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>4.1</TD>
<TD WIDTH=85% VALIGN=TOP>A Drawing may be made under the Tranche A Commitment on any Banking Day during the period from the
                date hereof up to and including the Term Date, provided:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>the Agent shall have received not less than 4 Banking Days prior to the first proposed
                           Drawdown Date the following in form and content satisfactory to it:-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20%></TD>
<TD WIDTH=10% VALIGN=TOP>(i)</TD>
<TD WIDTH=70% VALIGN=TOP>a counterpart of this Agreement duly signed on behalf of the Borrower;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(ii)</TD>
<TD VALIGN=TOP>company certificates evidencing that the Borrower, and the Guarantor are duly
                                     registered as limited companies and a copy of their articles of association;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(iii)</TD>
<TD VALIGN=TOP>a copy of the resolution of the board of directors of the Borrower  approving
                                     the execution and performance by the Borrower of this Agreement and the relevant
                                     Security Documents;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(iv)</TD>
<TD VALIGN=TOP>the Security Document set out in Clause 9.3 (a);<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(v)</TD>
<TD VALIGN=TOP>legal opinion from the Group&#146;s counsel;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(vi)</TD>
<TD VALIGN=TOP>such other legal opinion(s) in such jurisdictions as the Agent may reasonably have requested addressing
                                     questions or circumstances of relevance to this Facility;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(vii)</TD>
<TD VALIGN=TOP>a copy of any consent necessary from governmental or other authorities for the
                                     execution of and performance under this Agreement by the Borrower; and for the
                                     execution of and performance under the Guarantee by the Guarantor;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(viii)</TD>
<TD VALIGN=TOP>evidence that the Borrower and/or the Guarantor have been elected as preferred
                                     bidder in relation to the acquisition of Navion;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(ix)</TD>
<TD VALIGN=TOP>a copy of the resolution of the board of directors of the Guarantor approving the execution and performance
                                     by the Guarantor of the Guarantee;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(x)</TD>
<TD VALIGN=TOP>a fee letter separately agreed between the Guarantor and the Agent;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(xi)</TD>
<TD VALIGN=TOP>a copy of the Intercompany Facility Agreement;<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>the Agent shall have received not later than 12:00 noon Oslo time on the third Banking Day
                           prior to each proposed Drawdown Date an irrevocable written drawdown notice substantially
                           in the form of Exhibit 2 or renewal notice in the form of Exhibit 3 attached hereto;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the Agent shall not have received notice from any Bank prior to 11:00 a.m. London time on
                           the Quotation Date prior to the Drawdown Date that it is unable to obtain deposits in USD
                           in the London interbank market in a sum necessary to fund its participation in the Loan;
                           and<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>4.2</TD>
<TD WIDTH=85% VALIGN=TOP>A Drawing may be made under the Tranche B Commitment, subject to the Tranche A Commitment having been
                made available pursuant to Clause 4.1, and further subject to the following additional terms and
                conditions:-<BR><BR></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>The Agent shall have received the following documents not less than  four (4) Banking Days
                          prior to the Availability Date in form and content satisfactory to the Majority Banks:-<BR><BR>
</TD>
</TR>
</TABLE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20%></TD>
<TD WIDTH=10% VALIGN=TOP>(i)</TD>
<TD WIDTH=70% VALIGN=TOP>A request to the Banks to make the Tranche B Commitment available on the
                                   Availability Date;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(ii)</TD>
<TD VALIGN=TOP>The Security Document set out in Clause 9.3 (b);<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(iii)</TD>
<TD VALIGN=TOP>The Navion Sale and Purchase Agreement together with evidence that the parties thereto have complied with
                                   their respective conditions precedent to completion of the sale and purchase of
                                   the Navion Shares;<BR><BR>
</TD>
</TR>

<TR>
<TD></TD>
<TD VALIGN=TOP>(iv)</TD>
<TD VALIGN=TOP>Evidence that none of the assets of Navion are encumbered in any way whatsoever except for Permitted
                                   Security, the evidence to  include (i) the Declaration of Negative Pledge and
                                   (ii) a certified true copy of the Seller&#146;s Closing Disclosure Letter  (as defined
                                   in the SPA) confirming that the assets of Navion are not encumbered in any way;<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>The Agent, will confirm to the Borrower and the Banks, upon satisfaction of the conditions
                           contained in sub-clause 4.2 (a), that the Tranche B Commitment is available for Drawing
                           and setting out the Availability Date.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>Clause 4.1 (b) and (c) will apply mutadis mutandis to the Tranche B Commitment.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>4.3</TD>
<TD WIDTH=85% VALIGN=TOP>The Agent may, in its discretion, (i) extend the period for delivery of any of the documents referred
                to in Clause 4.1 and 4.2 above on such conditions as it thinks fit, and (ii) require any copy
                document to be certified as a true copy. In relation to Clause 4.2 (a) (iv) the Borrower shall
                undertake the evidence to be delivered within three (3) months after the completion set out in Clause
                4.2 (a) (iii)<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>4.4</TD>
<TD VALIGN=TOP>The Agent shall promptly notify each Bank of any notice received pursuant to Clause 4.1 (b), (c), or
                4.2 (a) (i) and of compliance with Clause 4.1 (a), and shall promptly notify the Borrower of any
                notice received pursuant to Clause 4.1 (c).<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>5.&nbsp;&nbsp;USD UNAVAILABILITY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>5.1</TD>
<TD WIDTH=85% VALIGN=TOP>In the event that on any Quotation Date the Banks are unable to obtain deposits in USD in the London
                interbank market to fund a Drawing or the Loan, the Agent shall forthwith notify the Borrower and
                until such notice is withdrawn the obligations of the Banks to advance any Drawing shall be
                suspended. The Banks shall endeavour to fund the Drawing or the Loan with USD from such other sources
                as may be available to them and in such event the rate of interest payable on such amount shall be
                the aggregate of the Margin and such rate as the Banks may from time to time certify as being the
                cost to them of funds in USD.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>5.2</TD>
<TD VALIGN=TOP>In the event that the Banks are unable to fund such amount from alternative sources, the Agent shall
                forthwith notify the Borrower and the Borrower shall repay such amount on the earlier of the next
                following Interest Payment Date and the date falling 5 Banking Days after receipt of such notice. In
                the event that the Banks are able to fund such amount from alternative sources but the Borrower
                considers the interest rate so determined to be too high, it may prepay such amount on giving the
                Agent not less than five (5) Banking Days' irrevocable written notice.<BR><BR>

                If at any time when the Banks are funding the Drawing or the Loan from alternative sources the Agent
                determines that USD deposits are available to them in the London interbank market the Agent shall
                forthwith notify the Borrower and the rate of interest payable on such amount for the period from the
                expiry of the then current period for funding from alternative sources to the expiry of the then
                current Interest Period determined under Clause 6.1 shall be the aggregate of the Margin and such
                rate as the Agent may certify as the rate at which the Banks are able to obtain deposits for such
                period as aforesaid.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>6.&nbsp;&nbsp;INTEREST</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>6.1</TD>
<TD WIDTH=85% VALIGN=TOP>Each Interest Period shall begin on the Drawdown Date or, as the case may be, on the Interest Payment
                Date in respect of the preceding Interest Period and shall end on such date 1, 2, 3 or 6 months
                thereafter as the Borrower may elect or such other period or periods as the Borrower and the Agent
                may agree, subject to availability, by not less than 3 Banking Days' prior written notice to the Bank
                in the form set out in Exhibit 3 hereto (renewal notice), provided that:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>if any Interest Period would otherwise end on a day which is not a Banking Day it shall be
                           extended to end on the succeeding Banking Day unless it would thereby end in a new
                           calendar month in which event it shall be shortened to end on the preceding Banking Day;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>subject to paragraph (c) below if no election is made by the Borrower in respect of any
                           Interest Period, the length of such Interest Period shall be 3 months;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if any Interest Period determined pursuant to the foregoing provisions would extend beyond
                           the following Final Maturity Date such Interest Period shall be shortened to end on that
                           Final Maturity Date;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the first Interest Period in respect of any Drawing subsequent to the first Drawing made
                          when such first Drawing remains outstanding shall end on the last day of the then current
                          Interest Period for such first Drawing; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the availability of 1 month Interest Periods shall be limited to 3 (for all Drawings
                          together) for each twelve month period after the first Drawdown Date.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>6.2</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower shall pay interest on the Loan or the relevant part thereof in arrears on each Interest
                Payment Date and additionally in the case of an Interest Period exceeding 3 months duration at three
                monthly intervals during such Interest Period at the annual rate which is conclusively certified by
                the Agent to be the aggregate of the applicable Margin and LIBOR.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>6.3</TD>
<TD VALIGN=TOP>The Agent shall give notice to the Borrower and each Bank of each interest rate fixed on the
                Quotation Date for the relevant Interest Period, which notice shall, in the absence of manifest
                error, be conclusive.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>7.&nbsp;&nbsp;REPAYMENT</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>7.1</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower shall, subject to the terms of Clause 2.4 above, repay each Drawing on its respective
                Interest Payment Date. A Drawing shall be deemed to have been repaid on its Interest Payment Date
                either in whole if the new Drawing is equal to or greater than the maturing Drawing or in part if the
                new Drawing is less than the maturing Drawing and to the extent that the maturing Drawing is so
                deemed to have been repaid, the principal amount of the new Drawing is to be made on such date shall
                be deemed to have been credited to the account of the Borrower by the Agent on behalf of the Banks in
                accordance with the terms of this Agreement and the Banks shall only be obliged to make available
                pursuant to Clause 2 a principal amount equal to the amount by which the new Drawing exceeds the
                maturing Drawing.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>7.2</TD>
<TD VALIGN=TOP>On the Final Repayment Date, all outstanding Drawings and other sums (if any) then owing under this
                Agreement shall in any event be repaid or paid in full by the Borrower.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>8.&nbsp;&nbsp;VOLUNTARY AND MANDATORY PREPAYMENT</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>8.1</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower may prepay the Loan without penalty in whole or in part in a minimum amount of
                USD 5,000,000 or multiples thereof on any Interest Payment Date subject to the Agent having received
                not less than  five (5) Banking Days prior to such date irrevocable written notice of the amount to
                be prepaid.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>8.2</TD>
<TD VALIGN=TOP>Any sum prepaid pursuant to Clause 8.1 after the Term Date may not be redrawn by the Borrower. Any
                partial prepayment after the Term Date shall be applied in reduction of the Loan in inverse order of
                maturity.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>8.3</TD>
<TD VALIGN=TOP>The Borrower shall promptly prepay the Loan without penalty with such amounts which are equal to:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>the proceeds from any issue of long term debt by any entity of the Group with the ultimate
                          purpose to refinance the acquisition of the Navion Shares. For the avoidance of doubt
                          "long term debt" shall include, but not be limited to, debt of more than 6 months
                          duration, or debt of less than 6 month duration which is prolonged and/or renewed for more
                          than 6 months duration in total, but shall exclude intercompany debt;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the proceeds from any financial distribution (either by way of dividends, loans or
                          otherwise) which either directly or indirectly originate from Navion;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the net sale proceeds of any Relevant Vessel which is sold or declared an actual or
                          constructive total loss provided that such Relevant Vessel is not replaced with another
                          vessel as approved by the Agent; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the proceeds of amounts repaid or prepaid under the Intercompany Facility Agreement.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Borrower shall within 5 days notice from the Agent prepay the Loan without penalty if
                          the Borrower and the Agent have not agreed on the terms of a Change of Control based on
                          good faith negotiations, within 45 days of a Change of Control occurring.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>8.4</TD>
<TD WIDTH=85% VALIGN=TOP>Any sum prepaid pursuant to Clause 8.3 may not be redrawn by the Borrower and the Total Commitment
                shall be cancelled with an amount being equal the prepaid amounts, provided however that amounts
                equivalent to prepaid amounts under sub-clause 8.3 (b) and 8.3 (d) may be redrawn, subject to (i)
                utilisation of such amounts only within the Borrower Group and (ii) the aggregate amount outstanding
                under the Intercompany Facility Agreement not to be less than the aggregate amount outstanding under
                the Agreement.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>9.&nbsp;&nbsp;REPRESENTATIONS, UNDERTAKINGS AND SECURITY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>9.1</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower represents to the Agent and the Banks that:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>it and the Purchaser are duly formed and validly existing under the respective laws of
                          incorporation and have the power and has obtained all necessary consents for the execution
                          and performance of this Agreement, the Security Documents, the Navion Sale and Purchase
                          Agreement and the Intercompany Facility Agreement to which it is a party;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>this Agreement, the Security Documents, the Navion Sale and Purchase Agreement and the
                          Intercompany Facility Agreement to which the Borrower and the Purchaser are party
                          constitute valid, binding and enforceable obligations of the Borrower and/or the
                          Purchaser, and the execution and performance of this Agreement, the Security Documents,
                          the Navion Sale and Purchase Agreement and the Intercompany Facility Agreement do not and
                          will not contravene any applicable law, order, regulation or restriction of any kind,
                          including contractual restrictions, binding on the Borrower;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it and the Purchaser is not in default under any other agreement to which it is a party,
                          nor is it in default in respect of any financial commitment or obligation;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it and the Purchaser has no other borrowings or guarantee liabilities at the date hereof
                          other than provided pursuant to the Navion Sale and Purchase Agreement and the
                          Intercompany Facility Agreement;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it has provided the Guarantor and the Purchaser with all material information relating to
                          this Agreement and the Security Documents, including the content of Clause 13; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>in relation to the borrowing by the Borrower of the Loan, the performance and discharge of
                          its obligations and liabilities under this Agreement and the Security Documents and the
                          transactions and other arrangements effected or contemplated by this Agreement and the
                          Security Documents to which the Borrower is a party, it is acting for its own account and
                          that the foregoing will not involve or lead to a contravention of any law, official
                          requirement or other regulatory measure or procedure which has been implemented to combat
                          "money laundering" (as defined in Article 1 of the Directive (91/308/EEC) of the Council
                          of the European Communities).<BR><BR>
</TD>
</TR>
</TABLE>

<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>9.2</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower undertakes to the Agent and the Banks that so long as any amount is outstanding
                hereunder:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>it will promptly inform the Agent on behalf of the Banks of the occurrence of an event of
                          which it becomes aware which constitutes or which with the giving of notice or  lapse of
                          time  or other condition would or might constitute an Event of Default or which in its
                          reasonable opinion might adversely affect its or the Purchaser's ability to perform its
                          and/or the Puchaser's obligations hereunder, under any Security Document, under the
                          Navion Sale and Purchase Agreement or under the Intercompany Facility Agreement;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it and the Guarantor will deliver to the Agent for distribution to the Banks copies of
                          its, the Guarantor&#146;s and the Purchaser's (i) annual audited, consolidated and
                          unconsolidated accounts not later than 135 days after the end of its financial year
                          prepared in accordance with GAAP (except in the case of the Borrower it will supply either
                          audited or unaudited statements depending on (and in line with) local law requirements and
                          in case of the Guarantor the statements shall be consolidated only) (ii) unaudited
                          quarterly, consolidated and unconsolidated, reports including balance sheet and profit and
                          loss statement within 60 days after the end of each calendar quarter prepared in
                          accordance with GAAP (except in the case of the Guarantor the statements shall be
                          consolidated only), (iii) the Compliance Certificate and (iv) such other financial and/or
                          technical information as the Agent may reasonably request;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will not, and procure that the Navion group (upon acquisition) does not, make (either
                          within the Group or to a third party) any further borrowings, enter into any guarantee
                          liabilities except for guarantee in the course of ordinary operation of the business (it
                          being understood that guarantees in relation to arrests and similar indemnities do not
                          constitute an ordinary operation of the Vessel), grant loans except for the Intercompany
                          Facility Agreement, or make any further investments without the prior written consent of
                          the Agent on behalf of the Majority Banks;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will not create, incur or allow to exist over any of its or any of its Subsidiaries'
                          assets any further encumbrances other than Permitted Security;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will procure that there will be no change in ownership of any entity of the Navion
                          Group, and that none of the entities of the Navion Group will be party to any merger,
                          consolidation or similar action, without the prior written consent of the Agent on behalf
                          of the Banks, provided however that change of ownership within the Borrower Group may be
                          effected without such consent;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>in the event either (i) the long-term senior secured credit ratings of assigned to the
                          Guarantor by Standard &amp; Poor's Rating Services ("S&amp;P") and Moody&#146;s Investor Service
                          ("Moody's") (or, if such long-term senior secured credit ratings are not available, the
                          S&amp;P Long-Term Issuer Rating or Moody&#146;s Senior Implied Rating) fall below BB- or Ba3,
                          respectively, or (ii) the Guarantor does not have a debt rating assigned to it by S&amp;P or
                          Moody's, then the Borrower shall, on the Agent's request but at its own expense, obtain
                          valuations of the Relevant Vessels free of any charters or employment contracts from at
                          least two (2) independent shipbrokers satisfactory to the Agent and if the aggregate of
                          (x) the average amount of the above mentioned valuations (the "Market Value") and (y) the
                          value of any additional security taken under this sub-Clause previously, is less than
                          100 % of the Tranche A Commitment, promptly restore such ratio if the Agent on behalf of
                          the Beneficiaries so requires by either providing additional security satisfactory to the
                          Majority Banks or reducing and cancelling the Tranche A Commitment accordingly.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will not permit any change of ownership of the Navion Shares without the prior written
                          consent of the Agent on behalf of the Banks;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will procure that the Guarantor and the Borrower and their respective Subsidiaries do
                          not materially change the nature of their business or commence any business any materially
                          different from its current business;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will ensure that the Group does not to sell, assign, transfer, pledge or otherwise
                          convey or dispose of any of the shares of any entity within the Navion Group including the
                          Navion Shares (including by way of spin-off, instalment sale or otherwise) or of any other
                          ownership interest  of the Purchaser, Navion and/or any of their Subsidiaries without the
                          prior written consent of the Agent on behalf of the Banks, provided however that any such
                          transaction effected within the Borrower Group may be effected without such consent;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>it will ensure that none of the entities within the Navion Group or any of their
                          Subsidiaries will sell, or otherwise dispose of, any of their assets (including  by way of
                          spin-off, instalment sale or otherwise), except of assets of Navion or any of it's
                          Subsidiaries  which is substantial in relation to the assets taken as a whole unless
                          consented thereto in writing by the Agent on behalf of the Majority Banks, any surplus
                          sale proceeds whatsoever shall be utilised as legal distribution or repayment of
                          inter-company debt to the Borrower for the prepayment and cancellation of the Loan
                          pursuant to Clause 8.4 unless the Borrower prepays an identical amount from other sources
                          at a time acceptable to the Agent;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>in the ordinary course of its business, it conducts such  reviews of the effect of
                          Environmental Laws on the business, operations and properties of the Borrower as it deems
                          appropriate and such reviews as the Agent may require. On the basis of this review, the
                          Borrower has reasonably concluded that (i) it has complied with the provisions of all
                          Environmental Laws, (ii) has obtained all relevant environmental approvals and is in
                          compliance with all such environmental approvals, (iii) has not received notice of any
                          environmental claim, (iv) is not aware that any environmental claim is pending or
                          threatened against it or the Vessel, (v) there has been no emission, spill, release or
                          discharge of a material of environmental concern from the Vessel and (vi) that the
                          compliance by any of its employees, agents or representatives with Environmental Laws
                          and/or environmental approvals presently in effect or the consequences of the involvement
                          of the Vessel in any incident which gives rise or may give rise to an environmental claim,
                          are unlikely to have a material adverse effect on the Borrower.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>9.3</TD>
<TD WIDTH=85% VALIGN=TOP>The Loan, and all amounts outstanding hereunder, shall be secured by the following in form and
                content satisfactory to the Agent:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;the Guarantee;<BR>
                         &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;the Assignment Agreement and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the Assignment Agreement secured with a first priority pledge over all Navion Shares
                           pursuant to Exhibit 10.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>10.&nbsp;&nbsp;CHANGES IN CIRCUMSTANCES</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>10.1</TD>
<TD WIDTH=85% VALIGN=TOP>If by reason of: (i) changes in any existing law, rule or regulation, or (ii) the adoption of any new
                law, rule or regulation, or (iii) any change in the interpretation or administration of (i) or (ii)
                above by any governmental authority, or (iv) compliance with any directive or request from any
                governmental authority (whether or not having the force of law):<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>any of the Banks incurs costs as a result of it having entered into this Agreement and/or
                           performing its obligations hereunder; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>there is an increase in the costs to any of the Banks of maintaining or funding its
                           portion of the Total Commitment, the Loan or any advances hereunder; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>any of the Banks becomes subject to any new or modified capital adequacy or similar
                           requirements which will have the effect of increasing the amount of capital required or
                           expected to be maintained by such Bank based on such Bank's obligations hereunder;<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER></TD>
<TD WIDTH=85% VALIGN=TOP>then any such cost, liability or reduction of return as referred to in the preceding paragraphs
                (a)-(c) shall be payable by the Borrower upon request by the Agent either in the form of an
                increased margin or in the form of an indemnification. The relevant Bank shall via the Agent give
                the Borrower notice within a reasonable time of its intention to claim compensation under this
                Clause 10.1 and it shall specify the form and amount of such compensation. The relevant Bank's
                determination of the amount of compensation to be made under this Clause 10.1 shall, absent manifest
                error, be conclusive.  The Borrower shall be entitled to prepay such Bank's portion of the Loan in
                accordance with Clause 8 at any time following receipt of notice from the Agent as aforesaid on
                giving not less than 7 Banking Days' irrevocable written notice. In such event the Borrower shall
                nevertheless compensate such Bank for such requested indemnification for the period up to and
                including the date of prepayment and Clause 12.5 shall be applicable.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>10.2</TD>
<TD WIDTH=85% VALIGN=TOP>In the event that it shall be unlawful for any Bank to make available its portion of the Total
                Commitment or maintain or fund its portion of the Loan hereunder then such Bank's obligations shall
                terminate and all amounts owing by the Borrower to such Bank shall become due and payable on demand
                by such Bank through the Agent and Clause 12.5 shall be applicable.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>10.3</TD>
<TD WIDTH=85% VALIGN=TOP>Neither the Agent nor any Bank shall be liable for any failure to perform the whole or any part of
                this Agreement resulting directly or indirectly from the action or inaction or purported action of
                any government or other authority or any strike, lockout, boycott, blockade, or war affecting the
                Bank.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>10.4</TD>
<TD WIDTH=85% VALIGN=TOP>If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any
                respect under the laws of any jurisdiction, neither the legality, validity or enforceability of the
                remaining provisions hereof nor the legality, validity or enforceability of such provision under the
                laws of any other jurisdiction shall in any way be affected or impaired thereby.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>11.&nbsp;&nbsp;FEES AND EXPENSES</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>11.1</TD>
<TD WIDTH=85% VALIGN=TOP>The Borrower shall pay to the Agent:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>such fees as set out in a separate fee letter;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>for the account of the Banks, a commitment fee in USD in respect of the undrawn part of
                          the Commitment for the period from (i) 27 November 2002 and 180 days thereafter, of 0,30 %
                          p.a., and (ii) for the period subsequent to (i) and the Final Repayment Date, of 0,50 %
                          p.a. calculated on the daily average undrawn amount of the Commitment, such fee to be
                          payable quarterly in arrears commencing on the first drawdown date and finally on the last
                          day of such period as aforesaid;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>and  upon demand, all expenses (including internal and external legal and collateral fees
                          of the Agent) incurred by the Agent in connection with the preparation, execution or
                          termination of this Agreement and any other documents delivered pursuant to this Agreement
                          or incurred by the Agent and the Banks in connection with the preservation or enforcement
                          of any rights hereunder and/or thereunder.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>11.2</TD>
<TD WIDTH=85% VALIGN=TOP>The obligations of the Borrower in Clause 11.1 (c) above shall survive the Final Repayment Date.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>12.&nbsp;&nbsp;PAYMENTS</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>12.1</TD>
<TD WIDTH=85% VALIGN=TOP>In the event that the date on which a payment is due to be made hereunder is not a Banking Day, such
                date of payment shall be the following Banking Day unless it would thereby fall in a new calendar
                month in which event it shall be the preceding Banking Day.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>12.2</TD>
<TD VALIGN=TOP>In the event that any payment to be made hereunder by the Borrower to any Bank is not received by the
                Agent on the due date therefor, interest will be charged by such Bank from the due date until the
                date that payment is received at a rate which is equal to the aggregate of (i) the Margin (ii) a
                default funding charge of two (2)% per annum and (iii) the rate at which deposits from one Banking
                Day to the next in an amount approximately equal to the defaulted amount due to such Bank are offered
                to such Bank in the London interbank market at approximately 11:00 a.m. London time on the due date
                for payment and on each succeeding Banking Day until payment in full of the amount due is received by
                such Bank; provided that if the Agent determines that such default may be reasonably expected to
                continue unremedied for a period exceeding one week then it may require by notice to the Borrower
                that the funding cost shall be determined by reference to the rate at which deposits are offered as
                aforesaid for periods of such length (not exceeding three months) as it may designate. Interest
                charged under this Clause 12.2 shall be payable on demand and unless so paid shall be added to the
                defaulted amount at the end of each month following the due date for payment of such amount.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>12.3</TD>
<TD VALIGN=TOP>All payments to be made by the Borrower hereunder shall be made without set-off or counterclaim.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>12.4</TD>
<TD VALIGN=TOP>All payments to be made by the Borrower hereunder shall be made free and clear of and without
                deduction for or on account of any present or future Taxes of any nature now or hereafter imposed
                unless the Borrower is compelled by law to make payment subject to any such Taxes. In that event the
                Borrower shall (i) pay to the Agent for account of the Banks such additional amounts as may be
                necessary to ensure that the Banks receive a net amount equal to that which they would have received
                had such payment not been made subject to any Taxes, and (ii) deliver to the Agent within 10 Banking
                Days of any request by it an official receipt in respect of the payment of any Taxes so deducted.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>12.5</TD>
<TD VALIGN=TOP>If any amount of principal is, for any reason whatsoever, repaid on a day other than the last day of
                the then current Interest Period relating to such amount, the Borrower shall pay to the Agent for
                account of the Banks on request such amount as may be necessary to compensate the Banks for any loss
                or premium or penalty incurred by them in respect of the liquidation or re-employment of funds
                borrowed for the purpose of maintaining the amount repaid.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>12.6</TD>
<TD VALIGN=TOP>If the Agent pays any amount to a Bank or the Borrower which has not but ought to have been paid to
                it by the Borrower or a Bank (as the case may be) then unless such amount is paid within 3 Banking
                Days of the due date such Bank or the Borrower (as the case may be) shall refund such amount to the
                Agent on demand. At the time such amount is paid or refunded the person paying the same shall also
                pay interest to the Agent on such amount at such rate per annum as reflects the cost to the Agent of
                funding such amount during the period from the time when such amount ought to have been paid to the
                time when such amount was actually paid, provided, however, that this shall not reduce the
                obligations of the Borrower according to Clause 12.2 above.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>12.7</TD>
<TD VALIGN=TOP>Interest, commitment fee and any other payments hereunder of an annual nature shall accrue from day
                to day and be calculated on the actual number of days elapsed and on the basis of a 360 day year or
                in any case where market practice differs, in accordance with market practice.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>13.&nbsp;&nbsp;EVENTS OF DEFAULT</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>13.1</TD>
<TD WIDTH=85% VALIGN=TOP>The obligations of the Banks hereunder shall terminate forthwith and any amount outstanding shall
                become immediately due and payable together with interest thereon and the Banks may exchange all or
                part of any outstanding amounts hereunder to NOK as elected by the Majority Banks in their sole
                discretion and/or enforce their rights under this Agreement and the Security Documents,  in the
                manner and order they deem appropriate, if any of the following events occurs and the Agent, upon the
                instruction of the Majority Banks, gives notice to the Borrower:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>if the Borrower fails to pay any sum due hereunder on the due date unless such non-payment
                           is due solely to technical or administrative difficulties affecting the transfer, in which
                           case such failure to pay must be remedied within the close of business in Oslo on the
                           third succeeding Banking Day; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Borrower defaults in the due performance or observance of any term or covenant
                           contained herein or in any Security Document and such default continues unremedied for a
                           period of 10 Banking Days after the Agent has given to the Borrower notice of such
                           default; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if any material representation made by the Borrower in this Agreement or in any notice,
                           certificate or statement delivered or made pursuant hereto proves to have been inaccurate
                           or misleading when made; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>subject to the expiry of any applicable cure period in any relevant agreement, if any
                           indebtedness in respect of borrowed money or guarantee liabilities of (x) the Borrower
                           and/or its Subsidiaries, or (y) the Guarantor and/or any of its Subsidiaries in excess
                           of the aggregate amount of USD 15,000,000  is not paid when due or becomes due prior to
                           the specified payment date by reason of default (except for any amounts outstanding
                           hereunder) ; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if a distress or other execution is levied upon or against any substantial part of the
                           assets of the Borrower and is not discharged within 30 days, or contested in good faith by
                           the Borrower; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Borrower is unable or admits in writing its inability to pay its lawful debts as
                           they mature, or makes a general assignment for the benefit of its creditors; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if any proceedings are commenced in relation to insolvency or bankruptcy or any order or
                           judgment is given by any court for the liquidation, winding-up or reorganisation of the
                           Borrower or for the appointment of a receiver, trustee or liquidator of the Borrower or
                           all or any part of its assets (save for the purpose of amalgamation or reorganisation not
                           involving insolvency, the terms of which shall have received the prior written approval of
                           the Agent on behalf of the Majority Banks); or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Borrower ceases or threatens to cease to carry on its business or disposes or
                           threatens to dispose of a substantial part of its assets or the same are seized or
                           appropriated for any reason; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if any Security Document or this Agreement ceases to be in full force and effect; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if any consent required for the performance by the Borrower of its obligations hereunder
                           or by the Guarantor of its obligations under the Guarantee is revoked or is otherwise
                           modified in a manner unacceptable to the Agent; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Guarantor does not provide the Agent with a Compliance Certificate and does not
                           provide the Agent with such Compliance Certificate within 4 Oslo Banking Days after the
                           Agent has given to the Borrower notice of such default; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>If the Guarantor does not maintain a financial condition at all times, on a consolidated
                           basis which is cash, cash equivalents and marketable securities in an amount not less than
                           the greater of (i) USD 75,000,000 and (ii) 7.5% of the Guarantor's Total Debt; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Borrower ceases to be a directly or indirectly wholly owned Subsidiary of the
                           Guarantor; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if, after acquisition of the Navion Shares a situation arises within the Group which, in the reasonable
                          opinion of the Majority Banks, will prevent fulfilment by the Borrower of its obligations
                          hereunder, or by the Guarantor of its obligations under the Guarantee; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if any breach or event of default occurs under any of the Security Documents; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Purchaser fails to pay any sum due under the Intercompany Facility Agreement on the
                          due date unless such non-payment is due solely to technical or administrative difficulties
                          affecting the transfer, in which case such failure to pay must be remedied within the
                          close of business in Oslo on the third succeeding Banking Day; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Purchaser defaults in the due performance or observance of any term or covenant
                          contained in the Intercompany Facility Agreement or in any security document connected
                          thereto and such default continues unremedied for a period of 10 Banking Days, or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the Navion Sale and Purchase Agreement is terminated by either party to the agreement
                          unless contested in good faith.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>13.2</TD>
<TD WIDTH=85% VALIGN=TOP>Clause 13.1 (c) - (h) shall also apply with respect to the Guarantor and the Purchaser.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>14.&nbsp;&nbsp;TRANSFER</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>14.1</TD>
<TD WIDTH=85% VALIGN=TOP>Any Bank may transfer all or part of its participation in the Facility to any other bank or financial
                institution by giving not less than 10 Banking Days' prior written notice to the Agent, which shall
                promptly notify the Borrower provided that the Agent may reject such transfer in its sole discretion
                if a rejection notice is received by the relevant Bank within 3 Banking Days after its notice of the
                intended transfer to the Agent. The Agent may not reject transfers of Banks to any affiliate of such
                Bank. In event of transfer references herein to such Bank shall be construed as references to its
                transferee or transferees to the extent necessary. The Borrower may not transfer the Facility or any
                part thereof to any party.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>15.&nbsp;&nbsp;AGENCY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>15.1</TD>
<TD WIDTH=85% VALIGN=TOP>Each Bank authorises the Agent to take such action on its behalf and to exercise such powers as are
                specifically delegated to it by the terms hereof together with all such powers as are reasonably
                incidental thereto. The relationship between the Agent and each Bank is that of agent and principal
                only, and nothing herein shall impose on the Agent any duties or obligations other than those for
                which express provision is made herein.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.2</TD>
<TD VALIGN=TOP>Except as expressly provided herein the Agent shall distribute promptly to the Banks all sums
                received from the Borrower rateably in proportion to the amount of each Bank's participation in the
                Facility.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.3</TD>
<TD VALIGN=TOP>The Agent will promptly advise each Bank of any notice received by it from the Borrower hereunder.
                The Agent shall not be under any obligation towards any Bank to ascertain or enquire as to the
                performance or observance of any of the terms or conditions hereof or of the Security Documents to be
                performed or observed by any other party hereto or thereto.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.4</TD>
<TD VALIGN=TOP>Each Bank shall indemnify, to the extent not reimbursed by the Borrower, the Agent rateably according
                to the amount of its participation in the Facility against any loss, expenses (including legal fees)
                or liability (except such as results from the Agent's own gross negligence or wilful misconduct),
                which the Agent may suffer or incur in connection with the implementation, administration or
                enforcement of this Agreement or any Security Document.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.5</TD>
<TD VALIGN=TOP>In performing its duties and exercising its powers hereunder the Agent will be entitled to rely on
                (i) any communication believed by it to be genuine and to have been sent or signed by the person by
                whom it purports to have been sent and signed and (ii) the opinions and statements of any
                professional advisers selected by it in connection herewith, and the Agent shall not be liable to any
                other party hereto for any consequence of any such reliance.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.6</TD>
<TD VALIGN=TOP>The Agent takes no responsibility for the truth of any representations made herein nor for the
                adequacy or enforceability of this Agreement and neither the Agent (except in the case of gross
                negligence or wilful misconduct) nor any of its directors, officers or employees shall be liable for
                any action taken or omitted by it or any of them.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.7</TD>
<TD VALIGN=TOP>Notwithstanding the agency hereinbefore constituted, the Agent may without liability to account
                therefore make loans to, accept deposits from and generally engage in any kind of banking or other
                business with the Borrower. The Agent and each Bank shall have the right (but no obligation) to
                set-off any claim it has against the Borrower towards any claim the Borrower has against the Agent or
                such Bank, irrespective of such claims being nominated in different currencies or if the claims have
                not yet fallen due, but only after the Agent has declared an Event of Default and demanded a
                repayment of the Loan. If any Bank shall at any time receive payment (whether by set-off,
                counterclaim or otherwise) and the result thereof is that it receives an amount which is greater in
                proportion to its participation than the amount received by any other Bank in proportion to such
                Bank's participation, then the receiving Bank shall, through the Agent, distribute such payment among
                the Banks in proportion to their pro rata participations in the Loan.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.8</TD>
<TD VALIGN=TOP>Each Bank acknowledges that it has taken and will take such independent action and make such
                investigations as it deems necessary to inform itself as to the financial condition and affairs of
                the Borrower. Each Bank shall be responsible for making its own assessment of the financial condition
                and affairs of the Borrower in connection with the making and continuance of the Loan and has made
                its own appraisal of the creditworthiness of the Borrower.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.9</TD>
<TD VALIGN=TOP>The Agent may grant waivers and consents, vary the terms of this Agreement and do or omit to do all
                such acts and things in connection with this Agreement as may be authorised in writing by the
                Majority Banks or if specifically designated in a relevant term of this Agreement, all the Banks. Any
                such waiver, consent, variation, act or omission so authorised and effected by the Agent shall be
                binding on all the Banks and the Agent shall be under no liability whatsoever in respect thereof,
                except that the prior written agreement of all of the Banks shall be required to authorise (i) any
                change in any rate at which interest is payable under or in connection with this Agreement, (ii) any
                extension of the date for or alteration in the amount or currency of, any payment of principal,
                interest, commitment fee or other amount payable under or in connection with this Agreement, (iii)
                any increase in any Bank's obligations under Clause 2, except for the Tranche B Commitment which will
                be made available on behalf of all the Banks on instruction from the Majority Banks, (iv) any release
                of security interests provided hereunder, (v) any variation of the definition of Majority Banks, or
                (vi) any variation of the terms of this Clause 15.9.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>15.10</TD>
<TD VALIGN=TOP>The Agent may resign (without reason) its appointment at any time by giving a 30 days' prior written
                notice to the parties hereto. The resignation shall only become effective upon the appointment of a
                new agent. The Agent may appoint a new agent among any reputable and experienced finance institution.
                Upon the appointment of a new agent, such new agent shall assume all rights and obligations from such
                time designated by the Agent, and the Agent shall from such time be discharged from any further
                obligations hereunder.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>16.&nbsp;&nbsp;NOTICES AND TIME</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>16.1</TD>
<TD WIDTH=85% VALIGN=TOP>Every notice under this Agreement shall be in writing and may be given or made by letter or telefax.
                Communications hereunder shall be addressed as follows:-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>if to the Agent, at N-0021 Oslo, Norway<BR>
                         telefax no. +47 22 48 28 94<BR>
                         Attention: Credit Administration shipping;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if to the Borrower, c/o  Teekay Shipping (Canada) Ltd.<BR>
                         telefax no.   1 604- 681 3011<BR>
                         Attention: Director, Finance;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if to the Banks, at their respective addresses listed in Exhibit 1 hereto;<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>16.1</TD>
<TD WIDTH=85% VALIGN=TOP>or to such other address as one party may hereafter notify to the other parties.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>16.2</TD>
<TD VALIGN=TOP>Communications sent by letter or telefax shall be effective upon receipt. Any communication by
                telefax from the Borrower to the Agent shall be confirmed by letter if so requested by the Agent.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>16.3</TD>
<TD VALIGN=TOP>No failure or delay on the part of the Agent or the Banks to exercise any power or right under this
                Agreement or the Security Documents shall operate as a waiver thereof or of any other power or right.
                The remedies provided herein are cumulative and are not exclusive of any remedies provided by law.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>17.&nbsp;&nbsp;GOVERNING LAW AND JURISDICTION</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=15% VALIGN=TOP ALIGN=CENTER>17.1</TD>
<TD WIDTH=85% VALIGN=TOP>This Agreement shall be governed by and construed in accordance with Norwegian law.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=CENTER>17.2</TD>
<TD VALIGN=TOP>The Borrower hereby irrevocably submits to the non-exclusive jurisdiction of the Norwegian courts,
                the venue to be elected by the Agent.<BR><BR>
</TD>
</TR>
</TABLE>


<P><U>The Borrower</U><BR>
NORSK TEEKAY HOLDINGS LTD.</P>

<P>By.........................................................................................<BR>
Name in block letters............................................................<BR>
Title......................................................................................</P>

<P><U>The Bank</U><BR>
p.p. DEN NORSKE BANK ASA</P>

<P>By.........................................................................................<BR>
Name in block letters............................................................<BR>
Title......................................................................................</P>

<P><U>The Agent</U><BR>
p.p. DEN NORSKE BANK ASA</P>

<P>By.........................................................................................<BR>
Name in block letters............................................................<BR>
Title......................................................................................</P>

<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=RIGHT>EXHIBIT 1</P>
<BR>
<BR>
<P ALIGN=CENTER><B>B A N K &nbsp;&nbsp;C O M M I T M E N T S</B></P>

<BR>
<BR>
<BR>

<P>Den norske Bank ASA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100%<BR>
N-0021 Oslo<BR>
Norway<BR>
<BR>
Telefax:&nbsp;&nbsp;&nbsp;+47 22 48 28 94<BR>
Attn:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit Administration Shipping</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><B>F O R M &nbsp;&nbsp;O F<BR>
D R A W D O W N &nbsp;&nbsp;N O T I C E</B></P>

<P>From:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Norsk Teekay Holdings Ltd.<BR>
To:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Den norske Bank ASA<BR>
Attention:&nbsp;&nbsp;&nbsp;Credit Administration Shipping<BR>
Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;...........................................</P>

<P>Dear Sirs</P>

<P>We refer to a revolving credit facility agreement dated .... .......................... 20.... (the "Agreement")
made between inter alia ourselves as Borrower and Den norske Bank ASA as Agent. Terms defined in the Agreement shall
have the same meaning in this notice.</P>

<P>We hereby give you irrevocable notice that pursuant to the Agreement and on .... ...................... 20...., we
wish to draw down the amount of USD....................................... upon the terms and subject to the
conditions contained therein.</P>

<P>The Interest Period for the Drawing shall, subject to the provisions of the Agreement, be of ...... months duration.</P>

<P>The Drawing, net of applicable fees and expenses described in Clause 11, shall be transferred to the account of
.................................... with ..................................... , account no.
................................... .</P>

<P>As of today no event has occurred which with or without notice and/or lapse of time would constitute an Event of
Default under the Agreement.</P>

<P>In the event that drawdown does not take place on the aforementioned date, by reasons beyond the control of the
Agent and/or the Banks,  we hereby undertake to reimburse you as Agent and all the Banks for any and all costs
incurred, including but not limited to interest.</P>

<P ALIGN=CENTER>                                                   Yours faithfully<BR>
                                                 for and on behalf of<BR>
                                              Norsk Teekay Holdings Ltd.</P>

<P ALIGN=CENTER>                          .................................................................<BR>
                                                 (authorised officer)</P>
<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=RIGHT>                                                                                                     EXHIBIT 3</P>
<BR>
<BR>
<BR>

<P ALIGN=CENTER><B>FORM OF CERTIFICATE OF COMPLIANCE</B></P>
<BR>
<BR>

<P>From:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Norsk Teekay Holdings Ltd.<BR>
To:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Den norske Bank ASA<BR>
Attention:&nbsp;&nbsp;&nbsp;Credit Administration Shipping<BR>
Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;...........................................</P>

<P>We refer to the USD 500,000,000 revolving credit agreement dated  .. March, 2003, under which we are Borrower and
you are Agent (the "Agreement").  We give this compliance certificate as required under Clause 13 of the Agreement
and Clause 9 of the Guarantee.  Terms used in this compliance certificate have the meaning given to them in the
Agreement.</P>

<P>We report the following with respect to the figures requested in Clause 13.1 (j) of the Agreement, that as of 31.03
/ 30.06 / 31.09 / 31.12 of 200[  ] the following figures apply:</P>
<BR>

<P>...............................................................................<BR>
<BR>
................................................................................</P>
<BR>
<BR>

<P>We hereby confirm that no change has occurred since the last time we forwarded information to you according to
Clause  9.1 (b) (Financial information) of the Agreement.</P>

<P>For and on behalf of (as applicable)<BR>
Norsk Teekay Holdings Ltd.</P>


<P>_______________________________________<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>Signature</FONT><BR>
<BR>
_______________________________________<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name with block letters</FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT>                                                                              EXHIBIT 4</P>
<BR>
<BR>

<P ALIGN=CENTER><B>LIST OF RELEVANT VESSELS</B></P>
<BR>
<BR>

<PRE>
<B>Vessel Name                        Type             Built             dwt              Clarkson's*</B>


Bahamas Spirit                     DH               1998              107,261          30,300,000

Kanata Spirit                      DH               Jul-99            113,000          32,650,000

Seletar Spirit                     DS               Jan-88            94,988           13,930,000

Semakau Spirit                     DS               Jun-88            97,172           18,980,000

Sentosa Spirit                     DS               Dec-89            97,163           15,320,000

Singapore Spirit                   DS               Jan-87            96,967           11,900,000

Sudong Spirit                      DS               Sep-87            98,215           12,020,000


Total Value                                                                           135,100,000
</PRE>

<P>* The values are up to 19 November 2002 as per Clarkson's ShipValue.net in USD.</P>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT>                                                                             EXHIBIT 5</P>



<P ALIGN=CENTER><B>FORM OF TRANSFER CERTIFICATE</B></P>


<P><B>WHEREAS:</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP>A.</TD>
<TD WIDTH=90% VALIGN=TOP>Pursuant to a revolving credit facility agreement dated [ &#149; ] March, 2003 (the "<B>Agreement</B>") the banks listed
       in Schedule 1 to the Agreement (the "<B>Banks</B>"), represented by Den norske Bank ASA as agent (the "<B>Agent</B>"), have
       made available to Norsk Teekay Holdings Ltd. (the "<B>Borrower</B>") a revolving credit facility in the initial
       maximum principal amount of USD 500,000,000;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>B.</TD>
<TD VALIGN=TOP>Any transfer of a Bank's rights and obligations under the Agreement is subject to the provisions of Clause
       14 (Assignment) of the Agreement;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>C.</TD>
<TD VALIGN=TOP>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] (the "<B>Transferor</B>") has requested and the Agent and the Borrower have consented to
       the transfer by the Transferor of [a part of] its rights and obligations under the Agreement to
       [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] (the "<B>Transferee</B>");<BR><BR>
</TD>
</TR>
</TABLE>
<BR>


<P><B>NOW THEREFORE:</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP>1.</TD>
<TD WIDTH=90% VALIGN=TOP>The Transferor hereby transfers, with effect from the date hereof, [a part of] its rights and obligations
       under the Agreement [corresponding to the principal amount of USD [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]] to the Transferee.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>2.</TD>
<TD VALIGN=TOP>The Transferee confirms having received from the Transferor a full and complete set of copies of the
       Agreement and all documents pertaining thereto, and hereby confirms and agrees to be bound by the terms
       thereof as a Bank thereunder. Particularly the Transferee confirms having made an individual credit risk
       assessment of the Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>IN WITNESS WHEREOF</B> the parties hereby have caused this Transfer Certificate to be duly executed by their authorised
officers on the [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] day of [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;].</P>

<PRE>
For and on behalf of (as applicable)                      For and on behalf of (as applicable)
Norsk Teekay Holdings Ltd.                                Den norske Bank ASA
(as Borrower)                                             (as Agent)



_______________________________________                   _______________________________________
Signature                                                 Signature

_______________________________________                   _______________________________________
Name with block letters                                   Name with block letters


For and on behalf of                                      For and on behalf of
[                                  ]                      [                                  ]
as Transferor                                             as Transferee



_______________________________________                   _______________________________________
Signature                                                 Signature

_______________________________________                   _______________________________________
Name with block letters                                   Name with block letters
</PRE>

<P ALIGN=RIGHT>                                                                                                             EXHIBIT 6</P>

<P ALIGN=CENTER><B>FORM OF GUARANTEE AND INDEMNITY AGREEMENT</B></P>
<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=CENTER>                             GUARANTEE AND INDEMNITY AGREEMENT<BR>
<BR>
<BR>
                                                       between<BR>
<BR>
<BR>
                                             TEEKAY SHIPPING CORPORATION<BR>
<BR>
                                                     as Guarantor<BR>
<BR>
                                                         and<BR>
<BR>
                                                 DEN NORSKE BANK ASA<BR>
<BR>
                                                       as Agent</P>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER>           ______________________________________________________________<BR>
<BR>
                           related to the obligations of Norsk Teekay Holdings Ltd. under a<BR>
                                 USD 500,000,000 Revolving Credit Facility Agreement<BR>
                                                 dated ...... March 2003<BR>
                            ______________________________________________________________</P>

<BR>
<BR>
<P ALIGN=CENTER>                                                 Dated ...... March 2003</P>
<BR>
<BR>
<BR>
<BR>
<BR>

<P><B>THIS GUARANTEE AND INDEMNITY AGREEMENT</B> (the "Guarantee") is made on the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; day of March 2003</P>

<P><B>BETWEEN:</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP>(1)</TD>
<TD WIDTH=90% VALIGN=TOP><B>TEEKAY SHIPPING  CORPORATION</B>,  a corporation  incorporated in the Republic of the Marshall  Islands with an
           office at TK House,  Bayside  Executive  Park,  West Bay Street &amp; Blake  Road,  Nassau,  The  Bahamas  (the
           "<B>Guarantor</B>"); and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(2)</TD>
<TD VALIGN=TOP><B>DEN NORSKE BANK ASA</B>, 0021 Oslo,  Norway (the "Agent"),  acting on behalf of itself and a certain  syndicate
           of banks (together the "Beneficiaries"),<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP></TD>
<TD VALIGN=TOP><B>WHEREAS:-</B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(A)</TD>
<TD VALIGN=TOP>By a revolving  credit  facility  agreement dated [&#149;]March 2003 (the "<B>Loan  Agreement</B>")  made between Norsk
           Teekay  Holdings  Ltd.  (the  "<B>Borrower</B>"),  the  Beneficiaries  as lenders,  and the Agent as agent for the
           Beneficiaries,  the  Beneficiaries  have granted  (subject to the terms and conditions set forth therein) a
           loan,  divided into a tranche of USD 100,000,000  ("Tranche A") and a tranche of USD 400,000,000  ("Tranche
           B"), to the Borrower in the aggregate  principal  amount of up to USD  500,000,000  (the  "<B>Loan</B>"),  for the
           purpose of assisting the Borrower in financing the acquisition of Navion ASA ("Navion");<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(B)</TD>
<TD VALIGN=TOP>It is a condition  for  drawdown  of the Loan under the Loan  Agreement  that the  Guarantor  executes  and
           delivers this  Guarantee as part of the security to be provided for the due and correct  performance by the
           Borrower of all of their  obligations and liabilities to the  Beneficiaries  under the Loan Agreement,  and
           the Guarantor in consideration  thereof,  has agreed to execute and deliver this Guarantee in favour of the
           Agent (acting as agent and security trustee for the Beneficiaries)  after having examined and agreed to all
           the terms and conditions of the Loan Agreement (and all Schedules thereto),<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>NOW THEREFORE:-</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP><B><U>1</U></B></TD>
<TD WIDTH=90% VALIGN=TOP><B><U>DEFINITIONS AND CONSTRUCTION</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>1.1</B></TD>
<TD VALIGN=TOP><B>Definitions</B><BR>
           In this  Guarantee  including  the preamble  hereto  (unless the context  otherwise  requires)  any term or
           expression  defined in the preamble  shall have the meanings  ascribed to it therein and the following term
           and  expression  shall have the meanings  set out below.  In addition,  terms and  expressions  not defined
           herein but whose meanings are defined in the Loan Agreement shall have the meanings set out therein.<BR><BR>
</TD>
</TR>
</TABLE>

<PRE>
           "<B>Outstanding Indebtedness</B>":              means  all  sums  of any  kind  at any  time  owing  actually  or
                                                    contingently  by the  Borrower to the Agent and the  Beneficiaries
                                                    pursuant  or  in  relation  to  the  Loan  Agreement   (including,
                                                    without limitation,  by way of repayment of principal,  payment of
                                                    interest   and  default   interest,   payment  of   indemnity   or
                                                    counter-indemnity  amounts,  reimbursement  of costs or  otherwise
                                                    whatsoever).

           "<B>Relevant Vessels</B>"                       means the vessels set out in Schedule 1 hereto.

           "<B>Total Debt</B>"                             means for the Guarantor the aggregate of (i) that portion, as
                                                    determined in accordance with US GAAP, of the Indebtedness
                                                    shown as &#147;long term debt&#148; on the consolidated balance sheet
                                                    of the Guarantor  and  (ii)  that portion, as determined in
                                                    accordance with US GAAP, of the Indebtedness shown as
                                                    "current portion of long term debt" on the consolidated
                                                    balance sheet of the Guarantor.
</PRE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP><B><U>2</U></B></TD>
<TD WIDTH=90% VALIGN=TOP><B><U>GUARANTEE AND INDEMNITY</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>2.1</B></TD>
<TD VALIGN=TOP><B>Guarantee obligations</B><BR>
           In order to secure the payment of the  Outstanding  Indebtedness  in accordance  with the provisions of the
           Loan  Agreement,  the  Guarantor as primary  obligor as and for its own debt and not merely as surety ("som
           selvskyldnergarantist"),  hereby undertakes to the Agent to be responsible for and hereby guarantees to the
           Agent as agent and security  trustee for the  Beneficiaries,  the due and punctual  payment by the Borrower
           (as and when due  under  the Loan  Agreement  by  acceleration,  demand  or  otherwise  whatsoever)  of the
           Outstanding Indebtedness and every part thereof, limited  only as set forth in Clause 2.4 below.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>2.2</B></TD>
<TD VALIGN=TOP><B>Demands</B><BR>
           The Guarantor  undertakes,  unconditionally  and  irrevocably,  and immediately upon receipt of the Agent's
           first written  demand from time to time, to make payment in accordance  with its  obligations  under Clause
           2.1 where such demand is  accompanied  by a statement of the Agent that a payment has fallen due in respect
           of the  Outstanding  Indebtedness,  that the  Borrower  has failed to make such  payment  when due and that
           notice of such  non-payment  has been issued to the Borrower.  Each of such  payments so demanded  shall be
           made by the Guarantor to such account as the Agent may from time to time notify in writing.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>2.3</B></TD>
<TD VALIGN=TOP><B>Indemnity</B><BR>
           The Guarantor  undertakes,  unconditionally  and  irrevocably,  and immediately upon receipt of the Agent's
           first  written  demand  from  time to time,  to  indemnify  and hold  harmless  the  Agent  and each of the
           Beneficiaries  in respect of any loss incurred by the Agent or any of the  Beneficiaries as a result of the
           Loan  Agreement or any of the Security  Documents or any  provision  thereof  being or becoming  invalid or
           unenforceable  for any reason  whatsoever up to the maximum amount which would  otherwise be payable in the
           event such invalidity or unenforceability had not occurred.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>2.4</B></TD>
<TD VALIGN=TOP><B>Limited liability</B><BR>
           The total liability of the Guarantor under this Guarantee shall always be limited to USD 500,000,000 plus
           interest and costs.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>2.5</B></TD>
<TD VALIGN=TOP><B>Number of claims</B><BR>
           Subject  always to the total  liability  amount  set forth in Clause  2.4  above,  there is no limit on the
           number of claims  that may be made by the Agent on behalf of the  Beneficiaries  under this  Guarantee.  No
           claim may be made hereunder after 31 December 2004.<BR><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>3</U></B></TD>
<TD VALIGN=TOP><B><U>SURVIVAL OF GUARANTOR's LIABILITY</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(a)</TD>
<TD VALIGN=TOP>The Guarantor's  liability to the Agent and the Beneficiaries under this Guarantee shall not be discharged,
           impaired or otherwise  affected by reason of any of the following  events or  circumstances  (regardless of
           whether any such events or circumstances occur with or without the Guarantor's  knowledge or consent):-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>any time,  forbearance  or other  indulgence  given or  agreed by the Agent or the  Beneficiaries
                     with any of the  Borrower  or any third party in respect of any of their  respective  obligations
                     under the Loan Agreement and/or the Security Documents;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>any legal  limitation,  disability  or  incapacity  of the Borrower or any third party related to
                     the Loan Agreement and/or the Security Documents;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>any invalidity,  irregularity,  unenforceability or imperfection of the Loan Agreement and/or the
                     Security Documents;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the  liquidation,   bankruptcy  or  dissolution  (or  proceedings   analogous   thereto)  or  the
                     appointment  of a  receiver  for the  Borrower  or any  third  party,  or the  occurrence  of any
                     circumstances  whatsoever  affecting  the  liability  of any party to  discharge  its  respective
                     obligations under the Loan Agreement or any of the Security Documents;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>any  challenge,  dispute or  avoidance  by any  liquidator  of the Borrower or any third party in
                     respect of any claim by the Borrower by right of subrogation in any such liquidation;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>any  release,  discharge,  renewal,  amendment  or  extension  of the Loan  Agreement  and/or the
                     Security Documents; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>any failure on the part of the Agent or the  Beneficiaries  (whether  intentional or not) to take
                     or perfect any  security  agreed to be taken  under or in  relation to any of the Loan  Agreement
                     and/or the Security Documents.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP>(b)</TD>
<TD WIDTH=90% VALIGN=TOP>The Guarantor  specifically  waives all rights under the provisions of the Norwegian  Financial  Agreements
           Act of 25 June 1999 no. 46 not being  mandatory  provisions,  including the following  provisions (the main
           contents of the relevant provisions being as indicated in the brackets):<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP><B>&sect; 62 (1) (a)</B> (to be  notified  of any  security  the giving of which was a  precondition  for the
                     advance of the Loan, but which has not been validly granted or has lapsed);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 63 (1) - (2)</B> (to be notified of any Event of Default  under the Loan  Agreement  and to be kept
                     informed thereof);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 63 (3)</B> (to be  notified  of any  extension  granted to the  Borrower  in  payment of  principal
                     and/or interest);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 63  (4)</B>  (to be  notified  of the  Borrower's  bankruptcy  proceedings  or  debt  reorganisation
                     proceedings and/or any application for the latter);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 65 (3)</B>  (that the  consent  of the  Guarantor  is  required  for the  Guarantor  to be bound by
                     amendments to the Loan Agreement that may be detrimental to its interest);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 66 (1) - (2)</B> (that the  Guarantor  shall be released  from  liabilities  hereunder  if security
                     which was  given,  or the giving of which was a  precondition  for the  advance  of the Loan,  is
                     released by the Beneficiaries without the consent of the Guarantor);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 66 (3)</B> (that the Guarantor  shall be released from its  liabilities  hereunder if,  without its
                     consent,  security the giving of which was a  precondition  for the advance of the Loan,  was not
                     validly granted);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 67 (2)</B> (about reduction of the Guarantor's liabilities hereunder);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 70</B> (as the Guarantor  shall have no right of subrogation  into the rights of the  Beneficiaries
                     under the Loan Agreement until and unless the  Beneficiaries  shall have received all amounts due
                     or to become due to them under the Loan Agreement);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 71</B> (as the Agent and/or the  Beneficiaries  shall have no  liability  first to make demand upon
                     or seek to enforce  remedies  against the Borrower or any other  security  provided in respect of
                     the Borrower's  liabilities  under the Loan Agreement before demanding payment under or seeking to
                     enforce the security created hereunder);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 72</B> (as all interest and default  interest due under the Loan Agreement  shall form part of this
                     Guarantee);<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(xii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 73 (1) - (2)</B> (as all costs and expenses  related to a default  under the Loan  Agreement  shall
                     form part of this Guarantee); and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(xiii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>&sect; 74 (1) - (2)</B> (as the  Guarantor  shall make no claim against the Borrower for payment until and
                     unless the  Beneficiaries  first  shall have  received  all  amounts due or to become due to them
                     under the Loan Agreement).<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP><B><U>4</U></B></TD>
<TD WIDTH=90% VALIGN=TOP><B><U>CONTINUING GUARANTEE</U></B><BR>
           This Guarantee  shall be a continuing  guarantee  which shall remain in full force and effect until payment
           in full has been  received  by the Agent and the  Beneficiaries  of each and  every  part and the  ultimate
           balance of the Outstanding Indebtedness.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>5</U></B></TD>
<TD VALIGN=TOP><B><U>COVENANTS</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>5.1</B></TD>
<TD VALIGN=TOP><B>Covenants of the Borrower</B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(a)</TD>
<TD VALIGN=TOP>The Guarantor shall procure that the Borrower at all times complies with all of their obligations,  covenants
           and  representations  under the Loan Agreement and the Security  Documents,  and undertakes at all times to
           comply with all  obligations,  covenants  and  representations  under the Loan  Agreement  and the Security
           Documents  which  refers  to the  Guarantor  thereunder,  particularly  as set out in  Clause 9 of the Loan
           Agreement.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(b)</TD>
<TD VALIGN=TOP>The  Guarantor  specifically  represents  and warrants  that all the  representations  and  warranties of the
           Borrower with respect to it as Guarantor as set out in Clause 9 of the Loan  Agreement are true and correct
           in all respects.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>5.2</B></TD>
<TD VALIGN=TOP><B>Financial covenants</B><BR>
           The Guarantor undertakes that its financial condition shall be such that it will maintain at all times, on
           a consolidated basis cash, cash equivalents and marketable securities in amount not less than the greater
           of (i) USD 75,000,000 and (ii) 7.5% of the Guarantor's consolidated Total Debt.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>5.3</B></TD>
<TD VALIGN=TOP><B>Negative Pledge</B><BR>
           Except as contemplated by the Loan Agreement and the Security  Documents,  the Guarantor shall procure that
           no security  interest,  other than  Permitted  Security,  is created,  incurred or assumed  over any of the
           Relevant Vessels, related earnings and/or insurances.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>5.4</B></TD>
<TD VALIGN=TOP><B>Ownership</B><BR>
           Save with the prior  written  consent  of the  Agent,  the  Guarantor  undertakes  that it will not sell or
           otherwise  transfer  any of its shares in the Borrower  and/or  Navion  (when  acquired)  and/or any of its
           ownership  share over the Relevant  Vessels.  The  Guarantor  will procure that it will not be party to any
           merger, demerger, reconstruction or similar action without the prior written consent of the Agent.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>5.5</B></TD>
<TD VALIGN=TOP><B>Rating</B><BR>
             In the event either (i) the long-term senior secured credit ratings of assigned to the Guarantor by
             Standard &amp; Poor's Rating Services ("S&amp;P") and Moody&#146;s Investor Service ("Moody's") (or, if such
             long-term senior secured credit ratings are not available, the S&amp;P Long-Term Issuer Rating or Moody&#146;s
             Senior Implied Rating) fall below BB- or Ba3, respectively, or (ii) the Borrower does not have a debt
             rating assigned to it by S&amp;P or Moody's, then the Guarantor shall, on the Agent's request but at its own
             expense, obtain valuations of the Relevant Vessels free of any charters or employment contracts from at
             least two (2) independent shipbrokers satisfactory to the Agent and if the aggregate of (x) the average
             amount of the above mentioned valuations (the "Market Value") and (y) the value of any additional
             security taken under this sub-Clause previously, is less than 100 % of Tranche A, promptly restore such
             ratio if the Agent on behalf of the Beneficiaries so requires by either providing additional security
             satisfactory to the Beneficiaries or reducing Tranche A accordingly.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>6</U></B></TD>
<TD VALIGN=TOP><B><U>FURTHER UNDERTAKINGS</U></B><BR>
           The Guarantor does further undertake to the Agent that as long as this Guarantee is effective;-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>if the Borrower  shall  become the subject of an  insolvency  proceeding  or shall be wound up or
                     liquidated,  the  Guarantor  shall  not  (unless  so  instructed  by the  Agent  and then only on
                     condition  that the Guarantor  holds the benefit of any claim in such  insolvency or  liquidation
                     to pay any  amounts  recovered  thereunder  to the  Agent)  make any  claim  in such  insolvency,
                     winding-up or liquidation  until all Outstanding  Indebtedness  owing or due has been irrevocably
                     paid in full;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if the  Guarantor,  in breach of  paragraph  (a) above of this Clause 6 receives or recovers  any
                     money pursuant to any such exercise,  claim or proof as therein  referred to, such money shall be
                     held by the  Guarantor  for the  Agent  to apply  the same as if they  were  moneys  received  or
                     recovered by the Agent under this Guarantee;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the Guarantor has not taken and will not take from the Borrower any security whatsoever for the
                     moneys hereby guaranteed; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>all payments to be made hereunder  shall be made in immediately  available  funds without set-off
                     or  counter-claim  and free and clear of and without  deduction  for or on account of any present
                     or future taxes of any nature now or hereafter imposed,  levied,  collected,  withheld,  deducted
                     or assessed by any taxing and/or  governmental  authority  whatsoever or  wheresoever  unless the
                     Guarantor is  compelled by law to deduct such taxes.  In that event all such taxes shall be borne
                     by the Guarantor or, if under the  provisions of any applicable  law this  stipulation  cannot be
                     applied,  then the  Guarantor  shall  increase  the payments to the Agent so that the net amounts
                     received by the Agent  shall be equal to the full  amounts  which the Agent  would have  received
                     had payment not been made  subject to such taxes.  As used in this  sub-clause  the term  &#147;taxes&#148;
                     includes all levies,  imposts,  duties, charges, fees, deductions and withholdings whatsoever and
                     any restriction or condition resulting in a charge.<BR><BR>
</TD>
</TR>
</TABLE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP><B><U>7</U></B></TD>
<TD WIDTH=90% VALIGN=TOP><B><U>EXCLUSION OF GUARANTOR's RIGHTS</U></B><BR>
           Until the Outstanding  Indebtedness  has been paid in full, the Guarantor shall not be entitled to share in
           or  succeed  to or  benefit  from  (by  subrogation  or  otherwise)  any  rights  which  the  Agent  or the
           Beneficiaries  may have in respect of the Outstanding  Indebtedness or any security  therefor or all or any
           of the proceeds of such rights or security.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>8</U></B></TD>
<TD VALIGN=TOP><B><U>ENFORCEMENT</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>8.1</B></TD>
<TD VALIGN=TOP><B>No formalities</B><BR>
           The Agent shall not be obliged before taking steps to enforce this Guarantee against the Guarantor:-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>to  obtain  judgement  against  any of the  Borrower  or any  third  party in any  court or other
                     tribunal;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>to make or file any claim in a bankruptcy or liquidation of any of the Borrower or any third
                     party; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>to take any action  whatsoever  against  any of the  Borrower or any third party under any of the
                     Loan Agreement or the Security Documents;<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP></TD>
<TD WIDTH=90% VALIGN=TOP>The  Guarantor  hereby  waives all such  formalities  or rights to which it would  otherwise be entitled or
           which the Agent would otherwise  first be required to satisfy or fulfil before  proceeding or making demand
           against the Guarantor hereunder.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>8.2</B></TD>
<TD VALIGN=TOP><B>Action</B><BR>
           Without  affecting the obligations of the Guarantor  hereunder,  the Agent and the  Beneficiaries  may take
           such action as the Agent and the  Beneficiaries  in their own discretion may consider  appropriate  against
           the Borrower,  the Guarantor or any of them or any other person or parties and securities to recover moneys
           due and payable in respect of the obligations under the Loan Agreement and/or the other Security Documents.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>8.3</B></TD>
<TD VALIGN=TOP><B>Conditional release</B><BR>
           Other than set out in the Loan Agreement,  any release,  discharge or settlement  between the Guarantor and
           the Agent or any of the  Beneficiaries  in relation to this Guarantee  shall be conditional  upon no right,
           security,  disposition  or payment to the Agent or any of the  Beneficiaries  by the  Borrower or any other
           person being void, set aside or ordered to be refunded  pursuant to any enactment or law relating to breach
           of duty by any person,  bankruptcy,  liquidation,  administration,  protection from creditors  generally or
           insolvency or for any other reason. If any such right,  security,  disposition or payment is void or at any
           time so set aside or ordered to be  refunded  the Agent  shall be  entitled  subsequently  to enforce  this
           Guarantee  against the Guarantor  notwithstanding  any return of this  Guarantee to the Guarantor and as if
           such release,  discharge or settlement had not occurred and any such  security,  disposition or payment had
           not been made.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>9</U></B></TD>
<TD VALIGN=TOP><B><U>EXPENSES</U></B><BR>
           The Guarantor shall pay to the Agent on demand on a full indemnity basis all reasonable charges,  costs and
           expenses  (including  the fees and expenses of legal  advisors)  properly  incurred by the Agent and/or the
           Beneficiaries in the  preservation and enforcement of any of the rights of the Agent and the  Beneficiaries
           hereunder.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>10</U></B></TD>
<TD VALIGN=TOP><B><U>MISCELLANEOUS</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>10.1</B></TD>
<TD VALIGN=TOP><B>Severability</B><BR>
           Any provisions  contained  herein which are  prohibited by or deemed  unlawful or  unenforceable  under any
           applicable law shall,  to the extent required by such law, be ineffective  without  modifying the remaining
           provisions  hereof.  Where,  however,  the provisions of any such  applicable  law may be waived,  they are
           hereby  waived by the  Guarantor  to the  fullest  extent  permitted  by such law with the intent that this
           Guarantee shall be valid, binding and enforceable in accordance with its terms.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>10.2</B></TD>
<TD VALIGN=TOP><B>No waivers</B><BR>
           No  failure  or delay by the  Agent or the  Beneficiaries  in  exercising  any  right,  power or  privilege
           hereunder and no course of dealing between any person and the Agent or the  Beneficiaries  shall operate as
           a waiver thereof,  nor shall any single or partial  exercise thereof preclude any other or further exercise
           thereof or the  exercise of any other  right,  power or  privilege.  Subject  always to the maximum  amount
           recoverable by the Beneficiaries  pursuant to or in relation to the Loan Agreement being the maximum amount
           of the  Outstanding  Indebtedness,  the rights and remedies  herein are cumulative and not exclusive of any
           rights or remedies which the Agent and/or the  Beneficiaries  would otherwise have. Any recovery under this
           Guarantee shall pro tanto reduce the Outstanding Indebtedness.

<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>10.3</B></TD>
<TD VALIGN=TOP><B>Knowledge of Loan Agreement etc.</B><BR>
           The Guarantor  hereby  represents  and warrants to the Agent that the Guarantor has received  copies of and
           has full knowledge of the terms and provision of the Loan Agreement,  the Security  Documents and all other
           documents related thereto.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>10.4</B></TD>
<TD VALIGN=TOP><B>Security</B><BR>
           Without prejudice to Clause 3 (b) (vii) and (x) above, the Guarantor acknowledges and confirms that the
           Borrower's obligations under the Loan Agreement, in addition to this Guarantee, are or will be secured by
           the Assignment Agreement.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>11</U></B></TD>
<TD VALIGN=TOP><B><U>ASSIGNMENT</U></B><BR>
           The  Beneficiaries  may assign or  transfer  their  rights  hereunder  to any person to whom the rights and
           obligations of the Beneficiaries  under the Loan Agreement are wholly or partially  assigned or transferred
           in accordance with Clause 14 of the Loan Agreement.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B><U>12</U></B></TD>
<TD VALIGN=TOP><B><U>NOTICES</U></B><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>12.1</B></TD>
<TD VALIGN=TOP><B>Mode of Communication</B><BR>
           Except as otherwise provided herein each notice,  request,  demand or other communication or document to be
           given or made under this Guarantee shall be given in writing but unless  otherwise  stated,  may be made by
           telefax.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP><B>12.2</B></TD>
<TD VALIGN=TOP><B>Address</B><BR>
           Any notice,  demand or other  communication to be made or delivered by any party pursuant to this Guarantee
           shall (unless the addressee has by seven (7) days&#146; written notice to that party specified  another address)
           be made or delivered:-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP><U>if to the Guarantor</U>:-<BR>
<BR>
                     TEEKAY SHIPPING CORPORATION,<BR>
                     TK House, Bayside Executive Park, West Bay Street &amp; Blake Road, Nassau,<BR>
                     The Bahamas<BR>
<BR>
                     Attn: Finance Department<BR>
                     Fax: &#149;<BR><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>if to the Agent</U>:-<BR>
<BR>
                     DEN NORSKE BANK ASA<BR>
                     Stranden 21<BR>
                     N-0021 Oslo, Norway<BR>
<BR>
                     Attn: Shipping Department<BR>
                     Telefax:  +47 22 48 20 20<BR>
                     S.W.I.F.T.:  DNBANOKK<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP><B><U>13</U></B></TD>
<TD WIDTH=90% VALIGN=TOP><B><U>GOVERNING LAW - JURISDICTION</U></B><BR>
           This Guarantee shall be governed by and construed in accordance with the laws of Norway with the Oslo
           District Court as the proper legal venue.<BR><BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>
<P><U>I N  &nbsp;&nbsp;W I T N E S S</U>  whereof the parties  hereto have signed  this  Guarantee  as a deed in two (2)  originals  as of the
date first set forth above</P>




<P>SIGNED:<BR>
for and on behalf of<BR>
TEEKAY SHIPPING CORPORATION<BR>
- - as Guarantor&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
.......................................................<BR>
<BR>
<BR>
<BR>
SIGNED:<BR>
for and behalf of<BR>
DEN NORSKE BANK ASA<BR>
- - as Agent for the Beneficiaries&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
.......................................................</P>


<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT>                                                                                               SCHEDULE 1</P>


<P>
    ---------------------------------------<BR>
    Name of Relevant Vessel<BR>
    ---------------------------------------<BR>
    Bahamas Spirit<BR>
    Kanata Spirit<BR>
    Seletar Spirit<BR>
    Semakau Spirit<BR>
    Sentosa Spirit<BR>
    Singapore Spirit<BR>
    Sudong Spirit<BR>
    ---------------------------------------
</P>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT>                                                                                EXHIBIT 7</P>
<BR>
<BR>


<P ALIGN=CENTER><B>F O R M &nbsp;&nbsp;O F &nbsp;&nbsp;N E G A T I V E &nbsp;&nbsp;P L E D G E</B></P>



<P>Norsk Teekay AS<BR>
<BR>
Norsk Teekay Holdings Ltd.</P>

<P ALIGN=RIGHT>                [date]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<BR>
<BR>
<BR>

<P><B>DECLARATION OF NEGATIVE PLEDGE</B></P>


<P>We, Navion ASA, hereby undertake not to, and shall ensure that any of our subsidiaries shall not create, assume or
permit to exist, any mortgage, pledge, lien, charge, encumbrance or any security interest whatsoever upon any assets
or other property except for:</P>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP>&#149;</TD>
<TD WIDTH=95% VALIGN=TOP>liens for taxes not yet payable for which adequate reserves have been maintained;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>&#149;</TD>
<TD VALIGN=TOP>other liens, charges and encumbrances incidental to the conduct of the business of Navion ASA and/or our
    subsidiaries, which do not in the aggregate materially detract from the value of each such party's property or
    assets or materially impair the use thereof in the operation of its business; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>&#149;</TD>
<TD VALIGN=TOP>a separate financing of Voluntary Organic Compound Equipment, subject to be on a non recourse basis.<BR><BR>
</TD>
</TR>
</TABLE>

<P>We declare to be bound by this declaration unless released in writing by yourselves and Den norske Bank ASA.</P>


<P ALIGN=CENTER>                                    Navion ASA<BR>
<BR>
                                             ____________________________</P>

<BR>
<BR>
<BR>
<BR>
<BR>


<P ALIGN=RIGHT>EXHIBIT 8</P>

<P ALIGN=CENTER><B>FORM OF LETTER RELATING TO EFFECTIVE INTEREST</B></P>


<P>To:      Norsk Teekay Holdings Ltd.<BR>
Att:     Financial Director<BR>
Fax:</P>


<P ALIGN=RIGHT>[ &#149; ] March, 2003</P>

<BR>
<BR>
<BR>
<P>Dear Sirs</P>


<P><B>RE.: USD500,000,000 REVOLVING CREDIT FACILITY AGREEMENT TO BE DATED AROUND [ &#149; ] MARCH, 2003 (THE "CREDIT FACILITY")
- - IMPLICATIONS OF THE NORWEGIAN ACT ON FINANCIAL AGREEMENTS 1999-06-25-0046 (THE "FINANCIAL AGREEMENTS ACT")</B></P>

<P>The Norwegian Financial Agreements Act came into force on 1 July, 2000. The Financial Agreements Act applies to all
agreements entered into and financial services provided by financial or similar institutions. The Financial
Agreements Act contains a number of detailed and mandatory requirements concerning inter alia information which must
be documented within a contractual relationship, irrespective of whether the client of the financial institution is
a consumer or a professional or commercial organisation.</P>

<P>With one important exception, namely effective annual interest rate, all mandatory information has been included in
the draft of the Credit Facility. It is difficult for us to state the effective annual interest rate, since in
principle a borrower under a floating rate revolving loan facility is free to avail himself of the facility and may,
if he so wishes, elect interest periods of a duration of one, three, six or twelve months, or such other periods as
may be agreed, with the relevant interest (other than the applicable margin) not being fixed until the time of
drawdown.</P>

<P>We have concluded that the requirements of the Financial Agreements Act will be fulfilled in respect of the above
matter if we have provided you with, and you have accepted, the sample clause set out below. This clause should be
regarded as an addition to the term sheet. The sample clause contains examples of annual effective interest.</P>

<P>This letter, duly signed, shall be attached to the Credit Facility. We would however wish to point out that the
sample clause is intended as an example only.</P>

<P ALIGN=CENTER><U>Sample Clause</U></P>

<P><I>"Effective Annual Interest Rate"<BR>
<BR>
Under the assumption that the Borrower requests a drawing in USD for a period of 3 months, such request being
acceptable to the Banks, and 3 months LIBOR is fixed at [   ]% p.a. the effective annual interest rate (in Norwegian
"Effektiv &Aring;rlig Rente") would then be as follows in respect of the relevant sample utilisation of the facility set
opposite such effective annual interest rate:</I></P>

<BR>
<BR>
<PRE>
<I><B>         Utilisation                             Effective
                                                  Interest</B>
         20%                                        [ &#149; ]%           [AWAITING INPUT FROM THE AGENT]
         50%                                        [ &#149; ]%           [AWAITING INPUT FROM THE AGENT]
         75%                                        [ &#149; ]%           [AWAITING INPUT FROM THE AGENT]
         100%                                       [ &#149; ]%           [AWAITING INPUT FROM THE AGENT]</I>
</PRE>

<P><I>being the aggregate of the aforesaid relevant interest rates, the Margin, the up-front fee, the commitment fee and
all other fees and costs payable by the Borrower under the Credit Facility as measured on an annual basis, certain
costs have not been finally set and we have made the following cost assumptions (which are assumptions only and not
to be used as reference point for calculating the final costs):</I></P>

<P><I>[AWAITING INPUT FROM THE AGENT]<BR>
<BR>
The Effective Annual Interest Rate will change over the life of the Credit Facility subject to changes in underlying
variable parameters, of which the most important are the reference interest rate (whether LIBOR or any other
relevant interest rates), the outstanding loan amount, Interest Period and (as the case may be) the Borrower's
actual utilisation of the Credit Facility. Thus, the aforesaid calculations serve as examples only."</I></P>


<P>Yours faithfully<BR>
<BR>
For and on behalf of<BR>
Den norske Bank ASA</P>

<BR>
<BR>
<BR>

<P>________________________________________________<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>Signature</FONT></P>

<P>________________________________________________<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name with block letters</FONT></P>

<BR>
<BR>
<P>We hereby confirm that we have received a letter from Den norske Bank ASA of which this is a copy and accept the
contents of the above sample clause.</P>

<P>Date:    [ &#149; ] March, 2003</P>

<P>For and on behalf of<BR>
[ &#149; ]</P>

<BR>
<BR>
<BR>

<P>________________________________________________<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>Signature</FONT></P>

<P>________________________________________________<BR>
<FONT FACE="Times New Roman, Times, Serif" SIZE=1>Name with block letters</FONT></P>


<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT>EXHIBIT 9</P>

<BR>
<BR>
<BR>
<P ALIGN=CENTER><B>FORM OF ASSIGNMENT AGREEMENT</B></P>

<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER>                               <B>ASSIGNMENT AGREEMENT</B><BR>
                                          (in relation to a loan granted by<BR>
                                    Norsk Teekay Holdings Ltd to Norsk Teekay AS)</P>

<BR>
<BR>
<BR>
<P ALIGN=CENTER>                                       BETWEEN<BR>
<BR>
<BR>
                                     N O R S K &nbsp;&nbsp;T E E K A Y &nbsp;&nbsp;H O L D I N G S &nbsp;&nbsp;L T D.<BR>
<BR>
                                              N O R S K &nbsp;&nbsp;T E E K A Y &nbsp;&nbsp;A S<BR>
<BR>
<BR>
                                                         and<BR>
<BR>
<BR>
                                           D E N &nbsp;&nbsp;N O R S K E &nbsp;&nbsp;B A N K &nbsp;&nbsp;A S A</P>


<BR>
<BR>
<BR>
<BR>
<BR>

<P><B>THIS ASSIGNMENT AGREEMENT</B> IS DATED &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003 between:<BR></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP>(1)</TD>
<TD WIDTH=95% VALIGN=TOP><B>NORSK TEEKAY  HOLDINGS LTD.</B>, TK House,  Bayside  Executive Park,  West Bay Street &amp; Blake Road,  Nassau,  The
         Bahamas (the "<B>Pledgee</B>")<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(2)</TD>
<TD VALIGN=TOP><B>NORSK TEEKAY AS</B> (Enterprise No. 985 030 235) (the "<B>Company</B>"); and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>(3)</TD>
<TD VALIGN=TOP><B>DEN NORSKE BANK ASA</B> (the "<B>Agent</B>" as agent and trustee for the Finance Parties (as defined below).<BR><BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>

<P><B>BACKGROUND:</B></P>

<P>The Pledgee and the Company have entered into a loan  agreement (the  "<B>Intercompany  Facility  Agreement</B>")  whereunder
the  Pledgee  has  granted a loan in the amount of USD  500,000,000  to the  Company on terms and  conditions  set out
therein and attached as Appendix 1 hereto.  The  Intercompany  Facility  Agreement  will be secured with a pledge over
all the shares in Navion ASA.</P>

<P>The Finance  Parties,  the Agent and the Pledgee have entered into a loan  agreement  whereunder  the Finance  Parties
have granted a loan in the amount of USD  500,000,000  to the Pledgee  pursuant to the terms and conditions set out in
therein (the  "<B>Facility  Agreement</B>").  The Facility  Agreement  requires the Pledgee to assign the  facility,  and any
connected security, under the Intercompany Facility Agreement to the Financing Parties.</P>

<BR>
<BR>

<P><B>IT IS AGREED</B> as follows:</P>

<P><B><U>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTERPRETATION</U></B></P>

<P>In this Assignment Agreement</P>

<PRE>
         "<B>Event of Default</B>"                 has the meaning given to it in the Agreement.

         "<B>Finance Documents</B>"                means the Facility Agreement and the Security Documents as defined in the
                                            Facility Agreement.

         "<B>Finance Parties</B>"                  means the Banks and Agent as defined pursuant to the Facility Agreement.

         "<B>Liability</B>"                        means any amount pursuant to the Intercompany Facility Agreement owed by
                                            the Company to the Pledgee.

         "<B>Secured Liabilities</B>"              means all present and future obligations and liabilities of the Pledgee
                                            to the Finance Parties under the Finance Documents to which the Pledgee
                                            is a party.

         "<B>Security Assets</B>"                  means all assets of the Pledgee the subject of any security created by
                                            this Assignment Agreement.

         "<B>Security Interest</B>"                means any mortgage, pledge, lien, charge, assignment by way of security,
                                            hypothecation or security interest or any other agreement or arrangement
                                            having a similar effect.

         "<B>Security Period</B>"                  means the period beginning on the date of this Assignment Agreement and
                                            ending on the date on which all the Secured Liabilities have been
                                            unconditionally and irrevocably paid and discharged in full.

         "<B>Subsidiary</B>"                       means:

                                            (a)      an entity as defined as a subsidiary in Sections 1-3 of the
                                            Norwegian Public Limited Companies Act of 13th June, 1997, No. 45; and
                                            (b)      an entity of which a person has direct or indirect control or
                                            owns directly or indirectly more than 50% of the voting capital or
                                            similar right of ownership and "control" for this purpose means the legal
                                            power to direct or cause the direction of the management and the policies
                                            of the person whether through the ownership of voting capital, by
                                            contract or otherwise.
</PRE>

<P><B><U>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CREATION OF SECURITY</U></B></P>

<P><B>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>All the security created under this Assignment Agreement:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP><U>is created in favour of the Agent on behalf of itself and the other Finance Parties;</U><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>is created over the present and future liability of the Company to the Pledgee; and</U><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>is security for the payment of all the Secured Liabilities.</U><BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Agent holds the benefit of this Assignment Agreement on trust for the Finance Parties.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pledgee's Liability</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Pledgee assigns absolutely all of its rights in respect of the liability to the Agent on behalf of
         itself and the other Finance Parties.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PRESERVATION OF SECURITY</B></P>

<P><B>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continuing security</B><BR></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>This Assignment Agreement is continuing and will extend to the ultimate balance of all the Secured
         Liabilities regardless of any intermediate payment or discharge in whole or in part.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional security</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>This Security is in addition to and is not in anyway prejudiced by any other security now or subsequently
         held by any Finance Party.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appropriations</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Company shall pay any amounts owed to the Pledgee under the Intercompany Facility Agreement to
                  interest-bearing suspense account no.__________________of the Pledgee with the Agent and any moneys
                  standing on the account is hereby pledged to the Agent on behalf of Finance Parties, such account
                  to bear interest for the account of the Pledgee at the rate reasonably considered by the Agent to
                  be a fair market rate, provided that such interest need not be paid to the Pledgee until the end of
                  the Security Period. The Agent may apply any amount on the account for payments due under the
                  Facility Agreements<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>At any time after this Assignment Agreement has become enforceable, the Agent (or any trustee or agent on
                  its behalf) may,  without affecting the liability of the Pledgee:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP><U>refrain from applying or enforcing any other moneys, security or rights held or received by the Agent (or
                           any trustee or agent on its behalf) in respect of those amounts; or</U><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>apply and enforce them in such manner and order as it sees fit (whether against those amounts or otherwise).</U><BR><BR>
</TD>
</TR>
</TABLE>


<P><B>3. 4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reinstatement</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>If any discharge (whether in respect of the obligations of the Pledgee, or any security for those
                  obligations or otherwise) or arrangement is made in whole or in part on the faith of any payment,
                  security or other disposition which is avoided or must be restored on insolvency, liquidation or
                  otherwise without limitation, the liability of the Pledgee shall continue as if the discharge or
                  arrangement had not occurred to the extent such payment, security or other disposition is avoided.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Agent, acting reasonably, may concede or compromise any claim that any payment, security or other
                  disposition is liable to avoidance or restoration.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B><U>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REPRESENTATIONS - GENERAL</U></B></P>

<P><B>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security Assets</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Pledgee represents to the Agent that:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>Its entry into and performance of this Assignment Agreement will not conflict with any terms or
                  provisions in relation to the Intercompany Facility Agreement.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>Save for the Security Interests created under this Assignment Agreement, the Security Assets are
                  free from any Security Interest.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Times for making representations</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The representations set out in this Assignment Agreement (including in this Clause) are made on the date of
                  this Assignment Agreement.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>Unless a representation is expressed to be given at a specific date, each representation under this
                  Assignment Agreement is deemed to be repeated by the Pledgee on each date during the Security
                  Period.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>When a representation is repeated, it is applied to the circumstances existing at the time of repetition.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RESTRICTIONS ON DEALINGS</U></B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>Except as reflected in the Facility Agreement the Pledgee shall not:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>create or permit to subsist any Security Interest on any Security Asset; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>sell, transfer, pledge or otherwise dispose of any Security Asset.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMPANY'S LIABILITY</U></B></P>

<P><B>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undertaking</b></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Pledgee and the Company must:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP><U>duly and promptly perform its obligations, and diligently pursue its rights in relation to the terms and
                           provisions of the Intercompany Facility Agreement; and</U><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>supply the Agent with any information and documentation relating to the Intercompany Facility Agreement
                           requested by the Security Agent.</U><BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Company shall not exercise any set-off of any amounts owed by the Company to the Pledgee against any
                  amounts owed by the Pledgee to the Company.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notices of assignment</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The  Company  acknowledges  and  consents  to that the  Liability  is  assigned to the Agent on behalf of the
         Finance  Parties and  confirms  that all amounts  owed will be directed to the account  referred to in Clause
         3.3 (a) or such other account appointed by the Agent.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>7. WHEN SECURITY BECOMES ENFORCEABLE</U></B></P>

<P><B>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Event of Default</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The  Pledgee and the Company  agree that if an Event of Default  occurs  under the  Facility  Agreement,  the
         Agent may accelerate the Intercompany  Facility  Agreement so that all amounts owed thereunder become due and
         payable with immediate effect.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B><U>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ENFORCEMENT OF SECURITY</U></B></P>

<P><B>8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Protection of third parties</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>
No person (including a purchaser) dealing with the Agent or its agents will be concerned to enquire:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>whether the Secured Liabilities have become payable;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>whether any power which the Agent is purporting to exercise has become exercisable or is being properly
                  exercised;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>whether any money remains due under the Finance Documents; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>how any money paid to the Agent is to be applied.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemption of prior mortgages</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>At any time after this Security has become enforceable, the Agent may:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP><U>redeem any prior Security Interest against any Security Asset; and/or</U><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>procure the transfer of that Security Interest to itself; and/or</U><BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><U>settle and pass the accounts of the prior mortgagee, chargee or encumbrancer; any accounts so settled and
                           passed will be, in the absence of manifest error, conclusive and binding on the Pledgee.</U><BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Pledgee must pay to the Agent, immediately on demand, the reasonable costs and expenses properly
                  incurred by the Agent in connection with any such redemption and/or transfer, including the payment
                  of any principal or interest.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingencies</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>If this  Security is enforced at a time when no amount is due under the Finance  Documents but at a time when
         amounts may or will  become  due,  the Agent may pay the  proceeds  of any  recoveries  effected by it into a
         suspense  account,  such  account to bear  interest  for the  account of the  Pledgee at the rate  reasonably
         considered  by the Security  Agent to be a fair market rate,  provided that such interest need not be paid to
         the Pledgee until the end of the Security Period.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Application of proceeds</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>Any moneys  received by the Agent after this  Security has become  enforceable  must be applied in accordance
         with the Facility Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses and indemnity</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Pledgee must:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>immediately on demand pay all reasonable costs and expenses (including legal fees) properly incurred in
                  connection with this Assignment Agreement by the Agent or other person appointed by the Agent under
                  this Assignment Agreement; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>keep each of them indemnified against any failure or delay in paying those costs or expenses.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DELEGATION</B></P>

<P><B>11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Power of Attorney</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Agent may  delegate  by power of  attorney  or in any other  manner to any  person  any  right,  power or
         discretion exercisable by it under this Assignment Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>11.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Terms</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>Any such delegation may be made upon any terms (including  power to  sub-delegate)  which the Agent may think fit.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>11.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>None of the Finance  Parties will be in any way liable or  responsible to the Pledgee and the Company for any
         loss or  liability  arising  from any act,  default,  omission or  misconduct  on the part of any delegate or
         sub-delegate.<BR><BR>
</TD>
</TR>
</TABLE>


<P><U><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER ASSURANCES</B></U></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Pledgee must, at its own expense, take whatever action the Agent may require for:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>creating, perfecting or protecting any security intended to be created by this Assignment Agreement; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>facilitating the realisation of any Security Asset, or the exercise of any right, power or discretion
                  exercisable, by the Agent or any of its delegates or sub-delegates in respect of any Security Asset.<BR>
<BR>
         This includes:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>the execution of any transfer,  conveyance,  assignment or assurance of any property, whether to the Agent or
                  to its nominee; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the giving of any notice, order or direction and the making of any registration,<BR>
<BR>
         which, in any such case, the Agent may think expedient.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;POWER OF ATTORNEY</U></B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Pledgee,  irrevocably and severally  appoints the Agent and any of its delegates or  sub-delegates  to be
         its attorney to take any action  which the Pledgee is obliged to take under this  Assignment  Agreement.  The
         Pledgee  ratifies and confirms  whatever any attorney does or purports to do in accordance  with the terms of
         this Assignment Agreement under its appointment under this Clause.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MISCELLANEOUS</U></B></P>

<P><B>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Covenant to pay</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The  Pledgee  must pay or  discharge  the  Secured  Liabilities  in the manner  provided  for in the  Finance
         Documents.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CHANGES TO THE PARTIES</U></B></P>

<P><B>15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfers by the Pledgee</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The  Pledgee  may not  assign,  transfer,  novate or  dispose  of its rights  and/or  obligations  under this
         Assignment Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>15.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfers by Agent</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Agent may assign,  transfer,  novate or dispose of all or any part of its rights and/or obligations under
         this Assignment Agreement to a replacement Agent appointed in accordance with the Facility Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEVERABILITY</U></B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>If a  provision  of this  Assignment  Agreement  is or  becomes  illegal,  invalid  or  unenforceable  in any
         jurisdiction, that shall not affect:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>the validity or enforceability in that jurisdiction of any other provision of this Assignment Agreement; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the validity or enforceability in other jurisdictions of that or any other provision of this Assignment
                  Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COUNTERPARTS</U></B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>This Assignment  Agreement may be executed in any number of counterparts,  and this has the same effect as if
         the signatures on the counterparts were on a single copy of this Assignment Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICES</U></B></P>

<P><B>18.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Giving of notices</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>All notices or other  communications  under or in connection with this Assignment Agreement shall be given in
         writing and, unless otherwise stated,  may be made by, facsimile.  Any such notice will be deemed to be given
         as follows:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>if by letter, when delivered; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if by facsimile, when received in legible form.<BR>
<BR>
         However,  a notice given in  accordance  with the above but received on a non-working  day or after  business
         hours in the place of receipt will only be deemed to be given on the next working day in that place.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>18.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Addresses for notices</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The address and facsimile number of the Company are:<BR>
<BR>
                  ...............................<BR>
<BR>
                  Facsimile: + .......................<BR>
                  Attention: .........................<BR>
<BR>
                  or such other as the Pledgee may notify to the Agent by not less than five  Business  Days'  notice;
                  and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The address and facsimile number of the Security Agent are:<BR>
<BR>
                  Den norske Bank ASA<BR>
                  Stranden 21<BR>
                  0021 Oslo<BR>
                  Norway<BR>
<BR>
                  Facsimile: +47 22 48 28 94<BR>
                  Attention: Credit Administration Shipping<BR>
<BR>
                  or such other as the Agent may notify to the Pledgee by not less than five Business Days' notice.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B><U>19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RELEASE</U></B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>Upon the expiry of the Security Period (but not  otherwise),  the Agent shall, at the request and cost of the
         Pledgee,  take whatever action is necessary to release the Security  Assets from the security  constituted by
         this Assignment Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B><U>20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JURISDICTION</U></B></P>

<P><B>20.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>For the benefit of the Agent, the Pledgee and the Company agrees that the courts of Norway have jurisdiction
         to settle any disputes in connection with this Assignment Agreement and accordingly submits to the
         jurisdiction of the Norwegian courts, the venue to be Oslo City Court.</TD>
</TR>
</TABLE>


<P><B>20.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-exclusivity</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>Nothing  in this  Clause 20  limits  the right of the  Agent to bring  proceedings  against  the  Pledgee  in
         connection with this Assignment Agreement:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>in any other court of competent jurisdiction; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>concurrently in more than one jurisdiction.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>This Assignment Agreement is governed by Norwegian law. This Assignment Agreement has been entered into on
         the date stated at the beginning of this Assignment Agreement.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>NORSK TEEKAY HOLDINGS LTD.</B><BR>
<BR>
<BR>
___________________________________________<BR>
Signature<BR>
___________________________________________<BR>
Name with block letters<BR>
<BR>
<BR>
<B>NORSK TEEKAY AS</B>
<BR>
<BR>
___________________________________________<BR>
Signature<BR>
___________________________________________<BR>
Name with block letters<BR>
<BR>
<BR>
<B>DEN NORSKE BANK ASA</B>
<BR>
<BR>
___________________________________________<BR>
Signature<BR>
___________________________________________<BR>
Name with block letters<BR></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<P ALIGN=RIGHT>                                                                                                    EXHIBIT 10</P>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=CENTER><B>                  F O R M &nbsp;&nbsp;O F &nbsp;&nbsp;P L E D G E &nbsp;&nbsp;O F &nbsp;&nbsp;S H A R E S<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
                                       S H A R E &nbsp;&nbsp;P L E D G E &nbsp;&nbsp;A G R E E M E N T</B><BR>
<BR>
<BR>
                                        (in relation to shares in Navion ASA)<BR>
<BR>
                                                       between<BR>
<BR>
<B>                                     N O R S K &nbsp;&nbsp;T E E K A Y &nbsp;&nbsp;H O L D I N G S &nbsp;&nbsp;L T D.<BR>
<BR>
                                              N O R S K &nbsp;&nbsp;T E E K A Y &nbsp;&nbsp;A S<BR>
<BR>
                                                         and<BR>
<BR>
                                           D E N &nbsp;&nbsp;N O R S K E &nbsp;&nbsp;B A N K &nbsp;&nbsp;A S A</B></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<BR>




<P><B>THIS SHARE PLEDGE AGREEMENT</B> IS DATED &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2003 BETWEEN:</P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP><B>NORSK TEEKAY HOLDINGS LTD.</B>, TK House, Bayside Executive Park, West Bay Street &amp; Blake Road, Nassau, The
         Bahamas (the "<B>Pledgee</B>")<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>NORSK TEEKAY AS</B> (Enterprise No.  985 030 235)  (the "<B>Company</B>"); and~<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP><B>DEN NORSKE BANK ASA</B> (the "<B>Agent</B>" as agent and trustee for the Finance Parties (as defined below).<BR><BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>
<BR>

<P><B>BACKGROUND:</B></P>


<P>The Company enters into this Share Pledge Agreement in connection with a loan agreement between the Pledgee and the
Company (the "Intercompany Facility Agreement"). This Share Pledge Agreement is supplemental to the pledge agreement
on the letterhead of the Agent and known as "to take or give security in shares registered in the Norwegian
Securities Register i.e. VPS" (the "<B>Standard Pledge Agreement</B>").</P>


<P><B>IT IS AGREED</B> as follows:</P>



<P><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTERPRETATION</B></P>

<P>In this Share Pledge Agreement:</P>

<pre>
       "<B>Act</B>"                        means the Norwegian Enforcement Act of 1992.

       "<B>Event of Default</B>"          has the meaning given to it in the Facility Agreement.

       "<B>Facility Agreement</B>"        means the revolving credit facility agreement dated [ &#149; ] March, 2003 and entered
                                   into between the banks listed in Schedule 1 to the Facility Agreement (the
                                   "<B>Banks</B>"), the Agent and the Pledgee in the maximum principal amount of
                                   USD 500,000,000.

       "<B>Finance Documents</B>"         means the Facility Agreement and the Security Documents as defined in the Facility
                                   Agreement.

       "<B>Finance Party(-ies)</B>"       means the Pledgee and/or the Banks as set out in the Facility Agreement and the
                                   Agent.

       "<B>Related Rights</B>"            means any dividend or interest paid or payable in relation to any Shares and any
                                   rights, moneys or property accruing or offered at any time in relation to any
                                   Shares by way of redemption, substitution, exchange, bonus or preference, under
                                   option rights or otherwise.

       "<B>Secured Liabilities</B>"       means all present and future obligations and liabilities (whether actual or
                                   contingent and whether owed jointly or severally or in any other capacity
                                   whatsoever) of the Company to the Pledgee under the Intercompany Facility
                                   Agreement.

       "<B>Security Assets</B>"           means the Shares and all other assets of the Company the subject of any security
                                   created by this Share Pledge Agreement.

       "<B>Security Interest</B>"         means any mortgage, pledge, lien, charge, assignment by way of security,
                                   hypothecation or security interest or any other agreement or arrangement having a
                                   similar effect.

       "<B>Security Period</B>"           means the period beginning on the date of this Share Pledge Agreement and ending
                                   on the date on which all the Secured Liabilities have been unconditionally and
                                   irrevocably paid and discharged in full.

       "<B>Shares</B>"                    means all the shares in Navion ASA, enterprise no 979 199 325.
</pre>

<BR>
<BR>

<P><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECURITY</B></P>

<P><B>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Creation of security</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Company as security for the payment of all the Secured Liabilities hereby charges, pledges and assigns in
       favour of the Agent:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>all the Shares; and:<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>all Related Rights.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Perfection of security</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The security shall be perfected pursuant to Standard Pledge Agreement.<BR>
<BR>
The Company hereby undertakes to register any future pledge over the Shares in favour of the Agent in the
       Norwegian Securities Register.<BR><BR>
</TD>
</TR>
</TABLE>



<P><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PRESERVATION OF SECURITY</B></P>

<P><B>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Continuing security</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The security constituted by this Share Pledge Agreement is continuing and will extend to the ultimate balance
       of all the Secured Liabilities regardless of any intermediate payment or discharge in whole or in part.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional security</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The security constituted by this Share Pledge Agreement is in addition to and is not in anyway prejudiced by
       any other security now or subsequently held by any Finance Party.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appropriations</B></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>At any time after the Security under this Share Pledge Agreement has become enforceable, the Agent (or any
       trustee or agent on its behalf) may:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>without affecting the liability of the Company under the Share Pledge Agreement:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=20% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=80% VALIGN=TOP>refrain from applying or enforcing any other moneys, security or rights held or received by the
                Agent (or any trustee or agent on its behalf) in respect of those amounts; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>apply and enforce them in such manner and order as it sees fit (whether against those amounts or otherwise);
                and<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>hold in an interest-bearing suspense account any moneys received from the Company or on account of the
              Company&#146;s liability under this Share Pledge Agreement, such account to bear interest for the account
              of the Company at the rate reasonably considered by the Agent to be a fair market rate, provided that
              such interest need not be paid to the Company until the end of the Security Period.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reinstatement</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>If any discharge (whether in respect of the obligations of the Company, any security for those
              obligations or otherwise) or arrangement is made in whole or in part or any arrangement is made on the
              faith of any payment, security or other disposition which is avoided or must be restored on
              insolvency, liquidation or otherwise without limitation, the liability of the Company under this Share
              Pledge Agreement shall continue as if the discharge or arrangement had not occurred to the extent such
              payment, security or other deposition is avoided.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Agent may, acting reasonably, concede or compromise any claim that any payment, security or other
              disposition is liable to avoidance or restoration.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES</B></P>

<P><B>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Representations and warranties</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Company makes the representations and warranties set out in this Clause 4 to the Agent.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security Assets</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Shares and, to the extent applicable, the other Security Assets are fully paid.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Company is the sole legal and beneficial owner of the Security Assets.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>There are no agreements, rights or other matters whatsoever which might adversely affect the Security Assets.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>Save for the Security Interest created under this Share Pledge Agreement, the Security Assets are free from
                  any Security Interest.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Times for making representations and warranties</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The representations and warranties set out in this Clause 4 are made on the date of this Share Pledge
       Agreement and are deemed to be repeated by the Company on each date during the Security Period with reference
       to the facts and circumstances then existing.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;UNDERTAKINGS</B></P>

<P><B>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Duration</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The undertakings in this Clause 5 remain in force throughout the Security Period.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictions on dealing</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The Company shall not:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>create or permit to subsist any Security Interest on any Security Asset other than any Security Interest
              created by this Share Pledge Agreement;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>sell, transfer or otherwise dispose of, any Security Asset;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>take or permit the taking of any action which may result in the rights attaching to any of the
              Security Assets being altered or further shares in Navion ASA being issued.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calls and other obligations</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The Company shall pay all calls or other payments due and payable in respect of any of the Security
              Assets and if the Company fails to do so the Agent may pay the calls or other payments on behalf of
              the Company.  The Company shall forthwith on demand reimburse the Agent for any payment made by the
              Agent pursuant to this paragraph (a).<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Company shall promptly copy to the Agent and comply with all requests for information which is
              within its knowledge and which are made under Chapter 5 section VII of the Norwegian Limited Liability
              Companies Act of 1997 no 44 and/or Chapter 5 section VII of the Norwegian Public Limited Liability
              Companies Act of 1997 no 45 or any similar provision contained in any articles of association or other
              constitutional document relating to any of the Security Assets and if it fails to do so the Agent may
              elect to provide such information as it may have on behalf of the Company.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Company shall comply with all other conditions and obligations assumed by it in respect of any of
              the Security Assets.<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>The Agent is not obliged to carry out any obligation of the Company in respect of the Security Assets
              or to make any payment, or to make any enquiry as to the nature or sufficiency of any payment received
              by it or the Company, or to present or file any claim or take any other action to collect or enforce
              the payment of any amount to which it may be entitled under this Share Pledge Agreement.<BR><BR>
</TD>
</TR>
</TABLE>



<P><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEN SECURITY BECOMES ENFORCEABLE</B></P>

<P><B>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enforceability</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>The security constituted by this Share Pledge Agreement shall become immediately enforceable upon and at any
       time after the occurrence of an Event of Default which is outstanding.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Discretion</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>At any time when the security constituted by this Share Pledge Agreement is enforceable, the Agent may in its
       absolute discretion enforce all or any part of the security as it sees fit.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ENFORCEMENT OF SECURITY</B></P>

<P><B>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP ALIGN=RIGHT>&nbsp;&nbsp;</TD>
<TD WIDTH=95% VALIGN=TOP>Upon the occurrence of an Event of Default and Clause 6 of this Share Pledge Agreement, the Agent shall, to
       the extent possible under Norwegian law be entitled to:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>exercise any and all rights of conversion, exchange, subscription or any other rights, privileges or
              options pertaining to the Security Assets as if they were the absolute owners thereof, including,
              without limitation, the right to exchange at their discretion, any and all of such shares upon the
              merger, consolidation, reorganisation, recapitalisation or other readjustment of Navion ASA upon the
              exercise by the Agent of any right, privilege or option pertaining to the Security Assets; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>collect any Related Rights and apply them against the Secured Liabilities in accordance with Clause 8
              below.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>Upon the occurrence of an Event of Default and Clause 6 of this Share Pledge Agreement, the Agent shall,
       having given 14 days' notice to the Company or such lesser period of notice (if any) permitted from time to
       time by the Act or other applicable law, be entitled to:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>subject to the provisions of the Act or any succeeding act, require the forced use of the Security
              Assets and thereby exercise all voting rights in connection therewith or require a sale by way of
              forced auction through the courts or forced sale by a manager appointed by the enforcement officer of
              all or any part of the Security Assets;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>subject to a separate agreement as provided for in Section 1-3 of the Act having been entered into
              between the relevant parties after such Event of Default has occurred, to sell, assign or convert into
              money all or any part of the Security Assets in such a manner and upon such terms (i.e. by private
              sale) and for such consideration (whether in cash, securities or other assets) as is then agreed;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>apply any and all proceeds of such sales in satisfaction of all amounts owing to the Agent and the
              Banks in accordance with Clause 8 below; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>take any other action in relation to the Security Assets permitted by the Act or the Norwegian Liens
              Act of 1980.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>After the security constituted by this Share Pledge Agreement has become enforceable, the Agent may exercise
       (in the name of the Company and without any further consent or authority on the part of the Company) any
       voting rights and any powers or rights which may be exercised by the person or persons in whose name any
       Share or its Related Rights are registered or who is the holder of any of them or otherwise. Until that time,
       the voting rights, powers and other rights in respect of the Shares shall (if exercisable by the Agent) be
       exercised in any manner which the Company may direct in writing and all dividends or other income paid or
       payable in relation to any Shares shall be paid directly to the Company.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>7.3 &nbsp;&nbsp;&nbsp;Protection of purchaser</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>No person (including a purchaser) dealing with the Agent or its agents will be concerned to enquire:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>whether the Secured Liabilities have become payable;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>whether any power which the Agent is purporting to exercise has become exercisable;<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>whether any money remains due under the Finance Documents; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>how any money paid to the Agent is to be applied.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;APPLICATION OF PROCEEDS</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>Any moneys received by the Agent after this Security has become enforceable must be applied in accordance
       with the Facility Agreement.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EXPENSES AND INDEMNITY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Company and/or the Pledgee must:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>immediately on demand pay all reasonable costs and expenses (including legal fees) properly
                incurred in connection with this Agreement by the Agent or any attorney, manager, agent or
                other person appointed by the Agent under this Agreement; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>keep each of them indemnified against any failure or delay in paying the same.<BR><BR>
</TD>
</TR>
</TABLE>



<P><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DELEGATION</B></P>

<P><B>11.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Power of Attorney</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Agent may delegate by power of attorney or in any other manner to any person any right, power or
       discretion exercisable by the Agent under this Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>11.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Terms</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>Any such delegation may be made upon the terms (including power to subdelegate) and subject to any
       regulations which the Agent may think fit. None of the powers delegated by the Company or the Pledgee
       hereunder may be revoked.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FURTHER ASSURANCES</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Company must, at its own expense, take whatever action the Agent may require for:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>creating, perfecting or protecting any security intended to be created by this Agreement over any Security
              Asset; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>facilitating the realisation of any Security Asset or the exercise of any right, power or discretion
              exercisable by the Agent or any of its delegates or sub-delegates in respect of any Security Asset.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>This includes:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>the execution of any transfer, conveyance, assignment or assurance of any property whether to the Agent or
              to its nominees; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the giving of any notice, order or direction and the making of any registration, which in any such case, the
              Agent may think expedient.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;POWER OF ATTORNEY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Company and the Pledgee, subject to the provisions of the Act, irrevocably and severally appoints the
       Agent and any of its delegates or sub-delegates to be its attorney to take any action which the Company is
       obliged to take under this Share Pledge Agreement.  The Company ratifies and confirms whatever any attorney
       does or purports to do in accordance with the provisions of this Share Pledge pursuant to its appointment
       under this Clause.<BR><BR>
</TD>
</TR>
</TABLE>



<P><B>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MISCELLANEOUS</B></P>

<P><B>14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Covenant to pay</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Company shall pay or discharge the Secured Liabilities in the manner provided for in the Finance
       Documents. The Company acknowledges that the Intercompany Facility Agreement and connected security
       thereunder has been assigned to the Agent as security under a revolving facility agreement entered into
       between among others the Agent and the Pledgee in the amount of USD 500,000,000. Any payment by the Company
       under the Intercompany Facility Agreement shall be paid in accordance with the Assignment Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CHANGES TO THE PARTIES</B></P>

<P><B>15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfers by the Company</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Company may not assign, transfer, novate or dispose of its rights and/or obligations under this Share
       Pledge Agreement.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>15.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transfers by Agent</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>The Agent may assign, transfer, novate or dispose of all or any part of its rights and/or obligations under
       this Share Pledge Agreement to a replacement Agent appointed in accordance with the Facility Agreement.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SEVERABILITY</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>If a provision of this Share Pledge Agreement is or becomes illegal, invalid or unenforceable in any
       jurisdiction, that shall not affect:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>the validity or enforceability in that jurisdiction of any other provision of this Share Pledge
              Agreement; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>the validity or enforceability in other jurisdictions of that or any other provision of this Share
              Pledge Agreement.<BR><BR>
</TD>
</TR>
</TABLE>



<P><B>17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COUNTERPARTS</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>This Share Pledge Agreement may be executed in any number of counterparts, and this has the same effect as if
       the signatures on the counterparts were on a single copy of this Share Pledge Agreement.<BR><BR>
</TD>
</TR>
</TABLE>



<P><B>18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICES</B></P>

<P><B>18.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Giving of notices</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>All notices or other communications under or in connection with this Share Pledge Agreement shall be given in
       writing and, unless otherwise stated, may be made by, facsimile. Any such notice will be deemed to be given
       as follows:<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>if by letter, when delivered; and<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>if by facsimile, when received in legible form.<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>However, a notice given in accordance with the above but received on a non-working day or after business
       hours in the place of receipt will only be deemed to be given on the next working day in that place.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>18.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Addresses for notices</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The address and facsimile number of the Pledgee and the Company are:<BR>
 <BR>
                           telefax no.<BR>
                           Attention: Finance Director<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>or such other as the Company may notify to the Agent by not less than five Business Days' notice; and<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>The address and facsimile number of the Agent are:<BR>
                           N-0021 Oslo, Norway<BR>
                           telefax no. +47 22 48 28 94<BR>
                           Attention: Credit Administration shipping;<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>or such other as the Agent may notify to the Company by not less than five Business Days' notice.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>19.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RELEASE</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>Upon the expiry of the Security Period (but not otherwise), the Agent shall, at the request and cost of the
       Company, take whatever action is necessary to release the Security Assets from the security constituted by
       this Share Pledge Agreement.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>20.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JURISDICTION</B></P>

<P><B>20.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submission</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>For the benefit of the Agent, the Company agrees that the courts of Norway have jurisdiction to settle any
       disputes in connection with this Share Pledge Agreement and accordingly submits to the jurisdiction of the
       Norwegian courts, the venue to be Oslo City Court.<BR><BR>
</TD>
</TR>
</TABLE>

<P><B>20.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-exclusivity</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>Nothing in this Clause 19 limits the right of the Agent to bring proceedings against the Company in
       connection with this Share Pledge Agreement:-<BR><BR>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=10% VALIGN=TOP ALIGN=RIGHT>(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD WIDTH=90% VALIGN=TOP>in any other court of competent jurisdiction; or<BR><BR>
</TD>
</TR>

<TR>
<TD VALIGN=TOP ALIGN=RIGHT>(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN=TOP>concurrently in more than one jurisdiction.<BR><BR>
</TD>
</TR>
</TABLE>


<P><B>21.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW</B></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=5% VALIGN=TOP></TD>
<TD WIDTH=95% VALIGN=TOP>This Share Pledge Agreement is governed by Norwegian law.
       This Share Pledge Agreement has been entered into on the date stated at the beginning of this Share Pledge
       Agreement.<BR><BR>
</TD>
</TR>
</TABLE>

<BR>
<BR>
<BR>
<BR>

<P><B>NORSK TEEKAY HOLDINGS LTD.</B><BR>
<BR>
<BR>
___________________________________________<BR>
Signature<BR>
___________________________________________<BR>
Name with block letters<BR>
<BR>
<BR>
<B>NORSK TEEKAY AS</B>
<BR>
<BR>
___________________________________________<BR>
Signature<BR>
___________________________________________<BR>
Name with block letters<BR>
<BR>
<BR>
<B>DEN NORSKE BANK ASA</B>
<BR>
<BR>
___________________________________________<BR>
Signature<BR>
___________________________________________<BR>
Name with block letters<BR></P>


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