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<SEC-DOCUMENT>0000911971-04-000036.txt : 20040514
<SEC-HEADER>0000911971-04-000036.hdr.sgml : 20040514
<ACCEPTANCE-DATETIME>20040514170702
ACCESSION NUMBER:		0000911971-04-000036
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040331
FILED AS OF DATE:		20040514

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:			1T
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12874
		FILM NUMBER:		04808716

	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:		SUITE 2000,  BENTALL 5
		STREET 2:		550 BURRARD STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2K2

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	VIKING STAR SHIPPING INC
		DATE OF NAME CHANGE:	19930914
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6k_033104.htm
<DESCRIPTION>FORM 6K FOR PERIOD ENDING MARCH 31, 2004
<TEXT>
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<HTML>
<HEAD>
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     <!-- Control Number: A0037                                                            -->
     <!-- Rev Number:                                                                      -->
     <!-- Client Name:    Teekay Shipping Corporation                                      -->
     <!-- Project Name:   6-K for the period ended September 30, 2003                      -->
     <!-- Firm Name:      Teekay Shipping Corporation                                      -->
     <TITLE>Form 6K for the period ended September 30, 2003</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, 2004</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-59212, 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>

<PAGE>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>REPORT ON FORM 6-K FOR
THE QUARTERLY PERIOD ENDED MARCH 31, 2004 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>INDEX </U></FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=700 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=10% ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>PART I:</FONT></TD>
<TD WIDTH=79% ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FINANCIAL INFORMATION </FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>PAGE</U></FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Item 1.</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Financial Statements</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="700">
<TR VALIGN=Bottom>
     <TD WIDTH="20%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="72%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Independent Chartered Accountant's Review Report on Consolidated Interim Financial
                Statements</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Consolidated Statements of Income
                       </FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for the three months ended March 31, 2004 and 2003</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Consolidated Balance Sheets</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as at March 31, 2004 and December 31, 2003</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Consolidated Statements of Cash Flows</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for the three months ended March 31, 2004 and 2003</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Notes to the Consolidated Financial Statements</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>7</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Schedule A to the Consolidated Financial Statements</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>17</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

</TABLE>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=700 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5% ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=7% ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Item 2.</FONT></TD>
<TD WIDTH=80% ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Management's Discussion and Analysis of Financial Condition<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and Results of Operations </FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3><BR>20&nbsp;&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Item 3.</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Quantitative
and Qualitative Disclosures about Market Risk</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>28&nbsp;&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>

<TR VALIGN=TOP>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>PART II:</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>OTHER INFORMATION</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>29&nbsp;&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>


<TR VALIGN=TOP>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SIGNATURES</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="4%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>30&nbsp;&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD></TR>
<TR><TD>&nbsp;</TD></TR>
</TABLE>

<PAGE>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ITEM 1 -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FINANCIAL STATEMENTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>INDEPENDENT CHARTERED
ACCOUNTANT&#146;S REVIEW REPORT ON CONSOLIDATED INTERIM<BR>
FINANCIAL STATEMENTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>To the Shareholders and Board of
Directors of <BR>
<B>Teekay Shipping Corporation </B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<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,
2004, the related consolidated statements of income for the three-month periods ended
March 31, 2004 and 2003, and the consolidated statements of cash flows for the three-month
periods ended March 31, 2004 and 2003. Our review also included Schedule A as of March 31,
2004 and for the three-month periods ended March 31, 2004 and 2003 listed in Index Item 1.
These consolidated interim financial statements and schedule are the responsibility of the
Company&#146;s management.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<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>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Based on our reviews, we are not
aware of any material modifications that should be made to the accompanying consolidated
interim financial statements and schedule referred to above for them to be in conformity
with accounting principles generally accepted in the United States.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<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, 2003, the related consolidated statements of income, changes in stockholders&#146;
equity and cash flows for the year then ended, and the related schedule as of and for the
year ended December 31, 2003, not presented herein, and in our report dated February 18,
2004 (except for Note 20(b) which is as of March 15, 2004), we expressed an unqualified
opinion on those consolidated financial statements and related schedule when considered in
relation to the financial statements taken as a whole. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December 31, 2003, is fairly
stated, in all material respects, in relation to the consolidated balance sheet from which
it has been derived. Also, in our opinion, the information as of December 31, 2003 set
forth in Schedule A referred to above, is fairly stated, in all material respects in
relation to the consolidated balance sheet and related schedule from which it has been
derived.</FONT></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
        <TD WIDTH=45%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Vancouver, Canada,<BR>
        April 23, 2004 (except for Note 3 which is as of April 30, 2004)</FONT></TD>
        <TD WIDTH=55% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>/s/ ERNST &amp; YOUNG LLP<BR>
        Chartered Accountants&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>

<PAGE>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CONSOLIDATED STATEMENTS OF INCOME<BR>(in thousands of U.S. dollars, except share and per share amounts)</FONT></H1>
<!-- MARKER FORMAT-SHEET="Head Minor Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> </FONT></H1>

<PRE>

                                                                                   <B>Three Months Ended March 31,</B>
                                                                                    <B>2004</B>                  <B>2003</B>
                                                                                      <B>$</B>                     <B>$</B>
                                                                             -------------------- --------------------
                                                                                           <B>(unaudited)</B>

<B>VOYAGE REVENUES</B>                                                                    551,451              282,232
- -------------------------------------------------------------- -------- ---- -------------------- --------------------
<B>OPERATING EXPENSES</B>
Voyage expenses                                                                    103,884               69,334
Vessel operating expenses                                                           48,912               42,646
Time-charter hire expense                                                          108,665               12,911
Depreciation and amortization                                                       53,614               39,130
General and administrative                                                          27,625               14,727
- -------------------------------------------------------------- -------- ---- -------------------- --------------------
                                                                                   342,700              178,748
- -------------------------------------------------------------- -------- ---- -------------------- --------------------

<B>Income from vessel operations</B>                                                      208,751              103,484
Write-downs and gain (loss) on sale of vessels <I>(note 12)</I>                               603              (25,787)
Restructuring charge <I>(note 12)</I>                                                        (762)                   -
Equity income from joint ventures                                                    1,836                  785
- -------------------------------------------------------------- -------- ---- -------------------- --------------------

<B>Operating income</B>                                                                   210,428               78,482
- -------------------------------------------------------------- -------- ---- -------------------- --------------------

<B>OTHER ITEMS</B>
Interest expense                                                                   (21,563)             (14,386)
Interest income                                                                      1,254                  846
Other loss <I>(note 13)</I>                                                                (1,110)             (11,363)
- -------------------------------------------------------------- -------- ---- -------------------- --------------------
                                                                                   (21,419)             (24,903)
- -------------------------------------------------------------- -------- ---- -------------------- --------------------

<B>Net income</B>                                                                         189,009               53,579
- -------------------------------------------------------------- -------- ---- -------------------- --------------------

<B>Earnings per common share</B><I>(note 16)</I>
     - Basic                                                                          4.63                 1.35
     - Diluted                                                                        4.37                 1.32
<B>Weighted average number of common shares</B>
     - Basic                                                                    40,810,396           39,740,399
     - Diluted                                                                  43,261,082           40,451,189
- -------------------------------------------------------------- -------- ---- -------------------- --------------------
</PRE>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>The accompanying notes are an integral part of the consolidated financial statements.</I> </FONT></P>
<BR>
<BR>
<BR>
<BR>
<BR>

<PAGE>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CONSOLIDATED BALANCE SHEETS<BR>(in thousands of U.S. dollars)</FONT></H1>

<PRE>
                                                                                           <B>As at</B>            <B>As at</B>
                                                                                         <B>March 31,</B>       <B>December 31,</B>
                                                                                           <B>2004</B>              <B>2003</B>
                                                                                             <B>$</B>                <B>$</B>
                                                                                      ---------------- -----------------
                                                                                        <B>(unaudited)</B>
     <B>ASSETS</B>
     <B>Current</B>
     Cash and cash equivalents <I>(note 9)</I>                                                   304,009         292,284
     Restricted cash                                                                        1,902           2,672
     Accounts receivable                                                                  138,196         146,523
     Prepaid expenses and other assets                                                     46,934          39,054
     ----------------------------------------------------------------------------- ---------------- -----------------
     <B>Total current assets</B>                                                                 491,041         480,533
     ----------------------------------------------------------------------------- ---------------- -----------------

     Marketable securities <I>(note 6)</I>                                                       173,311          95,511

     <B>Vessels and equipment</B> <I>(note 9)</I>
     At cost, less accumulated depreciation of $1,083,120
         (December 31, 2003 -  $1,034,747)                                              2,506,536       2,386,642
     Vessels under capital leases, at cost, less accumulated
         depreciation of $804 (December 31, 2003 - $438)                                   36,840          37,562
     Advances on newbuilding contracts <I>(note 11)</I>                                           80,183         150,656
     ----------------------------------------------------------------------------- ---------------- -----------------
     <B>Total vessels and equipment</B>                                                        2,623,559       2,574,860
     ----------------------------------------------------------------------------- ---------------- -----------------
     Net investment in direct financing leases <I>(note 5)</I>                                    80,607          73,073
     Investment in joint ventures                                                          55,488          54,392
     Deposit for purchase of Naviera F. Tapias S.A. <I>(note 3)</I>                               30,183               -
     Other assets                                                                          52,215          60,333
     Intangible assets - net <I>(note 7)</I>                                                     113,705         118,588
     Goodwill <I>(note 7)</I>                                                                    130,754         130,754
     ----------------------------------------------------------------------------- ---------------- -----------------

                                                                                        3,750,863       3,588,044
     ================================================================================================================

     <B>LIABILITIES AND STOCKHOLDERS' EQUITY</B>
     <B>Current</B>
     Accounts payable                                                                      42,293          51,817
     Accrued liabilities                                                                   90,605         119,594
     Current portion of long-term debt <I>(note 9)</I>                                           101,355         102,062
     Current obligation under capital lease <I>(note 11)</I>                                       1,172           1,159
     ----------------------------------------------------------------------------- ---------------- -----------------
     <B>Total current liabilities</B>                                                            235,425         274,632
     Long-term debt <I>(note 9)</I>                                                            1,431,983       1,498,044
     Obligation under capital lease <I>(note 11)</I>                                              35,205          35,493
     Other long-term liabilities                                                          110,897         112,726
     ----------------------------------------------------------------------------- ---------------- -----------------
     <B>Total liabilities</B>                                                                  1,813,510       1,920,895
     ----------------------------------------------------------------------------- ---------------- -----------------
     <B>Minority interest</B>                                                                     15,925          15,322

     <B>Stockholders' equity</B>
     Capital stock <I>(note 10)</I>                                                              509,948         492,653
     Retained earnings                                                                  1,274,488       1,095,650
     Accumulated other comprehensive income                                               136,992          63,524
     ----------------------------------------------------------------------------- ---------------- -----------------
     <B>Total stockholders' equity</B>                                                         1,921,428       1,651,827
     ----------------------------------------------------------------------------- ---------------- -----------------

                                                                                        3,750,863       3,588,044
     ================================================================================================================
</PRE>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments and contingencies <I>(note 11)</I></FONT></P>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>
The accompanying notes are an integral part of the consolidated financial statements.</I> </FONT></P>
<BR>
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<BR>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>(in thousands of U.S. dollars) </FONT></H1>

<PRE>
                                                                                    <B>Three Months Ended March 31,</B>
                                                                                    <B>2004</B>                    <B>2003</B>
                                                                                     <B>$</B>                       <B>$</B>
                                                                           ----------------------- -----------------------
                                                                                             <B>(unaudited)</B>
Cash and cash equivalents provided by (used for)

<B>OPERATING ACTIVITIES</B>
Net income                                                                         189,009                 53,579
Non-cash items:
     Depreciation and amortization                                                  53,614                 39,130
     Gain on sale of assets                                                           (873)                (1,005)
     Loss on write-down of vessels                                                       -                 26,792
     Loss on write-down of marketable securities                                         -                  4,910
     Equity (income) loss (net of dividends received:
       March 31, 2004-$857; March 31, 2003 - $2,046)                                  (979)                 1,160
     Deferred income tax                                                             2,149                  3,322
     Other - net                                                                    (4,451)                  (475)
Change in non-cash working capital items related to operating activities           (25,346)               (38,323)
Expenditures for drydocking                                                         (7,931)                (5,019)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow from operating activities</B>                                            205,192                 84,071
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                                                   413,598                155,733
Scheduled repayments of long-term debt                                             (52,607)               (19,258)
Prepayments of long-term debt                                                     (428,170)              (200,000)
Decrease (increase) in restricted cash                                                 770                    (10)
Proceeds from issuance of Common Stock                                              17,294                  1,755
Cash dividends paid                                                                (10,170)                (8,541)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow used in financing activities</B>                                         (59,285)               (70,321)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                                             (93,829)               (62,891)
Proceeds from sale of vessels and equipment                                              -                 18,000
Proceeds from sale of available-for-sale securities                                  5,764                      -
Deposit for purchase of Naviera F. Tapias S.A. (<I>note 3</I>)                            (30,183)                     -
Other                                                                              (15,934)                (5,845)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Net cash flow used in investing activities</B>                                        (134,182)               (50,736)
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Increase (decrease) in cash and cash equivalents</B>                                    11,725                (36,986)
Cash and cash equivalents, beginning of the period                                 292,284                284,625
- -------------------------------------------------------------------------- ----------------------- -----------------------

<B>Cash and cash equivalents, end of the period</B>                                       304,009                247,639
==========================================================================================================================
</PRE>
<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The accompanying notes are an integral part of the consolidated financial statements.</I></FONT></P>
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<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>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>1.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Basis
of Presentation</B> </FONT></TD>
</TR>
</TABLE>
<BR>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The accompanying unaudited consolidated interim 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 (&#147;Teekay&#148;), which is incorporated under the laws
of the Republic of the Marshall Islands, and its wholly owned or controlled subsidiaries
(collectively, the &#147;Company&#148;). 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&#146;s audited financial statements for
the year ended December 31, 2003. 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&#146;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, 2004 are not necessarily indicative
of those for a full fiscal year.<BR><BR>Certain of the comparative figures have been reclassified to conform with the presentation adopted
in the current period.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>2.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Segment Reporting</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Company has two reportable segments: its spot tanker segment and its fixed-rate segment.
The Company&#146;s spot tanker segment consists of conventional crude oil tankers, oil
bulk ore carriers, and product carriers operating on the spot market or subject to time
charters or contracts of affreightment priced on a spot-market basis or on short-term
fixed-rate contracts. The Company considers contracts that have an original term of less
than three years in duration to be short-term. The Company&#146;s fixed-rate segment
consists of shuttle tankers, floating storage and offtake vessels, a liquid petroleum gas
carrier and conventional crude oil and product tankers subject to long-term fixed-rate
time-charter contracts or contracts of affreightment. Segment results are evaluated based
on income from vessel operations. The accounting policies applied to the reportable
segments are the same as those used in the preparation of the Company&#146;s consolidated
financial statements.<BR><BR>The following tables present results for these segments for the three-month periods ended
March 31, 2004 and 2003.</FONT></TD>
</TR>
</TABLE>

<PRE>
         ---------------------------------------------- -------------------- -------------------- ------------------
                                                            <B>Spot Tanker</B>          <B>Fixed-Rate</B>
                                                              <B>Segment</B>              <B>Segment</B>               <B>Total</B>
         Three months ended March 31, 2004                       <B>$</B>                    <B>$</B>                    <B>$</B>
         ---------------------------------------------- -------------------- -------------------- ------------------

         Voyage revenues - external...................        375,856              175,595              551,451
         Voyage expenses..............................         87,775               16,109              103,884
         Vessel operating expenses....................         23,453               25,459               48,912
         Time-charter hire expense....................         59,555               49,110              108,665
         Depreciation and amortization................         24,886               28,728               53,614
         General and administrative (1)...............         13,018               14,607               27,625
                                                        -------------------- -------------------- ------------------
         Income from vessel operations................        167,169               41,582              208,751
                                                        ==================== ==================== ==================
         Voyage revenues - intersegment...............              -                1,145                1,145
         Total assets at March 31, 2004...............      1,151,623            1,843,803            2,995,426

</PRE>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<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>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>

<PRE>
         ---------------------------------------------- -------------------- -------------------- ------------------
                                                              <B>Spot Tanker</B>          <B>Fixed-Rate</B>
                                                                <B>Segment</B>              <B>Segment</B>               <B>Total</B>
         Three months ended March 31, 2003                         <B>$</B>                    <B>$</B>                    <B>$</B>
         ---------------------------------------------- -------------------- -------------------- ------------------

         Voyage revenues - external....................         241,717               40,515              282,232
         Voyage expenses                                         68,249                1,085               69,334
         Vessel operating expenses.....................          31,613               11,033               42,646
         Time-charter hire expense.....................          12,911                    -               12,911
         Depreciation and amortization.................          26,867               12,263               39,130
         General and administrative (1)................          11,589                3,138               14,727
                                                        -------------------- -------------------- ------------------
         Income from vessel operations.................          90,488               12,996              103,484
                                                        ==================== ==================== ==================
         Voyage revenues - intersegment................               -                    -                    -
</PRE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
(1)&nbsp;&nbsp;Includes direct general and administrative expenses and indirect general and
               administrative expenses (allocated to each segment based on estimated use of
               corporate resources).</FONT></TD>
</TR>
</TABLE>



<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
A reconciliation of total segment assets to amounts presented in the consolidated balance sheet is as follows:</FONT></TD>
</TR>
</TABLE>


<PRE>
                                                                                 <B>March 31,</B>          <B>December, 31</B>
                                                                                    <B>2004</B>                <B>2003</B>
                                                                                     <B>$</B>                   <B>$</B>
                                                                             ------------------- -------------------
         Total assets of all segments........................................     2,995,426           2,942,704
         Cash, restricted cash and marketable securities.....................       479,222             390,467
         Accounts receivable and other assets................................       246,032             254,873
         Deposit for purchase of Naviera F. Tapias S.A.......................        30,183                   -
                                                                             ------------------- -------------------
            Consolidated total assets........................................     3,750,863           3,588,044
                                                                             =================== ===================
</PRE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>3.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Acquisition of Naviera F. Tapias S.A.</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On April 30, 2004, the Company acquired 100% of the issued and outstanding shares of Naviera
F. Tapias S.A. (&#147;Tapias&#148;), for approximately $297 million in cash, (including approximately
$22.0 million for assumed net working capital), and the assumption of
existing debt. In addition, the Company assumed approximately $540 million in newbuilding
commitments, most of which is expected to be fully debt financed prior to the vessel
deliveries. As of March 31, 2004, the Company had made a deposit of $30.0 million towards the purchase price.  Tapias is
the leading independent owner and operator of liquefied natural gas (&#147;LNG&#148;)
carriers and crude oil tankers in Spain. Teekay also entered into an agreement with the
shareholders of Tapias to establish a 50/50 joint venture that will pursue new business in
the oil and gas shipping sectors, focusing specifically on the Spanish market. The
acquisition of Tapias was funded by a combination of cash, cash generated from operations,
and borrowings under existing credit facilities.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Tapias&#146; LNG fleet consists of four vessels, including two newbuildings scheduled for delivery in
the second half of 2004. All four vessels are contracted under long-term fixed-rate
charters to major Spanish energy companies. Tapias&#146; conventional crude oil tanker
fleet consists of nine Suezmax tankers, including three newbuildings scheduled for
delivery in 2004 and 2005. Five of the conventional tankers are contracted under long-term
fixed-rate charters with a major Spanish oil company. The other four Suezmax tankers, two
of which are currently trading under short-term contracts, are expected to join the
Company&#146;s spot tanker fleet during the next 18 months. The average remaining
terms of the existing LNG and Suezmax charter contracts are approximately 21 and 18 years, respectively.</FONT></TD>
</TR>
</TABLE>

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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)
 </FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>4.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Acquisition of 50% of PetroTrans Holdings Ltd.</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On September 30, 2003, Teekay acquired 50% of the issued and outstanding shares of PetroTrans
Holdings Ltd., the parent company of Skaugen PetroTrans Inc. (&#147;SPT&#148;). The
acquisition was completed for approximately $25 million in cash, and an &#147;earn-out
element&#148; to be calculated based on the financial performance of SPT over the next
five years. The Company funded this acquisition with available cash.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
SPT is a lightering company operating out of Houston, Texas. Lightering is the process of
ship-to-ship transfer of oil cargo, which is required when vessels transporting oil are
too large to enter ports that are not deep enough, or have narrow entrances or small
berths. The lightering process consists of maneuvering a smaller tanker (service vessel)
alongside the larger tanker, typically with both vessels underway. The service vessel
transports the oil cargo to the port.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The acquisition of the 50% interest in PetroTrans Holdings Ltd. is being accounted for using
the equity method, whereby the investment is carried at the Company&#146;s original cost
plus its proportionate share of undistributed earnings. The excess carrying value of the
Company&#146;s investment over its underlying equity in the net assets of PetroTrans
Holdings Ltd., which amounts to approximately $15.7 million, has been accounted for as
goodwill. This investment is included in investments in joint ventures.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>5.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Acquisition of Navion AS</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In April 2003, Teekay completed its acquisition of 100% of the issued and outstanding shares
of Navion AS for approximately $774.2 million in cash, including transaction costs of
approximately $7.0 million. The Company made a deposit of $76.0 million towards the
purchase price on December 16, 2002. The remaining portion of the purchase price was paid
on closing. The Company funded its acquisition of Navion by borrowing under a $500 million
364-day facility (subsequently replaced by a $550 million revolving credit facility),
together with available cash and borrowings under other existing revolving credit
facilities. Navion&#146;s results of operation have been consolidated with Teekay&#146;s
results commencing April 1, 2003.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Navion, based in Stavanger, 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, 2004, consisted of eight owned and 13 chartered-in vessels (excluding six vessels
chartered-in from the Company&#146;s shuttle tanker subsidiary Ugland Nordic Shipping AS
(&#147;UNS&#148;)), 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&#146;s modern, chartered-in, conventional tanker fleet,
which as of March 31, 2004, consisted of 12 crude oil tankers and 15 product tankers,
operates primarily in the Atlantic region, providing services to Statoil and other oil
companies. In addition, Navion owns two floating storage and offtake vessels currently
trading as conventional crude oil tankers in the Atlantic region, one chartered-in
methanol carrier and one liquid petroleum gas (&#147;LPG&#148;) carrier on long-term
charter to Statoil. Through Navion Chartering AS, an entity owned jointly with Statoil,
Navion has a first right of refusal on Statoil&#146;s oil transportation requirements at
the prevailing market rate until December 31, 2007. In addition to tanker operations,
Navion also constructs, installs, operates and leases equipment that reduces volatile
organic compound emissions during loading, transportation and storage of oil and oil
products.</FONT></TD>
</TR>
</TABLE>
<BR>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)
 </FONT></H1>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The following table summarizes the fair value of the assets acquired and liabilities assumed
by the Company at April 1, 2003, the date of the Navion acquisition.</FONT></TD>
</TR>
</TABLE>
<PRE>
                                                                                                           <B>As at</B>
                                                                                                          <B>April 1,</B>
                                                                                                           <B>2003</B>
                                                                                                             <B>$</B>
                                                                                                    -----------------
                                                                                                         <B>(unaudited)</B>
         <B>ASSETS</B>
         Current assets                                                                                     64,457
         Vessels and equipment                                                                             543,003
         Net investment in direct financing leases                                                          45,558
         Other assets - long-term                                                                            3,835
         Intangible assets subject to amortization:
            Contracts of affreightment (15-year sum-of-years declining balance)                            117,000
         Goodwill (fixed-rate segment)                                                                      40,033
         ------------------------------------------------------------------------- ---------------- -----------------
         <B>Total assets acquired</B>                                                                             813,886
         ============================================================================================================
         <B>LIABILITIES</B>
         Current liabilities                                                                                36,270
         Other long-term liabilities                                                                         3,463
         ------------------------------------------------------------------------- ---------------- -----------------
         <B>Total liabilities assumed</B>                                                                          39,733
         ============================================================================================================

         <B>Net assets acquired (cash consideration)</B>                                                          774,153
         =============================================================================================================
</PRE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The following table shows comparative summarized consolidated pro forma financial information
for the Company for the three-month period ended March 31, 2003, and gives effect to the
acquisition of 100% of the outstanding shares in Navion as if it had taken place on
January 1, 2003:</FONT></TD>
</TR>
</TABLE>
<BR>
<PRE>
                                                                                                   <B>Pro Forma</B>
                                                                                                <B>Three Months Ended</B>
                                                                                                  <B>March 31, 2003</B>
                                                                                                       <B>$</B>
                                                                                           --------------------------
                                                                                                  <B>(unaudited)</B>

         Voyage revenues................................................................             510,665
         Net income.....................................................................              99,619
         Earnings per common share......................................................
         - basic........................................................................                2.51
         - diluted......................................................................                2.46
         --------------------------------------------------------------------------------- --------------------------

</PRE>
<BR>
<BR>
<BR>
<BR>
<BR>
<PAGE>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>




<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>6.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Investments in Marketable Securities</B> </FONT></TD>
</TR>
</TABLE>
<PRE>
                                                                          <B>Gross</B>           <B>Gross</B>          <B>Approximate</B>
                                                                        <B>Unrealized</B>     <B>Unrealized</B>         <B>Market and</B>
                                                           <B>Cost</B>           <B>Gains</B>          <B>Losses</B>        <B>Carrying Values</B>
                                                             <B>$</B>              <B>$</B>               <B>$</B>                 <B>$</B>
                                                      -------------- --------------- -------------- -------------------
         March 31, 2004
         Available-for-sale equity securities........      37,291        136,020               -           173,311

         December 31, 2003
         Available-for-sale equity securities........      42,180         53,331               -            95,511
</PRE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Available-for-sale equity securities represent 2,906,000 shares (December 31, 2003 &#150; 2,906,000) in A/S
Dampskibsselskabet Torm and nil shares (December 31, 2003 &#150; 351,221) in Nordic
American Tanker Shipping Ltd.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>7.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Goodwill and Intangible Assets</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The carrying amount of goodwill as at March 31, 2004 and December 31, 2003 for the
Company&#146;s spot tanker, fixed-rate, and other reporting units, are as follows:</FONT></TD>
</TR>
</TABLE>

<PRE>
                                                          <B>Spot Tanker</B>      <B>Fixed-Rate</B>
                                                            <B>Segment</B>         <B>Segment</B>          <B>Other</B>          <B>Total</B>
                                                               <B>$</B>               <B>$</B>               <B>$</B>              <B>$</B>
                                                        ---------------- --------------- -------------- -------------
          Goodwill......................................       -            128,575           2,179        130,754
                                                        ================ =============== ============== =============
</PRE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As at March 31, 2004 intangible assets consisted of:</FONT></TD>
</TR>
</TABLE>
<PRE>
                                              <B>Weighted-Average</B>     <B>Gross Carrying</B>     <B>Accumulated</B>     <B>Net Carrying</B>
                                                    <B>Life</B>               <B>Amount</B>         <B>Amortization</B>       <B>Amount</B>
                                                   <B>(years)</B>                <B>$</B>                <B>$</B>                <B>$</B>
                                            --------------------- ------------------ --------------- ----------------
          Contracts of affreightment........        15.0                124,250          17,054          107,196
          Intellectual property.............         7.0                  7,701           1,192            6,509
                                            --------------------- ------------------ --------------- ----------------
                                                    14.5                131,951          18,246          113,705
                                            ===================== ================== =============== ================
</PRE>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Aggregate amortization expense of intangible assets for the three months ended March 31, 2004 was
approximately $4.8 million.</FONT></TD>
</TR>
</TABLE>

<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>8.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Cash Flows</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Cash interest paid by the Company during the three-month periods ended March 31, 2004 and 2003
approximated $38.3 million and $25.3 million, respectively.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>
<PAGE>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>9.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Long-Term Debt</B> </FONT></TD>
</TR>
</TABLE>

<PRE>
                                                                                     <B>March 31,</B>        <B>December 31,</B>
                                                                                        <B>2004</B>              <B>2003</B>
                                                                                         <B>$</B>                  <B>$</B>
                                                                                  ----------------- ------------------
         Revolving Credit Facilities..............................................     390,000           430,000
         First Preferred Ship Mortgage Notes (8.32%) due February 1, 2006.........      64,314           109,314
         Premium Equity Participating Security Units (7.25%) due May 18, 2006.....     143,750           143,750
         Senior Notes (8.875%) due July 15, 2011 .................................     351,706           351,765
         Term Loans due through 2014 .............................................     583,568           565,277
                                                                                  ----------------- ------------------
                                                                                     1,533,338         1,600,106
         Less current portion.....................................................     101,355           102,062
                                                                                  ----------------- ------------------
                                                                                     1,431,983         1,498,044
                                                                                  ================= ==================
</PRE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As of March 31, 2004, the Company had three long-term revolving credit facilities (the
&#147;Revolvers&#148;) available, which, as at such date, provided for borrowings of up to
$872.0 million, of which $482.0 million was undrawn. The amount available under the
Revolvers reduces semi-annually by a combined $59.3 million, with final balloon reductions
scheduled for one Revolver in 2006 and for the other two Revolvers in 2008. Two of the
Revolvers are collateralized by first priority mortgages granted on 26 of the
Company&#146;s vessels, together with other related collateral, and all the Revolvers
include a guarantee from Teekay for all amounts outstanding under the Revolvers.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The 8.32% First Preferred Ship Mortgage Notes due February 1, 2006 (the &#147;8.32%
Notes&#148;) are collateralized by first preferred mortgages on seven of the
Company&#146;s Aframax tankers, together with other related collateral, and are guaranteed
by seven subsidiaries of Teekay that own the mortgaged vessels (the &#147;8.32% Notes
Guarantor Subsidiaries&#148;) to a maximum of 95% of the fair value of their net assets.
As at March 31, 2004, the fair value of these net assets approximated $218.4 million. The
8.32% Notes are also subject to a sinking fund, which retires $45.0 million of the
principal amount on each February 1, commencing 2004.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
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
interim financial statements.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The 7.25% Premium Equity Participating Security Units due May 18, 2006 (the &#147;Equity
Units&#148;) are unsecured and subordinated to all of the Company&#146;s senior debt. The
Equity Units are not guaranteed by any of the Company&#146;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&#146;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).</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Company has several term loans outstanding, which, as at March 31, 2004, totaled $583.6
million. Interest payments are based on LIBOR plus a margin. At March 31, 2004 the margins
ranged between 0.65% and 1.25%. The term loans reduce in quarterly or semi-annual payments
with varying maturities through 2014. All term loans of the Company are collateralized by
first preferred mortgages on the vessels to which the loans relate, together with certain
other collateral and guarantees from Teekay, excluding the term loans of UNS totaling
$307.3 million included above that are not guaranteed by Teekay.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>
<PAGE>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
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, 2004, to $616.2 million. Certain loan agreements require that a minimum
level of free cash be maintained. As at March 31, 2004, this amount was $100.0 million.
Certain of the loan agreements also require that a minimum level of free liquidity and undrawn
revolving credit lines (with less than six months to maturity) be maintained.  As at March 31, 2004,
this amount was $117.7 million.
</FONT></TD>
</TR>
</TABLE>

<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>10.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Capital Stock</B></FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The authorized capital stock of Teekay at March 31, 2004 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, 2004, Teekay had 41,099,171 shares of
Common Stock and no shares of Preferred Stock issued and outstanding.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In September 2003, the Company&#146;s 1995 stock Option Plan was terminated with respect to
new grants and the Company&#146;s 2003 Equity Incentive Plan was adopted. As at March 31,
2004, the Company had reserved pursuant to its 1995 Stock Option Plan and 2003 Equity
Incentive Plan (collectively referred to as the &#147;Plans&#148;) 4,432,701 shares of
Common Stock for issuance upon exercise of options or equity awards granted or to be
granted. As at March 31, 2004, options to purchase a total of 3,063,568 shares of
Teekay&#146;s Common Stock were outstanding, of which 2,062,244 options were then
exercisable at prices ranging from $16.875 to $41.19 per share, with a weighted-average
exercise price of $31.61 per share. All outstanding options have exercise prices ranging
from $16.875 to $67.25 per share and a weighted-average exercise price of $34.05 per
share. All outstanding options expire between July 19, 2005 and March 9, 2014, ten years
after the date of each respective grant.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Under Statement of Financial Accounting Standards No. 123 (&#147;SFAS 123&#148;),
&#147;Accounting for Stock-Based Compensation,&#148; and as amended by Statement of
Financial Accounting Standards No. 148 (&#147;SFAS 148&#148;), &#147;Accounting for
Stock-Based Compensation-Transition and Disclosure,&#148; 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 (&#147;APB 25&#148;) &#147;Accounting for Stock Issued to Employees.&#148;
As the exercise price of the Company&#146;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 had the Company applied the fair value recognition provisions of SFAS 123 to
stock-based employee compensation.</FONT></TD>
</TR>
</TABLE>

<PRE>
                                                                                 <B>Three Months Ended March 31,</B>
                                                                                   <B>2004</B>                  <B>2003</B>
                                                                                    <B>$</B>                      <B>$</B>
                                                                          --------------------- --------------------
         Net income - as reported.........................................       189,009                53,579
           Less: Total stock-based compensation expense...................         2,028                 2,063
                                                                          --------------------- --------------------
         Net income - pro forma...........................................       186,981                51,516
                                                                          ===================== ====================
         Basic earnings per common share:
           As reported....................................................          4.63                  1.35
           Pro forma......................................................          4.58                  1.30
         Diluted earnings per common share:
           As reported....................................................          4.37                  1.32
           Pro forma......................................................          4.32                  1.27

</PRE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For the purpose of the above pro forma calculation, the fair value of each option granted was
estimated on the date of the grant using the Black-Scholes option pricing model. The
following assumptions were used in computing the fair value of the options granted:
expected volatility of 35% in 2004 and 30% in 2003, expected life of five years, dividend yield of 2.0% in 2004
and 3.0% in 2003, and weighted-average risk-free interest rate of 2.7% in 2004 and 2.5% in 2003.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>11.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Commitments and Contingencies</B></FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As of March 31, 2004, excluding Tapias, the Company was committed to the construction of one
Suezmax tanker scheduled for conversion to a shuttle tanker upon delivery and 14 Aframax
tankers scheduled for delivery between April 2004 and March 2008, at a total cost of
approximately $616.4 million, excluding capitalized interest. As of March 31, 2004,
payments made towards these commitments totaled $76.3 million, excluding $3.9 million of
capitalized interest and other miscellaneous construction costs. Long-term financing
arrangements existed for $254.2 million of the unpaid cost of these vessels. It is the
Company&#146;s intention to finance the remaining unpaid amount of $285.9 million through
incremental debt or surplus cash balances, or a combination thereof. As of March 31, 2004,
the remaining payments required to be made under these newbuilding and conversion
contracts were: $214.8 million in 2004, $95.4 million in 2005, $83.2 million in 2006,
$96.0 million in 2007, and $50.7 million in 2008. The Suezmax tanker newbuilding will be
subject to a 13-year long-term charter contract upon delivery. Two of the Aframax tankers will be
subject to 10-year long-term charters to SPT upon delivery.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Company has been awarded a contract by a consortium of major oil companies to construct
and install on five shuttle tankers, volatile compound emissions plants which reduce
emissions during cargo operations. The construction and installation of these plants are
expected to be completed by 2005 at a total cost to Teekay of approximately $76.1 million.
As of March 31, 2004, the Company had made payments towards these commitments of
approximately $25.3 million. As of March 31, 2004, the remaining payments required to be
made towards these commitments were $31.8 million in 2004, and $19.0 million in 2005.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Teekay and certain subsidiaries of Teekay have guaranteed their share of the outstanding mortgage
debt in four 50%-owned joint venture companies. As of March 31, 2004, Teekay and these
subsidiaries had guaranteed $100.6 million, or 50% of the total $201.2 million, in
outstanding mortgage debt of the joint venture companies. These joint venture companies
own an aggregate of four shuttle tankers.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Company enters into indemnification agreements with certain officers and directors. In
addition, the Company enters into other indemnification 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 future
amounts paid up to the maximum amount of the insurance coverage, less any deductible
amounts pursuant to the terms of the respective policies, the amounts of which are not
considered material.</FONT></TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>12.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Gain on Sale of Vessels and Restructuring Charge</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
During December 2003, the Company sold and leased back three Aframax tankers which are accounted
for as vessel operating leases. The sale generated a $16.8 million deferred gain, which
has been included in other long-term liabilities and is being amortized over the 7-year
term of the leases. The amortization of this deferred gain for the three-month period
ended March 31, 2004 is $0.6 million.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
During the three-month period ended March 31, 2004, the Company incurred $0.8 million of
restructuring costs associated with the closure of the Company&#146;s Oslo office.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>13.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Other Loss</B> </FONT></TD>
</TR>
</TABLE>
<PRE>
                                                                                         <B>Three Months Ended</B>
                                                                                    <B>March 31,</B>           <B>March 31,</B>
                                                                                      <B>2004</B>                <B>2003</B>
                                                                                        <B>$</B>                   <B>$</B>
                                                                             ------------------- -------------------
         Gain on sale of available-for-sale securities.......................           873                   -
         Write-down in the carrying value of available-for-sale securities...             -              (4,910)
         Income tax expense..................................................        (2,149)             (3,322)
         Miscellaneous.......................................................           166              (3,131)
                                                                             ------------------- -------------------
                                                                                     (1,110)            (11,363)
                                                                             =================== ===================
</PRE>

<BR>
<BR>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>14.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Comprehensive Income</B> </FONT></TD>
</TR>
</TABLE>

<PRE>
                                                                                    <B>Three Months Ended</B>
                                                                               <B>March 31,</B>          <B>March 31,</B>
                                                                                 <B>2004</B>               <B>2003</B>
                                                                                  <B>$</B>                  <B>$</B>
                                                                          ------------------- -----------------
         Net income                                                            189,009             53,579
         Other comprehensive income:
            Unrealized gain on available-for-sale securities                    83,087                368
            Reclassification adjustment for (gain) loss on
              available-for-sale securities included in net income                (284)             4,910
            Unrealized loss on derivative instruments                           (8,116)            (9,415)
            Reclassification adjustment for gain on
              derivative instruments                                            (1,219)              (418)
                                                                          ------------------- -----------------
         Comprehensive income                                                  262,477             49,024
                                                                          =================== =================
</PRE>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>15.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Derivative Instruments and Hedging Activities</B></FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Company uses derivatives only for hedging purposes. The following summarizes the
Company&#146;s risk strategies with respect to market risk from foreign currency
fluctuations, changes in interest rates, spot market rates for vessels, bunker fuel
prices, and the effect of these strategies on the Company&#146;s financial statements.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
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, 2004, the Company was committed to foreign exchange contracts
for the forward purchase of approximately Norwegian Kroner 938.6 million, Canadian Dollars
31.5 million and Singapore Dollars 8.0 million for U.S. Dollars at an average rate of 7.49
Norwegian Kroner per U.S. Dollar, 1.59 Canadian Dollar per U.S. Dollar and 1.72 Singapore
Dollar per U.S. Dollar, respectively. The foreign exchange forward contracts mature as
follows: $90.8 million in 2004, $54.0 million in 2005, and $5.0 million in 2006. As at
March 31, 2004, the Company was committed to bunker fuel swap contracts totaling 28,500
metric tonnes, with a weighted-average price of $139.34 per tonne. The fuel swap contracts
expire in April and September 2004.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As at March 31, 2004, the Company was committed to interest rate swap agreements whereby $610
million of the Company&#146;s floating-rate debt was swapped with fixed-rate obligations
having a weighted-average remaining term of 1.6 years. These agreements, which expire
between May 2004 and January 2006, effectively change the Company&#146;s interest rate
exposure on $610 million of debt from a floating LIBOR rate to a weighted-average
fixed-rate of 2.75%. In January 2004, the Company entered into an additional interest rate
swap agreement whereby $200 million of the Company&#146;s floating rate debt will be
swapped with a fixed-rate obligation for a three-year term commencing in January 2006. The
agreement will effectively change the Company&#146;s interest rate exposure on $200
million of debt from a floating LIBOR rate to a fixed-rate of 4.24%. The Company is
exposed to credit loss in the event of non-performance by the counter parties to the
interest rate swap agreements, foreign exchange forward contracts, and forward freight
agreements; however, the Company does not anticipate non-performance by any of the counter
parties.</FONT></TD>
</TR>
</TABLE>
<BR>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Company hedges certain of its voyage revenues through the use of forward freight
agreements. Forward freight agreements involve contracts to provide a fixed number of
theoretical voyages at fixed rates thus hedging a portion of the Company&#146;s exposure
to the spot charter market. As at March 31, 2004, the Company was committed to forward
freight agreements totaling 6.1 million metric tonnes with a notional principal amount of
$48.3 million. The forward freight agreements expire between April 2004 and September
2005.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>
<PAGE>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<BR>
(all tabular amounts stated in thousands of U.S. dollars, except share and per share data)<BR>
(Information as at March 31, 2004 and for the Three-Month Periods<BR>
Ended March 31, 2004 and 2003 is unaudited)</FONT></H1>



<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
During the three-months ended March 31, 2004, the Company recognized a net loss of $0.2 million
relating to the ineffective portion of its interest rate swap agreements and foreign
currency forward contracts. The ineffective portion of these derivative instruments is
presented as interest expense and other loss.</FONT></TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>16.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Earnings Per Share</B> </FONT></TD>
</TR>
</TABLE>


<PRE>

                                                                                     <B>Three-Months Ended</B>
                                                                             <B>March 31, 2004</B>       <B>March 31, 2003</B>
                                                                                   <B>$</B>                     <B>$</B>
                                                                          --------------------- --------------------
         Net income available for common stockholders                             189,009               53,579
                                                                          --------------------- --------------------

         Weighted average number of common shares..................            40,810,396           39,740,399
         Dilutive effect of employee stock options.................             1,431,877              710,790
         Dilutive effect of Equity Units...........................             1,018,809                    -
                                                                          --------------------- --------------------
         Common stock and common stock equivalents.................            43,261,082           40,451,189
                                                                          ===================== ====================
         Earnings per common share:...............................
           - Basic................................................                   4.63                 1.35
           - Diluted..............................................                   4.37                 1.32
</PRE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For the three months ended March 31, 2003, the anti-dilutive effect of 4.1 million shares
attributable to outstanding stock options and Equity Units were excluded from the
calculation of diluted earnings per share. All outstanding stock options and Equity Units
were dilutive for the three months ended March 31, 2004.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>17.</B>  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Subsequent Event</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On April 21, 2004, the Company announced that its Board of Directors had authorized a
two-for-one stock split relating to the Teekay&#146;s common stock, to be effected in the
form of a 100% stock dividend. All stockholders of record on May 3, 2004 will receive one
additional share of common stock for each share held. The additional shares will be
distributed on or about May 17, 2004, the effective date of the stock dividend. The
earnings per share amounts disclosed in these financial statements do not give effect to
this stock split.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>

<PAGE>

<!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->
<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SCHEDULE A</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS<BR>
(in thousands of U.S. dollars)<BR>
 (unaudited)</FONT></H1>

<PRE>
                                                                 <B>Three Months Ended March 31, 2004
                                           -------------------------------------------------------------------------------
                                                             8.32% Notes                                      Teekay
                                           Teekay Shipping    Guarantor    Non-Guarantor                  Shipping Corp.
                                                Corp.       Subsidiaries   Subsidiaries    Eliminations   &amp; Subsidiaries
                                                  $               $              $              $               $</B>
                                           -------------------------------------------------------------------------------

Voyage revenues                                       -        18,331          551,451       (18,331)         551,451
Operating expenses                                3,554         8,583          348,894       (18,331)         342,700
                                           -------------------------------------------------------------------------------
   Income (loss) from vessel operations          (3,554)        9,748          202,557             -          208,751
Other operating income                                -             -            1,677             -            1,677
                                           -------------------------------------------------------------------------------
   Operating income (loss)                       (3,554)        9,748          204,234             -          210,428
Net interest expense                            (11,526)            -           (8,783)            -          (20,309)
Equity in net income of subsidiaries            215,514             -                -      (215,514)               -
Other income (loss)                             (11,425)            -           10,315             -           (1,110)
                                           -------------------------------------------------------------------------------
<B>Net income</B>                                      189,009         9,748          205,766      (215,514)         189,009
Retained earnings, beginning of the period    1,095,650         5,107        1,343,883    (1,348,990)       1,095,650
Dividends declared                              (10,171)            -                -             -          (10,171)
                                           -------------------------------------------------------------------------------
<B>Retained earnings, end of the period</B>          1,274,488        14,855        1,549,649    (1,564,504)       1,274,488
                                           ===============================================================================

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

Voyage revenues                                       -         8,867          282,232        (8,867)         282,232
Operating expenses                                3,548         8,490          175,577        (8,867)         178,748
                                           -------------------------------------------------------------------------------
   Income (loss) from vessel operations          (3,548)          377          106,655             -          103,484
Other operating expense                               -             -          (25,002)            -          (25,002)
                                           -------------------------------------------------------------------------------
   Operating income (loss)                       (3,548)          377           81,653             -           78,482
Net interest expense                            (10,816)            -           (2,724)            -          (13,540)
Equity in net income of subsidiaries             68,526             -                -       (68,526)               -
Other loss                                         (583)            -          (10,780)            -          (11,363)
                                           -------------------------------------------------------------------------------
<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
                                           ===============================================================================
</PRE>
<!-- MARKER FORMAT-SHEET="Cutoff Rule" FSL="Default" -->
<P>_________________ </P>
<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(See
Note 9)</FONT></P>


<PAGE>
<BR>
<BR>
<BR>
<BR>
<BR>

<!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->
<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SCHEDULE A</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CONDENSED CONSOLIDATED BALANCE SHEETS<BR>
(in thousands of U.S. dollars)<BR>
(unaudited)</FONT></H1>

<PRE>
                                                                        <B>As at March 31, 2004
                                          ---------------------------------------------------------------------------------
                                                            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                            -               -         304,009               -           304,009
Other current assets                             3,583             482         278,967         (96,000)          187,032
                                          ---------------------------------------------------------------------------------
     Total current assets                        3,583             482         582,976         (96,000)          491,041
Vessels and equipment (net)                          -         238,033       2,385,526               -         2,623,559
Advances due from subsidiaries                 202,851               -               -        (202,851)                -
Investment in direct financing leases                -               -          80,607               -            80,607
Other assets (principally marketable
securities                                   2,156,691               -         255,709      (2,156,691)          255,709
     and investments in subsidiaries)
Investment in joint ventures                         -               -          55,488               -            55,488
Intangible assets - net                              -               -         113,705               -           113,705
Goodwill                                             -               -         130,754               -           130,754
                                          ---------------------------------------------------------------------------------
                                             2,363,125         238,515       3,604,765      (2,455,542)        3,750,863
                                          =================================================================================
<B>LIABILITIES &amp; STOCKHOLDERS'  EQUITY</B>
Current liabilities                             15,820           1,514         314,091         (96,000)          235,425
Long-term debt and other long-term             562,869               -       1,015,216               -         1,578,085
liabilities
Due (from) to affiliates                             -        (147,184)        430,183        (282,999)                -
                                          ---------------------------------------------------------------------------------
     Total liabilities                         578,689        (145,670)      1,759,490        (378,999)        1,813,510
                                          ---------------------------------------------------------------------------------
Minority interest                                    -               -          15,925               -            15,925
Stockholders' Equity
Capital stock                                  509,948              23           5,943          (5,966)          509,948
Contributed capital                                  -         369,307         136,766        (506,073)                -
Retained earnings                            1,274,488          14,855       1,549,649      (1,564,504)        1,274,488
Accumulated other comprehensive income               -               -         136,992               -           136,992
                                          ---------------------------------------------------------------------------------
     Total stockholders' equity              1,784,436         384,185       1,829,350      (2,076,543)        1,921,428
                                          ---------------------------------------------------------------------------------
                                             2,363,125         238,515       3,604,765      (2,455,542)        3,750,863
                                          =================================================================================

                                                                       <B>As at December 31, 2003
                                          ---------------------------------------------------------------------------------
                                                            8.32% Notes                                        Teekay
                                              Teekay         Guarantor    Non-Guarantor                    Shipping Corp.
                                          Shipping Corp.    Subsidiaries   Subsidiaries     Eliminations   &amp; Subsidiaries
                                                 $               $              $                $                $</B>
                                         ------------------ ------------ ----------------- --------------- ----------------
<B>ASSETS</B>                                               -              -           292,284              -           292,284
Cash and cash equivalents
Other current assets                             1,429            344           282,476        (96,000)          188,249
                                         ------------------ ------------ ----------------- --------------- ----------------
     Total current assets                        1,429            344           574,760        (96,000)          480,533
Vessels and equipment (net)                          -        242,182         2,332,678              -         2,574,860
Advances due from subsidiaries                 309,071              -                 -       (309,071)                -
Investment in direct financing leases                -              -            73,073              -            73,073
Other assets (principally marketable
  securities         and investments
  in subsidiaries)                           1,911,491              -           155,844     (1,911,491)          155,844
Investment in joint ventures                         -              -            54,392              -            54,392
Intangible assets - net                              -              -           118,588              -           118,588
Goodwill                                             -              -           130,754              -           130,754
                                         ------------------ ------------ ----------------- --------------- ----------------
                                             2,221,991        242,526         3,440,089     (2,316,562)        3,588,044
                                         ================== ============ ================= =============== ================
<B>LIABILITIES &amp; STOCKHOLDERS'  EQUITY</B>
Current liabilities                             25,371          1,746           343,515        (96,000)          274,632
Long-term debt and other long-term
liabilities                                    608,317              -         1,037,946              -         1,646,263
Due (from) to affiliates                             -       (133,657)          493,190       (359,533)                -
                                         ------------------ ------------ ----------------- --------------- ----------------
     Total liabilities                         633,688       (131,911)        1,874,651       (455,533)        1,920,895
                                         ------------------ ------------ ----------------- --------------- ----------------
Minority Interest                                    -              -            15,322              -            15,322
Stockholders' Equity
Capital stock                                  492,653             23             5,943         (5,966)          492,653
Contributed capital                                  -        369,307           136,766       (506,073)                -
Retained earnings                            1,095,650          5,107         1,343,883     (1,348,990)        1,095,650
Accumulated other comprehensive loss                 -              -            63,524              -            63,524
                                         ------------------ ------------ ----------------- --------------- ----------------
     Total stockholders' equity              1,588,303        374,437         1,550,116     (1,861,029)        1,651,827
                                         ------------------ ------------ ----------------- --------------- ----------------
                                             2,221,991        242,526         3,440,089     (2,316,562)        3,588,044
                                         ================== ============ ================= =============== ================
</PRE>
<!-- MARKER FORMAT-SHEET="Cutoff Rule" FSL="Default" -->
<P>_________________ </P>
<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(See
Note 9)</FONT></P>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Right" FSL="Default" -->
<H1 ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SCHEDULE A</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<BR>
(in thousands of U.S. dollars)</FONT></H1>

<PRE>
                                                                   <B>Three Months Ended March 31, 2004
                                              -----------------------------------------------------------------------------
                                                                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        (38,161)        13,641          229,712           -          205,192
                                              ----------------- ------------- --------------- ------------ ----------------
<B>FINANCING ACTIVITIES</B>
Net proceeds from long-term debt                          -              -          413,598           -          413,598
Scheduled repayments of long-term debt              (45,000)             -           (7,607)          -          (52,607)
Prepayments of long-term debt                             -              -         (428,170)          -         (428,170)
Other                                               113,344        (13,527)         (91,923)          -            7,894
                                              ----------------- ------------- --------------- ------------ ----------------
     Net cash flow from financing activities         68,344        (13,527)        (114,102)          -          (59,285)
                                              ----------------- ------------- --------------- ------------ ----------------
<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                    -           (114)         (93,715)          -          (93,829)
Deposit for the purchase of Naviera F.
Tapias S.A.                                         (30,183)             -                -           -          (30,183)
Proceeds from dispositions of vessels and
equipment                                                 -              -            5,764           -            5,764
Other                                                     -              -          (15,934)          -          (15,934)
                                              ----------------- ------------- --------------- ------------ ----------------
     Net cash flow from investing activities        (30,183)          (114)        (103,885)          -         (134,182)
                                              ----------------- ------------- --------------- ------------ ----------------
<B>Increase in cash and cash equivalents</B>                     -              -           11,725           -           11,725
Cash and cash equivalents, beginning of the
period                                                    -              -          292,284           -          292,284
                                              ----------------- ------------- --------------- ------------ ----------------
<B>Cash and cash equivalents, end of the period</B>              -              -          304,009           -          304,009
                                              ================= ============= =============== ============ ================

                                                                   <B>Three Months Ended March 31, 2003
                                              -----------------------------------------------------------------------------
                                                                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        (10,882)          (573)          95,526           -           84,071
                                              ----------------- ------------- --------------- ------------ ----------------
<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                    -           (295)         (62,596)          -          (62,891)
Proceeds from disposition of assets                       -              -           18,000           -           18,000
Other                                                     -              -           (5,845)          -           (5,845)
                                              ----------------- ------------- --------------- ------------ ----------------
     Net cash flow from investing activities              -           (295)         (50,441)          -          (50,736)
                                              ----------------- ------------- --------------- ------------ ----------------
<B>Increase 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
                                              ================= ============= =============== ============ ================
</PRE>
<!-- MARKER FORMAT-SHEET="Cutoff Rule" FSL="Default" -->
<P>_________________ </P>
<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(See
Note 9)</FONT></P>
<BR>
<BR>
<BR>
<BR>
<BR>
<PAGE>





<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
MARCH 31, 2004<BR>PART I &#150; FINANCIAL INFORMATION</FONT></H1>



<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ITEM 2 -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>RESULTS OF OPERATIONS </FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>General</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Teekay is one of the world&#146;s
leading providers of international crude oil and petroleum product transportation
services, transporting oil for major oil companies, major oil traders and government
agencies worldwide. As at March 31, 2004, our fleet (excluding vessels managed for third
parties) consisted of 152 vessels (including 15 newbuildings on order, 51 vessels
time-chartered-in and 4 vessels owned by joint ventures), for a total cargo-carrying
capacity of approximately 16.0 million deadweight tonnes.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Our voyage revenues are derived from:</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3></FONT></TD>
<TD WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149;</FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Spot voyages,</FONT></TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3></FONT></TD>
<TD WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149;</FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Time charters, whereby vessels are chartered to customers for a fixed
period, and </FONT></TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3></FONT></TD>
<TD WIDTH=2%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149;</FONT></TD>
<TD WIDTH=93%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Contracts of affreightment, where we carry an agreed quantity of cargo for a customer over
a specified trade route within a given period of time.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Our fleet is divided into two main
segments, the spot tanker segment and the fixed-rate segment.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><I>Spot Tanker Segment</I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Our spot tanker segment consists of
conventional crude oil tankers, oil/bulk/ore carriers, and product carriers operating on
the spot market or subject to time charters or contracts of affreightment priced on a
spot-market basis or short-term fixed-rate contracts. We consider contracts that have an
original term of less than three years in duration to be short-term. All of our very large
crude carrier fleet and substantially all of our conventional Aframax and Suezmax tanker
fleets, large product and small product tanker fleets are among the vessels included in
the spot tanker segment. Our dependence on the spot market, which is within industry
norms, contributes to the volatility of our revenues, cash flow from operations and net
income. 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 spot markets historically have exhibited seasonal
variations in charter rates. Tanker spot 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. As at March 31,
2004, we had 12 Aframax tankers on order in our spot tanker segment, scheduled to be
delivered between April 2004 and March 2007.</FONT></P>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><I>Fixed-Rate Segment</I></FONT></P>
<BR>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Our fixed-rate segment includes our
shuttle tanker operations (operated through our subsidiaries Navion AS, or <I>Navion</I>,
and Ugland Nordic Shipping, or <I>UNS</I>), floating storage and offtake vessels, a liquid
petroleum gas carrier, and conventional crude oil, methanol and product tankers on
long-term fixed-rate time-charter contracts or contracts of affreightment. Our shuttle
tanker operations provide services to oil companies, primarily in the North Sea, under
long-term fixed-rate contracts of affreightment or time-charter agreements. Historically,
the utilization of shuttle tankers in the North Sea is higher in the winter months as
favorable weather conditions in the summer months provide opportunities for repairs and
maintenance to the offshore oil platforms, which generally reduces oil production. As at
March 31, 2004, we had three newbuilding vessels on order in our fixed-rate segment, with
one Suezmax tanker scheduled to be delivered in the second quarter of 2004 (to be
converted to a shuttle tanker upon delivery) and two conventional crude oil Aframax
tankers which are scheduled to be delivered in January 2008 and March 2008. The Aframax
tankers will commence 10-year long-term charters to our joint venture, Skaugen PetroTrans
Inc. (or <I>SPT</I>), upon delivery. In August 2003, we entered into an agreement to
provide a floating storage and offtake vessel to Unocal Thailand for a minimum period of
10 years. Our 1988-built Aframax tanker, the Namsan Spirit, has undergone conversion and
commenced its charter contract to Unocal in April 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Acquisition of Naviera
F. Tapias S.A. </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>On March 15, 2004, we entered into a
definitive agreement to acquire 100% of the issued and outstanding shares of Tapias. We
completed this acquisition on April 30, 2004. See Item 1 &#151; Financial Statements: Note
3 &#150; Acquisition of Naviera F. Tapias S.A. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We expect to realize financial and
operating benefits as a result of our acquisition of Tapias, including added
stability to our cash flow and earnings throughout the tanker market cycle as a result of
the fixed-rate, long-term nature of Tapias&#146; charter contracts. We expect the
acquisition to be immediately accretive to earnings and Tapias&#146; long-term charter
contracts with financially strong customers will add significantly to our fixed-rate
segment and will further increase our annualized cash flow
from vessel operations from long-term fixed-rate contracts. We believe the acquisition
gives us a base to build on in the high-growth LNG shipping market and also provides us
with further operating leverage to the spot tanker market. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Acquisition of 50% of
PetroTrans Holdings Ltd. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>On September 30, 2003, we acquired
50% of the issued and outstanding shares of PetroTrans Holdings Ltd., the parent company
of Skaugen PetroTrans Inc. We funded this acquisition with available cash. See Item 1-
Financial Statements: Note 4 &#151; Acquisition of 50% of PetroTrans Holdings Ltd. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Acquisition of Navion AS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>In April 2003, we completed our
acquisition of 100% of the issued and outstanding shares of Navion AS for approximately
$774.2 million in cash, including transaction costs of approximately $7 million. See Item
1 &#151; Financial Statements: Note 5 &#151; Acquisition of Navion AS </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Critical Accounting
Policies </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We prepare our consolidated financial
statements in accordance with accounting principles generally accepted in the United
States (or <I>GAAP</I>), which require us to make estimates in the application of our
accounting policies based on our best assumptions, judgments, and opinions. Following is a
discussion of the accounting policies that involve a higher degree of judgment and the
methods of their application. For a further description of our material accounting
policies, see Note 1 to our consolidated financial statements for the year ended December
31, 2003 included in our Annual Report on Form 20-F filed with the SEC. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><I>Revenue Recognition</I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We generate a majority of our
revenues from spot voyages and voyages servicing contracts of affreightment. 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. Most shipping companies,
including us, use the percentage of completion method. For each method, voyages may be
calculated on either a load-to-load or discharge-to-discharge basis. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>In applying the percentage of
completion method, we believe that in most cases 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, we generally have information about the next load port and
expected discharge port, whereas at the time of loading we are normally less certain what
the next load port will be. We use this method of revenue recognition for all spot voyages
and voyages servicing contracts of affreightment, with an exception for our shuttle
tankers servicing contracts of affreightment with offshore oil fields. In this case a
voyage commences with tendering of notice of readiness at a field, within the agreed
lifting range, and ends with tendering of notice of readiness at a field for the next
lifting. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Revenues from time charters and
bareboat charters are recorded over the term of the charter as service is provided. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><I>Vessel Lives and Impairment</I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The carrying value of each of our
vessels represents its original cost at the time of delivery or purchase less depreciation
or impairment charges. Depreciation is calculated using an estimated useful life of 25
years from the date the vessel was originally delivered from the shipyard, or a shorter
period if regulations prevent us from trading the vessels to 25 years. In the shipping
industry, the use of a 25-year vessel 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. In addition, we have reduced the estimated
useful lives from 25 years to an average of approximately 21 years for the 22 vessels
affected by the IMO regulatory changes announced in 2003. We are not aware of any other
regulatory changes or environmental liabilities that we anticipate will have a material
impact on our current or future operations.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The carrying values of our 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. We
review vessels and equipment for impairment whenever events or changes in circumstances
indicate the carrying amount of an asset may not be recoverable. We measure the
recoverability of these assets by comparing their carrying amount to future undiscounted
cash flows that the assets are expected to generate over the useful remaining life. If we
consider vessels and equipment to be impaired, we recognize impairment in an amount equal
to the excess of the carrying value of the assets over their fair market value. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><I>Goodwill</I></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Effective January 1, 2002, goodwill
and indefinite lived intangible assets are not amortized, but reviewed for impairment
annually, or more frequently if impairment indicators arise. An impairment test requires
us to estimate future cash flows. If events or circumstances change, including reductions
in anticipated cash flows generated by operations, goodwill could become impaired and
require a charge to earnings. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Tanker Market Overview </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Tanker freight rates continued to strengthen during the first quarter of 2004 as a result of
strong global oil demand and increased oil supplies from long-haul sources combined with
constrained tanker supply growth.  During April 2004, tanker rates have declined from the near
record levels experienced during the first quarter of 2004, mainly due to seasonal factors, but
remain relatively high levels when compared to historical averages.
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Global oil demand, an underlying
driver of tanker demand, continued to be strong, averaging 80.3 million barrels per day (mb/d)
during the first quarter of 2004, down from 80.8 mb/d in the fourth quarter of 2003, but up 1.1 mb/d
compared to the first quarter of 2003. On April 9, 2004, the International Energy
Agency raised its forecast for 2004 oil demand to 80.3 mb/d, which would represent an increase of 2.1% over
2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Global oil supply grew to
82.1 mb/d in the first quarter of 2004, an increase of 0.5 mb/d from the fourth quarter of 2003.
Rising Iraqi exports helped increase OPEC production by 0.3 mb/d while non-OPEC production rose
by 0.2 mb/d, led by the former Soviet Union. During the first quarter of 2004, OPEC
(excluding Iraq) production averaged approximately 25.9 mb/d, 1.4 mb/d above its quota of 24.5 mb/d
announced in November 2003.  At its March 31, 2004 meeting, OPEC reiterated its earlier decision
to further reduce production quotas by 1.0 mb/d to 23.5 mb/d,
effective April 1, 2004, in anticipation of the normal seasonal reduction in oil demand.
Market sources indicate that OPEC continues to produce significantly above these stated quotas.
</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The size of the world tanker fleet
increased to 320.9 million deadweight tonnes (mdwt) as of March 31, 2004, up 1.2% from the
end of the previous quarter. Despite the strong tanker rates, deletions in the first quarter of 2004
of 4.0 mdwt exceeded the 3.4 mdwt of tankers scrapped in the previous quarter. Deliveries of tanker newbuildings
during the first quarter totaled 7.8 mdwt, up from 5.7 mdwt in the previous quarter. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>As of March 31, 2004, the world
tanker orderbook stood at 82.3 mdwt representing 25.6% of the total world tanker fleet,
compared to 77.7 mdwt, or 24.5%, at the end of the previous quarter. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold" FSL="Default" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Results of Operations </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>In accordance with GAAP, we report
gross voyage revenues in our income statements and include voyage expenses among our
operating expenses. Our voyage expenses comprise all expenses relating to particular
voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions.
However, bulk shipping industry freight rates are commonly measured in the shipping
industry at the net voyage revenues level in terms of &#147;time-charter equivalent&#148;
(or TCE rates), defined as voyage revenues less voyage expenses, divided by
calendar-ship-days. 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. Under time-charter contracts the charterer pays for the
voyage expenses whereas under voyage charter contracts the shipowner pays for voyage
expenses. 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. Accordingly, the discussion of revenue below
focuses on net voyage revenues (i.e. voyage revenues less voyage expenses) and TCE rates
of our two reportable segments where applicable. See Item 1 &#151; Financial Statements:
Note 2 &#150; Segment Reporting. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The following tables compare our net
voyage revenues by reportable segment for the three-month periods ended March 31, 2004,
and March 31, 2003 to the most directly comparable GAAP financial measure: </FONT></P>

<PRE>
- -------------------------------------------- -------------------------------------- ---------------------------------
                                                      <B>Three Months Ended                   Three Months Ended
                                                        March 31, 2004                       March 31, 2003</B>
                                             -------------------------------------- ---------------------------------
                                              Spot Tanker   Fixed-Rate              Spot Tanker  Fixed-Rate
                                                Segment       Segment      Total      Segment     Segment     Total
                                               ($000's)      ($000's)     ($000's)    ($000's)    ($000's)   ($000's)
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
Voyage Revenues.............................    375,856      175,595       551,451     241,717      40,515    282,232
Voyage Expenses.............................     87,775       16,109       103,884      68,249       1,085     69,334
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
Net Voyage Revenues.........................    288,081      159,486       447,567     173,468      39,430    212,898
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
</PRE>
<PRE>
- -------------------------------------------- -------------------------------------- ---------------------------------
                                                      <B>Three Months ended                   Three Months Ended
                                                        March 31, 2004                       March 31, 2003</B>
                                             -------------------------------------- ---------------------------------
                                              Spot Tanker   Fixed-Rate              Spot Tanker  Fixed-Rate
                                                Segment      Segment      Total       Segment     Segment    Total
                                                  (%)          (%)          (%)         (%)         (%)        (%)
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
Voyage Revenues.............................       68            32         100          86         14        100
Voyage Expenses.............................       85            15         100          99          1        100
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
Net Voyage Revenues.........................       64            36         100          81         19        100
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
</PRE>
<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The following table outlines the TCE
rates earned by the vessels in our spot tanker segment for the three-month periods ended
March 31, 2004, and March 31, 2003: </FONT></P>

<PRE>
- -------------------------------------------- -------------------------------------- ---------------------------------
                                                      <B>Three Months ended                   Three Months Ended
                                                         March 31, 2004                      March 31, 2003</B>
                                             -------------------------------------- ---------------------------------
                                              Net Voyage                 TCE per     Net Voyage              TCE per
                                               Revenues   Calendar Days  calendar-    Revenues   Calendar   calendar-
Vessel Type                                     (000's)                  ship-day      (000's)     Days     ship-day
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
Very Large Crude Carriers...................   $19,400          273       $71,062      $7,036          90    $78,178
Suezmax Tankers.............................    36,475          561        65,018           -           -          -
Aframax Tankers.............................   206,086        5,122        40,235     148,407       5,160     28,761
Oil/Bulk/Ore Carriers(1)....................     3,269          157        20,822      12,798         720     17,775
Large Product Tankers.......................    10,854          395        27,478           -           -          -
Small Product Tankers.......................    11,443          847        13,510           -           -          -
- -------------------------------------------- ------------ ------------- ----------- ----------- ---------- ----------
Totals......................................  $287,527        7,355       $39,093    $168,241       5,970    $28,181
============================================ ============ ============= =========== =========== ========== ==========
</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
         (1) The  oil/bulk/ore  fleet's net voyage  revenues  exclude $0.5 million  (three-month  period ended March 31, 2004) and $5.2
         million  (three-month  period ended March 31, 2003) of net voyage  revenues  earned by the minority pool  participants  in the
         Panamax  oil/bulk/ore  pool that we operated prior to our disposition of all of our oil/bulk/ore  carriers and the termination
         of the pool.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Our acquisition of Navion was
completed during April 2003. Consequently, our 2003 financial results for both the Spot
Tanker Segment and Fixed-Rate Segment only reflect Navion&#146;s results of operations
commencing April 1, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Spot Tanker Segment</U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TCE rates for the vessels in our spot
tanker segment primarily depend on oil production and consumption levels, the number of
vessels scrapped, the number of newbuildings delivered and charterers&#146; preference for
modern tankers. As a result of our dependence on the tanker spot market, any fluctuations
in TCE rates will impact our revenues and earnings. Our average TCE rate for the vessels
in our spot tanker segment increased 38.7% to $39,093 for the three-month period ended
March 31, 2004, from $28,181 for the quarter ended March 31, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The average fleet size of our spot
tanker fleet (including vessels chartered-in) increased 17.5% for the three-month period
ended March 31, 2004, compared to the same period last year, primarily due to the
acquisition of Navion and an increase in the number of vessels chartered-in, partially
offset by the sale of 16 older vessels in the latter part of 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Net voyage revenues for the spot
tanker segment increased 66.1% to $288.1 million for the three-month period ended March
31, 2004, from $173.5 million for the same period last year. These increases were
primarily due to higher tanker rates and the increases in average fleet size from the same
period last year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Vessel operating expenses, which
include crewing, repairs and maintenance, insurance, stores and lubes, and communication
expenses, decreased 25.8% to $23.4 million for the three-month period ended March 31,
2004, from $31.6 million in the same period last year. The decreases in vessel operating
expenses were mainly attributable to the sale of older vessels in 2003 and lower repairs
and maintenance activity, offset in part by the increase in the number of vessels resulting
 from the acquisition of Navion. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Time-charter hire expense increased
361.3% to $59.6 million for the three-month period ended March 31, 2004, from $12.9
million for the same period last year. The increase was due primarily to the acquisition
of Navion and the sale and leaseback of three Aframax vessels in December 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Depreciation and amortization expense
decreased 7.4% to $24.9 million for the three-month period ended March 31, 2004, from
$26.9 million for the same period last year. The decrease in depreciation and amortization
was primarily attributable to the previously mentioned sale of older vessels in 2003.
Drydock amortization was $4.3 million for the three-month period ended March 31, 2004,
compared to $5.3 million for the same period last year. The decrease in drydock
amortization was primarily due to the previously mentioned dispositions of older vessels
in 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Fixed-Rate Segment</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The average fleet size of our
fixed-rate segment (including vessels chartered-in) increased 132.0% for the three-month
period ended March 31, 2004, compared to the same period last year, primarily due to the
acquisition of Navion, an increase in the number of vessels chartered-in, as well as the
delivery of two Aframax tankers, three Suezmax tankers and two Suezmax shuttle tankers
during the latter part of 2003 and early 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Net voyage revenues increased 304.5%
to $159.5 million for the three-month period ended March 31, 2004, from $39.4 million for
the same period last year due primarily to the increase in fleet size. The shuttle tankers
acquired as part of our acquisition of Navion generated, on average, more revenue per ship
day than the other vessels in our fixed-rate segment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Vessel operating expenses increased
130.8% to $25.5 million for the three-month period ended March 31, 2004, from $11.0
million for the same period last year primarily due to the increase in fleet size. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Time-charter hire expense increased
to $49.1 million for the three-month period ended March 31, 2004, from $nil for the same
period last year. We did not have any chartered-in tankers in the fixed-rate segment prior
to the acquisition of Navion. As at March 31, 2004, we had 13 chartered-in shuttle tankers
and one chartered-in methanol carrier. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Depreciation and amortization expense
increased 134.3% to $28.7 million for the three-month period ended March 31, 2004, from
$12.3 million for the same period last year. The increase was mainly due to increased
vessel cost amortization as a result of the increases in fleet size and the amortization
of the estimated fair market value of the contracts of affreightment we acquired as part
of the Navion acquisition. Depreciation and amortization expense included amortization of
drydocking costs of $1.4 million in the three-month period ended March 31, 2004, compared
to $1.1 million for the same period last year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Other Operating Results</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>General and administrative expenses
increased 87.6% to $27.6 million for the three-month period ended March 31, 2004, from
$14.7 million for the same period last year. This increase was primarily the result of the
acquisition of Navion and performance bonuses paid during the first quarter of 2004 which
related to 2003 results. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Interest expense increased 49.9% to
$21.6 million for the three-month period ended March 31, 2004, from $14.4 million for the
same period last year. The increase reflects primarily the additional debt resulting from the
purchase of Navion. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Interest income increased 48.2% to
$1.3 million in the three-month period ended March 31, 2004 from $0.9 million in the same
period last year. This increase was primarily due to higher cash balances compared to the same
period in 2003, as a result of the assumption of cash from the acquisition of Navion. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>A restructuring charge of $0.8
million relating to the closure of our Oslo office was recorded in the three-month period
ended March 31, 2004. We had no restructuring expenses in the first quarter of 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Equity income from joint ventures was
$1.8 million in the three-month period ended March 31, 2004 compared to $0.8 million in
the same period last year. The increase is primarily the result of our 50% investment in
Skaugen PetroTrans Inc. made during September 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Other loss for the three-month period
ended March 31, 2004 was $1.1 million and was primarily comprised of income tax expense,
minority interest expense, and foreign exchange loss, partially offset by a gain on sale
of our remaining shares in Nordic American Tanker Shipping Ltd. (or <I>NATS</I>) and
leasing income from our volatile organic compound emissions equipment. Other loss of $11.4
million for the three-month period ended March 31, 2003 was comprised primarily of a
write-down of marketable securities, income tax expense, foreign exchange loss and
minority interest expense, partially offset by dividend income from NATS. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>As a result of the foregoing factors,
net income was $189.0 million for the three-month period ended March 31, 2004, compared to
$53.6 for the same period last year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<A NAME=A001></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>LIQUIDITY AND CAPITAL
RESOURCES </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>As at March 31, 2004, our total cash
and cash equivalents was $304.0 million, compared to $292.3 million at December 31, 2003.
Our total liquidity, including cash and undrawn long-term borrowings, was $786.0 million
as at March 31, 2004, up from $774.8 million as at December 31, 2003. The increase in
liquidity was mainly the result of net cash flow from operating activities generated
during the first quarter of 2004, partially offset by debt repayments, cash used for
capital expenditures (including the $30.0 million deposit for the acquisition of Tapias),
and payment of dividends. In our opinion, working capital is sufficient for our present
requirements. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Net cash flow from operating
activities increased to $205.2 million in the three-month period ended March 31, 2004,
from $84.1 million in the same period last year, mainly reflecting the significant
increase in our average spot TCE rates and the increase in our fleet size. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Scheduled debt repayments were $52.6
million during the three-month period ended March 31, 2004, compared to $19.3 million
during the same period last year. Debt prepayments were $428.2 million during the
three-month period ended March 31, 2004, compared to $200.0 million during the same period
last year.  Of our debt prepayments in the three-month period ended March 31, 2004, $330.0 million
resulted from our drawing down and subsequently prepaying our Revolvers in anticipation of the
closing of the Tapias acquisition and for internal restructuring purposes.  In addition, $98.2 million
of cash generated from operations and from proceeds of permanent financings was used to prepay certain term loans and
Revolvers.  Occasionally we use our Revolvers to temporarily finance capital expenditures until permanent financing is obtained,
at which time we typically use all or a portion of the proceeds from the permanent financings to prepay outstanding
amounts under the Revolvers. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>As at March 31, 2004, our total debt
was $1,533.3 million, compared to $1,600.1 million as at December 31, 2003. As at March
31, 2004, our Revolvers provided for borrowings of up to $872.0 million, of which $482.0
million was undrawn. The amount available under the Revolvers reduces semi-annually, by a
combined $59.3 million, with final balloon reductions scheduled for one Revolver in 2006
and for the other two Revolvers in 2008. Our 8.32% Notes are due February 1, 2006 and are
subject to a sinking fund which retires $45.0 million principal amount of the 8.32% Notes
on February 1 of each year. Our Equity Units are due May 18, 2006 and our unsecured 8.875%
Senior Notes are due July 15, 2011. Our outstanding term loans reduce in quarterly or
semi-annual payments with varying maturities through 2014. See Item 1 &#150; Notes to
Consolidated Financial Statements: Note 9 &#150; Long-Term Debt. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Among other matters, our 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 we can make, including dividends and purchases of our own capital stock,
was limited to $616.2 million as of March 31, 2004. Certain of the loan agreements require
that a minimum level of free cash be maintained. As at March 31, 2004, this amount was
$100.0 million. Certain of the loan agreements also require that a minimum level of free liquidity
and undrawn revolving credit lines (with less than six months to maturity) be maintained.
As at March 31, 2004, this amount was $117.7 million.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Dividends declared during the
three-months ended March 31, 2004 were $10.2 million, or $0.25 cents per share. In October
2003, we increased our quarterly dividend from $0.215 per share to $0.25 per share. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>During the three months ended March
31, 2004, we incurred capital expenditures for vessels and equipment of $93.8 million.
These capital expenditures primarily represented the installment payments on our
newbuildings. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>As at March 31, 2004, we were
committed to the construction of one Suezmax (scheduled for conversion to shuttle tanker
upon delivery) and 14 Aframax tankers. See Item 1 &#151; Notes to Consolidated Financial
Statements: Note 11 &#150; Commitments and Contingencies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We are also committed to a 15-year
capital lease on an Aframax tanker that was delivered in September 2003. The lease will
require future minimum payments of $64.6 million (including a purchase obligation payment)
over the remaining term of the lease. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The following table summarizes our
long-term contractual obligations as at March 31, 2004 (in millions of U.S. dollars). This
table does not include the commitments related to the acquisition of Tapias. </FONT></P>


<PRE>
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
                                                 2004      2005      2006     2007      2008   There-after   Total
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
Long-term debt                                    49.6     126.3     308.3     92.2     324.4      632.5    1,533.3
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
Chartered-in vessels (operating leases)          302.7     311.5     279.1    199.7     121.0      270.5    1,484.5
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
Commitment for chartered-in vessel (capital
lease)                                             3.2       4.1       4.1      4.1       4.1       45.0       64.6
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
Newbuilding and conversion installments          214.8      95.4      83.2     96.0      50.7          -      540.1
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
Volatile organic compound emissions
  equipment                                       31.8      19.0         -        -         -          -       50.8
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
  Total                                          602.1     556.3     674.7    392.0     500.2      948.0    3,673.3
- --------------------------------------------- --------- --------- --------- -------- --------- ---------- ----------
</PRE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We and certain of our subsidiaries
have guaranteed our share of the outstanding mortgage debt in four 50%-owned joint venture
companies. See Item 1 &#151; Notes to Consolidated Financial Statements: Note 11 &#150;
Commitments and Contingencies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We have no off-balance sheet
arrangements that have or are reasonably likely to have a current or future material
effect on our financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital resources. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>As part of our growth strategy, we
will continue to consider strategic opportunities, including the acquisition of additional
vessels and expansion into new markets. We may choose to pursue such opportunities through
internal growth, joint ventures, or business acquisitions. We intend to finance any future
acquisitions through various sources of capital, including internally-generated cash flow,
existing credit facilities, additional debt borrowings, and the issuance of additional
shares of capital stock. </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Workstation" -->
<A NAME=A002></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>FORWARD-LOOKING
STATEMENTS </FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>This Report on Form 6-K for the
quarterly period ended March 31, 2004 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 our
operations, performance and financial condition, including, in particular, statements
regarding: our future growth prospects; tanker market fundamentals, including the balance
of supply and demand in the tanker market, and spot tanker charter rates; future capital
expenditures; delivery dates of and financing for newbuildings, and the commencement of
service of newbuildings under long-term contracts; the impact of the Tapias acquisition to
our earnings, future cash flow from vessel operations and strategic position; and the
growth prospects of the LNG shipping sector and the joint venture company with the Tapias
shareholders. Forward-looking statements include, without limitation, any statement that
may predict, forecast, indicate or imply future results, performance or achievements, and
may contain the words &#147;believe&#148;, &#147;anticipate&#148;, &#147;expect&#148;,
&#147;estimate&#148;, &#147;project&#148;, &#147;will be&#148;, &#147;will continue&#148;,
&#147;will likely result&#148;, or words or phrases of similar meanings. 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 our control. 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, petroleum products and LNG, either generally or in particular regions; the
cyclical nature of the tanker industry and our dependence on oil markets; greater or less
than anticipated levels of tanker newbuilding orders or greater or less than anticipated
rates of tanker scrapping; changes in trading patterns significantly impacting overall
tanker tonnage requirements; changes in applicable industry laws and regulations and the
timing of implementation of new laws and regulations; changes in typical seasonal
variations in tanker charter rates; changes in the offshore production of oil; competitive
factors in the markets in which we operate; our potential inability to integrate
effectively the operations of Tapias or any other future acquisitions; shipyard production
delays; and other factors detailed from time to time in our periodic reports, including
our Annual Report on Form 20-F for the year ended December 31, 2003, filed with the SEC.
We expressly disclaim any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any change in our
expectations with respect thereto or any change in events, conditions or circumstances on
which any such statement is based. </FONT></P>

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



<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
MARCH 31, 2004<BR>
PART I &#150; FINANCIAL INFORMATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ITEM 3 -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>We are exposed to market risk from
foreign currency fluctuations, changes in interest rates, and bunker fuel prices and spot
market rates for vessels. We use foreign currency forward contracts, interest rate swaps,
bunker fuel swap contracts and forward freight agreements to manage currency, interest
rate, bunker fuel price risks and spot market rates but do not use these financial
instruments for trading or speculative purposes. See Item 1 &#151; Notes to Consolidated
Financial Statements: Note 15 &#151; Derivative Instruments and Hedging Activities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The following table sets forth
further information on the magnitude of these foreign exchange forward contracts, interest
rate swap agreements, bunker fuel swap contracts, and forward freight agreements: </FONT></P>

<PRE>
                                                  Contract               Carrying Amount                 Fair
(in USD 000's)                                     Amount           Asset         Liability             Value
- -------------------------------------------- ----------------- -------------- ----------------- --------------------
<U>March 31, 2004</U>
Foreign Currency Forward Contracts             $   149,830       $  14,666      $                  $     14,666
Interest Rate Swap Agreements                      810,000                           13,520             (13,520)
Bunker Fuel Swap Contracts                           3,972             224                                  224
Forward Freight Agreements                          48,329                            2,635              (2,635)
Debt (including capital lease obligation)        1,569,715                        1,569,715          (1,631,324)

<U>December 31, 2003</U>
Foreign Currency Forward Contracts             $   146,912       $  20,944      $                  $     20,944
Interest Rate Swap Agreements                      710,000                            9,953              (9,953)
Bunker Fuel Swap Contracts                             696             183                                  183
Forward Freight Agreements                          13,385                            1,178              (1,178)
Debt (including capital lease obligation)        1,636,758                        1,636,758          (1,686,002)
- -------------------------------------------- ----------------- -------------- ----------------- --------------------
</PRE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>For a more comprehensive discussion
related to the general characteristics of Quantitative and Qualitative Disclosures about
Market Risk, please refer to Item 11 &#151; Quantitative and Qualitative Disclosures about
Market Risk contained in our Annual Report on Form 20-F for the year ended December 31,
2003. </FONT></P>


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


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Workstation" -->
<A NAME=A007></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
MARCH 31, 2004 <BR>
PART II &#150; OTHER INFORMATION </FONT></H1>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Item 1 &#150; Legal Proceedings</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Item 2 &#150; Changes in Securities and Use of Proceeds</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Item 3 &#150; Defaults Upon Senior Securities</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Item 4 &#150; Submission of Matters to a Vote of Security Holders</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A136></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Item 5 &#150; Other Information</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None</FONT></P>

<A NAME=A138></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Item 6 &#150; Exhibits
and Reports on Form 6-K </U></FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>a. </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Exhibits </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 5-TNR" FSL="Workstation" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>10.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Share Purchase Agreement, dated March 15, 2004, regarding the acquisition of Naviera F.
Tapias S.A. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 2-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>15.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Acknowledgement from Ernst &amp; Young LLP, as independent chartered accountants, dated
May 11, 2004, regarding unaudited interim consolidated financial information. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>b.</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Reports on Form 6-K </FONT></TD>
</TR>
</TABLE>
<BR>


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                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    On January 7, 2004 the Company filed a copy of its press release on Form 6-K
                    with respect to the announcement to declare a dividend. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>


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                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    On January 15, 2004 the Company filed a copy of its press release on Form 6-K
                    with respect to the announcement to order newbuilding Aframax tankers. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>


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                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    On February 26, 2004 the Company filed a copy of its press release on Form 6-K
                    with respect to its results for the quarter and year ended December 31, 2003. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>


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                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    On March 16, 2004 the Company filed a copy of its press release on Form 6-K with
                    respect to its announcement to acquire Naviera F. Tapias S.A., and the formation
                    of a new joint venture. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>THIS REPORT ON FORM 6-K IS HEREBY
INCORPORATED BY REFERENCE INTO THE FOLLOWING REGISTRATION STATEMENTS OF THE COMPANY.</B>
</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>&#149;       &nbsp;&nbsp;&nbsp;REGISTRATION STATEMENT ON FORM F-3 (NO. 33-97746) FILED WITH THE SEC ON OCTOBER 4, 1995;<BR>
&#149;        &nbsp;&nbsp;&nbsp;REGISTRATION STATEMENT ON FORM S-8 (NO. 333-42434) FILED WITH THE SEC ON JULY 28, 2000; AND<BR>
&#149;        &nbsp;&nbsp;&nbsp;REGISTRATION STATEMENT ON FORM F-3 (NO. 333-102594) FILED WITH THE SEC ON JANUARY 17, 2003</B>
</FONT></P>

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

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&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.
</font></P>

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<TR>
<TD WIDTH=45% VALIGN=MIDDLE>
<FONT FACE="Times New Roman, Times, Serif" SIZE=3>Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;May 14, 2004</font>
</TD>
<TD WIDTH=55% VALIGN=TOP>
<FONT FACE="Times New Roman, Times, Serif" SIZE=3>&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/ Peter Evensen&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peter Evensen<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive Vice-President and Chief Financial Officer<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Principal Financial and Accounting Officer)
</font>
</TD>
</TR>
</TABLE>

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

<A NAME=A026></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Exhibit 15.1</B> </FONT></P>

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<A NAME=A027></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ACKNOWLEDGEMENT OF
INDEPENDENT CHARTERED ACCOUNTANTS </FONT></H1>

<BR>
<BR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>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 (&#147;Teekay&#148;), 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 23, 2004, (except for Note 3 which is as of April 30, 2004), 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, 2004. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>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. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR>
<TD WIDTH=65%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Vancouver, Canada,<BR>
May 7, 2004</font></TD>

<TD WIDTH=35%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>/s/ ERNST &amp; YOUNG LLP<BR>
Chartered Accountants</font></TD>
</TR>
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<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit_sharepurchase.htm
<DESCRIPTION>6K EXHIBIT - SHARE PURCHASE AGREEMENT
<TEXT>
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<TITLE></TITLE>
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<BR>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A001></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>SHARE PURCHASE
AGREEMENT </FONT></H1>

<BR>
<BR>
<BR>

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<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>between </FONT></H1>

<BR>
<BR>

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<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Mr. Fernando Fern&aacute;ndez
Tapias, </FONT></H1>

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<A NAME=A004></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Mr. Borja
Fern&aacute;ndez-Tapias Riva, </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Project" -->
<A NAME=A005></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Ms. Nuria Gonz&aacute;lez
S&aacute;nchez, </FONT></H1>

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<A NAME=A006></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Doble A Promociones
S.A, </FONT></H1>

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<A NAME=A007></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Mr. Carlos Soto Otero, </FONT></H1>

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<A NAME=A008></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Mr. Melanio Enriquez
Moure, </FONT></H1>

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<A NAME=A009></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Ms. Claudia Jorge
Fern&aacute;ndez, </FONT></H1>

<BR>
<BR>

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<A NAME=A010></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>and </FONT></H1>

<BR>
<BR>

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<A NAME=A011></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TEEKAY Shipping
Corporation </FONT></H1>

<BR>
<BR>

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<A NAME=A012></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Madrid, 15 March 2004 </FONT></P>

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<BR>
<BR>
<BR>
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<A NAME=A014></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>INDEX </FONT></H1>

<PRE>
<B>
1.     SALE AND PURCHASE                                                                               9

2.     PURCHASE PRICE PAYMENT.                                                                        10

3.     ESCROW ACCOUNT                                                                                 10

4.     REPRESENTATIONS AND WARRANTIES                                                                 17

5.     INDEMNITY                                                                                      39

6.     PERIOD BETWEEN SIGNING AND CLOSING DATE                                                        46

7.     JOINT COMPANY FOR NEW PROJECTS                                                                 50

8.     EXCHANGE RATE (EURO-US$)                                                                       50

9.     CONDITIONS PRECEDENT TO CLOSING                                                                51

10.    CLOSING AND CLOSING DATE                                                                       55

11.    OTHER OBLIGATIONS OF THE PURCHASER                                                             58

12.    CONFIDENTIALITY                                                                                58

13.    ASSIGNMENT                                                                                     59

14.    NEW BUSINESS                                                                                   59

15.    SOLE AGREEMENT. WAIVER                                                                         60

16.    PUBLIC INSTRUMENT. SCHEDULES                                                                   60

17.    SEVERABILITY                                                                                   61

18.    TAXES AND EXPENSES                                                                             61

19.    SELLERS' REPRESENTATIVE.                                                                       61

20.    NOTICES                                                                                        63

21.    LANGUAGE                                                                                       64

22.    APPLICABLE LAW. JURISDICTION                                                                   64
</B>
</PRE>
<BR>
<BR>
<BR>
<BR>
<BR>

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<A NAME=A015></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>SHARE PURCHASE
AGREEMENT</U> </FONT></H1>

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<A NAME=A016></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>In Madrid on March 15,
2004. </FONT></P>

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<A NAME=A017></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>BY AND BETWEEN</U> </FONT></H1>

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<A NAME=A018></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>ON THE ONE HAND, </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>MR.
          FERNANDO FERN&Aacute;NDEZ TAPIAS, </B>a Spanish citizen, of legal age, married
          on separation of states, resident at Calle Lanzahita, 8, Madrid (Spain), and
          bearing National Identity no. 35208700-R, acting in his own name and in the name
          and on behalf of: (i) the Spanish company Naviera F. Tapias, S.A. in his
          capacity as authorised representative by virtue of a deed granted before the
          Notary of Madrid, Mr. Francisco Echavarri Lomo, on September 20, 2000 with
          number 2363 of the Notary&#146;s Protocol, for the purposes of Clause of 9, </FONT></P>

(hereinafter <B>"Mr. Fernandez Tapias"</B>)

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>MS.
          NURIA GONZ&Aacute;LEZ S&Aacute;NCHEZ</B>, a Spanish citizen, of legal age,
          married on separation of states, resident at Lanzahita, 8, Madrid (Spain), and
          bearing National Identity no. 12752964-U, acting in her own name. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(Mr.
          Fern&aacute;ndez Tapias and Ms. Nuria Gonz&aacute;lez S&aacute;nchez shall be
          jointly referred in this agreement as the &#147;<B>NUFER Sellers</B>&#148;)</FONT></P>

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

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>DOBLE A PROMOCIONES, S.A., </B>a
Spanish company with registered office in Madrid, Calle Claudio Coello, 14, and entered at
the Commercial Registry of Madrid on Volume 1878, Leaf 199, sheet M-33754, represented by
Mr. Ladislao de Arriba Azcona<B>, </B>a Spanish citizen, of legal age, married, resident
at Calle Claudio Coello, 14,, Madrid (Spain), and bearing National Identity no.
10546259-T, by virtue of a deed granted before the Spanish Notary Mr. Jos&eacute;
Mar&iacute;a de Prada Guaita on 16 December 2003 with number 4942 of the Notary&#146;s
Protocol. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>MR.
          CARLOS SOTO OTERO, </B>a Spanish citizen, of legal age, married on joint
          property, resident at Calle Doctor Cadaval, 4 bis Vigo (Spain), and bearing
          National Identity no. 35927487-S, acting in his own name and in the name of his
          wife, Ms. Guillermina Fern&aacute;ndez Tapias of legal age, married on joint
          property, with domicile at Calle Doctor Cadaval, 4 bis Vigo, with NIF
          35970410-O, by virtue of the public deed of power of attorney granted before the
          Notary of La Coru&ntilde;a, Mr. Jos&eacute; Pi&ntilde;eiro Prieto on July 3,
          2000, with number 1224 of the Notary&#146;s Protocol. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>MR.
          MELANIO ENR&Iacute;QUEZ MOURE, </B>a Spanish citizen, of legal age, married in
          joint property, resident at Calle Gran V&iacute;a 31, 4&ordm;, Vigo, (Spain),
          and bearing National Identity no. 35877918-B, acting in his own name and in the
          name of his wife, Ms. Julia Alonso Duque, with by virtue of the public deed of
          power of attorney granted before the Notary of La Coru&ntilde;a, Mr. Alberto
          Casal Rivas on August 13, 1958 with number 1932 of the Notary&#146;s Protocol. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>MS.
          CLAUDIA JORGE FERN&Aacute;NDEZ, </B>a Spanish citizen, of legal age, married in
          joint property, resident at Calle Fernando Gonz&aacute;lez, 7, La Coru&ntilde;a,
          (Spain), and bearing National Identity no. 32103487-H, represented by her
          husband, Mr.<B> </B>Domingo Alvarez-Arenas Caramelo, a Spanish citizen, of legal
          age, married, with domicile at C/ Fernando Gonzalez, 7 y 9, La Coru&ntilde;a,
          and D.N.I. number 32471638-P, by virtue of the public deed of power of attorney
          granted before the Notary Public of La Coru&ntilde;a Mr. Francisco Manuel
          Ordo&ntilde;ez Arman on November 17, 1992, with number 2887 of his protocol.. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(Doble A Promociones,  S.A., Mr. Soto Otero,  Mr.  Enriquez  Moure,  and Ms. Jorge  Fernandez  shall be
jointly referred in this agreement as the <B>"Minority Sellers"</B>).</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(The NUFER Sellers and the Minority
Sellers shall be jointly referred in this Agreement as the <B>&#147;Sellers</B>&#148;). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>MR.
          BORJA FERN&Aacute;NDEZ-TAPIAS RIVA, </B>a Spanish citizen, of legal age,
          married, resident at Calle Cantos Negros, 14, 28023 Madrid (Spain), and bearing
          National Identity no. 5204539-F, as owner of one share of Naviera F. Tapias Gas,
          S.A, </FONT></P>

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<A NAME=A019></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>AND ON THE OTHER HAND, </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>TEEKAY SHIPPING CORPORATION</B>, a
company organized under the laws of the Marshall Islands, with its head office at TK
House, West Bay St., &amp; Blake Road, Nassau, The Bahamas, represented by Mr. Peter
Evensen, Executive Vicepresident and Chief Financial Officer (hereinafter the
&#147;<B>Purchaser</B>&#148;) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Purchaser and Sellers are hereinafter
individually referred to as a &#147;<B>Party</B>&#148; and collectively as the
<B>&#147;Parties</B>&#148;. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The Parties, as they act, mutually
declare to one another that they have the sufficient legal capacity to enter into this
agreement (the &#147;<B>Share</B> <B>Purchase Agreement</B>&#148; or the
&#147;<B>Agreement</B>&#148;). </FONT></P>

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<A NAME=A020></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>WHEREAS</U> </FONT></H1>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>I.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NUFER Sellers are the sole and lawful owners of the quotas representing 100%
               of the capital of NUFER IBERIA, SL (the &#147;<B>NUFER Quotas</B>&#148;), a
               Spanish company with its registered office in Madrid, C/ Musgo, n&ordm; 5, La
               Florida 28023, Spain, and entered at the Commercial Registry of Madrid on Volume
               18323, Leaf 55, Page M-317738 (hereinafter &#147;<B>NUFER</B>&#148;). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NUFER owns, among other shareholdings, 72.809% of the share capital of Naviera F. Tapias, S.A.
(hereinafter &#147;the <B>NFT NUFER Shares</B>&#148;), a Spanish company with its
registered office in Madrid, C/ Musgo, n&ordm; 5, La Florida 28023, Spain, and entered at
the Commercial Registry of Madrid on Volume 8043, Leaf 88, Page 77488 (hereinafter
&#147;<B>NFT</B>&#148;). The NUFER Sellers declare that NUFER was incorporated in 2002 and
since its incorporation it has acted as a holding company owning the NFT NUFER Shares and
shares in two other companies, with no other material assets and liabilities.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Minority Sellers own the remaining 27.191% of the share capital of NFT, in the proportions
set out in Schedule I.1 (the &#147;<B>NFT Minority Shares</B>&#148;).</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All
and only all the NFT NUFER Shares and the NFT Minority Shares are referred hereinafter
collectively as the &#147;<B>NFT Shares</B>&#148;)</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Schedule
I.2 describes the numbers and titles or deeds of ownership of the NUFER Quotas, the NFT
NUFER Shares and the NFT Minority Shares respectively held by the NUFER Sellers, NUFER and
NFT Minority Sellers.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
(The
NUFER Quotas and the NFT Minority Shares shall be jointly referred to in this Agreement as
the &#147;<B>Shares</B>&#148;).</FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>II.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NFT owns and operates an oil shipping business (referred to as the
               &#147;<B>Tanker Business</B>&#148;) which consists of: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the oil tankers listed in Schedule II.1 (this Schedule includes the M/V
               &#147;Tito Tapias&#148;, which as of the date of this Agreement is owned by a
               subsidiary of NFT, but which will be transferred to and owned directly by NFT
               prior to the Closing Date, as defined in Clause Eleven) (each referred to as an
               &#147;<B>Oil Tanker&#148;</B> and collectively as the <B>&#147;Oil </B>
               <B>Tankers&#148;</B>); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               charter party agreements relating to the Oil Tankers listed in Schedule II.2
               (the &#147;<B>Oil Tankers </B> <B>Charter Party Agreements</B>&#148;); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>3. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               financing agreements and related guarantees relating to the Oil Tankers listed
               in Schedule II.3 (the &#147;<B>Oil Tankers Financing Agreements</B>&#148;); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               agreements for the construction and delivery of certain new oil tankers listed
               in Schedule II.4 (the &#147;<B>Oil Tankers Shipbuilding Agreements</B>&#148;);
               and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               all other agreements entered into in the ordinary course of business, and all
               business and accounting records, including the office furniture (with the
               exception of the office furniture corresponding to the office and meeting room
               of Mr. Fernandez Tapias) and the right to occupy the office premises, relating
               to the operation of the Tanker Business as a going concern. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>III.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NFT also owns and operates a LNG shipping business (the &#147;<B>LNG
               Business</B>&#148;) which consists of: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               four 99.99%owned Spanish subsidiaries namely Naviera F. Tapias GAS, S.A.,
               Naviera F. Tapias GAS II, S.A., Naviera F. Tapias GAS III, S.A. and Naviera F.
               Tapias GAS IV, S.A. (the &#147;<B>LNG Companies</B>&#148;) which are beneficial
               owners and legal owners or have full possession and hold an exclusive and
               legally enforceable purchase option, which option is described in Schedule III.1
               (a), to become legal owners, as the case may be, of the LNG vessels as listed in
               Schedule III.1 (b) (hereinafter the &#147;<B>LNG </B> <B>Vessels</B>&#148;). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               charter party agreements relating to the LNG Vessels as listed in Schedule III.2
               (the &#147;<B>LNG </B> <B>Charter Party Agreements</B>&#148;); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>3. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               financing agreements and related guarantees as listed in Schedule III.3 (the
               &#147;<B>LNG Financing </B> <B>Agreements</B>&#148;); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               agreements for the construction and delivery of certain new building LNG vessels
               as listed in Schedule III.4 (the &#147;<B>LNG Shipbuilding
               Agreements</B>&#148;); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Naviera F. Tapias Servicios Mar&iacute;timos, S.A, a Spanish company with
               registered office in Madrid, C/ Musgo, n&ordm; 5 , La Florida 28023, Spain, and
               entered at the Commercial Registry of Madrid on Volume 19038, Leaf 10, Page
               M-332816 (owned by each of the four LNG Companies in equal 25% stakes) mainly
               engaged in the crewing of LNG Vessels (&#147;<B>NFT Servicios
               Mar&iacute;timos</B>&#148;); and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               all other agreements entered into in the ordinary course of business, and all
               business and accounting records and other assets, including office furniture
               (with the exception of the office furniture corresponding to the office and
               meeting room of Mr. Fernandez Tapias), and right to occupy the office premises
               relating to the operation of the LNG Business as a going concern. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>IV.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Tanker Business and the LNG Business are hereinafter jointly referred to as
               the <B>&#147;Shipping Business</B>&#148;). NFT owns and operates the Shipping
               Business directly and indirectly through the subsidiary companies listed in
               Schedule IV.1, (the Schedule shall exclude NFT&acute;s subsidiary, Naviera
               Nellamar Espa&ntilde;a, S.L. for which company no representations and warranties
               shall be made) (the subsidiary companies are collectively referred to as the
               &#147;<B>NFT </B> <B>Subsidiaries</B>&#148;). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NFT
together with NFT Subsidiaries are hereinafter collectively referred to as the
&#147;<B>NFT </B> Group&#148;. Any and all references made in this Agreement to NFT Group
should be deemed to be made to NFT, each of the LNG Companies and NFT Servicios
Mar&iacute;timos, collectively and/or individually as appropriate.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NFT
owns, among other shareholdings, 99.99% of the share capital of each and all of the LNG
Companies. The 0,01% of the share capital of the LNG Companies is owned by Mr.
Fern&aacute;ndez Tapias and Mr. Borja Fern&aacute;ndez-Tapias Riva (hereinafter the
&#147;<B>NFT Subsidiaries Shares</B>&#148;).</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Schedule
IV.2 describes the numbers and titles or deeds of ownership of the NFT Subsidiaries
Shares.</FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>V.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER holds, as of the date of today, certain other assets and liabilities, as
               described in Schedule V.1., which are not related to the Shipping Business and
               which shall be sold and transferred by NUFER prior to the Closing Date of the
               transaction contemplated in this Agreement (the &#147;<B>NUFER</B> <B>Non
               Related Assets and Liabilities</B>&#148;) so that on the Closing Date NUFER will
               only hold the NFT NUFER Shares. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NFT
holds, as of the date of today, certain other assets and liabilities, as described in
Schedule V.2., which are not related to the Shipping Business and which shall be sold and
transferred by NFT prior to the Closing Date of the transaction contemplated in this
Agreement (the &#147;<B>NFT Non Related Assets and Liabilities</B>&#148;) so that on the
Closing Date NFT will only hold the Shipping Business.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NUFER Non Related Assets and Liabilities and NFT Non Related Assets and Liabilities are
hereinafter collectively referred to as &#147;<B>Non Related Assets and
Liabilities</B>&#148;.</FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>VI.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser has carried out before the execution of this Agreement a limited
               due diligence on the legal, tax, financial and technical aspects of the Shipping
               Business . Also, a physical examination of certain of the Oil Tankers and the
               LNG Vessels has been carried out by the Purchaser (the &#147;<B>Due
               Diligence</B>&#148;). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>VII.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser wishes to acquire the Shipping Business as a going concern by
               means of the acquisition of the Shares from the Sellers and by these means
               indirectly acquire the NFT Subsidiaries Shares and the Sellers wish to sell the
               Shipping Business to the Purchaser by means of the transfer of the Shares and by
               these means indirectly sell the NFT Subsidiaries Shares. For such purposes, the
               Purchaser and the Sellers have maintained conversations which have led to the
               execution of the Offer Letter dated February 27, 2004, and in connection
               therewith the Purchaser and the Sellers enter into this Share Purchase Agreement </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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

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<A NAME=A021></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>CLAUSES</U></FONT></H1>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>1.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>SALE AND PURCHASE</B></FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1.1</FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Purpose</U> </FONT></TD>
               </TR>
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               <BR>

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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
purpose of this Agreement is the transfer, by way of the sale and purchase of the Shares,
of the ownership of 100% of NUFER, the ownership of 100% of NFT, directly and indirectly,
and, by these means indirectly 100% of NFT Subsidiaries and any other rights, obligations
and legal relationships of these companies, excluding the Non Related Assets and
Liabilities, and including the M/V &#147;Tito Tapias&#148;</FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1.2. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Subject to the Conditions Precedent set out in Clause 9.3, the Purchaser hereby
               purchases the NUFER Quotas from the NUFER Sellers and the NFT Minority Shares
               from the Minority Sellers and the NUFER Sellers and the Minority Sellers, as
               fully legal owners thereof hereby respectively sell to the Purchaser the NUFER
               Quotas and the NFT Minority Shares, with all rights, free from any liens and
               encumbrances whatsoever, as a means to acquire NUFER, the NFT Group and
               consequently the Shipping Business. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1.3. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               This sale and purchase of the Shares (the <B>&#147;Sale and Purchase</B>&#148;)
               shall be completed on the Closing Date (as such term is defined in Clause 10
               below) by means of the transfer of title of the Shares and payment of the
               Purchase Price, subject to the terms and conditions of this Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1.4. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Prior to the Closing Date, the Non Related Assets and Liabilities shall be sold
               and transferred by NFT and NUFER so that on said date NFT will only hold the
               Shipping Business and NUFER will only hold the NFT NUFER Shares. Furthermore,
               NFT shall own and operate at Closing Date the M/V &#147;Tito Tapias&#148;. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>1.5. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sale and Purchase is conditional upon the simultaneous sale of all the
               Shares, subject notwithstanding to the provisions of Clause 9 below. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>2.</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               <B>PURCHASE PRICE PAYMENT.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.1 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The price of the Shares is fixed at US DOLLARS TWO HUNDRED AND SEVENTY FIVE MILLION (USD
275,000,000). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.2 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The price for the Sale and Purchase of the Shares shall be equal to the sum of the amounts
indicated in paragraph 2.1, paragraph 2.3 and the Price Adjustment (as defined under
paragraph 2.5.) (the &#147;<B>Purchase Price</B>&#148;), net and free of banking charges,
to be distributed among Sellers in the proportions set forth in Schedule 2.2. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.3 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The price indicated in 2.1. above shall be increased by the interest rate of 5% per annum
(which interest shall form an integral part of the Purchase Price) accrued during the
period between January 1, 2004 and the Closing Date. This interest shall be calculated and
accrued on the Purchase Price minus the allocated value indicated in Schedule 2.3 to the
LNG Vessels and Oil Tankers under construction and minus the Payment on Account. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.4 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Purchase Price less the Payment on Account shall be paid as of the Closing Date, value
same date, by wire transfer to the bank account as designated by the Sellers for such
purposes against transfer to Purchaser of full title of the Shares. The Sellers shall
acknowledge full receipt at the Closing Date of the total Purchase Price. Simultaneously
the Sellers shall settle any related-party amounts payable to NFT or NUFER on the Closing
Date. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.5 </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Closing price
adjustments </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On
the date of this Agreement, the Minority Sellers and/or the NUFER Sellers, as the case may
be, have provided the Purchaser with:</FONT></TD>
</TR>
</TABLE>
<BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the December 31, 2003 draft statutory balance sheets, prepared as required by
               Spanish Law, of NFT and of NFT Subsidiaries (the &#147;<B>NFT Draft Balance
               Sheet</B>&#148; and, the &#147;<B>NFT </B> <B>Subsidiaries Draft Balance
               Sheet</B>&#148; referred, collectively, as the &#147;<B>NFT Group Draft </B>
               <B>Balance Sheet</B>&#148;) and the NFT Group consolidated draft balance sheets
               (the &#147;<B>NFT </B> <B>Consolidated Draft Balance Sheet</B>&#148;) which are
               attached herewith as Schedule 2.5.(i) </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the December 31, 2003 draft statutory balance sheet, prepared as required by
               Spanish Law, of NUFER (the &#147;<B>NUFER Draft Balance Sheet</B>&#148;) which
               is attached herewith as Schedule 2.5.(ii). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>the December 31, 2003 consolidated draft proforma balance sheets, prepared as
          required by Spanish Law, of NFT Group which shall be prepared following the same
          structure as the NFT Consolidated Draft Balance Sheet and shall comprise the NFT
          Draft Consolidated Balance Sheet after making the necessary adjustments upwards
          or downwards to dispose of the NFT non-related assets and liabilities and the
          acquisition of the M/V &#147;Tito Tapias&#148; (the &#147;<B>NFT Consolidated
          Draft Proforma Balance Sheet</B>&#148;) which are attached herewith as Schedule
          2.5 (iii). The seller has prepared a Draft list of non-related assets and
          liabilities and a proforma adjustments list for illustrative purposes attached
          as schedule 2.5 (iv). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the December 31, 2003 draft proforma balance sheets, prepared as required by
               Spanish Law, of NUFER which shall be prepared following the NUFER Draft Balance
               Sheet structure and shall comprise the NUFER Draft Balance Sheet after making
               the necessary adjustments upwards or downwards to dispose of the NUFER
               non-related assets and liabilities (the <B>&#147;NUFER Draft Proforma Balance
               Sheet</B>&#148;) which are attached herewith as Schedule 2.5.(v). The seller has
               prepared a draft list of non-related assets and liabilities and a proforma
               adjustment list for illustrative purposes attached as schedule 2.5 (vi). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The NFT Consolidated Draft Proforma
Balance Sheet<B> </B>and NUFER Draft Proforma Balance Sheet to be referred, collectively,
as the &#147;<B>Draft Proforma Balance Sheet.</B>&#147;As stated in clause 2.6 the Sellers
shall provide the Purchasers with : </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the audited NFT Consolidated Statutory Accounts, the audited NUFER Statutory
               Accounts, and the NFT Final Consolidated Proforma Balance Sheet and the NUFER
               Final Proforma Balance Sheet, both as defined below; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               a preliminary calculation made by Sellers in good faith and following strictly
               the criteria described in this clause 2.5, of the adjustments to be made in
               order to calculate the Purchase Price.; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
These 2003 the audited NFT
Consolidated Statutory Accounts and the audited NUFER Statutory Accounts audited
Statements shall then be adjusted to reflect the actual net proceeds realised upon the
disposal of the Non-Related Assets and Liabilities net of the acquisition of the M/V
&#147;Tito Tapias&#148;; and adjusted for any unadjusted audit differences in excess of
10,000 Euros, not reflected in the 2003 audited Statutory Accounts, in order to form the
Final Proforma NFT Consolidated and NUFER Balance Sheets (the &#147;NFT Final Consolidated
Proforma Balance Sheet and the NUFER Final Proforma Balance Sheet&#148;). These
adjustments shall include the related tax burden duly justified, if any, resulting from
the disposal of the Non-Related Assets and Liabilities, always provided that NFT will
apply the reinvestment relief to capital gains triggered in the disposal of reference
since M/V &#147;Tito Tapias&#148; will be the eligible asset in which NFT will reinvest
the sale proceeds for tax purposes as stated in clause 6.1. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Purchase Price shall then be
adjusted (the &#147;<B>Price Adjustment</B>&#148;) taking into account the NFT Final
Consolidated Proforma Balance Sheet and the NUFER Final Proforma Balance Sheet, and items
2(c) and 2(d) below which refer to the period subsequent to December 31, 2003 up to and on
April 15<SUP>th</SUP> 2004, from which date the Sellers commit not to pay or approve any
dividend, extraordinary bonus or distribution ,as follows: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For NFT consolidated
Proforma Balance Sheet: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(1) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    upwards by: </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    Inventories (<I>Existencias</I> &#150; F1), Debtors (<I>Deudores </I>&#150; F2),
                    Short term financial investements <I>(Inversiones financieras temporales</I>
                    &#150; F3), Cash and banks (<I>Tesorer&iacute;a</I> &#150; F4+E) and Short term
                    Deferred expenses (<I>Ajustes por periodificacion</I> &#150; F5), included
                    within the Current Assets caption; </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TR VALIGN=TOP>
                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    Accrued interest (<I>Gastos a distribuir en varios ejercicios &#150; Intereses
                    Diferidos Prestamos</I> &#151; C); </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    Restricted Long term deposits (B4.2) in Naviera F. Tapias Gas, SA and Naviera F.
                    Tapias Gas II, SA and Naviera F. Tapias Gas III, SA, as set forth in Schedule
                    2.5.(v) minus US Dollars 8 million translated at the closing exchange rate as of
                    December 31, 2003; and </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
                    <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>                    Debt as set forth in Schedule 2.5 (vii) . For clarity purposes the parties
                    acknowledge that this amount does not correspond with any accounting caption
                    contained in the 2003 NFT Draft Consolidated Proforma Balance Sheet. The US
                    dollar debt as set forth in this Schedule shall be translated at the exchange
                    rates used in the NFT Final Consolidated Proforma Balance Sheet and the NUFER
                    Final Proforma Balance Sheet, if any. For greater clarity if the US dollar debt
                    as set forth in the Schedule is equal to the actual US dollar debt owed by the
                    NFT Group as stated in the Loan agreements there should no be Price Adjustment
                    as a result of exchange rate differences. This rule shall prevail on any
                    adjustment that could result from any other provision in this contract.(2)
                    downwards by: </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
                    <TR VALIGN=TOP>
                    <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
                    <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          Total Liabilities and Shareholders Equity (<I>Pasivo)</I> minus: </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
                    <TR VALIGN=TOP>
                    <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
                    <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Shareholders Equity (<I>Fondos Propios</I> &#151; Z); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
                    <TR VALIGN=TOP>
                    <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
                    <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Subsidies (<I>Subvenciones</I> &#150; Y.2); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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                    <TR VALIGN=TOP>
                    <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
                    <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Unrealized foreign exchange gains related to the NFT Group&#146;s financing)
          <I>(Diferencias positivas de cambio </I>Y.1); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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                    <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
                    <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Provision for drydockings and repairs subsequent to Dec 31, 2003 (<I>Prov. Para
          obras </I> <I>y reparac. Extraordinarias</I> &#151; X); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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                    <TR VALIGN=TOP>
                    <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
                    <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          Agreed minimum working capital figure of Euro 0 million; </FONT></TD>
               </TR>
               </TABLE>
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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Dividends paid or approved to be paid after December 31, 2003 up to and
               including the Closing Date; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Extraordinary bonus or distributions paid or approved to be paid after December
               31, 2003 up to and including the Closing Date. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>For illustration purposes and with no
effect whatsoever in order to make Price Adjustments calculation, the parties based on the
2003 NFT Consolidated Draft Proforma Balance Sheet (set forth in Schedule 2.5.(viii)) the
net adjustment would be Euro 12.26 million (upwards) . </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Schedule 2.5 (ix) sets forth the
remaining contractual payment of the NFT Group at December 31 2003. The extent to which
the actual remaining contractual payments are different than those listed on the Schedule
2.5 (viii) it shall be an adjustment to the Purchase Price. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The Purchase Price shall also be
adjusted (the &#147;<B>Price Adjustment</B>&#148;) taking into account NUFER Final
Proforma Balance Sheet, and items 2(c) and 2(d) below which refer to the period subsequent
to December 31, 2003 up to and on April 15<SUP>th</SUP> 2004, from which date the Sellers
commit not to pay or approve any dividend, extraordinary bonus or distribution, as
follows: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(1) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    upwards by: </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Inventories (<I>Existencias</I>), Debtors (<I>Deudores</I>), Short term
          financial investements <I>(Inversiones financieras temporales</I>), and Cash and
          banks (<I>Tesoreia</I>) included within the Current Assets caption; </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(2) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          downwards by: </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Total Liabilities and Shareholders Equity (<I>Pasivo</I>) minus:</FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
                    <TR VALIGN=TOP>
                    <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
                    <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Shareholders Equity (<I>Patrimonio Neto</I>);</FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Dividends paid or approved to be paid after December 31, 2003 up to and
          including the Closing Date; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Extraordinary bonus or distributions paid or approved to be paid after December
          31, 2003 up to and including the Closing Date. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
A further adjustment to be made downwards by: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          Total bank debt, including any cancelation costs, in NUFER as provided for under
          Clause 9.7. in the amount as described in the relevant bank certificates to be
          issued in accordance to such Clause 9.7 to the extent not included in the Final
          Nufer Proforma Balance Sheet and not adjusted by the above adjustment. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>2.6 </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
To enable the Purchaser to calculate the adjustment to the Purchase Price, the Minority
Sellers and the NUFER Sellers shall deliver to Purchaser on or prior to April 15th, 2004,: </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the audited 2003 NFT Consolidated Statutory Accounts, the audited 2003 NUFER
               Statutory Accounts, and the NFT Final Consolidated Proforma Balance Sheet and
               the NUFER Final Proforma Balance Sheet, both as defined under Clause 6.3.; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               together with a preliminary calculation made by Sellers in good faith and
               following strictly the criteria described in clause 2.5, of the adjustments to
               be made in order to calculate the Price Adjustment.; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               any bank certificates to be provided pursuant to Clause 9.7. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On or before April 27th, 2004 Ernst &amp; Young will issue a special report on (i) the NFT
Final Consolidated Proforma Balance Sheet, (ii) the NUFER Final Proforma Balance Sheet and
(iii) the Sellers&acute; calculation of the Price Adjustment. In connection with this
process, the Sellers will obtain not later than by April 15, 2004 (x) an authorisation
from NFT Group statutory auditors to allow Ernst &amp; Young full access to its 2003 audit
working papers, (y) full access to NFT Group management and any relevant documentation
that might be deemed necessary to carry out its review of the Price Adjustment made by the
Sellers and (z) the calculation of the Price Adjustment made by NFT Group statutory
auditors.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Sellers calculation of the Price Adjustment shall be reviewed by Ernst &amp; Young based
on the criteria described in Clause 2.5.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On or before 27 April 2004, Ernst &amp; Young shall present to the Parties the new Price
Adjustment and the Purchase Price shall have to be adjusted according to it for Closing on
the Closing Date</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
However, if either party does not agree with the determination of the Price Adjustment as presented
by Ernst &amp; Young, the Parties shall appoint, -within a term of five (5) business days
as from the Closing Date- an additional independent auditing firm to issue a new
calculation of the Price Adjustment, such firm to be one of the big four international
auditing firms (the &#147;<B>New Auditor&#148;</B>. The New Auditor shall have access to
the documents referred to in this paragraph, may consult with the Ernst &amp; Young and
with the Seller&#146;s auditor and management and shall, then, issue its calculation of
the price adjustment (the &#147;<B>Final Price </B> <B>Adjustment</B>&#148;) which shall
be binding among the parties. The difference between the result of the Price Adjustment as
calculated by Ernst &amp; Young and the result of the Final Price Adjustment shall be paid
or reimbursed, as the case may be, within the term of five (5) business days from receipt
of final report of the New Auditor containing the Final Price Adjustment.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Ernst &amp;Young&#146;s and the New Auditor&#146;s fees shall be paid among the parties on
fifty percent basis.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>3.</B></FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>
                ESCROW ACCOUNT</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>3.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Mr. Fern&aacute;ndez Tapias will open an escrow account (the &#147;<B>Escrow
Account</B>&#148;) with a bank (the &#147;<B>Bank</B>&#148;), pursuant to certain escrow
agreement to be entered by Mr. Fern&aacute;ndez Tapias, the Purchaser and the Bank (the
&#147;<B>Escrow Agreement</B>&#148;) attached herein in Schedule 3.1., and Mr.
Fern&aacute;ndez Tapias shall give notice to the Purchaser that the Escrow Agreement has
been formalised by the Bank and shall provide all relevant baking details. Within four
business days as from receipt by the Purchaser of such notice, the Purchaser will deposit
in the Escrow Account the amount of US Dollars THIRTY MILLION (USD 30,000,000) (the
&#147;<B>Payment on </B> <B>Account</B>&#148;) as Payment on Account of the Purchase Price
of the NUFER Quotas, owned by NUFER Sellers. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Payment on Account shall be released to NUFER Sellers on the Closing Date as a part of the
Purchase Price of the NUFER Quotas owned by NUFER Sellers, together with the interest
accrued on the amount deposited from the date of this Agreement until the Closing Date.
The remaining part of the Purchase Price of the NUFER Quotas owned by NUFER Sellers,
together with the interest accrued thereon pursuant to the provisions of Clause 2.3 above
shall be effectively paid to and received by NUFER Sellers on and as of the Closing Date,
value same date, by wire transfer to the bank account designated by NUFER Sellers for such
purposes.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>3.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Payment on Account shall act as a guaranty of the obligations of the Purchaser under
this Agreement, subject to the fulfilment of the Conditions Precedent indicated in Clause
9.3, so that in case the Sellers file or notify a claim to the Purchaser due to breach by
Purchaser of such obligations, the Payment on Account, together with all interest accrued,
shall be withheld in the manner set out in the Escrow Agreement until such claim has been
resolved. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Should
the Conditions Precedent listed on Clause 9.3 of this Agreement not be fulfilled by the
Sellers as of the Closing Date the Payment on Account, together with the interest accrued
thereof, shall be released forthwith to the Purchaser to an account specified by the
Purchaser for that purpose free of any cost, fees, charges retention, etc.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>4.</B> </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>REPRESENTATIONS AND
WARRANTIES</B></FONT></TD>
</TR>
</TABLE>
<BR>


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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.1. </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          The Sellers make to the Purchaser the representations and warranties set out
          below in respect of NFT, NFT NUFER Shares, NFT Minority Shares, NFT
          Subsidiaries, NFT Subsidiaries Shares and the Shipping Business. No
          representations and warranties are made by the Sellers with respect to the NFT
          Non Related Assets and Liabilities, including Naviera Nellamar Espa&ntilde;a,
          S.L., provided always that these are transferred and excluded in the terms as
          provided in this Agreement. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(A)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
         <B> Title to the Shares</B> </FONT></TD>
          </TR>
          </TABLE>
          <BR>

     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NUFER and the Minority Sellers are the lawful and sole owners of the shares representing 100% of
the issued subscribed and paid up share capital of NFT (the &#147;<B>NFT </B>
<B>Shares</B>&#148;).</FONT></TD>
</TR>
</TABLE>
<BR>

     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NFT, Mr. Fern&aacute;ndez Tapias and Mr. Borja Fern&aacute;ndez-Tapias Riva are, directly or
indirectly, the lawful and sole owners of the share capital of the NFT Subsidiaries Shares
as set forth in Schedule 4.1 (A).</FONT></TD>
</TR>
</TABLE>
<BR>

     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The LNG Companies are the lawful and sole owners of NFT Servicios Mar&iacute;timos.
</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All the NFT Shares and NFT Subsidiary Shares are issued, subscribed and paid up.
</FONT></TD>
</TR>
</TABLE>
<BR>

     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(B)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Absence of Liens</B>
</FONT></TD>
</TR>
</TABLE>
<BR>

     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All
the NFT Shares and the NFT Subsidiary Shares are free and clear of restrictions to the
exercise of the rights vested in them and of any claims, encumbrances, withholdings,
liens, charges, reservations of ownership, options and claims of third parties, except as
set forth in Schedule 4.1(B).</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(C)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Legal Capacity</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Sellers have full capacity to execute and perform this Agreement, as well as the
obligations contained herein, which does not infringe their corporate by-laws or any other
legislation, administrative regulation, agreement, contract or undertaking by which they
are bound. All the obligations arising from this Agreement are valid and binding for the
Sellers and enforceable against them.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(D)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Due Organization </B></FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NFT Group are business corporations with limited liability, duly organized and
               validly existing under the laws of Spain, and they comply with the legal
               requirements of Company Law applicable to them. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NFT Group has not resolved upon their dissolution, merger or spin off and is
               not required by law to effect such a dissolution. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NFT Group has the capacity and authority to carry on their businesses in the
               manner they do so at present. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(E)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Capital Structure</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>
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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               All the NFT Shares and the NFT Subsidiaries Shares are validly issued, fully
               subscribed and paid up. If and to the extent of the pre-emptive right of
               acquisition in the terms set out in the by-laws of the NFT Group, there are no
               options or undertakings relating to shares in the NFT Group. There are no sale,
               purchase and sale option agreements, nor agreements which guarantee preferential
               rights of any kind to related and/or third parties and thus no person nor entity
               has the right to acquire shares of the NFT Group except as set forth in Schedule
               4.1(E)(i). Neither are there increases or reductions of capital pending
               registration or in progress. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NFT Group has not issued nor agreed the issue of &#147;bonos de
               disfrute&#148; (founder&#146;s shares), debentures or any other kind of security
               or financial instrument convertible into shares, unless otherwise indicated in
               Schedule 4.1(E)(ii). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Since 31 December 2003 (the &#147;<B>Date of the Accounts</B>&#148;), the NFT
               Group has not distributed nor agreed to distribute any final or interim
               dividends neither have they distributed or agreed to distribute profits,
               reserves or funds in any other manner, or paid or agreed to pay any bonuses or
               other extraordinary payments or made or agreed to make any acquisitions,
               redemptions or reclassification of the shares in the NFT Group, except as set
               forth in Schedule 4.1(E)(iii) and as provided for in Clause 6 of this Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NFT Group does not own or hold as security shares of its own or of its
               controlling company. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(v) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NFT Group has not furnished sureties, guaranties or bonds of any kind to
               third parties, except for those set out in Schedule 4.1(E)(v). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(vi) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Except as set forth in Schedule 4.1(E)(vi), since the Date of the Accounts and
               until the date of the Agreement, the NFT Group has not: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Issued or resolved to issue shares, debentures, options, warrants or any other
               securities. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Changed their corporate by-laws. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Increased or agreed to increase the compensation or established benefits of any
               kind in favour of any of the members of the body of administration. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

 <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(vii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           The NFT Group has been depositing their annual accounts with the Commercial
          Registry in compliance with existing legislation. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

 <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(viii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                    The books or registers of any kind of the NFT Group are up to date and
          maintained in accordance with the legal requirements applicable, except where
          the non maintenance of such books and registers would not have a material
          adverse effect on the NFT Group. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In particular, the Minute Books of each of the companies of the NFT Group are duly legalised
and contain the companies&#146; resolutions taken by the corporate bodies of the same from
the date of its incorporation, except where the non legalisation and fulfilment of such
Minutes Books would not have a material adverse effect on the NFT Group, and none of said
companies&#146; resolutions having been challenged.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Such books and registers and whatever other documents (including documents relating to
ownership and copies of all other resolutions which are in force to which any NFT Group
was a party) which are the property of each NFT Group or which should be within their
control or under their control, are within their effective power and under their control.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
No
notice has been received or claim made relating to the material incorrectness of any
corporate document, or which must be corrected.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp; </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All
of the resolutions and documents which must be delivered have been delivered or filed at
the Mercantile Registry, except if the non or later delivery or filing of such resolutions
and, documents would not have a material adverse effect on the NFT Group.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(F)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Financial Statements</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NFT Draft Balance Sheet, the NFT Subsidiaries Draft Balance Sheet, NFT Group Draft Balance
Sheet and the NFT Consolidated Draft Balance Sheet (collectively, the &#147;<B>NFT Draft
Balance Sheet</B>&#148;) and the NFT Consolidated Draft Proforma Balance Sheet on the date
of this Agreement:</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           are complete, accurate and true and have been prepared in accordance with the
          applicable law and regulations and in accordance with SGAAP, as these have been
          applied by the NFT Group in previous fiscal years, except with respect to the
          NFT Non Related Assets and Liabilities, provided however that any such
          inaccuracy or lack of completeness under no event adversely affect the
          Purchaser&#146;s rights under this Agreement ; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           provide a true, fair and complete view of the equity and the financial
          situation of the NFT Group on the date of the same and of the results of its
          operations for the period closed on said date; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Duly set out all of the debts and debentures of the NFT Group </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           Duly set out and provide for all of the provisions which must be made or which
          should be made with respect to the NFT Group NFT Draft Balance Sheet; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               On the Closing Date<BR>
<BR>
               Since the Date of the Accounts:</FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               there has been no occurrence in relation to the NFT Group which, in material
               terms, has adversely affected or could affect the equity, financial situation,
               results, assets goodwill or commercial operations of the NFT Group as reflected
               in the NFT Draft Balance Sheet nor in the NFT Draft Proforma Balance Sheet. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the NFT Group has with respect to the NFT Group continued to record all their
               assets, liabilities, operations, income and expenditure in their financial
               statements and in their books of account consistently with that indicated in the
               accounting principles set out in the NFT Draft Balance Sheet and the NFT Draft
               Proforma Balance Sheet . </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               there has been no change in the accounting policy nor in the valuation criteria
               applied by the NFT Group, except with respect to the NFT Non Related Assets and
               Liabilities provided however that any such change under no event adversely
               affects the Purchaser&#146;s rights under this Agreement ; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Unless otherwise indicated in Schedule 4.1.(F), no act or operation outside the
               scope of the ordinary course of business or market practice normally followed by
               the NFT Group has been commenced, effected, adopted or concluded, and the NFT
               Group has developed their activity as it has done in the past years. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(G)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
                C<B>ontracts, Agreements and Practices.</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Schedule
4.1.(G) (i) is a list of all of the material contracts to which the NFT Group is a party,
true copies of which were made available to the Purchaser for review during the limited
Due Diligence and all of which are in full force and NFT Group has not taken any action to
modify them or agreed to modify them and is not aware of any breach or action that would
give rise to a breach of such contracts.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(H)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Subsequent Activities.</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Since
the Date of the Accounts and until the date of the Agreement, the NFT Group has not (a)
Assumed any material obligation or liability outside the normal course of their
businesses(b) Sold, assigned or otherwise disposed of or made subject to charges or
encumbrances any of their assets, except in the normal course of their business.(c)
Assumed any additional indebtedness, granted securities or changed the terms or conditions
of those existing, given moneys on loan, advanced payments to any third party, outside the
normal course of their respective businesses.(d) Cancelled any credit.(e) Sustained any
labour dispute or other labour circumstances having a material adverse effect on the
business, assets or results of the NFT Group operations.Changed the accounting principles
except in the ordinary course of business of the NFT Group</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(I)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Compliance with laws. Litigation</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NFT Group has conducted at all times its business in accordance with the substantial
aspects of the laws and regulations applicable in those countries in which it carries on
business, except where such failure would not have a material adverse effect on the NFT
Group.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Sellers to the best of their knowledge are not aware of any facts or circumstances that
could give rise to a claim against the NFT Group which could reasonably be deemed to be
material in relation to the transaction.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(J)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Payroll and
Service Agreements</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Attached hereto as Schedule 4.1(J)(i) is a list of the payrolls of the NFT
               Group, stating the length of service of the employees, their remunerations (for
               the purposes of this Agreement &#147;remuneration&#148; includes salary;
               remuneration in kind; extraordinary payments, bonuses; repayment of expenses;
               incentives; stock options, profit share schemes, travel, accident, sickness,
               invalidity, life or medical insurance; pensions schemes; company vehicles;
               loans; luncheon vouchers; or any other condition or benefit connected with
               employment (whether in cash or in kind), received by an employee, executive,
               manager or director of the NFT Group), whether they are permanent, temporary or
               other, and other conditions applicable to each category of employee. No
               substantial changes in respect of said conditions have occurred or are being
               negotiated neither is there any undertaking to substantially change them.
               Consequently, save for what is described in paragraph 4.1(J)(iii) below, the NFT
               Group does not have any other employees apart from those indicated in Schedules
               4.1(J)(i), and/or the NFT Group has not entered into any commitment to to employ
               any other employee apart from those set out in Schedules 4.1(J)(i). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Unless otherwise in Schedule 4.1(J)(i),  the contracts of employment have been executed
and  implemented  complying  with  all  substantial  aspects  of the  legal  and
statutory requirements.</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The NFT Group has at all times complied with the law and regulations relating to
               the Social Security and health and safety at work, and has punctually and
               correctly made all of the payments due, and have provided the documentation due
               (including forms TC-1 and TC-2) and communications and information required,
               unless where such failure would not have a material adverse effect on the NFT
               Group. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Unless
otherwise indicated in Schedule 4.1(K)(ii), the NFT Group complies, in all substantial
aspects, with the provisions of all applicable statutory legislation, Collective
Agreements in force and the employment contracts in force. The NFT Group does not have
Pension Plans or other benefit plans nor is required by law to have them.</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Schedule 4.1(K)(iii) also sets out all the employment, executive and service
               contracts that the NFT Group has in effect with personnel not included in
               paragraph (i). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NFT Group is up to date in performance of the obligations under the abovementioned
contracts, which have been executed and implemented complying in all substantial aspects
with the legal and statutory requirements.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Except as set forth in Schedule 4.1(K)(iv), no substantial change has been made
               since the Date of the Accounts in the conditions of employment or in the
               contracts with officers or for services of the NFT Group except for those
               changes mandatory by law or under the applicable Collective Agreements, neither
               has the NFT Group engaged any additional personnel, outside the ordinary course
               of business. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(v) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Unless otherwise stated in Schedule 4.1(J)(v), no present or past employee,
               officer, manager or director of the NFT Group has the right to an indemnity for
               termination of the contract of employment or dismissal in excess of that which
               is established by the law or regulations or by the applicable collective
               bargaining agreements. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Unless
otherwise stated in Schedule 4.1(J)(vi), the NFT Group is not involved in any court or
arbitration procedure on labour matters</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(K)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>By-laws and powers of attorney</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
existing By-laws of the NFT Group are as recorded in the relevant Commercial registries
and no act amending the By-laws is pending registration.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
persons holding general powers of attorney to act representing the NFT Group and/or to
draw from its bank accounts are those listed in Schedule 4.1(M). A copy of all said powers
of attorney is enclosed to Schedule 4.1(M).</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(L)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Subsidiaries and Branches</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NFT Group has no interests in other companies, subsidiaries or branches, except as set
forth in Schedule 4.1(N).</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(M)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Vessels and Spare Parts</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Schedule 4.1(P)(i) indicates the Oil Tankers and the LNG Vessels which are all
               the transport shipping vessels which beneficial ownership corresponds to NFT,
               directly or indirectly, through the NFT Subsidiaries, together with their
               respective structure of ownership and correlative description. The Oil Tankers
               and the LNG Vessels are free from all charters, encumbrances, mortgages and
               maritime liens, except as set forth in Schedule 4.1(P)(i)bis. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The conditions and the class of the Oil Tankers and the LNG Vessels are those
               described in their classification and trading certificates issued by the
               relevant Classification Societies attached herewith as Schedule 4.1(P)(ii) and
               at the time of the Closing, all such classification and trading certificates
               will be clear and valid. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Oil Tankers and the LNG Vessels are as they substantially were at the time
               of inspection by the Purchaser, fair wear and tear excepted. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Oil Tankers and the LNG Vessels are free of average damage affecting their
               class. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(v) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Oil Tankers and the LNG Vessels have all their classification trading and
               statutory certificates and national certificates, as well as all other
               certificates, plans and technical documentation the Vessels had at the time of
               inspection by the Purchaser. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(vi) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Oil Tankers and the LNG Vessels&#146; spare parts are in levels consistent
               with operational needs and are in the aggregate usable in the ordinary course of
               business and substantially at the same level of the time of inspection. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(N)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Capacity</B></FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
This
Agreement will create valid, binding and enforceable obligations for the Sellers on all
its terms.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(O)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>No conflict</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
execution and performance of this Agreement and of the other documents which are to be
executed or performed in accordance with the terms of this Agreement, together with the
performance of all of the operations contemplated in this Agreement or in said documents,
by the Sellers or by the NFT Group:</FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               do not entail the breach of material laws, regulations, orders, norms or
               judgement applicable to the Sellers or the NFT Group; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               to the best of the knowledge of the Sellers&acute; as of this date, do not
               require the Sellers to obtain any consent, approval or authorisation by the
               public authorities; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               do not entail the breach of the provisions of the Articles of Association of the
               Sellers, as the case may be, or of the NFT Group. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
above representations and warranties (the &#147;<B>Representations and Warranties
concerning the </B> <B>NFT Group</B>&#148;) are true and accurate as of the date of this
Agreement as well as of the Closing Date and any reference to date of the Agreement shall
be made, <I>mutatis mutandi</I>, to the Closing Date and any reference to the NFT Draft
Balance Sheet or the NFT Draft Proforma Balance Sheet shall be made to the NFT Group
Statutory Accounts, the NFT Consolidated Statutory Accounts and the NFT Final Consolidated
Proforma Balance Sheet (for which purpose the Sellers shall issue the statements listed in
Clause 10.2) and the Sellers shall modify accordingly the Schedules to this Agreement. For
the sake of clarity, each representation and warranty made with respect to the NFT Group
is made with respect to each company within the NFT Group, as if the representation and
warranty had been repeated for each company within the NFT Group.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>4.2</B> </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The NUFER Sellers make to the Purchaser the following representations and warranties with
respect to NUFER (the &#147;<B>Representations and Warranties concerning NUFER</B>&#148;).
No representation and warranties are made by the Sellers with respect to the NUFER Non
Related Assets and Liabilities, provided always that these are transferred and excluded in
the terms as provided in this Agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(A)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Title to the Quotas</B>
</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NUFER Sellers are the lawful and sole owners of the NUFER Quotas, which constitute one
hundred per cent (100%) of the issued, subscribed and paid in capital of NUFER.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(B)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Absence of Liens </B>
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NUFER Quotas are free and clear of restrictions to the exercise of the rights vested in
them and of any claims, encumbrances, withholdings, liens, charges, reservations of
ownership, options and claims of third parties, except as set forth in Schedule 4.2(B).</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(C)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Legal Capacity</B>
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NUFER Sellers have full capacity to execute and perform this Agreement, as well as the
obligations contained herein, which does not infringe any legislation, administrative
regulation, agreement, contract or undertaking by which they are bound. All the
obligations arising from this Agreement are valid and binding for the NUFER Sellers and
enforceable against them.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(D)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Due Organization</B>
</FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER is a business corporation with limited liability, duly organized and
               validly existing under the laws of Spain, and it complies with the legal
               requirements of Company Law applicable to it. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER has not resolved upon its dissolution, merger or spin off and is not
               required by law to effect such a dissolution. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER has the capacity and authority to carry on its businesses in the manner it
               does so at present. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(E)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>Capital Structure</B>
</FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               All the NUFER Quotas are validly issued, fully subscribed and paid up. If and to
               the extent of the pre-emptive right of acquisition in the terms set out in the
               by-laws of NUFER, there are no options or undertakings relating to the NUFER
               Quotas. There exist no sales, purchase and sales options agreements, nor
               agreements which guarantee preferential rights of any kind to third parties and
               thus no person nor entity has the right to acquire shares of NUFER except as set
               forth in Schedule 4.2.E.(i). Neither are there increases or reductions of
               capital pending registration or in progress. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Since the Date of the Accounts, NUFER has not distributed nor agreed to
               distribute any final or interim dividends neither has it distributed nor agreed
               to distribute profits, reserves or funds in any other manner or paid or agreed
               to pay any bonuses or other extraordinary payments or made or agreed to make any
               acquisitions, redemptions or reclassification of the quotas in NUFER, except as
               set forth in Schedule 4.2(E)(iii). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER does not own or hold as security quotas of its own. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER has not furnished sureties, guaranties or bonds of any kind to third
               parties, except for those set out in Schedule 4.2(E)(iv). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(v) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Except as set forth in Schedule 4.2(E)(v), since the Date of the Accounts and
               until the date of the Agreement, NUFER has not: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Issued or resolved to issue quotas . </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Changed its corporate by-laws. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(vii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           NUFER has been depositing its annual accounts with the Commercial Registry in
          compliance with existing legislation. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(viii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           The books or registers of any kind of NUFER are up to date and maintained in
          accordance with the legal requirements applicable, except where the non
          maintenance of such books and registers would not have a material adverse effect
          on NUFER. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In
particular, the Minute Books of NUFER are duly legalized and contain the company
resolutions taken by the distinct corporate bodies of the same from the date of its
incorporation, except where the non legalisation and fulfilment of such Minutes Books
would not have a material adverse effect on NUFER and none of said company resolutions
having been challenged.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Such
books and registers and whatever other documents (including documents relating to
ownership and copies of all other resolutions which are in force to which NUFER was a
party) which are the property of NUFER or which should be within its control or under its
control, are within its effective power and under its control.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
No
notice has been received or claim made relating to the material incorrectness of any
document, or which must be corrected.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All
of the resolutions and documents which must be delivered have been delivered or filed at
the Mercantile Registry, except if the non or later delivery or filing of such resolutions
and documents would not have a material adverse effect on NUFER.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(F)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Financial Statements.</B> </FONT></TD>
</TR>
</TABLE>
<BR>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The NUFER Draft Balance Sheet and the NUFER Draft Proforma Balance Sheet: </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>are complete, accurate and true and have been prepared in accordance with the
          applicable law and regulations and with SGAAP, as these have been applied by
          NUFER in previous fiscal years, except with respect to the NUFER Non Related
          Assets and Liabilities, provided however that any such inaccuracy or lack of
          completeness under no event adversely affect the Purchaser&#146;s rights under
          this Agreement; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          provide a true, fair and complete view of the equity and the financial
          situation of NUFER comprising the NFT NUFER Shares on the date of the same. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All
of the debts and debentures of NUFER are duly set out in the NUFER Draft Balance Sheet in
accordance with SGAAP and their assets are valued in accordance with SGAAP.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All
of the provisions which must be made or which should be made in accordance with SGAAP and
relating to the NFT NUFER Shares have been duly entered and provided for in the NUFER
Balance Sheet.<BR>
<BR>
                          Since the Date of the Accounts:
</FONT></TD>
</TR>
</TABLE>
<BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               there has been no occurrence in relation to NUFER which, in material terms, has
               adversely affected or could affect the equity, financial situation, results,
               assets goodwill or commercial operations of NUFER as they are reflected in the
               NUFER Draft Balance Sheet nor the NUFER Draft Proforma Balance Sheet . </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER has continued with respect to the NFT NUFER Shares to record all its
               assets, liabilities, operations, income and expenditure in their financial
               statements and in their books of account in the same way as that indicated in
               the accounting principles set out in the NUFER Draft Balance Sheet or the NUFER
               Draft Proforma Balance Sheet </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               there has been no change in the accounting policy nor in the valuation criteria
               applied by NUFER&cedil; except with respect to the NFT Non Related Assets and
               Liabilities, provided however that any such change under no event adversely
               affects the Purchaser&#146;s rights under this Agreement ; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               no act or operation outside the scope of the ordinary course of business or
               market practice normally followed by NUFER has been commenced, effected, adopted
               or concluded, and NUFER has developed its activity as it has done in the past
               years. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(G)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Contracts, Agreements and Practices.</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As
of the date of the Agreement NUFER and unless otherwise indicated in Schedule 4.2.(G) is
not party any agreement<SUP>1</SUP> neither has it assumed any existing undertaking other
than this Agreement or as reflected in the NUFER Draft Balance Sheet.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(H)</B> </FONT></TD>
          <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Subsequent Activities</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Except
as set forth in Schedule 4.2(H), since the Date of the Accounts and until the date of the
Agreement, NUFER has not:</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Assumed any material obligation or liability outside the normal course of its
               business. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Sold, assigned or otherwise disposed of or made subject to charges or
               encumbrances any of their assets, except in the normal course of its business. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Assumed any additional indebtedness, granted securities or changed the terms or
               conditions of those existing, given moneys on loan, advanced payments to any
               third party, outside the normal course of its business. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Cancelled any credit. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(e) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Sustained any labour dispute or other labour circumstances having a material
               adverse effect on the business, assets or results of NUFER&#146;s operations. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(f) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Changed the accounting principles except in the ordinary course of business of
               NUFER. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(I)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               <B>Compliance with laws. Litigation</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NUFER
has conducted at all times its business in accordance with all substantial aspects of the
laws and regulations applicable in Spain, except where such failure would not have a
material adverse effect on NUFER.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Sellers to the best of their knowledge are not aware of any facts or circumstances that
could give rise to a claim against NUFER which could reasonably be deemed to be material
in relation to the transaction.</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(J)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               <B>By-laws and powers of attorney</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The existing By-laws of NUFER are as recorded in the relevant Commercial
               Registry and no act amending the By-laws is pending registration. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The persons holding general powers of attorney to act representing NUFER and/or
               to draw from their bank accounts are those listed in Schedule 4.2(J). A copy of
               said powers of attorney is enclosed to Schedule 4.2(J). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(K)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Subsidiaries and Branches</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
NUFER
has no interests in other companies, subsidiaries or branches, except as set forth in
Schedule 4.2(K).</FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(L)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>Capacity</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
This
Agreement will create valid, binding and enforceable obligations for the NUFER Sellers.</FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(M)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>No conflict</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
execution and performance of this Agreement and of the other documents which are to be
executed or performed in accordance with the terms of this Agreement, together with the
performance of all of the operations contemplated in this Agreement or in said documents,
by the NUFER Sellers or NUFER:</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               do not entail the breach of material laws, regulations, orders, norms or
               judgement applicable to the NUFER Sellers or NUFER; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               to the best of the knowledge of the Sellers&acute; as of this date, do not
               require the Sellers to obtain any consent, approval or authorisation by the
               public authorities; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               do not entail the breach of the provisions of the Articles of Association of
               NUFER </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=20%>&nbsp;</TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
above Representations and Warranties concerning NUFER made by the NUFER Sellers shall be
true and accurate as of the date of this Agreement as well as of the Closing Date and any
reference to date of the Agreement shall be made, <I>mutatis mutandi</I>, to the Closing
Date and any reference to the NUFER Draft Balance Sheet or the NUFER Draft Proforma
Balance Sheet shall be made to the NUFER Statutory Accounts and the NUFER Final Proforma
Balance Sheet<B> </B>(for which purposes the NUFER Sellers shall issue the statements
listed in Clause 10.2.)</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.3 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Purchaser makes to the Sellers the representations and warranties set out below (the
<B>&#147;Representations and Warranties of Purchaser</B>&#148;). </FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(A)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser is a business corporation duly organized, validly existing and in
               good standing under the laws of the Marshall Islands, and it complies with the
               legal requirements of Company Law applicable to it. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(B)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser has not resolved upon its dissolution, merger or spin off. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(C)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser has full capacity and standing to execute and perform this
               Agreement, which does not infringe its corporate by-laws or any other
               legislation, administrative regulation, agreement, contract or undertaking by
               which it is bound. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(D)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser has adopted all such corporate or other resolutions that may be
               necessary to execute and implement this Agreement, including all required
               resolutions to be adopted by its bodies of administration. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(E)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The representative of the Purchaser is authorized to execute this Agreement for
               and on behalf of the Purchaser. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(F)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               This Agreement will create valid and binding obligations for the Purchaser on
               all their terms. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>(G)</B> </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The execution and performance of this Agreement and of the other documents which
               are to be executed or performed in accordance with the terms of this Agreement,
               together with the performance of all of the operations contemplated in this
               Agreement or in said documents, by the Purchaser: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
            do not entail the breach of material laws, regulations, orders, norms or
          judgement applicable to the Purchaser; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
            to the best of the knowledge of the Purchaser as of this date, do not require
          the Purchaser to obtain any consent, approval or authorisation by the public
          authorities; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           do not entail the breach of the provisions of the Articles of Association of the
          Purchaser. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.4</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Other undertakings in relation to the Representations and Warranties.</FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.4.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Representations and Warranties concerning NFT Group and the Representations and
Warranties concerning NUFER are collectively referred to in this Agreement as the
&#147;<B>Representations and </B> <B>Warranties</B>&#148;. </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.4.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          Continuance of the Representations and Warranties. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Representations and Warranties set out in clause 4 shall remain in force upon the
execution of this Agreement and shall be deemed to be repeated on the Closing Date in the
form as defined in Clause 10.2 (v).</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
existence of the Due Diligence does not limit in any way the aforementioned
Representations and Warranties.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
At
the Closing, the Purchaser shall deliver to the Sellers a certificate certifying that it
does not have any actual knowledge of any actual loss that will not be adjusted for in the
Price Adjustments.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.4.3 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Essential character of the Representations and Warranties</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
These
Representations and Warranties are an essential part of the entering into of this
Agreement by the Purchaser and the Sellers.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>4.4.4 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          Representations and Warranties set out in this Agreement are complete and
          accurate.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>5.</B></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>INDEMNITY</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<U>General regime</U></FONT></TD>
</TR>
</TABLE>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In this Clause 5, references to the Purchaser shall include the NFT Group and/or NUFER,
the Sellers shall be liable to the Purchaser for: </FONT></TD>
</TR>
</TABLE>
<BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any declared or hidden liabilities of NFT Group not set forth in the NFT
          Consolidated Proforma Balance Sheet arising from or in connection with events,
          acts or omissions originating before the Closing Date and; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any declared or hidden liabilities not set forth in the NFT Consolidated
          Proforma Balance Sheet arising from the NFT Non Related Assets and Liabilities
          and/or its transfer and sale; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any declared or hidden liabilities of NFT Group arising from the draft Tax
          Income Return referred to in Clause 10.2 (vii). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any losses and damages with respect to environmental incidents (unlawful
          discharge of a hazardous substance into the environment or the failure to record
          or report it in case it has occurred) that have taken place prior to the Closing
          Date. The Sellers shall not be liable with respect to environmental incidents
          that have taken place after the Closing Date, regardless that they are caused by
          acts or omissions originated before the Closing Date. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Additionally, the NUFER Sellers shall be liable to the Purchaser and/or NUFER within the
framework of this Agreement for: </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any declared or hidden liabilities of NUFER not set forth in the NUFER Proforma
          Balance Sheet arising from or in connection with events, acts or omissions
          originating before the Closing Date and, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any declared or hidden liabilities not set forth in the NUFER Proforma Balance
          Sheet arising from the NUFER Non Related Assets and Liabilities and/or its
          transfer and sale. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           any declared or hidden liabilities of NUFER arising from the draft Tax Income
          Return referred to in Clause 10.2 (vii). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.3</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Neither the Sellers nor the NUFER Sellers shall be obliged to indemnify the Purchaser
until the losses and damages subject to indemnification have been quantified and are due
and owing, so that contingent liabilities shall not be subject to indemnification until
they become actual liabilities. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In
the event that any claim or liability interferes or may interfere with the normal business
of the NFT Group or NUFER in the cases indicated in Schedule 5.1.3, the Sellers shall be
obliged to post a security for such claim or liability, as soon as practicable, to enable
NFT Group or NUFER to carry on its business and, thereafter, seek indemnity from the
Sellers. Should the Sellers fail to comply with this obligation, the Purchaser shall be
entitled to post the required security at the Sellers&#146; cost and expense.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.4</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Sellers&acute; and NUFER Sellers &acute; liability for indemnification and
Purchaser&#146;s rights to indemnification shall be governed only by the express
provisions of this Clause.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.5 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Under no event shall any matter be subject of double indemnification by making the
relevant claim in relation with both NFT and NUFER. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.6 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In respect of third party claims , the Purchaser shall always have the final decision as
to whether settle or contest the claim, provided that should this final decision be
contrary to Sellers decision, the Purchaser shall indemnify and hold harmless the Sellers
of any additional losses, costs and expenses that the Sellers may suffer as a consequence
of contesting or settling the claim following the Purchaser&#146;s decision </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.1.7 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Rights of Purchaser to claim indemnity under this section 5 shall in no event be limited
by any qualifications made the Sellers and/or the NUFER Sellers in section 4, such as,
material adverse effect, substantially or similar terms. </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<U>Admissibility of claims</U></FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.2.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For the purpose of section 5.1. above, the Sellers shall not be obliged to indemnify the
Purchaser for claim to the extent the failure of the Purchaser to comply with the
notification requirements set forth in Clause 5 prevents the ability for the Sellers to
defend the claim being made by a third party. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.2.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The rights of the Purchaser to claim shall expire:</FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               As regards claims related to the Oil Tankers and/or LNG Vessels and the
               contracts indicated in Schedules II.2 and III.2 of the NFT Group, 90 days after
               the Closing Date; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               As regards tax, social security and labor claims upon the expiration of the
               statute of limitation of the underlying tax, social security or labor
               legislation obligations; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               As regards environmental claims, on the fifth (5) anniversary of the Closing
               Date; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               All other claims, on the first anniversary of the Closing Date;. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
time barring of said periods under the above-agreed statute of limitation shall be
interrupted in the case that liabilities or claims are detected and duly notified by the
Purchaser to the Sellers&acute; Representative (as such term is defined in Clause 19
below) or the NUFER Sellers, as may be the case, within the referred periods.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Under
no event, the Sellers or the NUFER Sellers&acute; liability shall arise if the claim or
liability responds to changes in the legislation made after the Closing Date.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.3</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<U>Specification of the Liability</U></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.3.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For the convenience of the parties the Purchaser agrees to aggregate all claims for
indemnity into Euros 100,000 lots prior to presenting such claims to the Sellers for
payment. At the expiration of the indemnity period the Purchaser shall present the Sellers
with the remainder of the claims for payments, even if such lot is less than Euros
100,000. Notwithstanding the aggregation of claims the Purchaser shall advice the Sellers
of claims in accordance with Clause 5.4. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.3.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
When quantifying the Sellers&#146; and the NUFER Sellers&#146; liability hereunder, the
following items or amounts shall always be deducted: </FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Any amount in respect of indemnification actually collected (or that although
               collectable, non collected due to the non diligence of the Purchaser) from an
               insurance company or any other third party by the NFT Group or NUFER, or the
               Purchaser, in respect of the occurrence of the loss that gave rise to the claim
               or liability. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The amount of any tax savings actually realized of the NFT Group and/or NUFER
               and/or the Purchaser related to the claim or liability. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           The amount actually collected (or that although collectable, non collected due
          to the non diligence of the Purchaser) resulting from any hidden assets
          described in Schedule 5.3.2. of the NFT Group or NUFER originating from events
          that occurred before the Closing Date. If not deducted, said amount shall be
          kept by NFT Group or NUFER, as applicable, until the expiration of the time
          limits indicated above for claims when it shall then be returned to the Sellers. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.3.3</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The total amount to be paid by the Sellers plus the NUFER Sellers to the Purchaser and/or
the NFT Group and/or NUFER under the provisions of this Clause may never exceed a sum
equal to FIFTY MILLION US DOLLARS. The foregoing notwithstanding, claims related to the
Oil Tankers and/or LNG Vessels and the related contracts of the NFT Group will have a
total maximum limit of 100% of the Purchase Price, provided however that in the event that
the Purchaser files a claim, within the period of ninety days after Closing Date, in an
amount equal to or higher than FIFTY MILLION US DOLLARS related to the Oil Tankers and/or
LNG Vessels and/or said contracts, the Sellers may, at their option, elect to either
indemnify pursuant to this Agreement or to resolve the transaction. In this case, the
Sellers shall return to the Purchaser the Purchase Price and the Purchaser shall return to
the Sellers the Shares, as received at Closing Date, and through the Shares, the Purchaser
shall return to the Seller, the business of the NFT Group without any material change. The
above notwithstanding, claims related to the title of ownership of the Shares will have no
maximum limit. </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Procedure</U> </FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4.1. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser shall promptly (and in any event no later than twenty days after
               the Purchaser becomes aware of facts sufficient to show a claim exists) remit
               that claim in writing together with the relevant documentation to the
               Sellers&acute; Representative. The notice shall describe in sufficient detail
               the events or circumstances giving rise to the liability. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Upon
receipt of the claim by the Sellers&acute; Representative, a term of twenty (20) business
days shall commence during which the parties shall attempt to reach an agreement on the
particular claim. In so attempting to reach an agreement the parties may seek the opinion
of their respective auditors. On expiration of this term and if the Parties have not
reached an agreement, the course for the settlement of disputes stipulated in Clause 22
below shall become available. Should the parties reach an agreement, the Sellers or the
NUFER Sellers, as applicable, shall pay the amount stipulated in that agreement within
twenty (20) business days after the date of the relevant agreement, unless otherwise
decided by the parties.</FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4.2. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               In addition to the obligation contained in the previous section, the Purchaser
               shall inform the Sellers&acute; Representative, of the existence of any third
               party claim or tax audit notice that may lead to an admissible claim within a
               period of seven business days as from the date in which the the Purchaser has
               knowledge of them or in that other period which does not prevent the Sellers
               and/or the NUFER Sellers in exercising their rights. Failure by the Purchaser to
               comply with the obligation of notification set out in sections 5.4.1. and 5.4.2.
               shall result in the inadmissibility of the claim against the Sellers or the
               NUFER Sellers. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4.3. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Once it has been notified, the Sellers&acute; Representative may at his
               discretion assert and conduct all available recourses, actions and defenses to
               refute or oppose any third party claim or those administrative acts apt to lead
               to its liability hereunder, before any Administration and court. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Particularly
and without limitation to the above, the Sellers&acute; Representative may carry out
discussions, contacts, allegations and other formalities within the framework of any
action or inspection by the responsible administrative or judicial agency. The
Sellers&acute; Representative may make use of these authorities through the advisors it
designates, upon whom the Purchaser and the NFT Group and NUFER shall confer the powers of
attorney or authorities necessary for the discharge of their duties, in the understanding
that the Sellers or the NUFER Sellers, as applicable, shall meet all the costs of the
advisors in the relevant proceedings and shall reimburse the Purchaser, the NFT Group or
NUFER of any costs in respect to such proceedings; provided however, that in the event
that any of the NFT Group or NUFER or the Purchaser are awarded fees and costs of any
nature in respect to such proceedings, such amounts shall be promptly referred to the
Sellers or the NUFER Sellers, as applicable.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Sellers&acute; Representative shall keep the Purchaser informed at all times of its
actions under this paragraph and shall consult with the Purchaser on the taking of any
relevant decision.</FONT></TD>
</TR>
</TABLE>
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               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4.4. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers or the NUFER Sellers, as may apply, may also settle the third party
               claim on the condition that, before or at the time it becomes bound by the
               settlement, it makes available to the Purchaser or the NFT Group or NUFER the
               funds that the Purchaser or the NFT Group or NUFER have to pay to the third
               party in accordance with the settlement. </FONT></TD>
               </TR>
               </TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.4.5</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Sellers or the NUFER Sellers, as applicable, will pay any amount to be paid according
to the relevant final decision or award which gives termination to such third party claim
or administrative act within twenty (20) business days after the date upon which such
decision or award becomes definitively final and conclusive. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>5.5</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Security</U></FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As
security for the Purchaser&#146;s indemnity rights under this section 5, the Purchaser
shall have the right to deduct, from the sum pending to be contributed by the Purchaser to
the Joint Company TT, the amounts not paid by the Sellers or the NUFER Sellers, pursuant
to Clause 5 .</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Should
the Sellers or the NUFER Sellers not comply with their obligations pursuant to Clause 5,
after the date the Purchaser has contributed to the Joint Company TT the amounts
contemplated in Clause 7 below, the Purchaser shall be entitled to any dividend and/or
reimbursement to which the Sellers (through a company) may be entitled in the Joint
Company TT, as shareholders thereof, in the amount that sufficiently covers the obligation
of the Sellers, as per the pledge of dividends agreement (the &#147;<B>Pledge of Dividends
Agreement</B>&#148;) that shall be entered into between the Sellers and the Purchaser , in
a form substantially similar to that attached in Schedule 5.5 (to be negotiated in good
faith between the parties), at Closing Date.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>6.</B></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>PERIOD BETWEEN SIGNING AND CLOSING DATE</B>
<BR>
Prior to the Closing Date: </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Non Related Assets and Liabilities shall be excluded and transferred by the Sellers
from NFT and by the NUFER Sellers from NUFER, so that, on the Closing Date, NFT will only
own NFT Subsidiaries Shares together with the Shipping Business and NUFER will only own
the NFT NUFER Shares. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In
the event that any contingency of whatsoever nature arises for NFT from the transfer and
exclusion of the Non Related Assets and Liabilities and the Purchaser suffers a loss or
damage, the Sellers shall be liable to the Purchaser for said loss or damage, which
liability shall be governed by the provisions of Clause 5 above.</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In
the event that any contingency of whatsoever nature arises for NUFER from the transfer and
exclusion of the Non Related Assets and Liabilities and the Purchaser suffers a loss or
damage, the NUFER Sellers shall be liable to the Purchaser for said loss or damage, which
liability shall be governed by the provisions of Clause 5 above.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
When
quantifying the liability arising from the above referred contingencies, the Parties agree
that the amount to be paid to the Purchaser will be the net amount taking into account the
tax credits that may be applicable arising from the exclusion of the Non Related Assets
and Liabilities (i.e. if the transfer of certain asset produces a capital gain and the
transfer of another asset produces a loss, the amount to be paid to the Purchaser will be
the net effect for the relevant company).</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Pursuant to Clause 1.4 the M/V &#147;Tito Tapias&#148; will be transferred from Naviera
Nellamar Espa&ntilde;a, S.L. (a subsidiary of NFT forming part of the NFT Non Related
Assets and Liabilities) to NFT together with the financing agreements and related
guarantees as listed and described in Schedule 6.2, and free from any other liabilities,
liens, charges and/or any other encumbrances, except those described in Schedule 6.2. and
any cash payment due to the above mentioned transfer that shall be considered in the NFT
Final Proforma Balance Sheet. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In
the event that any contingency of whatsoever nature arises for NFT from the transfer of
M/V &#147;Tito Tapias&#148; and the Purchaser suffers a loss or damage, the Sellers shall
be liable to the Purchaser for said loss or damage, which liability shall be governed by
the provisions of Clause 5 above.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6.3 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Sellers shall cause the current directors of NFT Group and NFT Subsidiaries to draw
each of the statutory accounts and the Sellers shall approve the audited statutory
accounts of the NFT and of NFT Subsidiaries to be compulsory filed before the Spanish
Commercial Registry in accordance with Spanish law , respectively closed as of December
31, 2003 (the &#147;<B>NFT Statutory </B> <B>Accounts</B>&#148; and, the &#147;<B>NFT
Subsidiaries Statutory Accounts</B>&#148; referred, collectively as the &#147;<B>NFT </B>
<B>Group Statutory Accounts</B>&#148;) </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Sellers shall cause the current directors of NFT Group to draw the statutory consolidated
accounts which shall be audited and the Sellers shall approve the audited consolidated
statutory accounts of the NFT Group to be compulsory filed before the Spanish Commercial
Registry in accordance with Spanish law, respectively closed as of December 31, 2003 (the
&#147;<B>NFT </B> <B>Consolidated Statutory Accounts</B>&#148;).</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NUFER Sellers shall cause the current directors of NUFER to draw the statutory accounts
and the NUFER Sellers shall approve the audited statutory accounts of NUFER to be
compulsory filed before the Spanish Commercial Registry in accordance with Spanish law ,
respectively closed as of December 31, 2003 (the &#147;<B>NUFER Statutory
Accounts</B>&#148;).</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
Sellers and the NUFER Sellers shall provide the Purchaser with the NFT Group Statutory
Accounts, the NFT Consolidated Statutory Accounts and the NUFER Statutory Accounts no
later than April 15, 2004.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Additionally,
and also no later than April 15, 2004 the Sellers and the NUFER Sellers shall prepare and
provide the Purchaser with the adjusted NFT Final Consolidated Proforma Balance Sheet and
the NUFER Final Proforma Balance Sheet.</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
NFT Final Consolidated Proforma Balance Sheet and the NUFER Final Proforma Balance Sheet
will comprise a balance sheet and the related notes regarding the accounting principles
used for its preparation.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6.4 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Sellers shall do everything in their power so that the NFT Group, and the operation of
the Oil Tankers and the LNG Vessels, continue in the ordinary course of business and shall
not, without the prior written consent of the Purchaser: </FONT></TD>
</TR>
</TABLE>
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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               enter into any material agreement or agreement with a term exceeding Six (6)
               months or agreement for an amount in excess of ONE MILLION EURO (1,000,000)
               and/or agreements of any kind that could negatively affect the present financial
               status of the NFT Group or leave them in a materially worse commercial position;
               the Purchaser shall procure to provide to the Sellers the best reasonably
               possible market conditions regarding the Vessels&acute; insurance policies,
               acquisition of equipment and maintenance and the Sellers shall elect the
               proposal of the Purchaser in case it is more favourable. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               dispose of, encumber, assign, transfer, sale and/or any asset, except as
               otherwise foreseen in this Agreement, nor will they make substantial changes in
               the manner the day to day business is conducted. Likewise, the Sellers will not
               give or take options of any kind, modify or voluntarily terminate any lease,
               contract, agreement or commitment in force with a material adverse effect on the
               Shipping Business; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               invest, borrow money, enter into any loan, commit themselves to any credit,
               repay in advance any debt nor issue any guarantees; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               hire new employees, advisors, managers nor will they dismiss with indemnities or
               redundancy payments beyond the limits provided for by the applicable laws and
               regulations. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(e) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               modify the existing remuneration conditions of the employees. </FONT></TD>
               </TR>
               </TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6.5 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The NUFER Sellers will proceed in the same manner as provided in Clause 6.4 above with
respect to NUFER. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>6.6 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
To the extent that it may depend on the Sellers, they shall cause the NFT Group to adopt
the appropriate measures to preserve and protect the Shipping Business, in particular and
without limitation, the Oil Tankers and the LNG Vessels. The NUFER Sellers will proceed in
the same manner with respect to NUFER. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>7.</B> </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>JOINT COMPANY FOR NEW PROJECTS</B> </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>7.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
On the date of this Agreement the Sellers and Purchaser have entered into a joint venture
agreement (the &#147;<B>Joint Venture Agreement</B>&#148;) which shall become effective at
Closing Date. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>7.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Parties acknowledge that NFT is currently participating in a bidding process for the
acquisition of a subsidiary of the Portuguese company, GALP ENERGY. In the event that said
bid is awarded to NFT, the project will be offered to the Joint Company TT. In the event
the Joint Company TT elects not to undertake the project, the Sellers shall be obligated
to assume all rights, liabilities and obligations in connection with the performance of
the said project. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>8.</B> </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>EXCHANGE RATE (EURO-US$)</B></FONT></TD>
</TR>
</TABLE>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The Purchaser has agreed to pay the
Purchase Price in United States Dollars. This notwithstanding, the Sellers may, at any
time up to five (5) business days before the Closing, elect to convert the payment of some
or all of the Purchase Price into Euros by notifying the Purchaser in writing of such
election and the amount of United States Dollars that the Sellers wish to receive in Euros
(the &#147;Election&#148;). The Purchaser shall, within two (2) business days of receiving
such notification, enter into a forward purchase contract to acquire Euros in the amount
of the Election, with a settlement date within three (3) business days of the Closing
Date. On the Closing Date, the Parties shall calculate the Purchase Price in United States
Dollars in accordance with the terms of this Agreement. The Purchase Price, as adjusted,
shall be paid by the Purchaser: </FONT></TD>
</TR>
</TABLE>
<BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               up to the Election Amount, in Euros based on the exchange rate actually obtained
               by the Purchaser at the time of the Election; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               the balance, if any, in United States Dollars. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>In the event that the Closing Date is
extended at the request of the Sellers, the settlement date of the forward contract shall
be automatically extended within three (3) business days of the amended Closing Date and
any costs and losses related to such extension and the forward contract shall be borne by
the Sellers. If the Closing does not take place do to a default of the Sellers, the
Sellers shall indemnify and hold harmless the Purchaser for all costs and losses
associated with unwinding of the forward contract. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>9.</B> </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>CONDITIONS PRECEDENT TO CLOSING</B></FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The execution of the Sale and Purchase which is the purpose of this Agreement (payment of
the price and delivery of the Shares), and thus the closing of the transaction which is
the purpose of this Agreement are expressly conditional on the fulfilment of the
provisions of this clause prior to the Closing Date (as such term is defined in clause
10). </FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Conditions Precedent listed in Clause 9.3 (i), (ii) and (iii)(b) are for the sole
benefit of the Purchaser except with respect to the consent provided for in Schedule 9.2,
and the express waiver of the Conditions by Purchaser shall be equivalent to their
performance for the purposes of this Agreement. In the event that the consent provided for
in Schedule 9.2 has not been obtained: (i) the Purchaser will not be entitled to waive
such condition 9.3(i) in respect of the consent contain in Schedule 9.2 and, (ii) Sellers
shall not be entitled to sell or otherwise dispose of the Oil Tankers to which the
consents in Schedule 9.2 refer for a period of one (1) year as from the Closing Date.
Disposal or sale by Sellers in breach of (ii) above, shall entitle Purchaser to a penalty
amounting to US Dollars THIRTY MILLION (30,000,000). </FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.3 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The obligations of the Purchaser to complete the transaction contemplated in this
Agreement shall be subject to: </FONT></TD>
</TR>
</TABLE>
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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               satisfaction of the condition that the counterparties to the agreements
               indicated in Schedule 9.3 attached herewith, grant their written consent to the
               change of control that will result from the transaction contemplated in this
               Agreement, </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               NUFER and NFT having transferred and excluded the Non Related Assets and
               Liabilities pursuant to Clause 6.1; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               no material adverse change in the business and undertaking of the NFT Group
               shall have occurred after the 31st of December of 2003. For these purposes,
               material adverse change is defined as (a) the loss of any of the Oil Tankers or
               the LNG Vessels and/or (b) the termination or material modification of either of
               the Oil Tankers Financing Agreements, the Oil Tankers Charter Party Agreements,
               the LNG Financing Agreements and/or LNG Charter Party Agreements, and/or (c) any
               oil spill having material and substantial adverse consequences and/or (d) any
               other material event which prevents the operation of the Oil Tankers or the LNG
               Vessels. <BR>
(collectively the &#147;<B>Conditions Precedent</B>&#148;).
</FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.4 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Parties shall use their best joint efforts in order to obtain as soon as possible the
consents and authorizations referred to in Clause 9.3 above and both Parties shall
diligently cooperate in preparing and executing any actions and documents which may be
required to such effect. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.5 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Seller&#146;s Representative shall provide the Purchaser not less than five [5]
business days prior to Closing Date with: (a) written confirmation that the Non Related
Assets and Liabilities have been transferred and excluded from NFT and NUFER and (b)
documentary evidence showing the consents obtained pursuant to Clause 9.3. (i). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.6 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Save for the exception provided for in Clause 9.7 below, in the event that five [5]
business days prior to the Closing Date, the Conditions Precedent referred to in Clause
9.3 (i) and Clause 9.3 (ii) above have not been met, the Purchaser may elect at its sole
option either to; </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           waive the non fulfillment of such Conditions Precedent except as provided for
          in Clause 9.2 and continue with the performance of this Agreement; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           terminate this Agreement, in which case the Purchaser shall recover the amount
          of the Payment on Account together with the interest accrued thereof and,
          additionally, the Sellers shall, only in the case of non fulfillment of the
          Condition Precedent provided in Clause 9.3(ii) and subject to clause 9.7,
          indemnify the Purchaser by means of a penalty on the amount of THIRTY MILLION
          DOLLARS USD 30,000,000 </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.7 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Should the exclusion of the Non Related Assets and Liabilities have not been carried out
five [5] business days prior to the Closing Date, the Sellers may notify in writing to the
Purchaser, no later than three (3) days prior to the Closing Date, that the said exclusion
has not been carried out and that an extension is needed in order to proceed with the
exclusion. In such a case, the Closing Date shall be postponed for a period of ninety [90]
calendar days upon the expiration of which if the exclusion of the Non Related Assets and
Liabilities has not taken place, the Purchaser may elect at its sole option to proceed as
established in Clause 9.6 (a) or Clause 9.6 (b) above. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The
non exclusion from NUFER or NFT of bank debts amounting in aggregate up to 25,000,000 US$,
will not be considered as a non fulfillment of the condition precedent 9.3 (ii). Should
the Sellers decide that such debts are to remain in NUFER or NFT at Closing Date, then:
(i) any and all costs related to such debts&#146; early amortization will be borne
entirely by the Sellers; (ii) the Sellers shall provide a certificate issued by the
relevant bank to which the credit stands containing a statement on the exact amount,
including but not limited to any related costs and expenses, required to fully amortize
the relevant debt as on Closing Date (iii) such bank certificates will be included by the
Sellers in the notice to be sent to Purchaser on April 15, 2004, together with any further
information as described under Clause 2.6 and shall be taken into account in order to
calculate the Price Adjustments pursuant to Clause 2.5. </FONT>
</TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Additionally,
the Sellers shall indemnify the Purchaser by means of a penalty in the amount of THIRTY
MILLION DOLLARS USD 30,000,000 in case that, the Conditions Precedent above having been
fulfilled, the Sellers breach their obligation to execute the Sale and Purchase which is
the purpose of this Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.8 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In the event that the consents referred to in paragraph 9.3.(i) in relation to the
transfer of the Oil Tankers have not been obtained by the Closing Date, but all the
consents corresponding to the LNG Vessels have been granted, then either of the parties
may elect that the transactions contemplated in this Agreement be completed with respect
to the LNG Business, for a price of USD ONE HUNDRED AND SEVENTY MILLION (USD 170,000,000)
to be adjusted in accordance with Clause 2.5. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For
the purposes of this Clause 9.8, the references contained in this Agreement to the
Shipping Business shall be deemed to be made, <I>mutatis mutandi</I>, to the LNG Business.
In this event, any reference made in this Agreement to the Sellers shall be deemed to be
made, <I>mutatis mutandi</I>, to NFT.</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As
security for the Purchaser&#146;s and the Sellers&#146; rights under this Clause 10.7,
respectively, NFT hereby grants to the Purchaser a Call Option (the &#147;<B>LNG Call
Option</B>&#148;) and the Purchaser hereby grants to NFT a Put Option (the &#147;<B>LNG
Put Option</B>&#148;) as a means to purchase and sale all and only all the NFT
Subsidiaries Shares under the same terms and conditions, <I>mutatis mutandi</I>, of this
Agreement, as a means to acquire and transfer the LNG Business. The LNG Call Option will
be exercised within a term of 15 business days after Closing Date. The LNG Put Option will
be exercised within a term of 15 days after the expiration of the term of exercise of the
LNG Call Option.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>9.9 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
In the event that the consents referred to in paragraph 9.3.(i) referred to the transfer
of the LNG Vessels have not been obtained by the Closing Date, the Purchaser may elect
that the transactions contemplated in this Agreement be completed with respect to the LNG
Business, for a price of USD ONE HUNDRED AND SEVENTY MILLION (USD 170,000,000) to be
adjusted in accordance with Clause 2.5., and in this case, the Purchaser shall indemnify
the Sellers of any costs, expenses, losses and damages vis a vis the banks due to such
lack of consent. </FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For
the purposes of this Clause 9.9, the references contained in this Agreement to the
Shipping Business shall be deemed to be made, <I>mutatis mutandi</I>, to the LNG Business.
In this event, any reference made in this Agreement to the Sellers shall be deemed to be
made, <I>mutatis mutandi</I>, to NFT.</FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
As
security for the Purchaser&#146;s rights under this Clause 9.9, NFT hereby grants to the
Purchaser a Call Option (the &#147;<B>Second LNG Call Option</B>&#148;) as a means to
purchase and sale all and only all the NFT Subsidiaries Shares under the same terms and
conditions, <I>mutatis mutandi</I>, of this Agreement, as a means to acquire and transfer
the LNG Business. The Second LNG Call Option will be exercised within a term of 15
business days after Closing Date.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>10.</B></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>CLOSING AND CLOSING DATE</B> </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>10.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Parties, acknowledging that the Board of Directors of the Purchaser has already
approved the transaction and to the extent of the absence of any material adverse changes
in the Shipping Business during the period of January 1, 2004 to the date of today, agree
that the payment of the price and the delivery of the Shares (the
&#147;<B>Closing</B>&#148;) shall take place, subject to the satisfaction of the
conditions precedent referred to in Clause 10, no later than April 30, 2004, unless such
date is extended by written agreement between the Parties (the &#147;<B>Closing </B>
<B>Date</B>&#148;). </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>10.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
At the Closing Date, the Parties shall carry out the following actions:</FONT></TD>
</TR>
</TABLE>
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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers and the Purchaser shall appear before a Notary Public in the city of
               Madrid to be designated jointly by the Sellers and the Purchaser in order to
               execute the transfer of the NUFER Quotas by the NUFER Sellers and the NFT
               Minority Shares by the Minority Sellers and the shares of the LNG Companies
               owned by Mr. Fern&aacute;ndez Tapias and by Mr. Borja Fern&aacute;ndez-Tapias
               Riva in the terms and conditions contained in this Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers shall deliver to the Purchaser the share certificates or provisional
               share certificates or title or deed of ownership, as the case may be,
               representing the Shares and making the appropriate entries in the Stock
               Registers of NUFER and NFT. Likewise, Mr. Fernandez Tapias shall deliver to the
               Purchaser, the share certificates or provisional share certificates or title or
               deed of ownership, as the case may be, representing the shares he owns in each
               of the LNG Companies and making the appropriate entries in the Stock Registers
               of each of the LNG Companies. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Purchaser shall pay to the Sellers the Purchase Price (after deducting the
               Payment on Account with respect to the NUFER Quotas owned by Mr. Fernandez
               Tapias) in the proportions set forth in Schedule 10.2 (iii), by means of a money
               transfer of immediately available funds, value same day, to the bank account
               that the Sellers shall have designated. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(iv) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Mr. Fern&aacute;ndez Tapias and the Sellers, as the case may be, shall issue a
               statement in writing as of the Closing Date certifying that the Non related
               Assets and Liabilities have been sold, transferred and excluded from NUFER and
               NFT as the case may be; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(v) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers shall issue a statement in writing dated as of Closing Date
               certifying the accuracy and correctness of the Representations and Warranties of
               the Sellers set out in Clauses 4.1 and 4.2 as they apply to the NFT Consolidated
               Statutory Accounts, the NFT Final Proforma Balance Sheet, the NUFER Statutory
               Accounts and the NUFER Final Proforma Balance Sheet; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(vi) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers shall deliver or shall make available to the Purchaser the following
               documentation concerning the Oil Tankers and the LNG Vessels: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Certificate of ownership. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               Certificate of encumbrances. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c) </FONT></TD>
               <TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               All documentation pertaining to the each of the Vessels, including but not
               limited to the previous Confirmation of Class regarding the Oil Tankers and the
               LNG Vessels, the plans as well as other technical documentation. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(vii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers shall deliver a draft duly completed of Corporate Income Tax return
               for fiscal year 2003 for NFT Group and for NUFER, which shall be accurate and
               complete and will not contain any incorrect entry or omission. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(viii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               The Sellers will cause the members of the Board of NUFER and the NFT Group to
               deliver their dismissal letters waiving any possible right to compensation , and
               the Purchaser will, and will cause NUFER and the NFT Group to, release the Board
               Members in writing of any liability relating to such offices. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>11.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               <B>OTHER OBLIGATIONS OF THE PURCHASER</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Promptly after Closing Date and in
any event within thirty business days as from the Closing Date, the Purchaser shall rename
the companies within the NFT Group, and it shall rename the Oil Tankers and the LNG
Vessels as soon as practical and in any event no later than the next dry dock, in order to
discontinue using the names &#147;Fern&aacute;ndez Tapias&#148;, &#147;F. Tapias&#148; or
&#147;Tapias&#148;. Mr. Fern&aacute;ndez Tapias may request from the Purchaser copies of
the relevant documentation supporting such renaming, which copies shall not be
unreasonably withheld by the Purchaser. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>12.</B> </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          <B>CONFIDENTIALITY</B> </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>12.1. </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          The Purchaser shall keep confidential all the information and documentation
          furnished to it by the Sellers or its advisors until the Closing Date. If the
          Sale and Purchase is not consummated or if this Agreement is terminated for any
          cause, the Purchaser shall destroy or return to the Sellers all the information
          received from the Sellers in the possession of any of the directors, employees
          or advisors of the Purchaser and the Purchaser may never use such information
          for commercial ends. Such destruction or returning of the information referred
          above shall be certified in writing by the Purchaser. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>12.2. </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          The Purchaser and the Sellers shall not disclose any details of this Agreement
          and of the negotiations leading to its signing until the Closing Date, except as
          to mandatory communications required by the applicable laws, provided however
          that any party making such communication shall provide to the other party a
          draft of the communication not less than 48 hours prior to its release and shall
          reasonable agree with the amendments thereto that such other party may
          reasonably request. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>12.3. </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          The Purchaser and the Sellers shall use their best efforts to cause their
          directors, employees and advisors to comply with the contents of this Clause. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 3-TNR" FSL="Project" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>13.</B> </FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          <B>ASSIGNMENT</B> </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 3-TNR" FSL="Project" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
          <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Purchaser may assign to any of
its wholly owned and controlled subsidiaries any of its rights and obligations contained
herein. Assignor and assignee shall be jointly and severally liable for the performance of
the obligations arising from this Agreement and will execute such undertaking in writing
simultaneously with the assignment. The Sellers will cooperate to the extent required to
complete any assignment as and when reasonably required by the Purchaser. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>14.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               <B>NEW BUSINESS</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>14.1. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               For so long as a Seller is involved in the Joint Company TT, that Seller shall
               refer to the Joint Company TT all their new business projects concerning the
               Spanish market or to operations of, or led by, Spanish clients or whose parent
               company is Spanish and related to the maritime transport of gas and, all period
               charters regardless of term relating to the transportation of oil and oil
               derived products. Should the approval of a Business Project be denied by the
               Joint Company TT, the Seller having proposed it shall be entitled to undertake
               such Business Project in the same terms as described in the Joint Venture
               Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>14.2. </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               In the event that a Seller voluntarily leaves the Joint Company TT, then for a
               period of three (3) years as from Closing Date, other than as contemplated by
               the Joint Venture Agreement referred to in Clause 7, such Seller shall not be
               involved nor undertake business in any way whatsoever, individually or
               collectively, whether directly or indirectly, in the maritime transport of gas
               and all period charters, regardless of length, in relation to the transportation
               of oil and oil derived products, in particular, but not limited to the
               following, the Sellers, directly or indirectly, </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               shall not have nor constitute any business or company, nor acquire any business
               or shareholding in companies, nor collaborate or maintain an employment
               relationship, provide services, or maintain a management or advisory
               relationship with the same, in the maritime transport of gas and all period
               charters, regardless of length, in relation to the transportation of oil and oil
               derived products; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               shall not undertake or promote offers of employment or provision of services,
               nor employ employees or persons connected with any of the NFT Group, without the
               prior written consent of the Purchaser </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>15.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               <B>SOLE AGREEMENT. WAIVER</B> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>15.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
This Agreement is the only valid document between the Parties and it replaces any other
document, report, letter and communication existing before it. The relations between the
Parties arising from this Sale and Purchase shall therefore be governed only according to
this Agreement, particularly as regards the system of liability of the Sellers, and
Purchaser&#146;s rights of indemnity. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Hang Lv 3-TNR" FSL="Project" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>15.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The failure of any party to insist upon strict performance of any of the terms or
provisions of this Agreement or to exercise any right or remedy herein contained shall not
be construed as a waiver or as a relinquishment for the future of such term, provision,
right or remedy, or of any other, but the same shall continue and remain in full force and
effect. No waiver by any party of any term or condition hereof shall be deemed to have
been made unless expressed in writing and signed or initialled by an authorized
representative of such party. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>16.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>PUBLIC INSTRUMENT. SCHEDULES</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>This Agreement shall be granted into
public deed on or before Closing Date. </FONT></TD>
</TR>
</TABLE>
<BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The Schedules to this Agreement shall
be countersigned by the Purchaser and by Mr. Azcona, in representation of the Sellers. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 4-TNR" FSL="Project" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>17.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>SEVERABILITY</B> </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>If any provision herein, or the
application thereof to any circumstance of this Agreement, is held to be unenforceable,
invalid or illegal by any court, arbitration tribunal, government agency or regulatory
body of competent jurisdiction, (i) such provision shall be deemed deleted from this
Agreement or not applicable to such circumstance, as the case may be, and the
enforceability, validity and legality of the other provisions of this Agreement shall not
be affected or impaired thereby; and (ii) the parties shall negotiate in good faith to
agree on replacement terms that shall be enforceable, valid, legal, and consistent with
the initial intent of the parties. </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>18.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>TAXES AND EXPENSES</B> </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Each party shall pay all the taxes,
expenses, brokerage commission and fees incurred by them in connection with this
transaction and this Agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The fees of the Notary Public
attesting the documents that will be executed at the Closing Date shall be borne by the
parties on a fifty-fifty basis. </FONT></TD>
</TR>
</TABLE>
<BR>

          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>19.</B> </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
<B>SELLERS' REPRESENTATIVE.</B></FONT></TD>
</TR>
</TABLE>
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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>19.1 </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
               For all purposes provided in this Agreement, the Sellers hereby
               appoint, on an irrevocable basis until the expiry of the time limits for making
               or receiving any claim under this Agreement, Mr. Fern&aacute;ndez Tapias as
               representation of each and every one of the Sellers (hereinafter, the
               &#147;Sellers&#146; Representative&#148;). Mr. Fern&aacute;ndez Tapias hereby
               accepts his appointment as Sellers&#146; Representative on the terms hereof and
               undertakes to perform the duties of representation on the terms of this
               Agreement, including, but not limited those of the Escrow Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>19.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Acts of the Sellers through the Sellers&#146; Representative: All notices, decisions, acts
and agreements with the Purchaser or with the Bank and the Sellers&#146; Representative
shall be binding on each and every one of the Sellers. The Sellers&#146; Representative
shall hold the widest powers of representation of all the Sellers in relation to the
performance of this Agreement. In particular, the Seller&#146;s Representative is
authorized to: </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(a)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          receive or send any notice from or to the Purchaser or from or to the Bank; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(b)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           bring or defend any claim or proceeding, in or out of court or by arbitration,
          vis-&agrave;-vis the Purchaser; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(c)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           receive and defend any claim or proceeding, in or out of court or by
          arbitration, brought by the Purchaser; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(d)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           name advisors, incur expenses, drop proceedings and reach settlements; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(e)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
           carry out any action on behalf and for the account of the Sellers. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The
appointment of the Sellers&#146; Representative by the Sellers shall not be construed to
any extent whatsoever to limit each of the Sellers personal financial liability under this
Agreement.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>19.3.</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
All of the above such that any notice, claim, proceeding or act of the Purchaser or of the
Bank sent to, brought against or made with the Sellers&#146; Representative shall bind all
and each of the Sellers; and any notice, claim, proceedings or act of the Sellers sent to,
brought against or made with the Purchaser or the Bank shall only be valid if sent,
brought or made by the Sellers&#146; Representative. </FONT></TD>
</TR>
</TABLE>
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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>19.4 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Similarly, in the event that the Sellers&#146; Representative is unable to continue acting
as such for whatever reason, including death, incapacity or some other, the Sellers
undertake to appoint as soon as possible another Sellers&#146; Representative and
immediately to notify the Purchaser of the name of that new Sellers&#146; Representative.
In the event that the Sellers do not name a new Sellers&#146; Representative the Purchaser
and the Bank shall send the notices provided in this Agreement to the other Sellers. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>19.5 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
For the purposes of this Agreement, communications and notices sent by the Sellers shall
have no effect or validity whatsoever unless sent through the Sellers&#146;
representative. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>20.</B></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>NOTICES</B></FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>20.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Any notice to be served
hereunder shall be served in writing to the following addresses:</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(i)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          If addressed to the Sellers&#146; Representative,<BR><BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention Mr. Fernando Fernandez Tapias<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Calle Lanzahita n&deg;8.<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Madrid. Espa&ntilde;a<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fax number: +34.91.373.34.35<BR>
</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>(ii)</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          If addressed to the Purchaser, <BR><BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>TEEKAY SHIPPING CORPORATION</B><BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2100 - 550 Burrard Street<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Vancouver, British Columbia,<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Canada, V6C 2K2<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention General Counsel<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fax number 1-604-609-6447<BR>
<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With copy to:<BR>
<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Ur&iacute;a &amp; Men&eacute;ndez</B> <BR><BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention Mr. Luis Figaredo<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jorge Juan, 6<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28001 Madrid<BR>
          &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fax number: +34 91 586 05 00<BR>
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>20.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
The Parties may only change the above addresses and fax numbers by serving written notice
addressed to the other party for its full knowledge. All notices and communications sent
to the above addresses shall be deemed validly sent to the addressee unless the latter has
notified the other party three [3] days prior to the notice in question of a change of
address or fax numbers. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>20.3 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Notices may be served by registered or certified mail or by facsimile, or delivered in
hand or by courier with evidence of receipt and shall be deemed to have been served on the
date of its receipt at the address of the party to which it is addressed. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>21.</B> </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>LANGUAGE</B></FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>This agreement is executed in English
language. Attached herewith as schedule 21 is the Spanish translation of the agreement.
The Spanish translation is a convenience translation only and shall not be utilized to
construe the meaning of the agreement.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>22.</B></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>APPLICABLE LAW.
JURISDICTION</B></FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>22.1 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
          This Agreement shall be governed by and construed under the laws of Spain.</FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>22.2 </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
Any dispute arising out of or in connection with this Agreement, including any question
regarding its existence, validity or termination, shall be referred to the exclusive
jurisdiction of the High Court of England and Wales in London. All proceeding shall be
conducted in the English language. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>And in witness whereof, the Parties
have signed this document in two counterparts in the place and on the date first written
above. </FONT></TD>
</TR>
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<TD WIDTH=20%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&nbsp;</FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________
<BR>
Mr. Fernando Fern&aacute;ndez Tapias </FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________<BR>
Ms. Nuria Gonz&aacute;lez S&aacute;nchez </FONT></TD>
</TR>
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<BR>
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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________
<BR>
Doble A Promociones S.A</FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________<BR>
Mr. Carlos Soto Otero</FONT></TD>
</TR>
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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________
<BR>
Mr. Melanio Enr&iacute;quez Moure</FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________<BR>
Ms. Claudia Jorge Fern&aacute;ndez</FONT></TD>
</TR>
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<BR>
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<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________
<BR>
Mr. Borja Fern&aacute;ndez-Tapias Riva</FONT></TD>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>
____________________________________<BR>
TEEKAY SHIPPING CORPORATION</FONT></TD>
</TR>
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