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<SEC-DOCUMENT>0000911971-05-000012.txt : 20050408
<SEC-HEADER>0000911971-05-000012.hdr.sgml : 20050408
<ACCEPTANCE-DATETIME>20050407191806
ACCESSION NUMBER:		0000911971-05-000012
CONFORMED SUBMISSION TYPE:	20-F
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20041231
FILED AS OF DATE:		20050408
DATE AS OF CHANGE:		20050407

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:		20-F
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12874
		FILM NUMBER:		05740212

	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>20-F
<SEQUENCE>1
<FILENAME>form20f_123104.htm
<DESCRIPTION>FORM 20F FOR THE PERIOD ENDED DEC 31, 2004
<TEXT>
<HTML>
<HEAD>
<TITLE>TEEKAY SHIPPING CORPORATION</TITLE>
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<BODY><H1 align=center><FONT face="Times New Roman, Times, Serif" size=3>UNITED STATES SECURITIES AND EXCHANGE COMMISSION<BR></FONT><FONT face="Times New Roman, Times, Serif" size=2><B>Washington, D.C. 20549</B> </FONT></H1>
<BR>
<H1 align=center><FONT face="Times New Roman, Times, Serif" size=3>FORM 20-F</FONT></H1>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD width="10%">&nbsp;</TD>
<TD vAlign=top align=left width="10%"><FONT face="Times New Roman, Times, Serif" size=2>(Mark One)</font></TD>
<TD align=left width="70%">&nbsp;</TD>
<TD width="10%">&nbsp;</TD></TR>
</TABLE>


<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD width="10%">&nbsp;</TD>
<TD vAlign=top align=left width="10%">[&nbsp;&nbsp;&nbsp;]</TD>
<TD vAlign=top align=left width="70%"><FONT face="Times New Roman, Times, Serif" size=2><B>REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934</B></FONT></TD>
<TD width="10%">&nbsp;</TD></TR>
</TABLE>


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<P align=center><FONT face="Times New Roman, Times, Serif" size=2>OR </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD width="10%">&nbsp;</TD>
<TD vAlign=top align=left width="10%">[&nbsp;X&nbsp;]</TD>
<TD vAlign=top align=left width="70%"><FONT face="Times New Roman, Times, Serif" size=2><B>ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></font></TD>
<TD width="10%">&nbsp;</TD></TR>
</TABLE>


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<P align=center><FONT face="Times New Roman, Times, Serif" size=2>For the fiscal year ended December 31, 2004 </FONT>
</P>

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<P align=center><FONT face="Times New Roman, Times, Serif" size=2>OR </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD width="10%">&nbsp;</TD>
<TD vAlign=top align=left width="10%">[&nbsp;&nbsp;&nbsp;]</TD>
<TD vAlign=top align=left width="70%"><FONT face="Times New Roman, Times, Serif" size=2><B>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</B></font></TD>
<TD width="10%">&nbsp;</TD></TR>
</TABLE>


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<P align=center><FONT face="Times New Roman, Times, Serif" size=2>Commission file number 1- 12874 </FONT></P>
<BR>
<P align=center><FONT size=4><B>TEEKAY SHIPPING CORPORATION</B></FONT><BR>
<FONT face="Times New Roman, Times, Serif" size=2>(Exact name of Registrant as specified in its charter)</FONT></P>
<BR>
<P align=center><FONT face="Times New Roman, Times, Serif" size=2>Republic of The Marshall Islands<BR>(Jurisdiction of
 incorporation or organization) </FONT></P>

<P align=center><FONT face="Times New Roman, Times, Serif" size=2>TK House, Bayside Executive Park, West Bay Street &amp;
 Blake Road, P.O. Box AP-59212, Nassau,<BR>Commonwealth of the Bahamas <BR>(Address of principal executive
 offices) </FONT></P>

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<P><FONT face="Times New Roman, Times, Serif" size=2>Securities registered or to be registered pursuant
 to Section 12(b) of the Act. </FONT></P>

<TABLE width="100%">
<TR vAlign=top>
<TD vAlign=top align=center width="50%"><FONT face="Times New Roman, Times, Serif" size=2><B>Title of each class</B><BR>Common Stock, par value of $0.001 per share<BR>8.32% First Preferred Ship Mortgage Notes due 2006<BR>7.25% PEPS Unit<BR><BR></FONT></TD>
<TD vAlign=top align=center width="50%"><FONT face="Times New Roman, Times, Serif" size=2><B>Name of each exchange on which registered</B><BR>New York Stock Exchange<BR>New York Stock Exchange<BR>New York Stock Exchange<BR><BR></FONT></TD></TR>
</TABLE>



<P><FONT face="Times New Roman, Times, Serif" size=2>Securities registered or to be registered pursuant
 to Section 12(g) of the Act. </FONT></P>

<P align=center><FONT face="Times New Roman, Times, Serif" size=2>None</FONt></P>


<P><FONT face="Times New Roman, Times, Serif" size=2>Securities for which there is a reporting obligation
 pursuant to Section 15(d) of the Act. </FONT></P>

<P align=center><FONT face="Times New Roman, Times, Serif" size=2>None</FONT></P>


<P><FONT face="Times New Roman, Times, Serif" size=2>Indicate the number of outstanding shares of each of
 the issuer&#146;s classes of capital or common stock as of the close of the period covered by the annual
 report. </FONT></P>

<P align=center><FONT face="Times New Roman, Times, Serif" size=2>82,951,275 shares of Common Stock, par value of $0.001 per share.
</FONT></P>


<P><FONT face="Times New Roman, Times, Serif" size=2>Indicate by check mark whether the registrant (1) has
 filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
 during the preceding 12 months (or for such shorter period that the registrant was required to file
 such reports), and (2) has been subject to such filing requirements for the past 90 days. </FONT><BR>

<CENTER><FONT face="Times New Roman, Times, Serif" size=2>Yes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[X] &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No [&nbsp; ]</FONT></CENTER>

<P><FONT face="Times New Roman, Times, Serif" size=2>Indicate by check mark which financial statement item
 the registrant has elected to follow: </FONT></P>

<CENTER><FONT face="Times New Roman, Times, Serif" size=2>Item 17&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[ &nbsp;] &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Item 18&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[X]</FONT></CENTER><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR><BR>
<P align=center><FONT face="Times New Roman, Times, Serif" size=2><B>TEEKAY SHIPPING CORPORATION <BR>INDEX TO REPORT
 ON FORM 20-F</B></FONT></P>

<PRE>
                                                                                                    <B><U>Page</U></B>
 <B>PART I. </B>

  Item 1.           Identity of Directors, Senior Management and Advisors.....................  Not applicable
  Item 2.           Offer Statistics and Expected Timetable...................................  Not applicable
  Item 3.           Key Information.................................................................   3
  Item 4.           Information on the Company......................................................   9
  Item 5.           Operating and Financial Review and Prospects....................................  19
  Item 6.           Directors, Senior Management and Employees......................................  29
  Item 7.           Major Shareholders and Related Party Transactions...............................  33
  Item 8.           Financial Information...........................................................  34
  Item 9.           The Offer and Listing...........................................................  34
  Item 10.          Additional Information..........................................................  35
  Item 11.          Quantitative and Qualitative Disclosures About Market Risk......................  37
  Item 12.          Description of Securities Other than Equity Securities....................  Not applicable

 <B>PART II.</B>

  Item 13.          Defaults, Dividend Arrearages and Delinquencies.................................  39
  Item 14.          Material Modifications to the Rights of Security Holders and Use of Proceeds....  39
  Item 15.          Controls and Procedures.........................................................  39
  Item 16A.         Audit Committee Financial Expert................................................  39
  Item 16B.         Code of Ethics..................................................................  39
  Item 16C.         Principal Accountant Fees and Services..........................................  39
  Item 16D.         Exemptions from the Listing Standards for Audit Committees......................  40
  Item 16E.         Purchases of Equity Securities by the Issuer and Affiliated Purchasers..........  40


 <B>PART III.</B>

  Item 17.          Financial Statements......................................................  Not applicable
  Item 18.          Financial Statements............................................................  40
  Item 19.          Exhibits........................................................................  40
  Signature         ................................................................................  44
</PRE>

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

<P align=center><FONT face="Times New Roman, Times, Serif" size=2><B>PART I </B></FONT></P>

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<P><FONT face="Times New Roman, Times, Serif" size=2><I>This Annual Report should be read
in conjunction with the consolidated financial statements and accompanying notes included
in this report.</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>In addition to historical
information, this Annual Report contains forward-looking statements that involve risks and
uncertainties. Such forward-looking statements relate to future events and our operations,
objectives, expectations, performance, financial condition and intentions. When used in
this Annual Report, the words &#147;expect,&#148; &#147;intend,&#148; &#147;plan,&#148;
&#147;believe,&#148; &#147;anticipate,&#148; &#147;estimate&#148; and variations of such
words and similar expressions are intended to identify forward-looking statements.
Forward-looking statements in this Annual Report include, 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 time charter contacts; the impact of the Teekay
Spain acquisition to our earnings, future cash flow from vessel operations and strategic
position; the growth prospects of the LNG shipping sector, including increased
competition, and the joint venture company with the former controlling shareholder of
Teekay Spain; the initial public offering of Teekay LNG Partners L.P.; the expected impact
of IMO regulations and regulations of the European Union Parliament; the expected lifespan
of a new LNG carrier; the expected impact of the heightened environmental and quality
concerns of insurance underwriters, regulators and charterers; the growth of the global
economy and global oil demand; and the proceeds and gains in the first and second quarters
of 2006 relating to the sale of certain of our vessels. 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 believe,
anticipate, expect, estimate, project, will be, will continue, will likely result, 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 Teekay Spain or any other future acquisitions; the potential for early
termination of long-term contracts and inability of the Company to renew or replace
long-term contracts; shipyard production delays; conditions in the public equity markets;
the ultimate number of common units and price per unit, if any, issued by Teekay LNG
Partners L.P. in its proposed public offering; and other factors detailed from time to
time in our periodic reports.</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Forward-looking statements in this
Annual Report are necessarily estimates reflecting the judgment of senior management and
involve known and unknown risks and uncertainties. These forward-looking statements 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. Accordingly, these forward-looking statements should, be considered in light
of various important factors, including those set forth in this Annual Report under the
heading &#147;Factors That May Affect Future Results.&#148;</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>We do not intend to revise any
forward-looking statements in order to reflect any change in our expectations or events or
circumstances that may subsequently arise. You should carefully review and consider the
various disclosures included in this Annual Report and in our other filings made with the
SEC that attempt to advise interested parties of the risks and factors that may affect our
business, prospects and results of operations.</I> </FONT></P>

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

<P><FONT size=2><B>Item 1.&nbsp;&nbsp; Identity of Directors, Senior Management and Advisors </B></FONT><BR><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</FONT></P>

<P><B><FONT size=2>Item 2.&nbsp;&nbsp;Offer Statistics and Expected Timetable </FONT></B><BR><FONT size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.</FONT></P>

<P align=left><FONT face="Times New Roman, Times, Serif" size=2><B>Item 3.&nbsp;&nbsp; Key Information </B></FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Selected Financial Data </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Set forth below are selected
consolidated financial and other data of Teekay Shipping Corporation together with its
subsidiaries (sometimes referred to as &#147;Teekay,&#148; the &#147;Company,&#148;
&#147;we&#148; or &#147;us&#148;), for the years ended December 31, 2004, 2003, 2002, 2001
and 2000, which have been derived from our consolidated financial statements. The data
below should be read in conjunction with the consolidated financial statements and the
notes thereto and the Report of Independent Registered Public Accounting Firm therein,
with respect to the consolidated financial statements for the years ended December 31,
2004, 2003, and 2002, and &#147;Item 5. Operating and Financial Review and
Prospects,&#148; included herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our consolidated financial statements
are prepared in accordance with accounting principles generally accepted in the United
States. </FONT></P>

<PRE>
<B>                                     <U>Year Ended</U>     <U>Year Ended</U>      <U>Year Ended</U>     <U>Year Ended</U>      <U>Year Ended</U>
                                    <U>December 31,</U>   <U>December 31,</U>    <U>December 31,</U>   <U>December 31,</U>    <U>December 31,</U>
                                        <U>2004</U>           <U>2003</U>            <U>2002</U>           <U>2001</U>            <U>2000</U>
                                            <U>(in thousands, except share, per share data and ratios)</U></B>
<B>Income Statement Data:</B>
Voyage revenues....................  $2,219,238     $1,576,095       $783,327      $1,039,056       $893,226
Total operating expenses (1).......  (1,398,052)    (1,283,131)      (663,981)       (655,593)      (565,551)
Income from vessel operations......     821,186        292,964        119,346         383,463        327,675
Interest expense...................    (121,518)       (80,999)       (57,974)        (66,249)       (74,540)
Interest income....................      18,528          3,921          3,494           9,196         13,021
Equity income from joint ventures..      13,730          6,970          4,523          17,324          9,546
Gain (loss) on sale of marketable
securities.........................      93,175            517         (1,130)            758              -
Other - net........................     (67,661)       (46,009)       (14,868)         (7,974)        (5,682)
Net income.........................     757,440        177,364         53,391         336,518        270,020

<B>Per Share Data:</B>
Net income - basic (2).............       $9.14          $2.22          $0.67           $4.24          $3.51
Net income - diluted (2)...........        8.63           2.18           0.66            4.16           3.43
Cash dividends declared (2)........        0.51           0.45           0.43            0.43           0.43

<B>Balance Sheet Data (at end of year):</B>
Cash and marketable securities.....   $ 427,037      $ 387,795      $ 298,255       $ 196,004      $ 223,123
Restricted cash....................     448,812          2,672          8,785           7,833              -
Vessels and equipment..............   3,531,287      2,574,860      2,066,657       2,043,098      1,607,716
Total assets.......................   5,503,740      3,588,044      2,723,506       2,467,781      1,974,099
Total debt (including capital lease
obligations).......................   2,744,545      1,636,758      1,130,822         935,702        797,484
Capital stock......................     534,938        492,653        470,988         467,341        452,808
Total stockholders' equity.........   2,237,358      1,651,827      1,421,898       1,398,200      1,098,512
Number of outstanding shares of
common stock (2)...................  82,951,275     81,222,350     79,384,120      79,100,652     78,290,438

<B>Other Financial Data:</B>
Net voyage revenues (3)............  $1,786,843     $1,181,439      $ 543,872       $ 789,494      $ 644,269
Net operating cash flow............     814,704        455,575        179,531         500,086        321,314
Total debt to total
capitalization (4) (5).............       54.9%          49.5%          43.9%           39.8%          42.1%
Net debt to total net
capitalization (5) (6).............       45.3%          44.5%          36.4%           34.3%          34.3%
Capital expenditures:
  Vessel and equipment
     purchases, gross (7)..........     548,587        372,433        135,650         184,983         43,512
</PRE>

<HR WIDTH="15%" SIZE="1" ALIGN="Left">

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Total operating expenses includes vessel write-downs and (gain) loss on sale of
          vessels, and restructuring charges as follows: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<PRE>
<B>                                     <U>Year Ended</U>      <U>Year Ended</U>       <U>Year Ended</U>     <U>Year Ended</U>     <U>Year Ended</U>
                                    <U>December 31,</U>    <U>December 31,</U>     <U>December 31,</U>   <U>December 31,</U>   <U>December 31,</U>
                                        <U>2004</U>            <U>2003</U>            <U>2002</U>           <U>2001</U>           <U>2000</U>
                                                                    (in thousands)</B>
       Vessel write-downs and
       (gain) loss on sale of
       vessels.....................   $(79,254)        $90,389             $-             $-          $1,004
       Restructuring charges.......      1,002           6,383              -              -               -
                                   --------------- ---------------- --------------- -------------- --------------
                                       (78,252)         96,772              -              -           1,004
                                   =============== ================ =============== ============== ==============
</PRE>


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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          On May 17, 2004, we effected a two-for-one stock split relating to our common
          stock. All per share data and number of outstanding shares of common stock give
          effect to this stock split retroactively. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Consistent with general practice in the shipping industry, we use net voyage
          revenues (defined as voyage revenues less voyage expenses) as a measure of
          equating revenues generated from voyage charters to revenues generated from time
          charters, which assists us in making operating decisions about the deployment of
          our vessels and their performance. Under time charters the charterer pays the
          voyage expenses, whereas under voyage charter contracts the ship owner pays the
          voyage expenses. Some voyage expenses are fixed, and the remainder can be
          estimated. If we, as the ship owner, pay the voyage expenses, we typically pass
          the approximate amount of these expenses on to our customers by charging higher
          rates under the contract or billing the expenses to them. As a result, although
          voyage revenues from different types of contracts may vary, the net revenues
          after subtracting voyage expenses, which we call net voyage revenues, are
          comparable across the different types of contracts. We principally use net
          voyage revenues, a non-GAAP financial measure, because it provides more
          meaningful information to us than voyage revenues, the most directly comparable
          GAAP financial measure. Net voyage revenues are also widely used by investors
          and analysts in the shipping industry for comparing financial performance
          between companies and to industry averages. The following table reconciles net
          voyage revenues with voyage revenues. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<PRE>
<B>                                    <U>Year Ended</U>      <U>Year Ended</U>      <U>Year Ended</U>      <U>Year Ended</U>       <U>Year Ended</U>
                                   <U>December 31,</U>    <U>December 31,</U>    <U>December 31,</U>    <U>December 31,</U>     <U>December 31,</U>
                                       <U>2004</U>             <U>2003</U>           <U>2002</U>            <U>2001</U>             <U>2000</U>
                                                                 (in thousands)</B>

       Voyage revenues.........     $2,219,238      $1,576,095       $783,327       $1,039,056        $893,226
       Voyage expenses.........       (432,395)       (394,656)      (239,455)        (249,562)       (248,957)
                                  ---------------- --------------- --------------- --------------- --------------
       Net voyage revenues.....      1,786,843       1,181,439        543,872          789,494         644,269
                                  ================ =============== =============== =============== ==============
</PRE>


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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Total capitalization represents total debt, minority interest and total
          stockholders&#146; equity. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          As at December 31, 2004, we had $143.7 million of Premium Equity Participating
          Security Units due May 18, 2006 (or <I>Equity Units)</I> outstanding. If these
          Equity Units, which were issued on February 16, 2003, were presented as equity,
          our total debt to total capitalization would have been 52.1% as of December 31,
          2004 (December 31, 2003 &#151; 45.2%) and our net debt to total capitalization
          would have been 41.9% as of December 31, 2004 (December 31, 2003 &#150; 39.8%).
          We believe that this presentation as equity for the purposes of these
          calculations is consistent with the requirement of each Equity Unit holder to
          purchase for $25 a specified fraction of a share of our common stock on February
          16, 2006. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Net debt represents total debt less cash, cash equivalents, restricted cash and
          short-term marketable securities. Total net capitalization represents net debt,
          minority interest and total stockholders&#146; equity. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Excludes vessels purchased in connection with our acquisitions of Ugland Nordic
          Shipping AS in 2001, Navion AS in 2003 and Teekay Shipping Spain S.L. (<I>or
          Teekay Spain)</I> in 2004. Please see Item 5 &#150; Operating and Financial
          Review and Prospects. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A048></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Factors That May Affect
Future Results </FONT></H1>

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<A NAME=A049></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>The cyclical nature of
the tanker industry causes volatility in our profitability. </I></FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Historically, the tanker industry has
been cyclical, experiencing volatility in profitability due to changes in the supply of,
and demand for, tanker capacity. Increases or decreases in the supply of tankers could
have a material adverse effect on our business, financial condition and results of
operations. The supply of tanker capacity is influenced by the number and size of new
vessels built, older vessels scrapped, converted and lost, the number of vessels that are
out of service and regulations that may effectively cause early obsolescence of tonnage.
The demand for tanker capacity is influenced by, among other factors: global and regional
economic conditions; increases and decreases in production of and demand for crude oil and
petroleum products; increases and decreases in OPEC oil production quotas; the distance
crude oil and petroleum products need to be transported by sea; and developments in
international trade and changes in seaborne and other transportation patterns. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Because many of the factors
influencing the supply of and demand for tanker capacity are unpredictable, the nature,
timing and degree of changes in tanker industry conditions are also unpredictable. </FONT></P>

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<A NAME=A050></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>We depend upon oil
markets, changes in which could result in decreased demand for our vessels and services.</I> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Demand for our vessels and services
in transporting crude oil and petroleum products depends upon world and regional oil
markets. Any decrease in shipments of crude oil in those markets could have a material
adverse effect on our business, financial condition and results of operations.<B>
</B>Historically, those markets have been volatile as a result of the many conditions and
events that affect the price, production and transport of oil, as well as competition from
alternative energy sources. A slowdown of the United States and world economies may result
in reduced consumption of crude oil and petroleum products and a decreased demand for our
vessels and services. </FONT></P>

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<A NAME=A051></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Terrorist attacks,
increased hostilities or war could lead to further economic instability, increased costs
and disruption of our business.</I> </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Terrorist attacks, such as the
attacks that occurred in the United States on September 11, 2001, the bombings in Spain on
March 11, 2004, the current conflict in Iraq and current and future conflicts, may
adversely affect our business, operating results, financial condition, ability to raise
capital or future growth. Continuing hostilities in the Middle East may lead to additional
armed conflicts or to further acts of terrorism and civil disturbance in the United
States, Spain or elsewhere, which may contribute further to economic instability and
disruption of oil and liquefied natural gas (or <I>LNG</I>) production and distribution,
which could result in reduced demand for our services. In addition, oil and LNG
facilities, shipyards, vessels, pipelines and oil and gas fields could be targets of
future terrorist attacks. Any such attacks could lead to, among other things, bodily
injury or loss of life, vessel or other property damage, increased vessel operational
costs, including insurance costs, and the inability to transport oil and LNG to or from
certain locations. Terrorist attacks, war or other events beyond our control that
adversely affect the distribution, production or transportation of oil or LNG to be
shipped by us could entitle our customers to terminate our charter contracts, which could
harm our cash flow and our business. </FONT></P>

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<A NAME=A052></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Our substantial
operations outside the United States expose us to political, governmental and economic instability,
which could harm our operations.</I></FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Because our operations are primarily
conducted outside of the United States, they may be affected by economic, political and
governmental conditions in the countries where we are engaged in business or where our
vessels are registered. Any disruption caused by these factors could harm our business. In
particular, we derive a substantial portion of our revenues from shipping oil and LNG from
politically unstable regions. Past political conflicts in these regions, particularly in
the Arabian Gulf, have included attacks on ships, mining of waterways and other efforts to
disrupt shipping in the area. In addition to acts of terrorism, vessels trading in this
and other regions have also been subject, in limited circumstances, to piracy. Future
hostilities or other political instability in the Arabian Gulf or other regions where we
operate or may operate could have a material adverse effect on the growth of our business,
results of operations and financial condition. In addition, tariffs, trade embargoes and
other economic sanctions by Spain, the United States or other countries against countries
in the Middle East, Southeast Asia or elsewhere as a result of terrorist attacks,
hostilities or otherwise may limit trading activities with those countries, which could
also harm our business. </FONT></P>

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<A NAME=A053></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Our dependence on spot
voyages may result in significant fluctuations in the utilization of our vessels and our profitability.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004 and 2003, we derived
approximately 62% and 63%, respectively, of our net voyage revenues from the vessels in
our spot tanker segment. 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 tanker fleet, and large product and
small product tanker fleets, and approximately half of our Suezmax tanker fleet are among
the vessels included in our spot tanker segment. Due to our dependence on the spot charter
market, declining charter rates in a given period generally will result in corresponding
declines in operating results for that period. The spot charter market is highly
competitive and spot charter rates are subject to significant fluctuations based on tanker
and oil supply and demand. Charter rates have varied significantly in the last few years.
Future spot charters may not be available at rates that will be sufficient to enable our
vessels to be operated profitably or to provide sufficient cash flow to service our debt
obligations. </FONT></P>

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<A NAME=A055></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Reduction in oil produced
from offshore oil fields could harm our shuttle tanker business. </I></FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Demand for our shuttle tankers in
transporting crude oil and petroleum products depends upon the amount of oil produced from
offshore oil fields, especially in the North Sea, where our shuttle tankers primarily
operate. As oil prices increase, the prospect of offshore oil exploration and development
of offshore oil fields, which cost more to develop than land oil fields, becomes more
attractive to oil companies. However, when oil prices decline, it becomes less attractive
for oil companies to explore for oil offshore and develop offshore oil fields. If the
amount of oil produced from offshore oil fields declines, especially in the North Sea, our
shuttle tanker business could be harmed. In addition, if for environmental or other
reasons, there is a change in policy towards using pipelines rather than oceangoing
vessels in transporting crude oil and petroleum products from offshore oil fields, our
shuttle tanker business could be adversely affected, which could have a material adverse
effect on our business, financial condition and results of operations. As at December 31,
2004, we had 41 vessels (including 12 chartered-in vessels and one tanker held for sale)
in our shuttle tanker fleet. Most of our shuttle tanker revenues are derived from
long-term contracts of affreightment. Revenue under most of these contracts depends upon
the amount of oil we transport, the production of which is beyond our control and which
can vary depending upon the nature of a given oil field and the field operator&#146;s
production decisions. </FONT></P>

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<A NAME=A056></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Our growth partially
depends on continued growth in demand for LNG and LNG shipping. </I></FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A portion of our growth strategy
focuses on expansion in the LNG shipping sector and, thus, depends on continued growth in
world and regional demand for LNG and LNG shipping and supply of LNG. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Demand for LNG and LNG shipping could
be negatively affected by a number of factors, such as increases in the costs of natural
gas derived from LNG relative to the cost of natural gas generally, increases in the
production of natural gas in areas linked by pipelines to consuming areas, increases in
the price of LNG relative to other energy sources, the availability of new energy sources,
and negative global or regional economic or political conditions. Reduced demand for LNG
and LNG shipping would have a material adverse effect on future growth of our LNG segment,
and could harm that segment&#146;s results. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Growth of the LNG market may be
limited by infrastructure constraints and community and environmental group resistance to
new LNG infrastructure over concerns about the environment, safety and terrorism. If the
LNG supply chain is disrupted or does not continue to grow, or if a significant LNG
explosion, spill or similar incident occurs, it could have a material adverse effect on
our business, results of operations and financial condition. </FONT></P>

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<h1><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>The intense competition in our
markets may lead to reduced profitability or expansion opportunities.</I></B></FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our crude oil and product tankers
operate in highly competitive markets. Competition arises primarily from other
conventional Aframax and shuttle tanker owners, including major oil companies and
independent companies. We also compete with owners of other size tankers. Our market share
is insufficient to enforce any degree of pricing discipline in the markets in which we
operate and our competitive position may erode in the future. Any new markets that we
enter could include participants that have greater financial strength and capital
resources than we have. We may not be successful in entering new markets. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>One of our objectives is to enter
into additional long-term, fixed-rate LNG time charters. The process of obtaining new
long-term time charters is highly competitive and generally involves an intensive
screening process and competitive bids, and often extends for several months. We expect
substantial competition for providing marine transportation services for potential LNG
projects from a number of experienced companies, including state-sponsored entities and
major energy companies affiliated with the LNG project requiring LNG shipping services.
Many of these competitors have greater experience in the LNG market and significantly
greater financial resources than do we. We anticipate that an increasing number of marine
transportation companies, including many with strong reputations and extensive resources
and experience will enter the LNG transportation sector. This increased competition may
cause greater price competition for time charters. As a result of these factors, we may be
unable to expand our relationships with existing customers or to obtain new customers on a
profitable basis, if at all, which would have a material adverse effect on our business,
results of operations and financial condition. </FONT></P>

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<A NAME=A057></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>The loss of any key
customer could result in a significant loss of revenue in a given period.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have derived, and believe that we
will continue to derive, a significant portion of our voyage revenues from a limited
number of customers. One customer accounted for 17% ($373.7 million) of our consolidated
voyage revenues during 2004. The same customer accounted for 15% ($239.5 million) of our
consolidated voyage revenues during 2003. No customer accounted for more than 10% of our
consolidated voyage revenue during 2002. The loss of any significant customer or a
substantial decline in the amount of services requested by a significant customer could
have a material adverse effect on our business, financial condition and results of
operations. </FONT></P>

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<A NAME=A058></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>The tanker industry is
subject to substantial environmental and other regulations, which may significantly increase
our expenses.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our operations are affected by
extensive and changing environmental protection laws and other regulations and
international conventions. We have incurred, and expect to continue to incur, substantial
expenses in complying with these laws and regulations, including expenses for ship
modifications and changes in operating procedures. Additional laws and regulations may be
adopted that could limit our ability to do business or further increase our costs, which
could harm our business. This could have a material adverse effect on our business,
financial condition and results of operations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The United States Oil Pollution Act
of 1990 (or <I>OPA 90</I>) in particular has increased our expenses. OPA 90 provides for
the phase-in of the exclusive use of double-hull tankers at United States ports, as well
as potentially unlimited liability for owners, operators and demise or bareboat charterers
for oil pollution in U.S. waters. To comply with the OPA 90, tanker owners generally incur
increased costs in meeting additional maintenance and inspection requirements, in
developing contingency arrangements for potential spills and in obtaining required
insurance coverage. OPA 90 contains financial responsibility requirements for vessels
operating in U.S. waters and requires owners and operators of vessels to establish and
maintain with the United States Coast Guard evidence of insurance or of qualification as a
self-insurer or other evidence of financial responsibility sufficient to meet their
potential liabilities under the OPA 90. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Following the example of the OPA 90,
the International Maritime Organization (or <I>IMO</I>), the United Nations&#146; agency
for maritime safety, has adopted regulations for tanker design and inspection that are
designed to reduce oil pollution in international waters. Most recently, on December 9,
2003 the IMO announced regulations accelerating the phase out of single hull tankers. The
regulations also impose a more rigorous inspection regime for older tankers and ban the
carriage of heavy oils on single-hull tankers. As a result of changes to these
regulations, we recorded a non-cash write-down of the book value of certain vessels
totalling $56.9 million during the fourth quarter of 2003. The IMO&#146;s accelerated
phase out schedule will affect two of our existing vessels, effectively reducing the
economic life of each of these vessels. Please see Item 4. Information on the Company:
Regulations.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our shuttle tankers primarily operate
in the North Sea. In addition to the regulations imposed by the IMO, countries having
jurisdiction over North Sea areas impose regulatory requirements in connection with
operations in those areas. These regulatory requirements, together with additional
requirements imposed by operators of North Sea oil fields, require that we make further
expenditures for sophisticated equipment, reporting and redundancy systems on our shuttle
tankers and for the training of seagoing staff. Additional regulations and requirements
may be adopted or imposed that could limit our ability to do business or further increase
the cost of doing business in the North Sea. </FONT></P>

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<A NAME=A059></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>We may not be able to
successfully integrate future acquisitions. </I></FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A principal component of our strategy
is to continue to grow by expanding our business both in the geographic areas and markets
where we have historically focused as well as into new geographic areas, market segments
and services. We may not be successful in expanding our operations and any expansion may
not be profitable. Our strategy of growth through acquisitions, including our acquisition
in April 2004 of Teekay Spain<I>,</I> involves business risks commonly encountered in
acquisitions of companies, including: disruption of our ongoing business; difficulties in
integrating the operations, personnel and business culture of acquired companies;
difficulties of coordinating and managing geographically separate organizations; adverse
effects on relationships with our existing suppliers and customers, and those of the
companies acquired; difficulties entering geographic markets or new market segments in
which we have no or limited experience; and loss of key officers and employees of acquired
companies. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our failure to effectively integrate
businesses we may acquire in the future may harm our business and results of operations.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The process of integrating operations
could also cause an interruption of, or loss of momentum in, the activities of one or more
of an acquired company&#146;s businesses and our businesses. Members of our senior
management may be required to devote considerable amounts of time to this integration
process, which will decrease the time they will have to manage our business, service
existing customers and attract new customers. If our senior management is not able to
effectively manage the integration process, or if any significant business activities are
interrupted as a result of the integration process, our business could suffer. </FONT></P>

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<A NAME=A060></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>We may not realize
expected benefits from acquisitions, and implementing our strategy of growth through acquisitions
may harm our financial condition and performance. </I></FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Present and future acquisitions may
not be profitable to us at the time of their completion and may not generate revenues
sufficient to justify our investment. In addition, our acquisition growth strategy exposes
us to risks that may harm our results of operations and financial condition, including
risks that we may: fail to realize anticipated benefits, such as cost-savings, revenue and
cash flow enhancements and earnings accretion; decrease our liquidity by using a
significant portion of our available cash or borrowing capacity to finance acquisitions;
incur additional indebtedness, which may result in significantly increased interest
expense or financial leverage, or issue additional equity securities to finance
acquisitions, which may result in significant shareholder dilution; incur or assume
unanticipated liabilities, losses or costs associated with the business acquired; or incur
other significant charges, such as impairment of goodwill or other intangible assets,
asset devaluation or restructuring charges. </FONT></P>

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<A NAME=A061></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>The strain that growth
places upon our systems and management resources may harm our business.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our growth has placed and will
continue to place significant demands on our management, operational and financial
resources. As we expand our operations, we must effectively manage and monitor operations,
control costs and maintain effective quality and control in geographically dispersed
markets. Our future growth and financial performance will also depend on our ability to:
recruit, train, manage and motivate our employees to support our expanded operations; and
continue to improve our customer support, financial controls and information systems. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>These efforts may not be successful
and may not occur in a timely or efficient manner. Failure to effectively manage our
growth and the system and procedural transitions required by expansion in a cost-effective
manner could have a material adverse affect on our business. </FONT></P>

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<A NAME=A062></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Our insurance may not be
sufficient to cover losses that may occur to our property or as a result of our operations.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The operation of oil tankers and LNG
carriers is inherently risky. Although we carry protection and indemnity insurance, all
risks may not be adequately insured against, and any particular claim may not be paid. In
addition, we do not carry insurance on our oil tankers covering the loss of revenues
resulting from vessel off-hire time due to its cost compared to our off-hire experience.
In the future, we may not continue to maintain off-hire insurance for our LNG carriers.
Any claims covered by insurance would be subject to deductibles, and since it is possible
that a large number of claims may be brought, the aggregate amount of these deductibles
could be material. Certain of our insurance coverage is maintained through mutual
protection and indemnity associations, and as a member of such associations we may be
required to make additional payments over and above budgeted premiums if member claims
exceed association reserves. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We may be unable to procure adequate
insurance coverage at commercially reasonable rates in the future. For example, more
stringent environmental regulations have led in the past to increased costs for, and in
the future may result in the lack of availability of, insurance against risks of
environmental damage of pollution. A catastrophic oil spill or marine disaster could
exceed our insurance coverage, which could harm our business, financial condition and
operating results. Any uninsured or underinsured loss could harm our business and
financial condition. In addition, our insurance may be voidable by the insurers as a
result of certain of our actions, such as our ships failing to maintain certification with
applicable maritime self-regulatory organizations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Changes in the insurance markets
attributable to terrorist attacks may also make certain types of insurance more difficult
for us to obtain. In addition, the insurance that may be available to us may be
significantly more expensive than our existing coverage. </FONT></P>

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<A NAME=A064></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>An incident involving
environmental damage or pollution and any of our vessels could harm our reputation and business.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Oil spills related to the sinkings of
the tanker <I>Erika</I> off the coast of France in 1999 and the tanker <I>Prestige </I>off
the coast of Spain in 2002, and other tanker-related environmental incidents have created
increased demand for modern vessels operated by ship management companies with a
reputation for safety and environmental compliance. Any event involving our tankers that
results in material environmental damage or pollution could harm our reputation for safety
and environmental compliance and decrease the demand for our services, which could harm
our business. </FONT></P>

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<A NAME=A066></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Our operating results are
subject to seasonal fluctuations.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We operate our tankers in markets
that have historically exhibited seasonal variations in demand and, therefore, in charter
rates. This seasonality may result in quarter-to-quarter volatility in our results of
operations. Tanker markets are typically stronger in the winter months as a result of
increased oil consumption in the northern hemisphere. In addition, unpredictable weather
patterns in these months tend to disrupt vessel scheduling. The oil price volatility
resulting from these factors has historically led to increased oil trading activities in
the winter months. As a result, our revenues have historically been weaker during fiscal
quarters ended June 30 and September 30, and, conversely, revenues have been stronger in
fiscal quarters ended December 31 and March&nbsp;31. </FONT></P>

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<A NAME=A067></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>We expend substantial
sums during construction of newbuildings without earning revenue and without assurance
that they will be completed.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are typically required to expend
substantial sums as progress payments during construction of a newbuilding, but we do not
derive any revenue from the vessel until after its delivery. In addition, under some of
our time charters if our delivery of a vessel to a customer is delayed, we may be required
to pay liquidated damages in amounts equal to or, under some charters, almost double the
hire rate during the delay. For prolonged delays, the customer may terminate the time
charter and, in addition to the resulting loss of revenues, we may be responsible for
additional substantial liquidated charges. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If we were unable to obtain financing
required to complete payments on any of our newbuilding orders, we could effectively
forfeit all or a portion of the progress payments previously made. As of December 31,
2004, we had 15 newbuildings on order with deliveries scheduled between 2005 and 2008. We
may order additional newbuildings in the future. </FONT></P>

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<A NAME=A068></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Exposure to currency
exchange rate and interest rate fluctuations could result in fluctuations in our cash
flows and operating results.</I></FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Substantially all of our revenues are
earned in U.S. Dollars, although we are paid in Euros and Australian Dollars under some of
our charters. A portion of our operating costs are incurred in currencies other than U.S.
Dollars. This partial mismatch in operating revenues and expenses could lead to
fluctuations in net income due to changes in the value of the U.S. dollar relative to
other currencies, in particular the Norwegian Kroner, the Australian Dollar, the Canadian
Dollar, the Singapore Dollar, the Japanese Yen, the British Pound and the Euro. We also
make payments under two Euro-denominated term loans. If the amount of our Euro-denominated
obligations exceeds our Euro denominated revenues, we must convert other currencies,
primarily the U.S. Dollar, into Euros. An increase in the strength of the Euro relative to
the U.S. Dollar would require us to convert more U.S. Dollars to Euros to satisfy those
obligations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Because we report our operating
results in U.S. Dollars, changes in the value of the U.S. Dollar relative to other
currencies also result in fluctuations of our reported revenues and earnings. In addition,
under U.S. accounting guidelines, all foreign currency-denominated monetary assets and
liabilities, such as cash and cash equivalents, accounts receivable, restricted cash,
accounts payable, long-term debt and capital lease obligations, are revalued and reported
based on the prevailing exchange rate at the end of the period. This revaluation causes us
to report significant non-monetary foreign currency exchange gains and losses each period.
The primary source of these gains and losses is our Euro-denominated term loans. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At December 31, 2004, approximately
$1,561.8 million, or 74%, of our debt bore interest at floating interest rates. To
partially mitigate this interest rate exposure, we have entered into interest rate swaps
that effectively change our interest rate exposure from floating LIBOR and EURIBOR rates
to average fixed-rates. Please see Item 11 &#150; Quantitative and Qualitative Disclosures
About Market Risk. </FONT></P>

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<A NAME=A070></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>We may not be exempt from
United States tax on our United States source income, which would reduce our net income and
cash flow by the amount of the applicable tax.</I> </FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If we are not exempt from tax under
Section 883 of the United States Internal Revenue Code, the shipping income derived from
the United States sources attributable to our subsidiaries&#146; transportation of cargoes
to or from the United States will be subject to U.S. federal income tax. If our
subsidiaries were subject to such tax, our net income and cash flow would be reduced by
the amount of such tax. Currently, we have claimed an exemption under Section 883. We
cannot give any assurance that future changes and shifts in ownership of our stock will
not preclude us from being able to satisfy the existing exemption. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the years ended December 31, 2004
and 2003, approximately 15.2% and 12.3%, respectively, of our gross shipping revenues were
derived from U.S. sources attributable to the transportation of cargoes to or from the
United States. The average U.S. federal income tax on such U.S. source income, in the
absence of exemption under Section 883, would have been 4% thereof, or approximately $13.7
million and $7.8 million, respectively, for the years ended December 31, 2004 and 2003. </FONT></P>

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<A NAME=A071></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 4. Information on
the Company </FONT></H1>

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<A NAME=A072></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A. Overview, History and
Development </FONT></H1>

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<A NAME=A073></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Overview </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are a leading provider of
international crude oil and petroleum product transportation services through our spot
tanker fleet, which includes the world&#146;s largest fleet of Aframax-size oil tankers,
our fixed-rate fleet, which includes the world&#146;s largest fleet of shuttle tankers,
and our LNG fleet. Our tankers and LNG carriers provide transportation services to major
oil companies, oil traders and government agencies worldwide. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our spot tanker segment includes our
conventional crude oil tankers, 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 (contracts less than three years). As of December 31,
2004, our Aframax vessels, which had a total cargo capacity of approximately 7.1 million
tonnes, represented approximately 9% of the total tonnage of the world Aframax fleet.
Please see Item 4 &#150; Information on the Company: Our Fleet. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our fixed-rate tanker segment
includes our shuttle tanker operations, floating storage and off-take vessels, a liquid
petroleum gas carrier and certain conventional crude oil, methanol and product tankers on
long-term fixed-rate time-charter contracts or contracts of affreightment, under which we
carry an agreed quantity of cargo for a customer over a specified trade route within a
given period of time. As of December 31, 2004, our shuttle tanker fleet, which had a total
cargo capacity of approximately 4.9 million tonnes, represented approximately 68% of the
total tonnage of the world shuttle tanker fleet. Please see Item 4 &#150; Information on
the Company: Our Fleet. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our fixed-rate LNG segment includes
our seven LNG carriers, including three newbuildings, on long-term fixed-rate time charter
contracts. As of December 31, 2004, our LNG Fleet, including newbuildings, had a total
cargo carrying capacity of 1.0 million cubic meters. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Teekay organization was founded
in 1973. We are incorporated under the laws of the Republic of The Marshall Islands as
Teekay Shipping Corporation and maintain our principal executive headquarters at TK House,
Bayside Executive Park, West Bay Street &amp; Blake Road, P.O. Box AP-59212, Nassau, The
Bahamas. Our telephone number at such address is (242) 502-8820. Our principal operating
office is located at Suite 2000, Bentall 5, 550 Burrard Street, Vancouver, British
Columbia, Canada, V6C 2K2. Our telephone number at such address is (604) 683-3529. </FONT></P>

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<A NAME=A074></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Business Acquisitions
and Combinations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Acquisition of Teekay Shipping
Spain S.L., formerly Naviera F. Tapias S.A.</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On April 30, 2004, we acquired all of
the outstanding shares of Naviera F. Tapias S.A. and renamed it Teekay Shipping Spain S.L.
(or <I>Teekay Spain</I>). Teekay Spain is the leading independent owner and operator of
LNG carriers and crude oil tankers in Spain. We also entered into an agreement with an
entity controlled by the former controlling shareholder of Teekay Spain to establish a
50/50 joint venture that will pursue new business in the oil and gas shipping sectors that
relate only to the Spanish market or are led by Spanish entities or entities controlled by
a Spanish Company. The acquisition of Teekay Spain has provided us with a platform from
which to expand our presence in the high growth LNG shipping sector and positions us as a
key supplier of LNG shipping to Spain, the world&#146;s third largest importer of LNG. We
funded this acquisition with a combination of cash, cash generated from operations and
borrowings under existing credit facilities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, Teekay
Spain&#146;s LNG fleet consisted of four vessels, which are all contracted under long-term
fixed-rate charters to major Spanish energy companies. As at December 31, 2004, Teekay
Spain&#146;s conventional crude oil tanker fleet consisted of five Suezmax tankers, and
two newbuildings scheduled for delivery in 2005. Four Suezmax tankers and one
newbuilding are contracted under long-term fixed-rate charters with a major Spanish oil
company. We sold the Suezmax tanker newbuilding not contracted under a long-term fixed-rate
charter upon its delivery in March 2005. </FONT></P>

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<A NAME=A075></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Acquisition of 50% of
PetroTrans Holdings Ltd. </I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On September 30, 2003, we acquired
50% of the issued and outstanding shares of PetroTrans Holdings Ltd., the parent company
of Skaugen PetroTrans Inc. (or <I>SPT)</I>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. SPT
lighters approximately 14% of all seaborne crude oil delivered to U.S. ports. </FONT></P>

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<A NAME=A076></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Acquisition of Navion AS</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In April 2003, we completed our
acquisition of 100% of the issued and outstanding shares of Navion AS. 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 December 31,
2004, consisted of eight owned and 12 chartered-in vessels (excluding six vessels
chartered-in from our shuttle tanker subsidiary, Ugland Nordic Shipping AS, and our other
subsidiaries), 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. Subsequent to the acquisition, the operations of UNS and the
shuttle tanker operations of Navion were combined into one business unit, Teekay Navion
Shuttle Tankers. Navion&#146;s modern, chartered-in, conventional tanker fleet, which as
of December 31, 2004, consisted of 12 crude oil tankers and 16 product tankers, operates
primarily in the Atlantic region, providing services to Statoil and other oil companies.
In addition, Navion owns two floating storage and off-take vessels currently trading as
conventional crude oil tankers in the Atlantic region, one chartered-in methanol carrier
and one liquid petroleum gas carrier on long-term charter to Statoil. Through Navion
Chartering AS, an entity owned jointly with Statoil, Navion has a right of first refusal
on Statoil&#146;s oil transportation requirements at the prevailing market rate until
December 31, 2007. In addition to tanker operations, Navion also assembles, installs,
operates and leases equipment that reduces volatile organic compound emissions during
loading, transportation and storage of oil and oil products. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additional information about these
acquisitions, including our financing of them, is included in Item 5 &#150; Operating and
Financial Review and Prospects. </FONT></P>

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<A NAME=A077></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>B. Operations </FONT></H1>

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<A NAME=A078></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Spot Tanker Segment </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The vessels in our spot tanker
segment compete primarily in the Aframax market. In the Aframax market, international
seaborne oil and other petroleum products transportation services are provided by two main
types of operators: captive fleets of major oil companies (both private and state-owned)
and independent ship owner fleets. Many major oil companies and other oil trading
companies, the primary charterers of the vessels owned or controlled by us, also operate
their own vessels and transport their own oil and oil for third party charterers in direct
competition with independent owners and operators. Competition for charters in the Aframax
spot charter market is intense and is based upon price, location, the size, age, condition
and acceptability of the vessel, and the reputation of the vessel&#146;s manager. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We compete principally with other
Aframax owners in the spot charter market through the global tanker charter market. This
market is comprised of tanker broker companies that represent both charterers and ship
owners in chartering transactions. Within this market, some transactions, referred to as
&#147;market cargoes,&#148; are offered by charterers through two or more brokers
simultaneously and shown to the widest possible range of owners; other transactions,
referred to as &#147;private cargoes,&#148; are given by the charterer to only one broker
and shown selectively to a limited number of owners whose tankers are most likely to be
acceptable to the charterer and are in position to undertake the voyage. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of December 31, 2004, other large
operators of Aframax tonnage (including newbuildings on order) included Malaysian
International Shipping Corporation (approximately 36 Aframax vessels), Novorossiisk Sea
Shipping Co. (approximately 27 Aframax vessels), General Maritime Corporation
(approximately 26 Aframax vessels), British Petroleum (approximately 20 Aframax vessels)
and Minerva (approximately 17 Aframax vessels). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our competition in the Aframax
(75,000 to 119,999 dwt) market is also affected by the availability of other size vessels
that compete in our markets. Suezmax (120,000 to 199,999 dwt) size vessels and Panamax
(50,000 to 74,999 dwt) size vessels can compete for many of the same charters for which we
compete. Because of their large size, Very Large Crude Carriers (200,000 to 319,999 dwt)
(or <I>VLCCs</I>) and Ultra Large Crude Carriers (320,000+ dwt) (or <I>ULCCs</I>) rarely
compete directly with Aframax tankers for specific charters. However, because VLCCs and
ULCCs comprise a substantial portion of the total capacity of the market, movements by
such vessels into Suezmax trades and of Suezmax vessels into Aframax trades would heighten
the already intense competition. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We believe that we have competitive
advantages in the Aframax tanker market as a result of the quality, type and dimensions of
our vessels and our market share in the Indo-Pacific and Atlantic Basins. As of December
31, 2004, our Aframax tanker fleet (excluding Aframax-size shuttle tankers and newbuildings) had an average
age of approximately 7.7 years, compared to an average age for the world oil tanker
fleet, including Aframax tankers, of approximately 9.6 years and for the world Aframax
tanker fleet of approximately 9.7 years. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have chartering staff located in
Vancouver, Canada; Stavanger, Norway; Tokyo, Japan; London, England; Houston, USA; and
Singapore. Each office serves our clients headquartered in that office&#146;s region.
Fleet operations, vessel positions and charter market rates are monitored around the
clock. We believe that monitoring such information is critical to making informed bids on
competitive brokered business. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, approximately 62% of our
net voyage revenues were earned by the vessels in the spot tanker segment, compared to
approximately 63% in 2003 and 73% in 2002. Please see Item 5 &#151; Operating and
Financial Review and Prospects: Results of Operations. </FONT></P>

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<A NAME=A079></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fixed-Rate Tanker Segment </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The vessels in our fixed-rate tanker
segment compete primarily in the offshore loading business. These offshore loading vessels
called shuttle tankers, transport oil from offshore production platforms to onshore
storage and refinery facilities. Our shuttle tankers are primarily subject to long-term,
fixed-rate time-charter contracts for a specific offshore oil field or under contracts of
affreightment for various fields. The number of voyages performed under these contracts of
affreightment normally depends upon the oil production of each field. Competition for
charters is based primarily upon price, availability, the size, technical sophistication,
age and condition of the vessel and the reputation of the vessel&#146;s manager. Technical
sophistication of the vessel is especially important in harsh operating environments such
as the North Sea. Although the size of the world shuttle tanker fleet has been relatively
unchanged in recent years, conventional tankers could be converted into less sophisticated
shuttle tankers by adding specialized equipment to meet the requirements of the oil
companies. Shuttle tanker demand may also be affected by the possible substitution of
sub-sea pipelines to transport oil from offshore production platforms. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of December 31, 2004, there were
approximately 64 vessels in the world shuttle tanker fleet (including newbuildings), the
majority of which operate in the North Sea. We currently own 29 shuttle tankers, including
one classified as held for sale and charter in an additional 12 shuttle tankers. Other
shuttle tanker owners in the North Sea include Knutsen OAS Shipping AS and JJ Ugland
Group, which as of December 31, 2004 owned approximately 15 and five shuttle tankers,
respectively. The remaining owners in the North Sea each owned three or fewer vessels as
of that date. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We believe that we have significant
competitive advantages in the shuttle tanker market as a result of the quality, type and
dimensions of our vessels and our market share in the North Sea. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, approximately 36% of our
net voyage revenues were<B> </B>earned by the vessels in the fixed-rate tanker segment,
compared to approximately 37% in 2003 and 27% in 2002. Please see Item 5 &#151; Operating
and Financial Review and Prospects: Results of Operations. </FONT></P>

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<A NAME=A080></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fixed-Rate LNG Segment </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The vessels in our fixed-rate LNG
segment compete in the LNG market. LNG carriers are usually chartered to carry LNG
pursuant to time charter contracts, where a vessel is hired for a fixed period of time,
usually between 20 and 25 years, and the charter rate is payable to the owner on a monthly
basis. LNG shipping historically has been transacted with these long-term, fixed-rate time
charter contracts. LNG projects require significant capital expenditures and typically
involve an integrated chain of dedicated facilities and cooperative activities.
Accordingly, the overall success of an LNG project depends heavily on long-range planning
and coordination of project activities, including marine transportation. Although most
shipping requirements for new LNG projects continue to be provided on a long-term basis,
spot voyages (typically consisting of a single voyage) and short term time charters of
less than 12 months duration have grown from 1% of the market in 1992 to 8% in 2002. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We compete principally with other
private and state-controlled energy and utilities companies that generally operate captive
LNG fleets, and independent ship owners and operators. Many major energy companies compete
directly with independent owners by transporting LNG for third parties in addition to
their own LNG. Given the complex, long-term nature of LNG projects, major energy companies
historically have transported LNG through their captive fleets. However, independent fleet
operators recently have been obtaining an increasing percentage of charters for new or
expanded LNG projects as major energy companies continue to divest non-core businesses. As
of December 31, 2004, independent owners owned approximately 45% of the world LNG fleet,
including approximately 25% owned by independent Japanese and South Korean owners.
Approximately 60% of newbuilding orders are from independent owners. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LNG carriers transport LNG
internationally between liquefaction facilities and import terminals. After natural gas is
transported by pipeline from production fields to a liquefaction facility, it is
supercooled to a temperature of approximately negative 260 degrees Fahrenheit. This
process reduces its volume to approximately 1 / 600<SUP>th</SUP> of its volume in a
gaseous state. The reduced volume facilitates economical storage and transportation by
ship over long distances, enabling countries with limited natural gas reserves or limited
access to long-distance transmission pipelines to meet their demand for natural gas. LNG
carriers include a sophisticated containment system that holds and insulates the LNG so it
maintains its liquid form. LNG that evaporates during the voyage and converts to natural
gas (called boil-off) is used as fuel to help propel the vessel. The LNG is transported
overseas in specially built tanks on double-hulled ships to a receiving terminal, where it
is offloaded and stored in heavily insulated tanks. In regasification facilities at the
receiving terminal, the LNG is returned to its gaseous state (<I>or regasified)</I> and
then shipped by pipeline for distribution to natural gas customers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Most new vessels, including all of
our vessels, are being built with a membrane containment system. These systems are built
inside the carrier and consist of insulation between thin primary and secondary barriers
and designed to accommodate thermal expansion and contraction without overstressing the
membrane. New LNG carriers are generally expected to have a lifespan of approximately 40
years. Unlike the oil tanker industry, there currently are no regulations that require the
phase-out from trading of LNG carriers after they reach a certain age. As at December 31,
2004, there were approximately 177 vessels in the world LNG fleet, with an average age of
approximately 13.6 years. In addition, there are approximately 104 additional LNG carriers
under construction or on order for delivery through 2009. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our fixed-rate LNG segment consists
of LNG carriers subject to long-term, fixed-rate time-charter contracts. The acquisition
of Teekay Spain on April 30, 2004 established our entry into the LNG shipping sector. Our
fixed-rate LNG segment includes four LNG carriers. Two of the LNG carriers have been
included from the date of the Teekay Spain acquisition. We took delivery of one LNG
carrier in July 2004, which commenced service under a 25-year time-charter contract (with
a charterer&#146;s option to extend an additional five years). We took delivery of another
LNG carrier in December 2004, which commenced service under a 20-year time-charter
contract (with a charterer&#146;s option to extend an additional ten years). As at
December 31, 2004, we had three newbuilding LNG carriers on order, which will commence
service under long-term contracts with Ras Lafan Liquefied Natural Gas Co. Limited II (or
<I>RasGas II</I>), a joint venture company between a subsidiary of ExxonMobil Corporation
and Qatar Petroleum, upon delivery, scheduled for the fourth quarter of 2006 and the first
half of 2007. The vessels will be time-chartered to RasGas II for a period of 20 years
(with a charterer&#146;s option to extend for periods up to an additional 15 years). These
LNG charter contracts are subject, in certain circumstances, to termination and vessel
purchase rights. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, approximately 2% of our
net voyage revenues were<B> </B>earned by the vessels in the fixed-rate LNG segment. We
did not operate LNG carriers prior to 2004. Please see Item 5 &#150; Operating and
Financial Review and Prospects: Results of Operations. </FONT></P>

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<A NAME=A081></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ship Management </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Safety is our top operational
priority. Our vessels are operated in a manner intended to protect the safety and health
of our employees, the general public and the environment. We actively manage the risks
inherent in our business and are committed to eliminating incidents that threaten safety,
such as groundings, fires, collisions and petroleum spills. We are also committed to
reducing emissions and waste generation. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Customers and tanker rating services
have recognized us for safety, quality and service. Given the emphasis by customers on
quality as a result of stringent environmental regulations, and heightened concerns about
liability for oil pollution, we believe that our emphasis on quality and safety provide us
with a favorable competitive profile. We are one of a few companies who have fully
integrated our health, safety, environment and quality management systems. This results in
increased efficiencies in operations and management as any redundancies in each of the
four standards is reduced. As well, one management system for operations ensures that
strategies and programs are aligned when in comes to business, customer, safety,
environment, or quality drivers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have achieved certification under
the standards reflected in International Standards Organization&#146;s (or <I>ISO</I>)
9001 for quality assurance, ISO 14001 for environment management systems, OHSAS 18001 for
Occupational Health and Safety, and the IMO&#146;s International Management Code for the
Safe Operation of Ships and Pollution Prevention on a fully integrated basis. As part of
ISM Code compliance, all of our vessels&#146; safety management certificates are being
maintained through ongoing internal audits performed by our certified internal auditors
and intermediate audits performed by Det Norske Veritas. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The critical ship management
functions of vessel maintenance, crewing, purchasing, shipyard supervision, insurance and
financial management services are carried out &#147;in-house&#148; in our various
facilities around the world for most of our fleet. These functions are supported by
onboard and onshore systems for maintenance, inventory, purchasing and budget management.
Since 1995, IUM Shipmanagement AS, a company in which we own a 51% interest through our
wholly owned subsidiary UNS, has provided ship management services for certain of our
shuttle tankers, including crewing and maintenance. OSM Ship Management AS (or
<I>OSM</I>), a company which is unrelated to us, provides ship management services for
most of the shuttle tankers acquired as part of our acquisition of Navion. OSM is under
contract to provide these services to Navion until September 30, 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In 2003, we established a
purchasing alliance with two other shipping companies and named it Teekay Bergesen Worldwide.
This alliance leverages the purchasing power of the combined fleets, mainly in such commodity areas
 as lube oils, paints and other chemicals.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The generally uniform design of some
of our existing and newbuilding vessels and the adoption of common equipment standards
should also result in operational efficiencies, including with respect to crew training
and vessel management, equipment operation and repair, and spare parts ordering. </FONT></P>

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<A NAME=A082></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Business Structure </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our organization is divided into four
key areas: Teekay Tanker Services; Teekay Navion Shuttle Tankers; Teekay Gas &amp;
Offshore; and Teekay Marine Services. These centers of expertise work closely with
customers and internally to ensure a thorough understanding of our customers&#146;
requirements and to develop tailored solutions.

&#149;  </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay Tanker Services is
responsible for the commercial management of our conventional crude oil and product
tanker transportation services. We offer a full range of flexible, customer-focused
shipping solutions through our worldwide network of commercial offices.</FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay Navion Shuttle Tankers offers a wide range of shuttle tanker and project services.
Our expertise and partnerships allow us to create solutions for customers producing crude
oil from offshore installations. </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay Gas &amp; Offshore offers a diverse range of mooring, floating storage and
offloading solutions. In addition, we now also offer gas shipping services, pursuing the
LNG and compressed natural gas markets. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Hang Lv 4-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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay Marine Services provides a vast range of marine services and products across all
our operations as well as to third-parties. </FONT></TD>
</TR>
</TABLE>
<BR>

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<A NAME=A083></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Business Strategy </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We pursue an intensively customer-
and operations-oriented business strategy designed to achieve superior operating results.
We believe that we have four key competitive strengths: </FONT></P>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a strong network of
customer relationships developed by providing consistent performance, innovative solutions,
and exceptional customer service to quality-sensitive customers, </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Hang Lv 4-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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
a disciplined acquisition strategy that has resulted in our achieving a market
concentration in the Aframax market and the shuttle tanker market, which is sufficient to
facilitate comprehensive coverage of charterer requirements and provides a base for
efficient operation and a high degree of capacity utilization in those markets; </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Hang Lv 4-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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
a highly-integrated global network of approximately 5,500 sea staff and shore employees,
with comprehensive market intelligence and operational and technical sophistication. This
includes full-service marine operations capabilities and experienced management in all
functions critical to our operations, which affords a focused marketing effort, high
quality and tight cost controls, improved capacity utilization and effective operations
and safety monitoring; and </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Large Hang Lv 4-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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
a strong balance sheet that we believe allows us to take advantage of appropriate
investment opportunities throughout the tanker cycle. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As part of our growth strategy, we
will continue to consider strategic opportunities, including business acquisitions, such
as our acquisitions of Teekay Spain in 2004 and Navion and our joint venture, Skaugen
PetroTrans Inc. (or <I>SPT</I>), in 2003. To the extent we enter new geographic areas or
tanker market segments, there can be no assurance that we will be able to compete
successfully. New markets may involve competitive factors that differ from those of the
Aframax market segment in the Indo-Pacific and Atlantic Basins and the North Sea shuttle
tanker market and may include participants that have greater financial strength and
capital resources than we have. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our growth strategy is to leverage
our existing competitive strengths to continue to expand our business. We anticipate that
the continued upgrade and expansion of our tanker business will continue to be a key
component of our strategy. In addition, we believe that our full-service marine operations
capabilities, reputation for safety and quality and strong customer orientation provide us
with the opportunity to expand our business by providing additional value-added and
innovative services, in many cases to existing customers. Finally, we intend to identify
expansion opportunities in new tanker market segments, geographic areas and services to
which our competitive strengths are well suited, such as our entry into the shuttle tanker
market through our acquisitions of UNS and Navion and our entry into the LNG market
through our acquisition of Teekay Spain, as described above. We may choose to pursue such
opportunities through internal growth, joint ventures or business acquisitions. </FONT></P>

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<A NAME=A084></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Risk of Loss and
Insurance </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The operation of any ocean-going
vessel carries an inherent risk of catastrophic marine disasters, death or injury of
persons and property losses caused by adverse weather conditions, mechanical failures,
human error, war, terrorism, piracy and other circumstances or events. In addition, the
transportation of crude oil and LNG is subject to the risk of spills and to business
interruptions due to political circumstances in foreign countries, hostilities, labor
strikes and boycotts. The occurrence of any of these events may result in loss of revenues
or increased costs. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We carry &#147;hull and
machinery&#148; and &#147;protection and indemnity&#148; insurance coverage to protect
against most of the accident-related risks involved in the conduct of our business. Hull
and machinery insurance covers loss of or damage to a vessel due to marine perils such as
collisions, grounding and weather. Protection and indemnity insurance indemnifies us
against other liabilities incurred while operating vessels, including injury to our crew,
third parties, cargo loss and pollution. The current available amount of our coverage for
pollution is $1 billion per vessel per incident. We also carry insurance policies covering
war risks (including piracy and terrorism) and, for our LNG carriers, loss of revenues
resulting from vessel off-hire time due to a marine casualty or an officer or crew strike.
However, we my not continue to carry this &#147;loss of hire&#148; insurance based on its
cost compared to our off-hire experience. We believe that our current insurance coverage
is adequate to protect against most of the accident-related risks involved in the conduct
of our business and that we maintain appropriate levels of environmental damage and
pollution insurance coverage. However, we cannot assure that all covered risks are adequately
insured against, that any particular claim will be paid or that we will be able to procure
adequate insurance coverage at commercially reasonable rates in the future. More stringent
environmental regulations have resulted in increased costs for, and
may result in the lack of availability of, insurance against the risks of environmental
damage or pollution. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We use in our operations a thorough
risk management program that includes, among other things, computer-aided risk analysis
tools, maintenance and assessment programs, a seafarers competence training program,
seafarers workshops and membership in emergency response organizations. </FONT></P>

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<A NAME=A085></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Operations Outside the
United States </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Because our operations are primarily
conducted outside of the United States, they may be affected by currency fluctuations and
by changing economic, political and governmental conditions in the countries where we
engage in business or where our vessels are registered. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, we derived approximately
23% of our total net voyage revenues from our operations in the Indo-Pacific Basin,
compared to approximately 27% during 2003. Past political conflicts in that region,
particularly in the Arabian Gulf, have included attacks on tankers, mining of waterways
and other efforts to disrupt shipping in the area. Vessels trading in the region have also
been subject to, in limited instances, acts of piracy. In addition to tankers, oil
pipelines, LNG facilities and offshore oil fields could also be targets of terrorist
attacks. The escalation of existing or the outbreak of future hostilities or other
political instability in this region or other regions where we operate could affect our
trade patterns, increase insurance costs, increase tanker operational costs and otherwise
adversely affect our operations and performance. In addition, tariffs, trade embargoes,
and other economic sanctions by the United States or other countries against countries in
the Indo-Pacific Basin or elsewhere as a result of terrorist attacks or other hostilities
may limit trading activities with those countries, which could also adversely affect our
operations and performance. </FONT></P>

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<A NAME=A086></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Customers </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have derived, and believe that we
will continue to derive, a significant portion of our voyage revenues from a limited
number of customers. Our customers include major oil companies, major oil traders, large
oil consumers and petroleum product producers, government agencies, and various other
entities dependent upon the tanker transportation trade. One customer, an international
oil company, accounted for 17% ($373.7 million) of our consolidated voyage revenues during
2004. The same customer accounted for 15% ($239.5 million) of our consolidated voyage
revenues during 2003. No customer accounted for more than 10% of our consolidated voyage
revenues during 2002. No other customer accounted for more than 10% of our consolidated
voyage revenues during 2004 or 2003. The loss of any significant customer or a substantial
decline in the amount of services requested by a significant customer could have a
material adverse effect on our business, financial condition and results of operations. </FONT></P>

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<A NAME=A087></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Fleet </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following list provides
additional information with respect to our vessels as at December 31, 2004. </FONT></P>

<PRE>
- --------------------------------------------------------------------------------------------------------------------
                                                                      <B>Number of Vessels(1)</B>
                                             -----------------------------------------------------------------------
                                             <B>Owned Vessels  Vessels Held  Chartered-in  Newbuildings on    Total
                                                              for Sale       Vessels         Order</B>
- --------------------------------------------------------------------------------------------------------------------
  <B>Spot Tanker Segment:</B>
      Very Large Crude Carriers                      -             -              1               -          1
      Suezmax Tankers (2)                            2             -              4               1          7
      Aframax Tankers                               28             8             18               5         59
      Large Product Tankers                          -             -              5               3          8
      Small Product Tankers                          -             -             10               -         10
- --------------------------------------------------------------------------------------------------------------------
      Total Spot Tanker Segment                     30             8             38               9         85
====================================================================================================================

  <B>Fixed-Rate Tanker Segment:</B>
      Shuttle Tankers (3)                           28             1             12               -         41
      Conventional Tankers                          12             -              -               3         15
      Floating Storage &amp; Offtake (or FSO)            4             -              -               -          4
        Units (4)
      LPG / Methanol Carriers                        1             -              1               -          2
- --------------------------------------------------------------------------------------------------------------------
      Total Fixed-Rate Tanker Segment               45             1             13               3         62
====================================================================================================================

  <B>Fixed-Rate LNG Segment</B>                             4             -              -               3          7
- --------------------------------------------------------------------------------------------------------------------
                                   <B>Total            79             9             51              15        154</B>
====================================================================================================================
</PRE>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;
          Excludes vessels managed for third parties. <BR>
          (2)&nbsp;&nbsp;&nbsp;&nbsp;
          We have sold the Suezmax tanker newbuilding in the Spot Tanker Segment
          in March 2005. <BR>
          (3)&nbsp;&nbsp;&nbsp;&nbsp;
          Includes seven shuttle tankers of which our
          ownership interests range from 50% to 70.25%.<BR>
          (4)&nbsp;&nbsp;&nbsp;&nbsp;
          Includes one FSO unit of which our ownership interest is 89%. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our vessels are of Australian,
Bahamian, Canadian, Cayman Islands, Liberian, Norwegian, Norwegian International Ship and
Spanish registry. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Many of our Aframax vessels and some
of our shuttle tankers have been designed and constructed as substantially identical
sister ships. These vessels can, in many situations, be interchanged, providing scheduling
flexibility and greater capacity utilization. In addition, spare parts and technical
knowledge can be applied to all the vessels in the particular series, thereby generating
operating efficiencies. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As of December 31, 2004, we had 15
newbuildings on order, which will require remaining payments of $363.7 million in 2005,
$255.9 million in 2006, $140.9 million in 2007, and $50.7 million due in 2008 under the
terms of the contracts. Please see Item 5. Operating and Financial Review and Prospects
&#150; Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please see Note 9 of the consolidated
financial statements for information with respect to major encumbrances against our
vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A092></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Classification, Audits
and Inspections </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The seafaring staff operating our
vessels regularly inspect them and perform much of the necessary routine maintenance.
Shore-based operational and technical specialists also inspect our vessels at least twice
a year for conformity with established criteria. Upon completion of each inspection,
recommendations are made for improving the overall condition of the vessel and its
maintenance, safety and crew welfare. All recommendations are monitored until they are
completed. Our objectives are to: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
maintain the structural integrity of the vessel;
 </FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
ensure reliability;
 </FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
optimize performance in terms of speed and fuel consumption; and
 </FONT></TD>
</TR>
</TABLE>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
ensure the vessel's appearance will support our brand and meet customer expectations.
 </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To achieve our vessel structural
integrity objective, we use a comprehensive &#147;Structural Integrity Management
System&#148; developed by us. This system is designed to monitor the condition of our
vessels closely and to ensure that structural strength and integrity are maintained
throughout a vessel&#146;s life. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All of our vessels have been
certified as being &#147;in-class&#148; by their respective classification societies:
Bureau Veritas, Det Norske Veritas, Lloyd&#146;s Register of Shipping or American Bureau
of Shipping. Every vessel&#146;s hull and machinery is &#147;classed&#148; by a
classification society. The classification society certifies that the vessel has been
built and maintained in accordance with the rules of that classification society and
complies with applicable rules and regulations of the country of registry of the vessel
and the international conventions of which that country is a signatory, although for some
of our vessels we obtain this latter certification directly from the relevant flag state
authorities. Each vessel is inspected by a classification society surveyor annually, with
either the second or third annual inspection being a more detailed survey (an
<I>Intermediate Survey</I>) and the fourth or fifth annual inspection being the most
comprehensive survey (a <I>Special Survey</I>). The inspection cycle resumes after each
Special Survey. Vessels also may be required to be drydocked at each Intermediate and
Special Survey for inspection of the underwater parts of the vessel and resulting repairs.
Intermediate Surveys of steam-propelled LNG vessels may be done while the vessel is in
service, but in all instances the inspection requires shutting down the vessel&#146;s main
boiler, which slows travel if in service. In-water surveys generally take vessels out of
service for one day, but out-of-service surveys of steam-propelled LNG vessels can take up
to seven days. All of our LNG carriers, including our newbuildings, are steam-propelled.
Many of our vessels have qualified with their respective classification societies for
drydocking every four or five years in connection with the Special Survey and are no
longer subject to the Intermediate Survey drydocking process. To qualify, we were required
to enhance the resiliency of the underwater coatings of each vessel and mark the hull to
accommodate underwater inspections by divers.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition to the classification
inspections, many of our customers regularly inspect our vessels as a precondition to
chartering, and regular inspections are standard practice under long-term charters as
well. Port and flag state control authorities, such as the U.S. Coast Guard, the
Australian Maritime Safety Authority and Spain&#146;s flag administration (or
classification societies acting on behalf of the flag state control authorities), also
inspect some of our vessels. We believe that our relatively new, well-maintained and
high-quality vessels should provide us with a competitive advantage in the current
environment of increasing regulation and customer emphasis on quality of service. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have obtained approval for our
safety management system as being in compliance with the ISM Code. Our safety management
system has also been certified as being compliant with ISO 9001, 14001 and OSHAS 18001
standards. To maintain compliance, the system is audited regularly by either the
vessels&#146; flag state or, when nominated by them, of the classification societies.
Certification is valid for five years subject to satisfactorily completing internal and
external audits. </FONT></P>

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<A NAME=A093></A>
<h1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Organizational
Structure</FONT></h1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please see Exhibit 8.1 for a list of
our significant subsidiaries as at December 31, 2004. </FONT></P>

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<A NAME=A094></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>C. Regulations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our business and the operation of our
vessels are significantly affected by international conventions and national, state and
local laws and regulations in the jurisdictions in which our vessels operate, as well as
in the country of their registration. Because these conventions, laws, and regulations
change frequently, we cannot predict the ultimate cost of compliance or their impact on
the resale price or useful life of our vessels. Additional conventions, laws and
regulations may be adopted that could limit our ability to do business or increase the
cost of our doing business and that may materially adversely affect our operations. We are
required by various governmental and quasi-governmental agencies to obtain permits,
licenses and certificates with respect to our operations. Subject to the discussion below
and to the fact that the kinds of permits, licenses and certificates required for the
operations of the vessels we own will depend on a number of factors, we believe that we
will be able to continue to obtain all permits, licenses and certificates material to the
conduct of our operations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We believe that the heightened
environmental and quality concerns of insurance underwriters, regulators and charterers
will generally lead to greater inspection and safety requirements on all vessels in the
oil tanker and LNG carrier markets and will accelerate the scrapping of older vessels
throughout these industries. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Regulation&#151;International
Maritime Organization (or <I>IMO</I>).</B> IMO regulations relating to
pollution prevention for tankers apply to many jurisdictions in which our tanker fleet
operates. These regulations provide that: </FONT></P>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
tankers between 25 and 30 years old must be of
double-hull construction or of a mid-deck design with double-side
construction, unless they have wing tanks or double-bottom spaces, not used for the
carriage of oil, which cover at least 30% of the length of the cargo tank section of the
hull, or are capable of hydrostatically balanced loading which ensures at least the same
level of protection against oil spills in the event of collision or stranding;
 </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
tankers 30 years old or older must be of  double-hull  construction  or mid-deck  design with  double-side
             construction; and
 </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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
all tankers are subject to enhanced inspections.
 </FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Also, under IMO regulations, a tanker
must be of double-hull construction or a mid-deck design with double-side construction or
be of another approved design ensuring the same level of protection against oil pollution
in the event that such tanker (a) is the subject of a contract for a major conversion or
original construction on or after July 6, 1993, (b) commences a major conversion or has
its keel laid on or after January 6, 1994, or (c) completes a major conversion or is a
newbuilding delivered on or after July 6, 1996. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On December 9, 2003, the IMO revised
its regulations relating to the prevention of pollution from tankers. These regulations,
which came into effect on April 5, 2005, will accelerate the mandatory
phase-out of single-hull tankers and impose a more rigorous inspection regime for older
tankers. As of the date of this report, we estimate that upon their effectiveness, the regulations will ban from world-wide trading the
oldest single-hull tankers, representing approximately 3% to 5% of the current world tanker
fleet. It is expected that a further 22% to 24% of the existing world tanker fleet will be
excluded from the majority of the oil tanker trades by 2010. These regulations identify
three categories of single-hull tankers, which include double-bottom and double-side
tankers: </FONT></P>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Category 1 oil tanker&#148; means any oil tanker of 20,000 dwt and above carrying
crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and
above carrying other oils, which does not have segregated ballast tanks; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Category 2 oil tanker&#148; means any oil tanker of 20,000 dwt and above carrying
crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 dwt and
above carrying other oils, which has segregated ballast tanks; and </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;Category 3 oil tanker&#148; means an oil tanker of 5,000 dwt and above but less than
the tonnage specified for Category 1 and 2 oil tankers. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All of the single-hull tankers we
operate are Category 2 oil tankers. As illustrated in the following table, the most recent
IMO regulations provide for the phase-out on a rolling basis of Category 1 oil tankers
during 2005 and of Category 2 oil tankers by 2010. </FONT></P>

<PRE>
- ----------------------------------------- -----------------------------------------------------------------------
Category of Oil Tanker                    Year To Be Removed From Service
- ----------------------------------------- -----------------------------------------------------------------------

Category 1 ............................   April 5, 2005 for ships delivered on April 5, 1982 or earlier
                                          2005 for ships delivered after April 5, 1982

- ----------------------------------------- -----------------------------------------------------------------------
Category 2 and Category 3 .............   April 5, 2005 for ships delivered on April 5, 1977 or earlier
                                          2005 for ships delivered after April 5, 1977 but before 1978
                                          2006 for ships delivered in 1978 and 1979
                                          2007 for ships delivered in 1980 and 1981
                                          2008 for ships delivered in 1982
                                          2009 for ships delivered in 1983
                                          2010 for ships delivered in 1984 or later
- ----------------------------------------- -----------------------------------------------------------------------
</PRE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>However, under certain conditions,
Category 2 and Category 3 oil tankers may continue in operation beyond the date set forth
in the table above. For Category 2 and Category 3 oil tankers fitted with (a) double
bottoms or double sides, not used for the carriage of oil, that extend to the entire cargo
tank length or (b) double hull spaces, not meeting minimum distance protection
requirements, which are not used for the carriage of oil and that extend to the entire
cargo tank length, the vessel&#146;s flag state may allow continued operation beyond 2010,
provided that the ship was in service on July 1, 2001, the flag state is satisfied by
verification of the official records that the ship complied with the conditions specified,
and that those conditions remain unchanged. Such continued operation must not go beyond
the date on which the ship reaches 25 years of age measured from the date of delivery. In spite of
this flag-state exemption, a port state may declare that it does not accept entry of such
vessels after their phase-out date. The European Union, Cyprus and Malta have already
declared that they will not permit the entry of such vessels. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessels must pass a Condition
Assessment Scheme (or <I>CAS</I>) Survey after 2005 for Category 1 oil tankers, and after
2010 for Category 2 oil tankers. The CAS Survey includes surveys of the hull structure,
including cargo tanks, pump rooms, cofferdams, pipe tunnels, void spaces within the cargo
area and all ballast tanks. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The IMO&#146;s accelerated phase out
schedule will affect two of our existing vessels, effectively reducing the economic life
of each of these vessels. As a result of these regulations, we recorded non-cash
write-down of the book value of the affected vessels totaling $56.9 million during the
fourth quarter of 2003. The following table outlines the impact of these regulations on
the remaining two vessels: </FONT></P>

<PRE>
    Number                                                            Year of IMO          Year of IMO
      of        Vessel              Hull                Year           Phase-Out          Phase-Out Date
   Vessels       Type               Type                Built      (No Exemption) (1)    (With Exemption) (1)
- --------------- ----------- ----------------------- ------------- -------------------- ----------------------

      1         Aframax          Single-Hull            1989              2010                  2014
      1         Aframax          Single-Hull            1990              2010                  2015
</PRE>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               As described above, under certain conditions flag states may permit an exemption
               which allows continued operation of Category 2 or 3 tankers in the waters of the
               flag state beyond 2010 subject to satisfactory results from the CAS until the
               ship reaches 25 years of age or the anniversary date of the delivery in 2015,
               whichever is earlier. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IMO regulations also include the
International Convention for Safety of Life at Sea (or <I>SOLAS</I>), including amendments
to SOLAS implementing the International Security Code for Ports and Ships (or
<I>ISPS</I>), the ISM Code and the International Code for Construction and Equipment of
Ships Carrying Liquefied Gases in Bulk (or the <I>IGC </I>Code). SOLAS provides rules for
the construction of and equipment required for commercial vessels and includes regulations
for safe operation. Flag states which have ratified the convention and the treaty
generally employ the classification societies, which have incorporated SOLAS requirements
into their class rules, to undertake surveys to confirm compliance. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SOLAS and other IMO regulations
concerning safety, including those relating to treaties on training of shipboard
personnel, lifesaving appliances, radio equipment and the global maritime distress and
safety system, are applicable to our operations. Non-compliance with IMO regulations,
including SOLAS, the ISM Code, ISPS and the IGC Code, may subject us to increased
liability or penalties, may lead to decreases in available insurance coverage for affected
vessels and may result in the denial of access to or detention in some ports. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The ISM Code requires vessel
operators to obtain a safety management certification for each vessel they manage,
evidencing the shipowner&#146;s compliance with requirements of the ISM Code relating to
the development and maintenance of an extensive &#147;Safety Management System.&#148; Such
a system includes, among other things, the adoption of a safety and environmental
protection policy setting forth instructions and procedures for safe operation and
describing procedures for dealing with emergencies. Each of the existing vessels in our
fleet currently is ISM Code-certified, and we expect to obtain safety management for each
newbuilding vessel upon delivery. However, there can be no assurance that we will be able
to maintain such certification in the future. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ISPS was adopted in December 2002 in
the wake of heightened concern over worldwide terrorism and became effective on July 1,
2004. The objective of ISPS is to enhance maritime security by detecting security threats
to ships and ports and by requiring the development of security plans and other measures
designed to prevent such threats. The United States implemented ISPS with the adoption of
the Maritime Transportation Security Act of 2002 (or <I>MTSA</I>), which requires vessels
entering U.S. waters to obtain certification of plans to respond to emergency incidents
there, including identification of persons authorized to implement the plans. Each of the
existing vessels in our fleet currently complies with the requirements of ISPS and MTSA,
and we expect all newbuildings to comply upon delivery. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LNG carriers are also subject to
regulation under the IGC Code. Each LNG carrier must obtain a certificate of compliance
evidencing that it meets the requirements of the IGC code, including requirements relating
to its design and construction. Each of our LNG carriers currently is in compliance with
the IGC code, and each of our newbuilding shipbuilding contracts requires compliance prior
to delivery. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Environmental Regulations&#151;The
United States Oil Pollution Act of 1990 (or <I>OPA 90</I>).</B> OPA 90
established an extensive regulatory and liability regime for the protection and cleanup of
the environment from oil spills, including discharges of oil cargoes, fuel (or
<I>bunkers</I>) or lubricants. OPA 90 affects all owners and operators whose vessels trade
to the United States or its territories or possessions or whose vessels operate in United
States waters, which include the 200-mile exclusive economic zone around the United
States. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under OPA 90, vessel owners,
operators and demise or bareboat charterers are &#147;responsible parties&#148; and are
jointly, severally and strictly liable (unless the spill results solely from the act or
omission of a third party, an act of God or an act of war) for all containment and
clean-up costs and other damages arising from discharges or threatened discharges of oil
from their vessels. These other damages are defined broadly to include: </FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
natural resources damages and the costs of assessment thereof,
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
real and personal property damages,
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
net loss of taxes, royalties, rents, fees and other lost revenues,
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
lost profits or impairment of earning capacity due to property or natural resources damage,
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
net cost of public  services  necessitated by a spill  response,  such as protection from fire,  safety or
         health hazards, and
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
loss of subsistence use of natural resources.
</FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPA 90 limits the liability of
responsible parties to the greater of $1,200 per gross ton or $10 million per tanker that
is over 3,000 gross tons (subject to possible adjustment for inflation). These limits of
liability would not apply if the incident was proximately caused by violation of
applicable U.S. federal safety, construction or operating regulations, including IMO
conventions to which the United States is a signatory, or by the responsible party&#146;s
gross negligence or willful misconduct, or if the responsible party fails or refuses to
report the incident or to cooperate and assist in connection with the oil removal
activities. We currently plan to continue to maintain for each of our vessels pollution
liability coverage in the amount of $1 billion per incident. A catastrophic spill could
exceed the coverage available, which could harm our business, financial condition and
results of operations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under OPA 90, with limited
exceptions, all newly built or converted tankers delivered after January 1, 1994 and
operating in United States waters must be built with double-hulls, and existing vessels
that do not comply with the double-hull requirement must be phased out over a 20-year
period (1995 to 2015) based on size, age and hull construction. Vessels with double-sides
and double-bottoms are granted an additional five years of service life before being
phased out. Notwithstanding the phase-out period, OPA 90 currently permits existing
single-hull tankers to operate until the year 2015 if their operations within United
States waters are limited to discharging at the Louisiana Off-shore Oil Platform, or
off-loading by means of lightering activities within authorized lightering zones more than
60 miles offshore. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPA 90 requires owners and operators
of vessels, including LNG carriers, to establish and maintain with the United States Coast
Guard (or<I> Coast Guard</I>) evidence of financial responsibility sufficient to meet
their potential liabilities under OPA 90. In December 1994, the Coast Guard implemented
regulations requiring evidence of financial responsibility in the amount of $1,500 per
gross ton for tankers, coupling the OPA limitation on liability of $1,200 per gross ton
with the Comprehensive Environmental Response, Compensation, and Liability Act (or CERCLA)
liability limit of $300 per gross ton. Under the regulations, such evidence of financial
responsibility may be demonstrated by insurance, surety bond, self-insurance or guaranty.
Under OPA 90, an owner or operator of a fleet of tankers is required only to demonstrate
evidence of financial responsibility in an amount sufficient to cover the tanker in the
fleet having the greatest maximum liability under OPA 90. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Coast Guard&#146;s regulations
concerning certificates of financial responsibility (or <I>COFR</I>) provide, in
accordance with OPA 90, that claimants may bring suit directly against an insurer or
guarantor that furnishes COFR; and, in the event that such insurer or guarantor is sued
directly, it is prohibited from asserting any contractual defense that it may have had
against the responsible party and is limited to asserting those defenses available to the
responsible party and the defense that the incident was caused by the willful misconduct
of the responsible party. Certain organizations, which had typically provided COFR under
pre-OPA 90 laws, including the major protection and indemnity organizations, have declined
to furnish evidence of insurance for vessel owners and operators if they are subject to
direct actions or required to waive insurance policy defenses. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Coast Guard&#146;s financial
responsibility regulations may also be satisfied by evidence of surety bond, guaranty or
by self-insurance. Under the self-insurance provisions, the shipowner or operator must
have a net worth and working capital, measured in assets located in the United States
against liabilities located anywhere in the world, that exceeds the applicable amount of
financial responsibility. We have complied with the Coast Guard regulations by providing a
financial guaranty from a related company evidencing sufficient self-insurance for all our
vessels trading into the United States or by providing third-party guarantees. If other
vessels in our fleet trade into the United States in the future, we expect to provide
guaranties through self-insurance, or to obtain such guaranties from third-party insurers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPA 90 and CERCLA permit individual
states to impose their own liability regimes with regard to oil or hazardous substance
pollution incidents occurring within their boundaries, and some states have enacted
legislation providing for unlimited liability for spills. We intend to comply with all
applicable state regulations in the ports where our vessels call. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Owners or operators of tankers
operating in United States waters are required to file vessel response plans with the
Coast Guard, and their tankers are required to operate in compliance with their Coast
Guard approved plans. Such response plans must, among other things: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
address a &#147;worst case&#148; scenario and identify and ensure, through contract or
other approved means, the availability of necessary private response resources to respond
to a &#147;worst case discharge;&quot; </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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
describe crew training and drills; and</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
identify a qualified individual with full authority to implement removal actions.</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have filed vessel response plans
with the Coast Guard for the tankers we own and have received approval of such plans for
all vessels in our fleet to operate in United States waters. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPA 90 allows U.S. State legislatures
to pre-empt associated regulation if the state&#146;s regulations are equal or more
stringent. Several coastal states such as California, Washington and Alaska require state
specific COFR and vessel response plans. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERCLA contains a similar liability
regime to OPA 90, but applies to the discharge of &#147;hazardous substances&#148; rather
than &#147;oil.&#148; Petroleum products and LNG should not be considered hazardous
substances under CERCLA, but additives to oil or lubricants used on LNG carriers might
fall within its scope. CERCLA imposes strict liability upon the owner, operator or
bareboat charterer of a vessel for cleanup costs and damages arising from a discharge of
hazardous substances. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPA 90 and CERCLA do not preclude
claimants from seeking damages for the discharge of oil and hazardous substances under
other applicable law, including maritime tort law. Such claims could include attempts to
characterize the transportation of LNG aboard a vessel as an ultra-hazardous activity
under a doctrine that would impose strict liability for damages resulting from that
activity. The application of this doctrine varies by jurisdiction. There can be no
assurance that a court in a particular jurisdiction will not determine that the carriage
of oil or LNG aboard a vessel is an ultra-hazardous activity, which would expose us to
strict liability for damages we cause to injured parties even when we have not acted
negligently. </FONT></P>

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<A NAME=A097></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Environmental
Regulation&#151;Other Environmental Initiatives. </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On June 4, 2003, the European Union
Parliament passed legislation that will accelerate the phase-out of single-hull tankers
between now and 2010, ban the carriage of heavy crude oil and heavy fuel oils on
single-hull tankers in European waters and impose a Condition Assessment Scheme for
single-hull tankers older than 15 years. This new regulation effectively banned all
Category 1 single hull tankers over the age of 23 years immediately, with all remaining
Category 1 single hull tankers being phased out by 2005. The phase-out date for Category 2
single hull tankers is 2010, with double sided or double bottomed tankers being phased-out
by the earlier of 2015 or 25 years of age. The regulations became effective on October 21,
2003, and immediately banned approximately 11% of the existing world tanker fleet from
trading in European waters. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Although the United States is not a
party, many countries have ratified and follow the liability scheme adopted by the IMO and
set out in the International Convention on Civil Liability for Oil Pollution Damage, 1969,
as amended (or<I> CLC</I>)<I>,</I> and the Convention for the Establishment of an
International Fund for Oil Pollution of 1971, as amended. Under these conventions, which
are applicable to vessels that carry persistent oil (not LNG) as cargo, a
vessel&#146;s registered owner is strictly liable for pollution damage caused on the
territorial waters of a contracting state by discharge of persistent oil, subject to
certain complete defenses. Many of the countries that have ratified the CLC have increased
the liability limits through a 1992 Protocol to the CLC. The liability limits in the
countries that have ratified this Protocol are currently approximately $6.7 million plus
approximately $938 per gross registered tonne above 5,000 gross tonnes with an approximate
maximum of $134 million per vessel, with the exact amount tied to a unit of account which
varies according to a basket of currencies. The right to limit liability is forfeited
under the CLC where the spill is caused by the owner&#146;s actual fault or privity and,
under the 1992 Protocol, where the spill is caused by the owner&#146;s intentional or
reckless conduct. Vessels trading to contracting states must provide evidence of insurance
covering the limited liability of the owner. In jurisdictions where the CLC has not been
adopted, various legislative schemes or common law govern, and liability is imposed either
on the basis of fault or in a manner similar to the CLC. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition, the IMO, various
countries and states, such as Australia, the United States and the State of California,
and various regulators, such as port authorities, the U.S. Coast Guard and the U.S.
Environmental Protection Agency, have either adopted legislation or regulations, or are
separately considering the adoption of legislation or regulations, aimed at regulating the
discharge of ballast water as a potential pollutant. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A098></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shuttle Tanker Regulation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our shuttle tankers primarily operate
in the North Sea. In addition to the regulations imposed by the IMO, countries having
jurisdiction over North Sea areas impose regulatory requirements in connection with
operations in those areas. These regulatory requirements, together with additional
requirements imposed by operators in North Sea oil fields, require that we make further
expenditures for sophisticated equipment, reporting and redundancy systems on our shuttle
tankers and for the training of seagoing staff. Additional regulations and requirements
may be adopted or imposed that could limit our ability to do business or further increase
the cost of doing business in the North Sea. </FONT></P>

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<A NAME=A099></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>D. Taxation of the
Company </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>The following discussion is a
summary of the principal United States, Bahamian, Bermudian, Marshall Islands, Norwegian
and Spanish tax laws applicable to us. The following discussion of tax matters, as well as
the conclusions regarding certain issues of tax law that are reflected in such discussion,
are based on current law. No assurance can be given that changes in or interpretation of
existing laws will not occur or will not be retroactive or that anticipated future factual
matters and circumstances will in fact occur. Our views have no binding effect or official
status of any kind, and no assurance can be given that the conclusions discussed below
would be sustained if challenged by taxing authorities.</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A100></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>United States Taxation </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following discussion is based
upon the provisions of the U.S. Internal Revenue Code of 1986, as amended (or the
<I>Code</I>), existing and proposed U.S. Treasury Department regulations, administrative
rulings, pronouncements and judicial decisions, all as of the date of this Annual Report. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have made special U.S. tax
elections in respect of some of our vessel-owning or vessel-operating subsidiaries that
are potentially subject to U.S. tax as a result of deriving income attributable to the
transportation of cargoes to or from the United States. Our Norwegian, Canadian and
Spanish subsidiaries that occasionally transport cargoes to and from the United States are
eligible to claim exemption from United States tax under the United States-Norway, United
States-Canada or United States-Spain Income Tax Treaties. Other subsidiaries that are
considered to derive income from sources within the United States rely on our ability to
claim exemption under Section 883 of the Code. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For 2004 and 2003, approximately
15.2% and 12.3%, respectively, of our gross shipping revenues were derived from U.S.
sources attributable to the transportation of cargoes to or from the United States. The
average U.S. federal income tax on such U.S. source income, in the absence of exemption
under Section 883, would have been 4% thereof, or approximately $13.7 million and $7.8
million, respectively, for 2004 and 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under Section 883 of the Code, we
will be exempt from U.S. Taxation on our U.S. source shipping income if: </FONT></P>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Teekay is organized in a qualified foreign country which is one that grants an
          equivalent exemption from tax to corporations organized in the United States in
          respect of the shipping income for which exemption is being claimed under
          Section&nbsp;883 (referred to as the &#147;country of organization
          requirement&#148;); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 3-TNR" FSL="Default" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Teekay can satisfy any one of the following three stock ownership requirements: </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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
more than 50% of  Teekay's  stock,  in terms of value,  is  beneficially  owned by  individuals  who are
               residents of a qualified foreign country;
</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay is a &#147;controlled foreign corporation&#148; within the meaning of
Section&nbsp;957 of the Code and more than 50% of our shipping income is includible in the
gross income of U.S.&nbsp;persons that own 10% or more of our stock; or
</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
our stock is &#147;primarily and regularly&#148; traded on an established securities
market in the United States or any qualified foreign country (referred to as the &#147;publicly-traded requirement&#148;).
</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Final Treasury regulations
interpreting Section 883 were promulgated in August 2003 and became effective for tax
years beginning after September 24, 2004 (January 1, 2005 for calendar year taxpayers).
For purposes of this discussion, we have assumed these regulations apply for 2004. As of the date of this
report, we believe that we qualify for the Section 883 exemption from U.S. tax on U.S. source
shipping income under the final Treasury Regulations on the basis that we satisfy the
country of organization requirement because we are organized in the Marshall Islands and the publicly-traded requirement
because our stock is primarily and regularly traded on an established securities market in the United
States within the meaning of the Section 883 of the Code and the Treasury Regulations thereunder.
We can give no assurance that any changes in the ownership of our stock subsequent to the date of this
report will permit us to continue to qualify for the Section 883 exemption. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If we do not qualify for the Section 883 exemption,  we would be subject to U.S.  federal income taxation under
one of two  alternative  tax regimes  (the 4% gross basis tax or the net basis tax).  We may be subject to a 4%
U.S.  federal  income tax on the U.S.  source  portion of our gross income  (without the benefit of deductions)
attributable to shipping  transportation  that begins or ends in the United States. For this purpose,  the U.S.
source  portion of such gross  income is deemed to be 50% of the income  attributable  to  transportation  that
begins or ends in the United States.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If we have transportation  income that is deemed to be "effectively  connected" with a trade or business in the
U.S. and we do not qualify for the Section 883  exemption,  we may be subject to corporate  income tax on a net
basis  (currently the highest  statutory  rate is 35%);  however,  we do not expect to have any  transportation
income that is U.S. effectively connected income.</FONT></P>

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<A NAME=A101></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Marshall Islands,
Bahamian and Bermudian Taxation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We believe that neither we nor our
subsidiaries will be subject to taxation under the laws of the Marshall Islands, the
Bahamas or Bermuda, and distributions by our subsidiaries to us also will not be subject
to any taxes under the laws of such countries. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A102></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Norwegian Taxation </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Norwegian subsidiaries are
subject to the ordinary Norwegian corporate tax legislation, which in general charges a
28% tax on taxable income. As of December 31, 2004, the operations of our Norwegian
subsidiaries consisted of: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
ownership and operation of 11
shuttle tankers (including two 50%-owned vessels);
</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
12 in-chartered shuttle tankers;
</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
ownership and operation of two FSO vessels currently trading as conventional crude oil
tankers;
</FONT></TD>
</TR>
</TABLE>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
commercial management services for certain of our crude oil and product
tankers;
</FONT></TD>
</TR>
</TABLE>

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<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
our 51% interest in IUM; and
</FONT></TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
11 plants installed on shuttle tankers that
reduce volatile organic compound emissions during loading, transportation
and storage of oil and oil products.
</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
We don&#146;t expect that payment of Norwegian income taxes will have a material effect on our results.</font></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A103></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Spanish Taxation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Spain imposes income taxes on income
generated by our Spanish subsidiary&#146;s shipping related activities at a rate of 35%.
Our Spanish subsidiary&#146;s vessels are registered in the Canary Islands Special Ship
Registry. Consequently, we are allowed a credit, equal to 90% of the tax payable on income
from the commercial operation of the Canary Islands registered ships, against the tax
otherwise payable. This effectively results in an income tax rate of approximately 3.5% on
income from the operation of these vessels. Vessel sales are subject to the full 35%
Spanish tax rate. A 20% reinvestment credit it available if the entire gross proceeds from
the vessel sale are reinvested in a qualifying asset and if the asset disposed of has been
held for a minimum period of one year. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We record deferred taxes on the
consolidated financial statements in accordance with accounting principles generally
accepted in the United States. Please see Note 1 to our December 31, 2004 audited
consolidated financial statements included elsewhere in this annual report on Form 20-F.
We don&#146;t expect Spanish income taxes will have a material effect on our results. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A104></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 5. Operating and
Financial Review and Prospects </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A105></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Management&#146;s
Discussion and Analysis of Financial Condition and Results of Operations </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A106></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Teekay is one of the world&#146;s
leading providers of international crude oil and petroleum product transportation
services. We estimate that we transported more than 10% of the world&#146;s seaborne oil
in 2004. Through our acquisition of Teekay Shipping Spain S.L. (or<I> Teekay Spain</I>)
(formerly Naviera F. Tapias S.A.), we have also expanded into the liquefied natural gas
(or <I>LNG</I>) shipping sector. As at December 31, 2004, our fleet (excluding vessels
managed for third parties) consisted of 154 vessels (including 15 newbuildings on order,
51 vessels time-chartered-in, nine vessels held for sale and five vessels owned by joint
ventures). Our conventional tankers provide for a total cargo-carrying capacity of
approximately 19.1 million deadweight tonnes (or <I>mdwt</I>), and our LNG and LPG
carriers have total cargo-capacity of approximately 1.0 million cubic meters. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our voyage revenues are derived from: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Voyage or &#147;spot&#148; charters, which are charters priced on a current, or &#147;spot,&#148; market rate;
</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Time-charters, whereby vessels are chartered to customers for a fixed period of time at rates that are generally
fixed, but may contain a variable component, such as an inflation adjustment or a current
market rate component; and
</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The table below illustrates the
primary distinctions among these types of charters and contracts: </FONT></P>

<PRE>
                                                                                               <U>Contract of</U>
                                 <U>Voyage Charter(1)</U>     <U>Time-Charter</U>        <U>Bareboat-Charter</U>    <U>Affreightment</U>
Typical contract length........  Single voyage         One year or more    One year or more    One year or more
Hire rate basis(2).............  Varies                Daily               Daily               Typically daily
Voyage expenses (3) ...........  We pay                Customer pays       Customer pays       We pay
Vessel operating expenses (3)..  We pay                We pay              Customer pays       We pay
Off-hire(4) ...................  Customer does         Varied              Customer            Customer typically
                                 not pay                                   typically pays      does not pay</PRE>
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     <HR ALIGN=LEFT WIDTH=80% SIZE=1 NOSHADE>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;Under a consecutive voyage charter, the customer pays for idle time.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;"Hire" rate refers to the basic payment from the charterer for the use of the vessel.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;Defined below under "Important Financial and Operational Terms and Concepts."<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;&nbsp;"Off-hire" refers to the time a vessel is not available for service.</FONT></P>

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<A NAME=A109></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Segments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our fleet is divided into three main
segments, the spot tanker segment, the fixed-rate tanker segment and the fixed-rate LNG
segment. </FONT></P>

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<A NAME=A110></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Spot Tanker Segment</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our spot tanker segment consists of
conventional crude oil tankers 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 (or
<I>VLCC</I>) fleet and substantially all of our conventional Aframax, large product and
small product tanker fleets are among the vessels included in the spot tanker segment. Our
spot market operations contribute 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 December 31, 2004, we had five Aframax tankers on order in our spot tanker segment
scheduled to be delivered between January 2005 and March 2007, three large product tankers
scheduled to be delivered between August 2005 and December 2006, and one Suezmax tanker
which delivered in March 2005 and was sold concurrently with its delivery. </FONT></P>

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<A NAME=A111></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Fixed-Rate Tanker Segment</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our fixed-rate tanker segment
includes our shuttle tanker operations, floating storage and offtake (or <I>FSO</I>)
vessels, liquid petroleum gas carriers, and conventional crude oil, methanol and product
tankers on long-term fixed-rate time-charter contracts or contracts of affreightment. Our
shuttle tanker business, which is operated through our subsidiaries Navion AS (or
<I>Navion</I>) and Ugland Nordic Shipping (or <I>UNS</I>), provides 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 December 31, 2004, we had on
order two newbuilding conventional crude oil Aframax tankers and one newbuilding
conventional crude oil Suezmax tanker in our fixed-rate tanker segment. Upon delivery of
the Aframax tankers, which is scheduled for January and March 2008, the vessels will
commence 10-year long-term charters to our SPT joint venture. The Suezmax tanker will
commence a 20-year time charter contract with Compania Espanola de Petroleos, S.A. (or
<I>CEPSA</I>), a Spanish energy conglomerate, upon delivery scheduled for July 2005. In
April 2004, we commenced a charter contract to provide Unocal Thailand with an FSO vessel
(the Pattani Spirit) for a minimum of 10 years. </FONT></P>

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<A NAME=A112></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Fixed-Rate LNG Segment</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our fixed-rate LNG segment consists
of LNG carriers subject to long-term, fixed-rate time-charter contracts. The acquisition
of Teekay Spain on April 30, 2004 established our entry into the LNG shipping sector. Our
fixed-rate LNG segment includes four LNG carriers acquired as part of the Teekay Spain
acquisition, including the delivery of one LNG carrier in July 2004, which commenced
service under a 25-year time-charter contract (with a charterer&#146;s option to extend an
additional five years), and the delivery of another LNG carrier in December 2004, which
commenced service under a 20-year time-charter contract (with a charterer&#146;s option to
extend an additional ten years). As at December 31, 2004, we had three newbuilding LNG
carriers on order, which will commence service under long-term contracts with Ras Lafan
Liquefied Natural Gas Co. Limited II (or <I>RasGas II</I>), a joint venture company
between a subsidiary of ExxonMobil Corporation and Qatar Petroleum, upon their deliveries,
which are scheduled for the fourth quarter of 2006 and the first half of 2007. The vessels
will be time-chartered to RasGas II for a period of 20 years, with a charterer&#146;s
option to extend for periods up to an additional 15 years. These LNG charter contracts are
subject, in certain circumstances, to termination and vessel purchase rights in favor of
RasGas II. </FONT></P>

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<A NAME=A113></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Acquisition of Teekay
Shipping Spain, S.L.</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On April 30, 2004 we acquired 100% of
the issued and outstanding shares of Teekay Shipping Spain S.L. for $298.2 million in cash
and the assumption of existing debt and remaining newbuilding commitments.<I> </I>We
believe the long-term, fixed-rate nature of Teekay Spain&#146;s charter contracts will add
stability to our cash flow and earnings throughout the tanker market cycle. Please see
Item 4. Information on the Company: Acquisition of Teekay Shipping Spain S.L. and Item 18
&#151; Financial Statements: Note 3 &#151; Acquisition of Teekay Shipping Spain S.L. </FONT></P>

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<A NAME=A114></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Acquisition of 50% of
PetroTrans Holdings Ltd.</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On September 30, 2003, we acquired
50% of the issued and outstanding shares of PetroTrans Holdings Ltd., the parent company
of Skaugen PetroTrans Inc. (or <I>SPT)</I>. Please see Item 4. Information on the Company:
Acquisition of 50% of PetroTrans Holdings Ltd. and Item 18 &#151; Financial Statements:
Note 5 &#151; Acquisition of 50% of PetroTrans Holdings Ltd. </FONT></P>

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<A NAME=A115></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Acquisition of Navion AS</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 $7.0 million. Please
see Item 4. Information on the Company: Acquisition of Navion AS and Item
18&#151;Financial Statements: Note 4 &#151; Acquisition of Navion AS. </FONT></P>

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<A NAME=A116></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proposed Initial Public
Offering by Teekay LNG Partners L.P.</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In November 2004, our wholly-owned
subsidiary, Teekay LNG Partners L.P. (or <I>Teekay LNG Partners</I>), filed a registration
statement with the U.S. Securities and Exchange Commission for an initial public offering
of its common units. Teekay LNG Partners is a Marshall Islands limited partnership
recently formed by us as part of our strategy to expand our operations in the LNG sector.
Upon the closing of the offering, Teekay LNG Partners will provide LNG and crude oil
marine transportation services through a fleet of LNG carriers and Suezmaz class crude oil
tankers, primarily consisting initially of vessels we obtained through our acquisition of
Teekay Spain. Teekay GP L.L.C. is a wholly owned subsidiary of Teekay Shipping Corporation and
the general partner of Teekay LNG Partners. Please see Item 18 &#151; Financial Statements: Note 17 &#150; Commitments and Contingencies. </FONT></P>

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<A NAME=A117></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IMO and European Union
Regulatory Changes </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As described above under &#147;Item
4. Information on the Company: Regulations,&#148; in 2003 both the International Maritime
Organization (or<I> IMO</I>), the United Nations&#146; global maritime regulatory body,
and the European Union Parliament adopted regulations that, among other things, accelerate
the phasing-out of single-hull tankers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result of these regulations,
which became effective April 5, 2005, we recorded a $56.9 million non-cash
write-down in our spot tanker segment in 2003, and reduced the estimated useful lives from
25 years to approximately 21 years for the two remaining vessels affected by these
regulatory changes. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Management believes that these IMO
regulations may result in further discrimination against older single-hull vessels. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are not aware of any other
regulatory changes or environment liabilities that we anticipate will have a material
impact on our current or future operations. </FONT></P>

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<A NAME=A118></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Important Financial and
Operational Terms and Concepts </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We use a variety of financial and
operational terms and concepts when analyzing our performance. These include the
following: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Voyage Revenues.</I></B><I></I>
Voyage revenues primarily include revenues from voyage charters, time charters and
contracts of affreightment. Voyage revenues are affected by hire rates and the number of
calendar-ship-days a vessel operates. Voyage revenues are also affected by the mix of
business between time charters, voyage charters and contracts of affreightment. Hire rates
for voyage charters are more volatile, as they are typically tied to prevailing market
rates at the time of a voyage. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Forward Freight
Agreements.</I></B><I></I> We are exposed to market risk for vessels in our spot tanker
segment from changes in spot market rates for vessels. In certain cases we use forward
freight agreements (or <I>FFAs</I>) to manage this risk. FFAs involve contracts to provide
a fixed number or theoretical voyages at fixed-rates, thus hedging a portion of our
exposure to the spot charter market. These agreements are recorded as assets or
liabilities and measured at fair value. Changes in the fair value of the FFAs are
recognized in other comprehensive income (loss) until the hedged item is recognized as
voyage revenue in income. The ineffective portion of a change in fair value is immediately
recognized into income through voyage revenues.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Voyage Expenses.</I></B><I></I>
Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel
expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and
commissions. Voyage expenses are typically paid by the customer under time charters and by
us under voyage charters and contracts of affreightment. When we pay voyage expenses, we
typically add them to our hire rates at an approximate cost. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Net Voyage
Revenues.</I></B><I></I> Net voyage revenues represent voyage revenues less voyage
expenses. Because the amount of voyage expenses we incur for a particular charter depends
upon the form of the charter, we use net voyage revenues to improve the comparability
between periods of reported revenues that are generated by the different forms of
charters. We principally use net voyage revenues, a non-GAAP financial measure, because it
provides more meaningful information to us than voyage revenues, the most directly
comparable financial measure under accounting principles generally accepted in the U.S.
(or <I>GAAP</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Time Charter Equivalent (TCE)
Rates.</I></B><I></I> Bulk shipping industry freight rates are commonly measured in the
shipping industry at the net voyage revenues level in terms of time charter equivalent (or
<I>TCE</I>) rates, which represent net voyage revenues divided by calendar-ship-days. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Vessel Operating
Expenses.</I></B><I></I> Under all types of charters for our vessels, we are responsible
for vessel operating expenses, which include crewing, repairs and maintenance, insurance,
stores, lube oils and communication expenses. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Income from Vessel Operations.
</I></B><I></I>To assist us in evaluating our operations by segment, we analyze our income
from vessel operations for each segment, which represents the income we receive from the
segment after deducting operating expenses and depreciation and amortization, but prior to
the deduction of net interest expense, income taxes, foreign currency and interest rate
swap gains or losses and other income and losses. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Drydocking.</I></B><I></I>
          We must periodically drydock each of our vessels for inspection, repairs and
          maintenance and any modifications to comply with industry certification or
          governmental requirements. Generally, we drydock each of our vessels every two
          and a half to five years, depending upon the type of vessel and its age. In
          addition, a shipping society classification intermediate survey is performed on
          our LNG carriers between the second and third year of the five-year drydocking
          period. We capitalize a substantial portion of the costs incurred during
          drydocking and for the survey and amortize those costs on a straight-line basis
          from the completion of a drydocking or intermediate survey to the estimated
          completion of the next drydocking. We expense costs related to routine repairs
          and maintenance incurred during drydocking that do not improve or extend the
          useful lives of the assets. The number of drydockings undertaken in a given
          period, the size of the vessels and the nature of the work performed determine
          the level of drydocking expenditures. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Depreciation and
Amortization.</I></B><I></I> Our depreciation and amortization expense typically consists
of the following three components: </FONT></P>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
charges related to the depreciation of the historical cost of our fleet (less an estimated
residual value) over the estimated useful lives of our vessels; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
charges related to the amortization of drydocking expenditures over the estimated number
of years to the next scheduled drydocking; and </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
charges related to the amortization of the fair value of the time charters, contracts of
affreightment and intellectual property where amounts have been attributed to those items
on acquisitions of subsidiary companies. These amounts are amortized over the period which
the asset is expected to contribute to the future cash flows of the Company. </FONT></TD>
</TR>
</TABLE>
<BR>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Calendar-ship-days.</I></B><I></I>
          Calendar-ship-days are equal to the aggregate number of calendar days in a
          period that our vessels operate during that period. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Restricted Cash
Deposits.</I></B><I></I> Under capital lease arrangements for two of our LNG carriers, we
(a) borrow under term loans and deposit the proceeds into restricted cash accounts and (b)
enter into capital leases, also referred to as &#147;bareboat charters,&#148; for the
vessels. The restricted cash deposits approximate the present value of the remaining
amounts we owe under the lease arrangements, including our obligation to purchase the
vessels at the end of the lease terms. The restricted cash deposits and interest earned
thereon will fully fund the payments under these bareboat charters, including our
obligation to purchase the vessels. During vessel construction, we borrow under the term
loans and make restricted cash deposits that approximate the construction installment
payments. We also maintain cash on deposit relating to certain other term loans and other
obligations. Please see Item 18 &#150; Financial Statements: Note 11 &#150; Capital Leases
and Restricted Cash. </FONT></P>

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<A NAME=A119></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tanker Market Overview </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, tanker spot rates rose
to the highest level in three decades as strong global oil demand growth and a higher
level of oil supplies from long-haul sources increased the tanker demand. In early 2005,
reduced oil production by Middle East OPEC members, lower Iraqi oil exports, and
unforeseen production outages in the North Sea caused tanker rates to decline, although
they remained at high levels. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Global oil demand, an underlying
driver of tanker demand, rose to 82.5 million barrels per day (or <I>mb/d</I>) during
2004, an increase of 2.7 mb/d, or 3.4%, from 2003. Strong global economic growth led by
China, non-OECD Asian countries and North America helped push oil demand to record levels.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Global oil supply increased by 3.4
mb/d, or 4.3%, to 83.0 mb/d in 2004 from 79.6 mb/d in 2003 due in part to a 1.4 mb/d rise
in long-haul Middle East OPEC oil production. Non-OPEC production rose by 1.0 mb/d mainly
as a result of rising output in the former Soviet Union. At its January 30, 2005 meeting,
OPEC (excluding Iraq) voted to leave its existing quota limit unchanged at 27.0 mb/d,
citing a forecasted balance between oil supply and demand for the first quarter of 2005. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The size of the world tanker fleet
rose to 334.0 million deadweight tonnes (or <I>mdwt</I>) as of December 31, 2004, up 17
mdwt, or 5.4% from December 31, 2003. Deliveries of tanker newbuildings aggregated 27.8
mdwt in 2004, exceeding total deletions of 10.8 mdwt. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, the world
tanker order book rose to 89.6 mdwt, representing 26.8% of the total world tanker fleet,
up from 77.6 mdwt, or 24.5%, as of December 31, 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The outlook for the tanker  market for the  remainder of 2005 is  positive,  since the balance  between  tanker
demand and tanker supply is expected to continue to be relatively tight during this period.  The  International
Energy Agency is  forecasting  an increase in oil demand of 1.8 mb/d, or 2.2%, in 2005 over 2004,  which should
typically  lead to an  approximate  4.0%  increase  in tanker  demand.  The 31.0 mdwt in  scheduled  new tanker
deliveries  in 2005 are expected to be largely  offset by the  increase in tanker  demand and the impact of the
recent IMO  regulations,  which are expected to phase-out  approximately  3 to 5% of the existing  world tanker
fleet, or 10 to 15 mdwt, during 2005.</FONT></P>

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<A NAME=A120></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Results of Operations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In accordance with GAAP, we report
gross voyage revenues in our income statements and include voyage expenses among our
operating expenses. However, shipowners base economic decisions regarding the deployment
of their vessels in the spot market segment upon anticipated TCE rates, and industry
analysts typically measure bulk shipping freight rates in terms of TCE rates. This is
because under time charter contracts the customer usually pays the voyage expenses whereas
under voyage charters and contracts of affreightment the shipowner usually pays the voyage
expenses, which typically are added to the hire rate at an approximate cost. Accordingly,
the discussion of revenue below focuses on net voyage revenues (i.e. voyage revenues less
voyage expenses) and TCE rates of our three reportable segments where applicable. Please
see Item 18 &#151; Financial Statements: Note 2 &#150; Segment Reporting. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following tables compare our
operating results by reportable segment for 2004, 2003 and 2002, and compare our net
voyage revenues (which is a non-GAAP financial measure) by reportable segment for 2004,
2003, and 2002 to the most directly comparable GAAP financial measure: </FONT></P>


<PRE>
- ----------- ---------------------------------------- ------------------------------ -------------------------------
                 <B>Year Ended December 31, 2004</B>        <B>Year Ended December 31, 2003</B>    <B>Year Ended December 31, 2002</B>
                        Fixed                                   Fixed                          Fixed
               Spot     -Rate     Fixed                Spot     -Rate                Spot      -Rate
              Tanker    Tanker   -Rate LNG            Tanker    Tanker              Tanker     Tanker
              Segment   Segment  Segment    Total     Segment   Segment   Total     Segment    Segment    Total
             ($000's)  ($000's)  ($000's) ($000's)   ($000's)  ($000's)  ($000's)   ($000's)   ($000's)  ($000's)
- ----------- ---------- -------- --------- ---------- --------- --------- --------- ---------- --------- ---------

Voyage
Revenues    1,450,791   725,061   43,386  2,219,238  1,081,974  494,121  1,576,095   632,281    151,046   783,327
Voyage
Expenses     (355,116)   (7,058)    (221)  (432,395)  (342,928) (51,728) (394,656)  (234,376)    (5,079) (239,455)
- ----------- ---------- -------- --------- ---------- ---------- --------- --------- ---------- --------- ---------
Net Voyage
Revenues    1,095,675   648,003   43,165  1,786,843    739,046  442,393  1,181,439   397,905    145,967   543,872
- ----------- ---------- -------- --------- ---------- ---------- --------- --------- ---------- --------- ---------
</PRE>
<PRE>
- ----------- ---------------------------------------- ------------------------------ -------------------------------
                 <B>Year Ended December 31, 2004</B>        <B>Year Ended December 31, 2003</B>    <B>Year Ended December 31, 2002</B>
                        Fixed                                   Fixed                          Fixed
               Spot     -Rate     Fixed                Spot     -Rate                Spot      -Rate
              Tanker    Tanker   -Rate LNG            Tanker    Tanker              Tanker     Tanker
              Segment   Segment  Segment    Total     Segment   Segment   Total     Segment    Segment    Total
                 (%)      (%)     (%)        (%)        (%)       (%)       (%)        (%)        (%)       (%)
- ----------- ---------- -------- --------- ---------- --------- --------- --------- ---------- --------- ---------

Voyage
Revenues         65       33        2        100         69       31       100         81         19       100
Voyage
Expenses         82       18        -        100         87       13       100         98          2       100
- ----------- ---------- -------- --------- ---------- --------- --------- --------- ---------- --------- ---------
Net Voyage
Revenues         62       36        2        100         63       37       100         73         27       100
- ----------- ---------- -------- --------- ---------- --------- --------- --------- ---------- --------- ---------
</PRE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table outlines the TCE
rates earned by the vessels in our spot tanker segment for 2004, 2003 and 2002: </FONT></P>

<PRE>
- --------------- -------------------------------- ------------------------------ -------------------------------
                 <B>Year Ended December 31, 2004</B>    <B>Year Ended December 31, 2003</B>     <B>Year Ended December 31, 2002</B>
                                      TCE per                          TCE per                         TCE per
                 Net Voyage           calendar-  Net Voyage           calendar-  Net Voyage           calendar-
Vessel Type       Revenues   Calendar ship-day    Revenues   Calendar  ship-day   Revenues  Calendar  ship-day
                  ($000's)     Days      ($)      ($000's)     Days     ($)      ($000's)     Days       ($)
- --------------- ------------ -------- ---------- ----------- -------- --------- ----------- --------- ---------

VLCC                 67,129      887     75,681     36,891       819    45,044      6,257        365   17,141
Suezmax(1)          133,706    2,423     55,182     62,329     1,841    33,856          -          -        -
Aframax(1)          813,371   20,697     39,299    535,570    21,489    24,923    340,643     21,383   15,930
Oil/Bulk/Ore (2)      3,269      157     20,822     39,849     2,451    16,258     32,749      2,920   11,215
Large Product        50,221    1,962     25,597     17,331       560    30,948          -          -        -
Small Product        49,175    3,515     13,990     27,960     2,416    11,573          -          -        -
- --------------- ------------ -------- ---------- ----------- -------- --------- ----------- --------- ---------
   Totals         1,116,871   29,641     37,680    719,930    29,576    24,342    379,649     24,668   15,390
=============== ============ ======== ========== =========== ======== ========= =========== ========= =========
</PRE>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The Suezmax net voyage revenues exclude losses on FFAs of $11.3 million (2004)
               and gains on FFAs of $0.6 million (2003). The Aframax net voyage revenues
               exclude losses on FFAs of $10.5 million (2004) and losses on FFAs of $0.3
               million (2003). We were not a party to any FFAs during 2002. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The oil/bulk/ore fleet&#146;s net voyage revenues exclude $0.5 million (2004),
               $18.8 million (2003), and $18.2 million (2002) 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 in 2004. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A126></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Year Ended December 31,
2004 versus Year Ended December 31, 2003 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We acquired Teekay Spain on April 30,
2004. Consequently, our 2004 financial results for our segments only reflect Teekay
Spain&#146;s results of operations commencing May 1, 2004. We completed our acquisition of
Navion on April 1, 2003. Consequently, our 2003 financial results for our segments only
reflect Navion&#146;s results of operations on that date. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A127></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Spot Tanker Segment</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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;
&#145;reference for modern tankers. As a result of our dependence on the spot tanker
market, any fluctuations in TCE rates will affect our revenues and earnings. As a result
of the previously mentioned strong tanker freight rates during 2004, our average TCE rate
for the vessels in our spot tanker segment increased 54.8% to $37,680 for 2004, from
$24,342 for 2003. During 2004, approximately 62% of our net voyage revenues were earned by
the vessels in the spot tanker segment, compared to approximately 63% in 2003. The
decrease from 2003 was due primarily to our acquisition of Teekay Spain and its fixed-rate
Suezmax tanker and LNG fleet and the sale of 11 older spot vessels as part of our fleet
renewal program, partially offset by the increase in spot tanker rates compared to 2003
and an increase in the chartered-in vessels in our spot tanker segment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table provides a
summary of the change in fleet size, based on calendar-ship-days, of our spot tanker
segment by owned and chartered-in vessels: </FONT></P>

<PRE>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                    <B> Year Ended December 31,</B>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                  <B>2004</B>                      <B>2003</B>                <B>Percentage Change</B>
                                            (Calendar Days)            (Calendar Days)                 (%)
- -------------------------------------- ------------------------- ------------------------- --------------------------
Owned Vessels                                     16,181                    21,206                   (23.7)
Chartered-in Vessels                              13,460                     8,370                    60.8
- -------------------------------------- ------------------------- ------------------------- --------------------------
Total                                             29,641                    29,576                     0.2
====================================== ========================= ========================= ==========================
</PRE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The average fleet size of our spot
tanker fleet (including vessels chartered-in) increased slightly in 2004, primarily due
the delivery of four Aframax newbuildings and an increase in the number of vessels
chartered-in due to the inclusion of Navion for a fully year in 2004, compared to nine
months in 2003, as well as the sale and leaseback of three Aframax tankers in December
2003. These increases were substantially offset by the sale of 11 older tankers in the
spot tanker segment during 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues for the spot
tanker segment increased 48.3% to $1,095.7 million for 2004, from $739.0 million for 2003.
This increase was primarily due to the increases in average TCE rates from 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses, which
include crewing, repairs and maintenance, insurance, stores and lubes, and communication
expenses, decreased 26.0% to $93.4 million for 2004, from $126.3 million for 2003. The
decrease in vessel operating expenses was primarily due to the sale of 11 older vessels
during the year. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Time-charter hire expense increased
56.3% to $263.1 million for 2004, from $168.3 million for 2003. This increase was due
primarily to the previously mentioned increase of chartered-in vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and amortization expense
decreased 10.2% to $95.6 million for 2004, from $106.4 million for 2003. The decrease was
primarily attributable to the previously mentioned vessel dispositions, partially offset
by the deliveries of the four newbuilding Aframax tankers during 2004 and the increased
amortization of older vessels due to the accelerated depreciation of vessels affected by
the previously mentioned IMO regulations. Depreciation and amortization expense included
amortization of drydocking costs of $16.1 million for 2004, compared to $22.3 million for
2003. The decrease in drydock amortization was primarily due to the previously mentioned
sale of older vessels that require more frequent drydocks. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gain on sale of vessels for 2004 of
$72.1 million included gains on the sale of the 11 older vessels, as well as amortization
of a deferred gain on the sale and leaseback of the three Aframax tankers in December
2003. The write-downs and loss on sale of vessels for 2003 of $90.3 million was primarily
comprised of the write-down of vessel values as a result of the previously mentioned IMO
regulations and vessels sold in 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We incurred restructuring charges of
$1.0 million in 2004 relating to the closure of our Oslo, Norway office. Restructuring
charges of $4.4 million in 2003 relate to the closure of our Oslo, Norway and Melbourne,
Australia offices, and severance costs related to the termination of seafaring staff. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A129></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Fixed-Rate Tanker Segment</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table provides a
summary of the change in fleet size, based on calendar ship days, of our fixed-rate tanker
segment by owned and chartered-in vessels: </FONT></P>


<PRE>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                     <B>Year Ended December 31,</B>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                  <B>2004</B>                      <B>2003</B>                <B>Percentage Change</B>
                                            (Calendar Days)           (Calendar Days)                  (%)
- -------------------------------------- ------------------------- ------------------------- --------------------------
Owned Vessels                                     14,808                    10,196                    45.2
Chartered-in Vessels                               5,905                     4,370                    35.1
- -------------------------------------- ------------------------- ------------------------- --------------------------
Total                                             20,713                    14,566                    42.2
====================================== ========================= ========================= ==========================
</PRE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The average fleet size of our
fixed-rate tanker segment (including vessels chartered-in) increased significantly in 2004
compared to 2003, primarily due to our acquisition of Teekay Spain, which included four
Suezmax tankers in this segment, and the delivery of four newbuildings in 2004. In
addition, the results of Navion, including its fixed-rate shuttle tanker fleet, were only
included for nine months in 2003, compared to a full year in 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues increased 46.5%
to $648.0 million for 2004, from $442.4 million for 2003 primarily due to the increase in
fleet size. The shuttle tankers acquired as part of our acquisition of Navion generated,
on average, more revenue per ship than the remaining vessels in our fixed-rate tanker
segment. During 2004, approximately 36% of our net voyage revenues were earned by the
vessels in the fixed-rate tanker segment, compared to approximately 37% in 2003.<U></U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses increased
39.3% to $117.6 million for 2004, from $84.4 million for 2003. The increase in vessel
operating expenses was primarily due to the increase in fleet size and the appreciation of
other major currencies against the U.S. Dollar. The shuttle tankers acquired as part of
our acquisition of Navion incurred, on average, higher operating costs per ship than the
remaining vessels in our fixed-rate tanker segment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Time-charter hire expense increased
42.4% to $194.1 million for 2004, from $136.3 million for 2003. The increase is due
primarily to Navion&#146;s chartered-in shuttle tankers being included for the full year
in 2004, but only for nine months in 2003, the date of the Navion acquisition. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and amortization expense
increased 52.1% to $129.1 million for 2004, from $84.9 million for 2003. The increase was
mainly due to increased vessel cost amortization during 2004 as a result of the increase
in fleet size of owned vessels in this segment, the amortization of the estimated fair
market value of the time charter contracts we acquired as part of the Teekay Spain
acquisition and a full year of amortization during 2004 of the contracts of affreightment
we acquired as part of the 2003 Navion acquisition. Depreciation and amortization expense
included amortization of drydocking costs of $7.3 million for 2004, compared to $4.2
million for 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gain on sale of vessels for 2004 of
$7.2 million represents gains on the sale of three older vessels. Loss on sale of vessels
for 2003 of $0.1 million relate to the sale of a shuttle tanker in our fixed-rate tanker
segment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We incurred no restructuring charges
in 2004 in our fixed-rate tanker segment. Restructuring charges of $2.0 million in 2003
relate to the closure of our Oslo, Norway and Melbourne, Australia offices, and severance
costs related to the termination of seafaring staff. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A131></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Fixed-Rate LNG Segment</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The results of our fixed-rate LNG
segment reflect the operations of our four LNG carriers (including one newbuilding that
delivered in July 2004, and one newbuilding that delivered in December 2004) acquired as
part of our acquisition of Teekay Spain on April 30, 2004. The total number of calendar
ship days of our LNG carriers during 2004 was 660. We had no LNG shipping operations prior
to the Teekay Spain acquisition. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues totaled $43.2
million for 2004, or $65,402 per calendar-ship-day. During 2004 approximately 2% of our
net voyage revenues were earned by the vessels in the fixed-rate LNG segment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses totaled
$7.5 million for 2004, or $11,377 per calendar-ship-day. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and amortization was $12.9
million in 2004, which includes $3.6 million of amortization of time-charter contracts
acquired as part of the Teekay Spain acquisition. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A132></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Other Operating Results</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General and administrative expenses
increased 53.5% to $130.7 million for 2004, from $85.1 million for 2003, primarily as a
result of the Teekay Spain acquisition, the inclusion of Navion for 12 months in 2004
compared to only nine months in 2003, an increase in the accrual for performance-based
bonuses in 2004, including $12.5 million authorized by the Board of Directors in addition
to the regular bonus plan, and the appreciation of several major currencies against the
U.S. Dollar. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense increased 50.0% to
$121.5 million for 2004, from $81.0 million for 2003. This increase primarily reflects
interest on the additional debt we incurred in connection of our acquisitions of Navion
and Teekay Spain. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest income increased 372.5% to
$18.5 million for 2004, compared to $3.9 million for 2003. This increase was primarily due
to interest earned on higher average cash and restricted cash balances. Please see
&#147;Important Financial and Operational Terms and Concepts &#151; Restricted Cash
Deposits&#148; above. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Equity income from 50%-owned joint
ventures increased 97.0% to $13.7 million for 2004, from $7.0 million for 2003, primarily
as a result of our acquisition of a 50% interest in SPT during September 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gain on sale of marketable securities
was $93.2 million in 2004, compared to $0.5 million in 2003. During 2004 we sold our
investments in marketable securities. Please see Item 18 &#150; Financial Statements: Note
6 &#150; Investments in Marketable Securities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other loss of $67.7 million for 2004
was primarily comprised of foreign exchange losses of $42.7 million, income taxes of $35.0
million and a $0.8 million loss on redemption of $13.4 million of our 8.32% First
Preferred Ship Mortgage Notes, partially offset by dividend income from our joint ventures
and leasing income from our volatile organic compound emissions equipment. Other loss of
$46.0 million for 2003 was primarily comprised of income taxes of $36.5 million, a $5.4
million loss on redemption of $57.9 million of our 8.32% First Preferred Ship Mortgage
Notes, a write-down of marketable securities, goodwill and other assets, minority interest
expense, and foreign exchange losses, partially offset by dividend income from Nordic
American Tanker Shipping Ltd. (or <I>NATS</I>), and leasing income from our volatile
organic compound emissions equipment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result of the foregoing factors,
net income increased to $757.4 million for 2004, from $177.4 million for 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A133></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Year Ended December 31,
2003 versus Year Ended December 31, 2002 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We completed our acquisition of on
April 1, 2003. Consequently, our 2003 financial results for our segments only reflect
Navion&#146;s results of operations for nine months. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A134></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Spot Tanker Segment</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result of strengthening in
tanker freight rates during 2003, our average TCE rate for the vessels in our spot tanker
segment increased 58.2% to $24,342 for 2003, from $15,390 for 2002. During 2003,
approximately 63% of our net voyage revenues were earned by the vessels in the spot tanker
segment, compared to approximately 73% in 2002. The decrease from 2002 was due primarily
to our acquisition of Navion and its shuttle tanker fleet that is part of our fixed-rate
tanker segment, partially offset by an increase in spot tanker rates compared to 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table provides a
summary of the change in fleet size, based on calendar ship days, of our spot tanker
segment by owned and chartered-in vessels: </FONT></P>

<PRE>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                     <B>Year Ended December 31,</B>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                  <B>2003</B>                      <B>2002</B>                <B>Percentage Change</B>
                                            (Calendar Days)           (Calendar Days)                  (%)
- -------------------------------------- ------------------------- ------------------------- --------------------------
Owned Vessels                                     21,206                    22,824                    (7.1)
Chartered-in Vessels                               8,370                     1,844                   353.9
- -------------------------------------- ------------------------- ------------------------- --------------------------
Total                                             29,576                    24,668                    19.9
====================================== ========================= ========================= ==========================
</PRE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The average fleet size of our spot
tanker fleet (including vessels chartered-in) increased in 2003, primarily due to our
acquisition of Navion, and the delivery of three chartered-in newbuildings (two Aframax
tankers delivered in April 2003 and August 2003, and a VLCC delivered in June 2003) and a
vessel under capital lease (an Aframax tanker delivered in September 2003). These
increases were partially offset by the sale of 16 older tankers in the spot tanker segment
during 2003 as part of our fleet renewal program. The average fleet size of our owned spot
tanker fleet decreased in 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues for the spot
tanker segment increased 85.7% to $739.0 million for 2003, from $397.9 million for 2002.
These increases were primarily due to the increases in average fleet size and average TCE
rates from 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses, which
include crewing, repairs and maintenance, insurance, stores and lubes, and communication
expenses, decreased 1.3% to $126.3 million for 2003, from $128.0 million for 2002. The
decrease in vessel operating expenses was primarily due to the decreased size of our owned
spot tanker fleet, partially offset by higher repairs and maintenance costs on our
remaining vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Time-charter hire expense increased
237.0% to $168.3 million for 2003, from $49.9 million for 2002. This increase was due
primarily to the addition of the chartered-in vessels included as part of the Navion
acquisition and the previously mentioned delivery of three additional chartered-in
vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and amortization expense
increased 0.9% to $106.4 million for 2003, from $105.4 million for 2002. The increase was
primarily attributable to the larger fleet size resulting from our acquisition of Navion
and increased drydock amortization, substantially offset by the effect of the previously
mentioned vessel dispositions. Depreciation and amortization expense included amortization
of drydocking costs of $22.3 million for 2003, compared to $18.1 million for 2002. The
increase in drydock amortization was primarily due to an increase in the amount of work
done in drydock on most vessels during 2003 and an increase in the frequency of required
drydockings for older vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As previously mentioned, we wrote
down the book values of certain of our tankers by $56.9 million in the fourth quarter of
2003 due to changes in IMO regulations, and we sold 16 older vessels in our spot tanker
segment in 2003. These dispositions resulted in a $34.7 million write-down in the book
value of these vessels, partially offset by a $1.3 million gain on the sale of some of the
vessels. There were no vessel write-downs or vessel dispositions in our spot tanker
segment in 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring charges of $4.4 million
in 2003 related to the closure of our Oslo, Norway and Melbourne, Australia offices, and
severance costs related to the termination of seafaring staff. There were no restructuring
changes in our spot tanker segment in 2002. </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=2><U>Fixed-Rate Tanker Segment</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table provides a
summary of the change in fleet size, based on calendar-ship-days of our fixed-rate tanker
segment by owned and chartered-in vessels: </FONT></P>

<PRE>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                     <B>Year Ended December 31,</B>
- -------------------------------------- --------------------------------------------------- --------------------------
                                                  <B>2003</B>                      <B>2002</B>                <B>Percentage Change</B>
                                            (Calendar Days)           (Calendar Days)                  (%)
- -------------------------------------- ------------------------- ------------------------- --------------------------
Owned Vessels                                     10,196                     6,249                    63.2
Chartered-in Vessels                               4,370                         -                      -
- -------------------------------------- ------------------------- ------------------------- --------------------------
Total                                             14,566                     6,249                   133.1
====================================== ========================= ========================= ==========================
</PRE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The average fleet size of our
fixed-rate tanker segment (including vessels chartered-in) more than doubled in 2003
compared to 2002, primarily due to our acquisition of Navion and the addition of four
shuttle tankers (including deliveries of two newbuilding shuttle tankers) in 2003. In
addition, the first three of five newbuilding conventional tankers on 12-year charters to
ConocoPhillips were delivered in the second half of 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net voyage revenues increased 203.1%
to $442.4 million for 2003, from $146.0 million for 2002, primarily due to the increase in
fleet size. The shuttle tankers acquired as part of our acquisition of Navion generated,
on average, more revenue per ship than the remaining vessels in our fixed-rate tanker
segment. During 2003, approximately 37% of our net voyage revenues were earned by the
vessels in the fixed-rate tanker segment, compared to approximately 27% in 2002.<U></U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Vessel operating expenses increased
110.7% to $84.4 million for 2003, from $40.1 million for 2002. The increase in vessel
operating expenses was primarily due to the increase in fleet size. The shuttle tankers
acquired as part of our acquisition of Navion incurred, on average, higher operating costs
per ship than the remaining vessels in our fixed-rate tanker segment. Other less
significant reasons for the increase in vessel operating expenses were higher repair,
maintenance and crewing costs, and the appreciation of the Norwegian Kroner against the
U.S. Dollar. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Time-charter hire expense was $136.3
million for 2003. We incurred no time-charter hire expense in 2002, as we did not have any
chartered-in tankers in the fixed-rate tanker segment prior to our acquisition of Navion.
As at December 31, 2003, we had 13 chartered-in shuttle tankers and one chartered-in
methanol carrier. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Depreciation and amortization expense
increased 93.4% to $84.9 million for 2003, from $43.9 million for 2002. The increase was
mainly due to increased vessel cost amortization as a result of the increase in fleet size
of our owned vessels 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 $4.2 million for 2003,
compared to $3.7 million for 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Loss on sale of vessels for 2003 of
$0.1 million related to the sale of a shuttle tanker in our fixed-rate tanker segment.
There were no vessel dispositions in our fixed-rate tanker segment in 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Restructuring charges of $2.0 million
in 2003 relate to the closure of our Oslo, Norway and Melbourne, Australia offices, and
severance costs related to the termination of seafaring staff. No restructuring charges
were incurred in 2002 in our fixed-rate tanker segment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A138></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Other Operating Results</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>General and administrative expenses
increased 48.7% to $85.1 million for 2003, from $57.2 million for 2002, primarily as a
result of the Navion acquisition, a special compensation expense to an executive officer
and the appreciation of several major currencies against the U.S. Dollar. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Equity income from 50%-owned joint
ventures increased 54.1% to $7.0 million for 2003, from $4.5 million for 2002, primarily
as a result of our acquisition of a 50% interest in SPT during September 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest expense increased 39.7% to
$81.0 million for 2003, from $58.0 million for 2002. This increase primarily reflects
interest on the additional debt we incurred to acquire Navion. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest income increased 12.2% to
$3.9 million for 2003, compared to $3.5 million for 2002. This increase was primarily due
to interest earned on higher average cash balances, partially offset by lower interest
rates. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other loss of $46.0 million for 2003
was primarily comprised of income taxes of $36.5 million, a loss on redemption of $57.9
million of our 8.32% First Preferred Ship Mortgage Notes, a write-down of
available-for-sale securities, goodwill and other assets, minority interest expense, and
foreign exchange losses, partially offset by dividend income from Nordic American Tanker
Shipping Ltd., leasing income from our volatile organic compound emissions equipment and a
gain on the disposition of available-for-sale securities. Other loss of $14.9 million for
2002 was primarily comprised of income taxes of $11.4 million, the settlement of a
contingent payment relating to our purchase in 1993 of all the issued and outstanding
shares of Palm Shipping Inc. (now Teekay Chartering Limited), a loss on sale of
available-for-sale securities, and minority interest expense, partially offset by dividend
income from Nordic American Tanker Shipping Ltd., and foreign exchange gains. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As a result of the foregoing factors,
net income increased to $177.4 million for 2003, from $53.4 million for 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A139></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Liquidity and Capital
Resources </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, our total
cash and cash equivalents was $427.0 million, compared to $292.3 million at December 31,
2003. Our total liquidity, including cash, short-term marketable securities and undrawn
long-term borrowings, was $1,258.2 million as at December 31, 2004, up from $774.8 million
as at December 31, 2003. The increase in liquidity was mainly the result of cash generated
by our operating activities, proceeds from the sale of 14 older vessels during the year
and the sale of our marketable securities during the year, partially offset by our debt
repayments, cash used for capital expenditures 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="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Net cash flow from operating
activities increased to $814.7 million in 2004 from $455.6 million in 2003, mainly
reflecting the significant increase in our average spot TCE rates. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Scheduled debt repayments were $150.3
million during 2004 compared to $62.2 million during 2003. Repayments of capital lease
obligations were $66.1 million in 2004 compared to $0.3 million in 2003. Debt prepayments
were $1,731.2 million during 2004 compared to $1,466.8 million during 2003. Of our 2004
debt prepayments, $1,326.0 million resulted from our drawing down and subsequently
prepaying under some of our eight long-term revolving credit facilities (the Revolvers) in
anticipation of the closing of the Teekay Spain acquisition and for internal restructuring
purposes. In addition, in 2004 a total of $391.0 million of cash generated from operations
and from proceeds of longer-term financings was used to prepay certain term loans, and
$14.2 million was used to repurchase a portion of the 8.32% First Preferred Ship Mortgage
Notes (the <I>8.32% Notes</I>). Occasionally we use our Revolvers to temporarily finance
capital expenditures until longer-term financing is obtained, at which time we typically
use all or a portion of the proceeds from the longer-term financings to prepay outstanding
amounts under the Revolvers. Please see Item 18 &#151; Financial Statements: Note 9 &#150;
Long-Term Debt. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, our total
debt was $2,108.0 million, compared to $1,600.1 million as at December 31, 2003. As at
December 31, 2004, our Revolvers provided for borrowings of up to $1,361.2 million, of
which $831.2 million was undrawn. The amount available under the Revolvers reduces by
$142.2 million (2005), $165.2 million (2006), $130.1 million (2007), $444.3 million
(2008), $39.4 million (2009) and $440.0 million (thereafter). All of the Revolvers are
collateralized by first priority mortgages granted on 52 of the Company&#146;s vessels,
together with other related collateral, and include a guarantee from Teekay for all
amounts outstanding under the Revolvers. 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, commencing 2004. Our 7.25% Premium Equity Participating
Security Units are due May 18, 2006 and our unsecured 8.875% Senior Notes are due July 15,
2011. Our outstanding term loans reduce in monthly, quarterly or semi-annual payments with
varying maturities through 2023. Please see Item 18 &#150; Financial Statements: Note 9
&#150; Long-Term Debt. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Among other matters, our long-term
debt agreements generally provide for the 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 specified 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 $892.8 million as of December 31, 2004. Certain of the loan
agreements require that we maintain a minimum level of free cash. As at December 31, 2004,
this amount was $100 million. Certain of the loan agreements also require that a minimum
level of free liquidity and undrawn revolving credit lines (excluding undrawn revolving
credit lines with less than 6 months to maturity) be maintained. As at December 31, 2004,
this amount was $205.8 million. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conduct our funding and treasury
activities within corporate policies to minimize borrowing costs and maximize investment
returns while maintaining the safety of the funds and appropriate levels of liquidity for
our purposes. We hold cash and cash equivalents primarily in U.S. dollars, with some
balances held in Japanese Yen, Singapore Dollars, Canadian Dollars, Australian Dollars,
British Pounds, Euros and Norwegian Kroner. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are exposed to market risk from
foreign currency fluctuations, changes in interest rates, spot market rates for vessels,
and bunker fuel prices. We use forward foreign currency contracts, interest rate swaps,
forward freight agreements and bunker fuel swap contracts to manage currency, interest
rate, bunker fuel price risks and spot tanker rates, but we do not use these financial
instruments for trading or speculative purposes. Please see Item 11 &#150; Quantitative
and Qualitative Disclosures About Market Risk. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dividends declared during 2004 were
$42.4 million, or $0.5125 per share. In October 2004, we increased our quarterly dividend
from $0.125 per share to $0.1375 per share. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In November 2004, we announced that
our Board of Directors authorized the repurchase of up to 3,000,000 shares of our common
stock. As at December 31, 2004, we had repurchased 1,400,200 shares of our common stock at
an average price of $43.73 per share. In January 2005, we repurchased an additional
1,599,800 shares at an average price of $42.27, for a total of 3,000,000 shares
repurchased. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In November 2004, our subsidiary
Teekay LNG Partners filed a registration statement with the Securities and Exchange
Commission for an initial public offering of its common units. Proceeds from the offering
will be used to repay debt the partnership will owe to us and to pay offering expenses.
Proceeds of any exercise of the over-allotment option will be used to repay debt under
ship financing arrangements of the partnership. Please see Item 18 &#150; Financial
Statements: Note 17 &#150; Commitments and Contingencies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, we incurred capital
expenditures for vessels and equipment of $548.6 million. These capital expenditures
primarily represented installment payments on our newbuildings. Cash expenditures for
drydocking decreased to $32.9 million for 2004, compared to $42.7 million during 2003, due
primarily to the sale of 11 older vessels during 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, we were
committed to the construction of seven Aframax tankers, two Suezmax tankers, three product
tankers and three LNG carriers scheduled for delivery between January 2005 and March 2008.
Please see Item 18 &#150; Financial Statements: Note 17 &#150; Commitments and
Contingencies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are also committed to capital
leases on one Aframax tanker, four Suezmax tankers and two LNG carriers. The leases
require minimum scheduled payments of $780.4 million, including a purchase obligation
payment, over the remaining terms of the leases. Please see Item 18 &#150; Financial
Statements: Note 11 &#150; Capital Leases and Restricted Cash. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table summarizes our
long-term contractual obligations as at December 31, 2004 (in millions of U.S. dollars). </FONT></P>

<PRE>
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
                                                 2005      2006      2007     2008      2009     There-     Total
                                                                                                 after
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
 Long-term debt                                  119.5     219.5      36.4    284.0     189.3   1,259.3    2,108.0
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
 Chartered-in vessels (operating leases)         365.5     289.3     197.3    120.9      83.5     192.8    1,249.3
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
 Commitment for chartered-in vessels
   (capital leases)                              130.1     317.7      39.7     41.3      42.8     208.8      780.4
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
 Newbuilding installments (1)                    363.7     255.9     141.0     50.7         -         -      811.3
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
 Volatile organic compound emissions
    equipment                                     31.5         -         -        -         -         -       31.5
- --------------------------------------------- --------- --------- --------- --------- --------- --------- ----------
      Total                                    1,010.3   1,082.4     414.4    496.9     315.6   1,660.9    4,980.5
============================================= ========= ========= ========= ========= ========= ========= ==========
</PRE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Includes $38.0 million of installments on a newbuilding that was sold upon
               delivery during the first quarter of 2005. Please see Item 18 &#150; Financial
               Statements: Note 21 &#150; Subsequent Events. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The sale of 14 older vessels during
2004 generated gross proceeds of $440.6 million. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In 2004 we sold our investments in
A/S Dampskibsselskabet Torm and Nordic American Tanker Shipping Ltd. for proceeds of
$135.4 million. Please see Item 18 &#151; Financial Statements: Note 6 &#150; Investments
in Marketable Securities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A140></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Off Balance Sheet
Arrangements </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We and certain of our subsidiaries
have guaranteed our share of the outstanding mortgage debt in four 50%-owned joint venture
companies. Please see Item 18 &#151; Financial Statements: Note 17 &#150; Commitments and
Contingencies. We do not believe theses off-balance sheet arrangements have and we have no
other 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="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A141></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Critical Accounting
Policies </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We prepare our consolidated financial
statements in accordance with GAAP, 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 high degree of
judgment and the methods of their application. For a further description of our material
accounting policies, please see Item 18 &#150; Financial Statements: Note 1 &#150; Summary
of Significant Accounting Policies. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A142></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Revenue Recognition</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. In other words,
revenues are recognized ratably either from the beginning of when product is loaded for
one voyage to when it is loaded for another voyage, or from when product is discharged
(unloaded) at the end of one voyage to when it is discharged after the next voyage. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. However, we do not begin recognizing voyage revenue until a charter has been
agreed to by the customer and us, even if the vessel has discharged its cargo and is
sailing to the anticipated load port on its next voyage. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We recognize revenues from time
charters daily over the term of the charter as the applicable vessel operates under the
charter. We do not recognize revenues during days that the vessel is off-hire. </FONT></P>

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<A NAME=A143></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Vessel Lives and
Impairment</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The carrying value of each of our
vessels represents its original cost at the time of delivery or purchase less depreciation
or impairment charges. We depreciate our vessels on a straight-line basis over a
vessel&#146;s estimated useful life, less an estimated residual value. Depreciation is
calculated using an estimated useful life of 25 years for Aframax, Suezmax, VLCC and
product tankers, and 35 years for LNG carriers, from the date the vessel was originally
delivered from the shipyard, or a shorter period if regulations prevent us from operating
the vessels to 25 years or 35 years, respectively. In the shipping industry, the use of a
25-year vessel life for Aframax, Suezmax, VLCC and product tankers has become the
prevailing standard. In addition, the use of a 30 to 40 year vessel life for LNG carriers
is typical. However, the actual life of a vessel may be different, with a shorter life
potentially resulting in an impairment loss. We have reduced the estimated useful lives
from 25 years to approximately 21 years for our two remaining vessels affected by the
International Maritime Organization&#146;s 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>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 an asset by comparing its carrying amount to future undiscounted cash
flows that the asset is expected to generate over its remaining useful life. If we
consider a vessel or equipment to be impaired, we recognize impairment in an amount equal
to the excess of the carrying value of the asset over its fair market value. </FONT></P>

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<A NAME=A144></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Drydocking</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Generally, we drydock each vessel
every two and a half to five years. In addition, a shipping society classification
intermediate survey is performed on our LNG carriers between the second and third year of
the five-year drydocking period. We capitalize a substantial portion of the costs we incur
during drydocking and for the survey and amortize those costs on a straight-line basis
from the completion of a drydocking or intermediate survey to the estimated completion of
the next drydocking. We expense costs related to routine repairs and maintenance incurred
during drydocking that do not improve or extend the useful lives of the assets. When
significant drydocking expenditures occur prior to the expiration of the original
amortization period, the remaining unamortized balance of the original drydocking cost and
any unamortized intermediate survey costs are expensed in the month of the subsequent
drydocking. </FONT></P>

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<A NAME=A145></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Goodwill and Intangible
Assets</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We allocate the cost of acquired
companies to the identifiable tangible and intangible assets and liabilities acquired,
with the remaining amount being classified as goodwill. Certain intangible assets, such as
time charter contracts, contracts of affreightment and intellectual property are amortized
over time. Our future operating performance will be affected by the future amortization of
intangible assets and potential impairment charges related to goodwill. Accordingly, the
allocation of the purchase price to intangible assets and goodwill has a significant
impact on our future operating results. The allocation of the purchase price of the
acquired companies to intangible assets and goodwill requires management to make
significant estimates and assumptions, including estimates of future cash flows expected
to be generated by the acquired assets and the appropriate discount rate to value these
cash flows. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Goodwill and indefinite lived
intangible assets are not amortized, but reviewed for impairment annually, or more
frequently if impairment indicators arise. The process of evaluating the potential
impairment of goodwill and intangible assets is highly subjective and requires significant
judgment at many points during the analysis. The fair value of our reporting units was
estimated based on discounted expected future cash flows using a weighted average cost of
capital rate. The estimates and assumptions regarding expected cash flows and the discount
rate require considerable judgment and are based upon existing contracts, historical
experience, financial forecasts, and industry trends and conditions. </FONT></P>

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<A NAME=A146></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Recent Accounting
Pronouncements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On December 16, 2004, the Financial
Accounting Standards Board (or <I>FASB</I>) issued FASB Statement No. 123(R) (or <I>SFAS
123(R)</I>), <I>Share-Based Payment</I>, which is a revision of FASB Statement No. 123,
<I>Accounting for Stock-Based Compensation</I>. SFAS 123(R) supersedes APB 25. SFAS 123(R)
requires all share-based payments to employees, including grants of employee stock
options, to be recognized in the income statement based on their fair values. Pro forma
disclosure is no longer an acceptable alternative. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SFAS 123(R) must be adopted no later
than July 1, 2005. Early adoption will be permitted in periods in which financial
statements have not yet been issued. We expect to adopt SFAS 125(R) on July 1, 2005. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SFAS 123(R) permits public companies
to adopt its requirements using one of the following two methods: </FONT></P>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A &#147;modified prospective&#148; method in which compensation cost is
               recognized beginning with the effective date based on (a) the requirements of
               SFAS 123(R) for all share-based payments granted after the effective date and
               (b) the requirements of SFAS 123 for all awards granted to employees prior to
               the effective date of SFAS 123(R) that remain unvested on the effective date. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=6%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A &#147;modified retrospective&#148; method which includes the requirements of
               the modified prospective method described above, but also permits entities to
               restate based on the amounts previously recognized under SFAS 123 for purposes
               of pro forma disclosures, either (a) all prior periods presented or (b) prior
               interim periods of the year of adoption. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We plan to adopt SFAS 123(R) using
the modified-prospective method. </FONT></P>

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<A NAME=A147></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 6. Directors,
Senior Management and Employees </FONT></H1>

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<A NAME=A148></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Directors and Senior
Management </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our directors and executive officers
as of the date of this annual report and their ages as of December 31, 2004 are listed
below: </FONT></P>

<PRE>
<B><U>Name</U></B>                     <B><U>Age</U></B>   <B><U>Position</U></B>

C. Sean Day              55    Director and Chair of the Board
Bjorn Moller             47    Director, President and Chief Executive Officer
Axel Karlshoej           64    Director and Chair Emeritus
Bruce C. Bell            57    Director
Dr. Ian D. Blackburne    58    Director
Leif O. Hoegh            41    Director
Thomas Kuo-Yuen Hsu      58    Director
Eileen A. Mercier        57    Director
Tore I. Sandvold         57    Director
Peter Antturi            46    President, Teekay Navion Shuttle Tankers, a division of Teekay Shipping Corporation
Arthur Bensler           47    SVP, Secretary and General Counsel
Peter Evensen            46    EVP and Chief Financial Officer
David Glendinning        50    President, Teekay Gas and Offshore, a division of Teekay Shipping Corporation
Jennifer Gordon          43    SVP, Corporate Resources
Vincent Lok              36    SVP and Treasurer
Graham Westgarth         50    President, Teekay Marine Services, a division of Teekay Shipping Corporation
Paul Wogan               42    President, Teekay Tanker Services, a division of Teekay Shipping Corporation
</PRE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Certain biographical information
about each of these individuals is set forth below: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>C. Sean Day</B>
has served as our Chair of the Board since September 1999. Mr. Day
          has served as Chair of Teekay GP L.L.C.&#145;s board of directors since it was
          formed in November 2004. From 1989 to 1999, he was President and Chief Executive
          Officer of Navios Corporation, a large bulk shipping company based in Stamford,
          Connecticut. Prior to this, Mr. Day held a number of senior management positions
          in the shipping and finance industry. He is currently serving as a director of
          Kirby Corporation. Mr. Day also serves as the Chair of the Board of Resolute Investments,
          Inc., our largest shareholder. Please see Item 7 &#150; Related Party
          Transactions. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Bjorn Moller </B>became our
President and Chief Executive Officer in April 1998. Mr. Moller has served as Vice Chair
and a Director of Teekay GP L.L.C. since it was formed in November 2004. Mr. Moller has
over 20 years&#146; experience in the shipping industry and has served in senior
management positions with Teekay for more than 15 years. He has headed our overall
operations since January 1997, following his promotion to the position of Chief Operating
Officer. Prior to this, Mr. Moller headed our global chartering operations and business
development activities. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Axel Karlshoej </B>was Chair of
the Board from June 1994 to September 1999, and has been Chair Emeritus since stepping
down as Chair. Mr. Karlshoej is President and serves on the compensation committee of
Nordic Industries, a California general construction firm with which he has served for the
past 30 years. He is the older brother of the late J. Torben Karlshoej, Teekay&#146;s
founder. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Bruce C. Bell </B>is the Managing
Director of Oceanic Bank and Trust Limited, a Bahamian bank and trust company,
a position he has held since March 1994. Mr. Bell has served as the
Secretary of Teekay GP L.L.C. since it was formed in November 2004. Prior to joining
Oceanic Bank and Trust, Mr. Bell was engaged in the private practice of law in Canada,
specializing in corporate/commercial, banking and international business transactions.
From May 2000 until May 2003, Mr. Bell served as our Corporate Secretary. Mr. Bell is a
director and the Vice President of Resolute Investments, Inc., our largest shareholder.
Please see Item 7 &#150; Related Party Transactions. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Dr. Ian D. Blackburne </B>has over 25&nbsp;years&#146; experience in petroleum
          refining and marketing, and in March 2000 he retired as Managing Director and
          CEO of Caltex Australia Limited, a large petroleum refining and marketing
          conglomerate based in Australia. He is currently serving as Chairman of CSR
          Limited and is a director of Suncorp-Metway Ltd., Mayne Group Limited, Australian public companies in
          the diversified industrial and financial sectors. Dr. Blackburne is also the
          Chairman of the Australian Nuclear Science and Technology Organization. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Leif O. H&ouml;egh </B>was
appointed as a director in June 1999 in connection with our acquisition of Bona
Shipholding Ltd. He served as a director of Bona from November 1993 to June 1999 and as
its Chairman from June 1998 to June 1999. Mr. H&ouml;egh is the joint controlling
shareholder and Deputy Chairman of Leif H&ouml;egh and Co. Ltd., a shipping company. He
also serves as a director of NeoMed Management Ltd. and as the Chairman of H&ouml;egh
Capital Partners, Inc. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Thomas Kuo-Yuen Hsu </B>has served
30 years with, and is presently a director of CNC Industries, an affiliate of the Expedo Group
of Companies that manages a fleet of nine vessels
ranging in size from 30,000 dwt to 150,000 dwt. He has been a Committee Director of the
Britannia Steam Ship Insurance Association Limited since 1988. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Eileen A. Mercier </B>has over 30
years&#146; experience in a wide variety of financial and strategic planning positions,
including Senior Vice President and Chief Financial Officer for AbitibiPrice Inc. from
1990 to 1995. She also currently serves as a director for Hydro One
Inc., ING Bank of Canada, the Ontario Teachers' Pension Plan, Quebecor World Inc., York University,
the University Health Network and, and as a director and audit committee member for CGI Group Inc.,
ING Canada Inc., Shermag Inc. and Winpak Ltd. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Tore I. Sandvold</B> has over 30
years&#146; experience in the oil and energy industry. From 1973 to 1987 he served in the
Norwegian Ministry of Industry, Oil &amp; Energy in a variety of positions in the area of
domestic and international energy policy. From 1987 to 1990 he served as the Counselor for
Energy in the Norwegian Embassy in Washington, D.C. From 1990 to 2001 Mr. Sandvold served
as Director General of the Norwegian Ministry of Oil &amp; Energy, with overall
responsibility for Norway&#146;s national and international oil and gas policy. From 2001
to 2002 he served as Chairman of the Board of Petoro, the Norwegian state-owned oil
company that is the largest oil asset manager on the Norwegian continental shelf. From
2002 to the present, Mr. Sandvold, through his company, Sandvold Energy AS, has acted as
advisor to companies and advisory bodies in the energy industry. Mr. Sandvold serves on
other boards, including those of Schlumberger Limited., E. on Ruhrgas Norge AS, Lambert Energy Advisory
Ltd., University of Stavanger, Offshore Northern Seas, and the Energy Policy Foundation of Norway.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Peter Antturi </B>joined Teekay in
September 1991. Since then, he has held a number of finance and accounting positions,
including Controller from March 1992 until his promotion to the position of Senior Vice
President, Treasurer and Chief Financial Officer in October 1997. In 2003 he became
President of Navion AS upon the closing of our acquisition of Navion. In November 2003 Mr.
Antturi was appointed President of our Teekay Navion Shuttle Tankers division, which is
responsible for the shuttle tanker activities and projects of our two wholly owned
subsidiaries, Navion AS and Ugland Nordic Shipping AS. Prior to joining Teekay,
Mr.&nbsp;Antturi held various accounting and finance roles in the shipping industry since
1985. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Arthur Bensler </B>joined Teekay
in September 1998 as General Counsel. He was promoted to the position of Vice President in
March 2002 and became our Corporate Secretary in May 2003. He was appointed Senior Vice
President in February 2004. Prior to joining Teekay, Mr. Bensler was a partner in a large
Vancouver, Canada law firm, where he practiced corporate, commercial and maritime law from
1986 until joining Teekay. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Peter Evensen</B> joined Teekay in
May 2003 as Senior Vice President, Treasurer and Chief Financial Officer. He was appointed
Executive Vice President and Chief Financial Officer in February 2004. Mr. Evensen has
served as the Chief Executive Officer and Chief Financial Officer of Teekay GP L.L.C.
since it was formed in November 2004 and as Director of Teekay GP L.L.C. since January
2005. Mr. Evensen has over 20 years&#146; experience in banking and shipping finance.
Prior to joining Teekay, Mr. Evensen was Managing Director and Head of Global Shipping at
J.P. Morgan Securities Inc. and worked in other senior positions for its predecessor
firms. His international industry experience includes positions in New York, London and
Oslo. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>David Glendinning </B>joined
Teekay in January 1987. Since then, he has held a number of senior positions, including service as Vice
President, Marine and Commercial Operations from January 1995 until his promotion to
Senior Vice President, Customer Relations and Marine Project Development in February 1999.
In November 2003 Mr. Glendinning was appointed President of our Teekay Gas and Offshore
division, which is responsible for our initiatives in the LNG business and other areas of
gas activity as well as building on our international presence in the floating storage and
offtake (or <I>FSO</I>) business and related offshore activities.
Prior to joining Teekay, Mr. Glendinning, who is a Master Mariner, had 18 years&#146; sea
service on oil tankers of various types and sizes. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Jennifer Gordon</B> joined Teekay
in April 2004 as Senior Vice President, Corporate Resources. Prior to joining Teekay, Ms.
Gordon was Senior Vice President, Human Resources of Placer Dome Inc., an international
gold, silver and copper mining company. Her experience includes positions in human
resources management at Finning International Inc., Colgate-Palmolive Canada Inc. and
Suncor Energy Inc. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Vincent Lok </B>joined Teekay in
1993. Since that time, he has held a number of finance and accounting positions, including
Controller from 1997 until his promotion to the position of Vice President, Finance in
March 2002. He was appointed Senior Vice President and Treasurer in February 2004. Prior
to joining Teekay, Mr. Lok worked in the Vancouver, Canada audit practice of Deloitte
&amp; Touche. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Graham Westgarth </B>joined Teekay
in February 1999 as Vice President, Marine Operations. He was promoted to the position of
Senior Vice President, Marine Operations in December 1999. In November 2003 Mr. Westgarth
was appointed President of our Teekay Marine Services division, which is responsible for
all of our marine and technical operations as well as marketing a range of services and
products to third-parties, such as marine consulting services and computer-based marine
training software. He has extensive shipping industry experience. Prior to joining Teekay
Mr. Westgarth was General Manager of Maersk Company (UK), where he joined as Master in
1987. His international industry experience includes 18 years&#146; sea service with five
years in a command position. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Paul Wogan </B>joined Teekay in
November 2000 as the Managing Director of the London office. He was promoted to the
position of Vice President, Business Development in March 2002. In November 2003 Mr. Wogan
was appointed President of our Teekay Tanker Services division, which is responsible for
the commercial management of our conventional crude oil and product tanker transportation
services. Prior to joining Teekay, Mr. Wogan was with the chartering arm of a major crude
oil and product carrier fleet controlled by the Ceres Hellenic Group (Livanos), which
subsequently founded Seachem Tankers Ltd., a chemical tanker company, where he served as
the Chief Executive Officer from 1997 until joining Teekay. </FONT></P>

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<A NAME=A150></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compensation of
Directors and Senior Management </FONT></H1>

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<A NAME=A151></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Director Compensation</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, the eight non-employee
directors received, in the aggregate, approximately $484,000 in cash fees for their
services as directors, plus reimbursement of their out-of-pocket expenses. In addition,
each non-employee director received a $50,000 annual retainer to be paid by way of a grant
of restricted stock or stock options under our 2003 Equity Incentive Plan, at the
director&#146;s election. During 2004, certain of the directors elected to receive this
annual retainer in the form of stock options to purchase an aggregate of 14,400 shares of
our common stock at an exercise price of $33.63 per share. These options expire March 9,
2014, ten years after the date of the grant. Certain other directors elected to receive
this annual retainer in the form of 14,260 shares of restricted stock. In addition to the
$50,000 annual retainer, the Chair of the Board received a further $228,000 retainer in
the form of a grant of restricted stock under our 2003 Equity Incentive Plan. </FONT></P>

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<A NAME=A152></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Annual Executive
Compensation</I> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The aggregate compensation earned by
Teekay&#146;s nine executive officers listed above (<I>or the Executive Officers) </I>for
2004 was $14.3 million. This is comprised of base salary ($3.1 million), annual bonus
($4.3 million), special bonus ($6.0 million) and pension and other benefits ($0.9
million). These amounts were paid primarily in Canadian Dollars, but are reported here in
U.S. Dollars using an exchange rate of 1.20 Canadian Dollars for each U.S. Dollar, the exchange
rate on December 31, 2004. Teekay&#146;s annual bonus plan considers both
company performance, through comparison to established targets and financial performance
of peer companies, and individual performance. Due to the extraordinary performance of
Teekay during the previous four years, the Compensation and Human Resource Committee
granted a special bonus to our senior management during 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A153></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Long-Term Executive
Compensation</I> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Teekay&#146;s long-term incentive
programs are designed to encourage creation of long-term value for our shareholders,
employee retention and equity ownership. The programs consist of stock option grants,
stock appreciation rights and restricted stock awards. All grants in 2004 and 2005 have
been made under our 2003 Equity Incentive Plan. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, we granted stock options
to purchase an aggregate of 339,400 shares of our common stock, 15,494 restricted share
units and stock appreciation rights (or SARs) with respect to 33,200 shares of common
stock to the Executive Officers under our 2003 Equity Incentive Plan. The
weighted-average exercise price of these stock options and SARs is $33.72 per share.
These options and SARs, which vest equally over three years, expire March 9, 2014, ten
years after the date of the grant. The restricted share units vest on December 31, 2006.
Upon vesting, the restricted share units will be paid in the form of cash.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In March 2005, we awarded 303,291
restricted share units to our Executive Officers as incentive based compensation. Each
restricted share unit is equal in value to one share of our common stock and reinvested
dividends from the date of the grant to the vesting of the restricted share unit. Based on
the grant date share price of $46.80 per share, the restricted share units had a notional
value of $14.2 million on the date of the grant. The restricted share units vest in three
equal amounts on March 31, 2006, March 31, 2007 and November 30, 2007. Upon vesting, the
restricted share units will be paid to each grantee in the form of cash or shares of Teekay's
common stock, at the election of the grantee. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A154></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Options to Purchase
Securities from Registrant or Subsidiaries </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004 we had
reserved pursuant to our 1995 Stock Option Plan, which was terminated with respect to new
grants effective September 10, 2003, and our 2003 Equity Incentive Plan, which was adopted
effective on the same date (together, the <I>Plans</I>) 6,716,413 shares of common stock
for issuance upon exercise of options granted or to be granted. During 2004, 2003, and
2002 we granted options under the Plans to acquire up to 833,840, 2,119,160 and 2,052,050
shares of common stock, respectively, to eligible officers, employees, and directors. The
options under the Plans have a 10-year term and vest equally over three years from the
grant date, except for one grant of 50,000 options which will vest 100% on December 31,
2006. The outstanding options under the Plan are exercisable at prices ranging from $8.44
to $34.37 per share, with a weighted-average exercise price of $20.47 per share, and
expire between July 19, 2005 and April 5, 2014. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A155></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Board Practices </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board of Directors consists of
nine members. The Board of Directors is divided into three classes, with members of each
class elected to hold office for a term of three years in accordance with the
classification indicated below or until his or her successor is elected and qualifies.
Directors Thomas Kuo-Yuen Hsu, Axel Karlshoej, and Bjorn Moller have terms expiring in
2005 and have been nominated by the Board of Directors for re-election at the 2005 Annual
Meeting of Shareholders. Directors Bruce C. Bell, C. Sean Day, and Dr. Ian D. Blackburne
have terms expiring in 2006. Directors Leif O. H&ouml;egh, Eileen A. Mercier and Tore I.
Sandvold have terms expiring in 2007. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There are no service contracts
between us and any of our directors providing for benefits upon termination of their
employment or service.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board has determined that each of
the current members of the Board, other than C. Sean Day and Bjorn Moller, has no material
relationship with us, either directly or as a partner, shareholder or officer of an
organization that has a relationship with us, and is independent within the meaning of our
director independence standards, which reflect the NYSE director independence standards as
currently in effect and as they may be changed from time to time. In making this determination
the Board considered Bruce C. Bell's relationship with our largest shareholder and concluded this
relationship does not create a concern regarding his independence from our management.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board has the following three
committees: Audit Committee, Compensation and Human Resources Committee, and Nominating
and Governance Committee. The membership of these committees during 2004 and the function
of each of the committees are described below. Each of the committees is currently
comprised of independent members and operates under a written charter adopted by the
Board. All of the committee charters are available under &#147;Corporate Governance&#148;
in the Investor Centre of our Web site at www.teekay.com. During 2004, the Board held nine
meetings. Each director attended all Board meetings, except for two Board meetings at
which one director each was absent from each. Each director attended all applicable
committee meetings. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Audit Committee is composed
entirely of directors who satisfy applicable NYSE and SEC audit committee independence
standards. Our Audit Committee includes Eileen A. Mercier (Chair), Leif O. H&ouml;egh and
Tore I. Sandvold. All members of the committee are financially literate and the Board has
determined that Ms. Mercier qualifies as an audit committee financial expert and that her
membership on four other public company audit committees will not interfere with her
service on Teekay&#146;s Audit Committee. The Audit Committee assists the Board in
fulfilling its responsibilities for general oversight of: the integrity of our financial
statements; our compliance with legal and regulatory requirements; the independent
auditors&#146; qualifications and independence; and the performance of our internal audit
function and independent auditors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, our Compensation and
Human Resource Committee included Axel Karlshoej (Chair), C. Sean Day, Ian D. Blackburne
and Thomas Kuo-Yuen Hsu. Effective March 2005, C. Sean Day ceased to be a member of this
committee. The Compensation and Human Resource Committee: reviews and approves corporate
goals and objectives relevant to the Chief Executive Officer&#146;s compensation,
evaluates the Chief Executive Officer&#146;s performance in light of these goals and
objectives and, either as a Committee or with the Board&#146;s other independent
directors, determines the Chief Executive Officer&#146;s compensation; reviews and approves the
evaluation process and compensation structure for executives, other than the Chief
Executive Officer, evaluates their performance and sets their compensation based on this
evaluation; reviews and makes recommendations to the Board regarding compensation for
directors; establishes and administers long-term incentive-compensation and equity-based
plans; and oversees our other compensation plans, policies and programs. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004, our Nominating and
Governance Committee included C. Sean Day (Chair), Bruce C. Bell and Eileen A. Mercier.
Effective March 2005, C. Sean Day ceased to be a member of this committee and Ian D.
Blackburne and Thomas Kuo-Yuen Hsu became members of this committee. The Nominating and
Governance Committee: identifies individuals qualified to become Board members; selects
and recommends to the Board director and committee member candidates; develops and
recommends to the Board corporate governance principles and policies applicable to us,
monitors compliance with these principles and policies and recommends to the Board
appropriate changes; and oversees the evaluation of the Board and management. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A156></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Crewing and Staff </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, we employed
approximately 4,800 seagoing and 700 shore-based personnel, compared to approximately
4,000 seagoing and 700 shore-based personnel in 2003, and 3,650 seagoing and 450
shore-based personnel as at December 31, 2002. The increase in personnel from December 31,
2003 to December 31, 2004 was primarily due to our acquisition of Teekay Spain. The
increase in personnel from December 31, 2002 to December 31, 2003 was primarily due to our
acquisition of Navion in April 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We regard attracting and retaining
motivated seagoing personnel as a top priority. Through our global manning organization
comprised of offices in Glasgow, Scotland, Grimstad, Norway, Riga, Latvia, Manila,
Philippines, Mumbai, India, Sydney, Australia, and Madrid, Spain, we offer seafarers
highly competitive employment packages and comprehensive benefits. We also provide
excellent opportunities for personal and career development, which relate to our
philosophy of promoting internally. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During fiscal 1996, we entered into a
Collective Bargaining Agreement with the Philippine Seafarers&#146; Union, an
affiliate of the International Transport Workers&#146; Federation (or <I>ITF</I>), and a Special
Agreement with ITF London that covers substantially all of our junior officers and seamen.
We are also party to Enterprise Bargaining Agreements with various Australian maritime
unions that covers officers and seamen employed through our Australian operations. Our
officers and seamen for our Spanish-flagged vessels are covered by a collective bargaining
agreement with Spain&#146;s Union General de Trabajdores and Comisiones Obreras. We
believe our relationships with these labor unions are good. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We see our commitment to training as
fundamental to the development of the highest caliber seafarers for our marine operations.
Our cadet training program is designed to balance academic learning with hands-on training
at sea. We have relationships with training institutions in Canada, Croatia, India,
Latvia, Norway, Philippines, Turkey, and the United Kingdom. After receiving formal
instruction at one of these institutions, the cadets&#146; training continues on board a
Teekay vessel. We also have a career development plan that is designed to ensure a
continuous flow of qualified officers who are trained on our vessels and are familiar with
our operational standards, systems and policies. We believe that high-quality manning and
training policies will play an increasingly important role in distinguishing larger
independent tanker companies that have in-house, or affiliate, capabilities from smaller
companies that must rely on outside ship managers and crewing agents. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A157></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Share Ownership </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table sets forth
certain information regarding beneficial ownership, as of March 15, 2005, of our common
stock by the directors and Executive Officers as a group. The information is not
necessarily indicative of beneficial ownership for any other purpose. Under SEC rules a
person or entity beneficially owns any shares that the person or entity has the right to
acquire as of May 14, 2005 (60 days after March 15, 2005) through the exercise of any
stock option or other right. Unless otherwise indicated, each person or entity has sole
voting and investment power (or shares such powers with his or her spouse) with respect to
the shares set forth in the following table. Information for certain holders is based on
information delivered to us. </FONT></P>

 <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=BOTTOM>
               <TD WIDTH=55%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     <B><U>Identity of Person or Group</U></B></FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     <B><U>Shares Owned</U></B></FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     <B><U>Percent of Class</U></B></FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    &nbsp;</FONT></TD> </TR>
<TR>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD></TR>
              <TR VALIGN=BOTTOM>
               <TD WIDTH=55%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     All directors and Executive Officers (17 persons).....................................................</FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     644,441 (1) (3)</FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     0.8% (2)</FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    &nbsp;</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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Includes 508,669 shares of common stock subject to stock options exercisable by
               May 14, 2005 under our 1995 and 2003 Stock Option Plans with a weighted-average
               exercise price of $20.14 that expire between May 13, 2008 and March 9, 2014.
               Excludes (a) 570,097 shares of common stock subject to stock options exercisable
               after May 14, 2005 under our 1995 and 2003 Stock Option Plans with a weighted
               average exercise price of $35.50, that expire between March 10, 2013 and March
               9, 2014 (b) shares owned by Resolute Investments, Inc. (Please see Item 7
               &#150; Major Shareholders and Related Party Transactions) and (c) 303,291 restricted
               share units which will be paid to each grantee in the form of cash or shares of Teekay's
               common stock, at the election of the grantee. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Each director and Executive Officer beneficially owns less than one percent of
               the outstanding shares of common stock. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Each director is expected to acquire at least 10,000 shares of Teekay&#146;s
               common stock by no later than the later of May 14, 2008 or the fifth anniversary of the date
               on which the director joined the Board. In addition, each Executive Officer is
               expected to acquire shares of Teekay's common stock equivalent in value to one to three times
               their annual base salary by 2010.</FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A158></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 7. Major
Shareholders and Related Party Transactions </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A159></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Major Shareholders </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          The following table sets forth information regarding beneficial ownership, as of
          March 15, 2005, of Teekay&#146;s common stock by each person we know to
          beneficially own more than 5% of the common stock. Information for certain
          holders is based on their latest filings with the SEC or information delivered
          to us. The number of shares beneficially owned by each person or entity is
          determined under SEC rules and the information is not necessarily indicative of
          beneficial ownership for any other purpose. Under SEC rules a person or entity
          beneficially owns any shares as to which the person or entity has or shares
          voting or investment power. In addition, a person or entity beneficially owns
          any shares that the person or entity has the right to acquire as of May 14, 2005
          (60 days after March 15, 2005) through the exercise of any stock option or other
          right. Unless otherwise indicated, each person or entity has sole voting and
          investment power (or shares such powers with his or her spouse) with respect to
          the shares set forth in the following table. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=BOTTOM>
               <TD WIDTH=55%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     <B><U>Identity of Person or Group</U></B></FONT></TD>

               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     <B><U>Shares Owned</U></B></FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     <B><U>Percent of Class</U></B></FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    &nbsp;</FONT></TD> </TR>


<TR>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD>
      <TD>&nbsp;</TD></TR>
<TR VALIGN=BOTTOM>
               <TD WIDTH=55%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     Resolute Investments, Inc. (1).....................................................................................................<BR><BR>
                     FMR Corp., Edward C. Johnson 3rd and Abigail P. Johnson, as a group(2)..............................<BR><BR>
                     Neuberger Berman, Inc. and Neuberger Berman, LLC, as a group(3) ......................................</FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     32,631,380<BR><BR>
                     11,554,017<BR><BR>
                      &nbsp;&nbsp;8,338,419</FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                     39.3%<BR><BR>
                     13.9%<BR><BR>
                     10.1%</FONT></TD>
               <TD WIDTH=15% ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    &nbsp;</FONT></TD> </TR>
              </TABLE>

<HR WIDTH="15%" SIZE="1" ALIGN="Left">

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Two of our directors are officers and directors of Resolute Investments, Inc.
               Two additional Teekay directors are directors of the entity that ultimately
               controls Resolute. Please see &#147;&#151;-Related Party Transactions.&#148; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Includes sole voting power as to 330,922 shares and sole dispositive power as to
               11,554,017 shares. This information is based on the Schedule 13G/A filed by this
               group with the SEC on February 14, 2005. Based on prior information filed with
               the SEC, FMR Corp.&#145;s beneficial ownership in Teekay was 11.4% on March 15,
               2004 and 14.03% on March 15, 2003. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
               <TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Includes sole voting power as to 5,532,750 shares, shared voting power as to
               1,274,100 shares and shared dispositive power as to 8,338,419 shares. Neuberger
               Berman, LLC and Neuberger Berman Management Inc. both have shared voting and
               dispositive power. Neuberger Berman, LLC and Neuberger Management Inc. serve as
               sub-adviser and investment manager, respectively, of Neuberger Berman
               Inc.&#145;s mutual funds. This information is based on the Schedule 13G/A filed
               by this group on February 15, 2005. Based on prior information filed with the
               SEC, Neuberger Berman Inc&#146;s beneficial ownership in Teekay was 7.0% on
               March 15, 2004 and less than 5% on March 15, 2003. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our major shareholders have the same
voting rights as our other shareholders. No corporation or foreign government or other
natural or legal person owns more than 50% of our outstanding common stock. We are not
aware of any arrangements, the operation of which may at a subsequent date result in a
change in control of Teekay. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A160></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Related Party
Transactions </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at December 31, 2004, Resolute
Investments, Inc. (or <I>Resolute</I>) owned 39.3% of our outstanding Common Stock. Two of
our directors, C. Sean Day, who is also Chair of our Board, and Bruce Bell, are directors
and the Chairman and Vice President, respectively, of Resolute. Two additional directors,
Thomas Kuo-Yuen Hsu and Axel Karlshoej, are among the Managing Directors of The Kattegat
Trust Company Limited, which is the trustee of the trust that owns all of Resolute&#146;s
outstanding equity. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Bruce Bell is also the Managing Director of
Oceanic Bank and Trust Limited.  Payments made by us to Oceanic Bank and Trust Limited
in respect of corporate administration fees and shared office costs for 2004,
totaled approximately $0.5 million.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In 1993 we purchased all of the
issued and outstanding shares of Palm Shipping Inc. (now Teekay Chartering Limited) from
an affiliate of Resolute. During 2002, we accrued and expensed in other (loss) income $
6.0 million as a settlement of a contingent payment, which was required under the terms of
the Palm Shipping acquisition agreement. We paid this amount in February 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A161></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 8. Financial
Information </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A162></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Consolidated Financial
Statements and Notes </FONT></H1>

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<A NAME=A163></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please see Item 18 below. </FONT></P>

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<A NAME=A164></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Legal Proceedings </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>From time to time we have been, and
we expect to continue to be, subject to legal proceedings and claims in the ordinary
course of our business, principally personal injury and property casualty claims. Such
claims, even if lacking merit, could result in the expenditure of significant financial
and managerial resources. We are not aware of any legal proceedings or claims that we
believe will have, individually or in the aggregate, a material adverse effect on our
financial condition or results of operations. </FONT></P>

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<A NAME=A165></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dividend Policy </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commencing with the fiscal quarter
ended September 30, 1995, we declared and paid quarterly cash dividends in the amount of
$0.1075 per share on our common stock. We increased our quarterly dividend from $0.1075
per share to $0.125 per share on our common stock in the fourth quarter of 2003 and from
$0.125 per share to $0.1375 per share on our common stock during the fourth quarter of
2004. On May 17, 2004, we effected a two-for-one stock split relating to our common stock.
All per share data give effect to this stock split retroactively. Subject to financial
results and declaration by the Board of Directors, we currently intend to continue to
declare and pay a regular quarterly dividend in such amount per share on our common stock.
Pursuant to our dividend reinvestment program, holders of common stock are permitted to
choose, in lieu of receiving cash dividends, to reinvest any dividends in additional
shares of common stock at then prevailing market prices, but without brokerage commissions
or service charges. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The timing and amount of dividends,
if any, will depend, among other things, on our results of operations, financial
condition, cash requirements, restrictions in financing agreements and other factors
deemed relevant by our Board of Directors. Because we are a holding company with no
material assets other than the stock of our subsidiaries, our ability to pay dividends on
the common stock is dependent on the earnings and cash flow of our subsidiaries. The
indenture relating to our 8.32% First Preferred Ship Mortgage Notes due 2006 and certain
of the agreements governing our (and our subsidiaries&#146;) credit facilities provide
that our ability to pay dividends is subject to limitations based upon our cumulative net
income plus certain additional amounts, including the proceeds we receive from any
issuance of our capital stock. We do not believe that the restrictions contained in that
indenture or in other financing agreements to which we and our subsidiaries are party to
will restrict payment of cash dividends on the common stock for the foreseeable future. </FONT></P>

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<A NAME=A166></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Significant Changes </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On November 24, 2004, we announced
that our wholly-owned subsidiary, Teekay LNG Partners L.P. (or <I>Teekay LNG
Partners</I>), had filed a registration statement with the SEC for an initial public
offering of its common units. Teekay LNG Partners is a Marshall Islands partnership
recently formed by us as part of our strategy to expand our operations in the LNG shipping
sector. This master limited partnership will provide LNG and crude oil marine
transportation services under long-term, fixed-rate contracts with major energy and
utility companies through its fleet of four LNG carriers and five Suezmax class crude oil
tankers, primarily consisting of vessels we obtained through our acquisition of Teekay
Spain in April 2004. After the offering, we will own approximately an 81 percent interest
in the partnership (including our 2% general partner interest). The offering will increase
if the underwriters exercise in full their over-allotment option, reducing our ownership
to approximately 79 percent. </FONT></P>

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<A NAME=A167></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 9. The Offer and
Listing </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our common stock is traded on the New
York Stock Exchange (or <I>NYSE</I>) under the symbol &#147;TK&#148;. The following table
sets forth the high and low closing sales prices for our common stock on the NYSE for each
of the periods indicated. <SUP>(1)</SUP> </FONT></P>

<PRE>
<B>Years Ended</B>         Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,
                      2004        2003        2002        2001        2000
                  ----------- ----------- ----------- ----------- ------------ ---------- ----------- -----------
   High            $54.4500    $28.6750    $20.8500    $26.3050     $25.4375
   Low              27.9500     17.8550     13.1750     12.7450       7.6563

<B>Quarters Ended</B>      Dec. 31,    Sep. 30,    Jun. 30,    Mar. 31,    Dec. 31,    Sep. 30,    Jun. 30,    Mar. 31,
                      2004        2004        2004        2004        2003        2003        2003        2003
                  ----------- ----------- ----------- ----------- ------------ ---------- ----------- -----------
   High            $54.4500    $43.3800    $37.6500    $34.9350     $28.6750    $23.6250   $21.8350    $21.5800
   Low              41.1400     34.5600     29.4100     27.9500     20.9550      20.9750    18.1250     17.8550

<B>Months Ended</B>        Feb. 28,    Jan. 31,    Dec. 31,    Nov. 30,    Oct. 31,    Sep. 30,
                      2005        2005        2004        2004        2004        2004
                  ----------- ----------- ----------- ----------- ------------ ---------- ----------- -----------
   High            $50.0100    $44.3700    $50.3600    $54.4500     $48.9800    $43.3800
   Low              44.9600     40.1200     41.1400     44.7000     43.7100      35.6500
</PRE>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The Company&#146;s Board of Directors authorized a two-for-one stock split
               relating to our common stock, which was effected in May 2004 in the form of a
               100% stock dividend. All stockholders of record on May 3, 2004 received one
               additional share of common stock for each share held. The above table gives
               effect to this stock split retroactively. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Premium Equity Participating
Security Units due May 18, 2006 (or <I>Equity Units)</I> are traded on the NYSE under the
symbol &#147;TK PR&#148;. The following table sets forth the high and low closing sales
prices for our Equity Units on the NYSE for each of the periods indicated. </FONT></P>

<PRE>
<B>Years Ended</B>          Dec. 31,    Dec. 31,
                       2004      2003 (1)
                   ----------- ----------- ---------- ----------- ----------- ---------- ----------- -----------
   High             $63.3400    $36.1400
   Low               35.2400     24.8600

<B>Quarters Ended</B>       Dec. 31,    Sep. 30,   Jun. 30,    Mar. 31,    Dec. 31,   Sep. 30,    Jun. 30,    Mar. 31,
                       2004        2004       2004        2004        2003       2003        2003      2003 (1)
                   ----------- ----------- ---------- ----------- ----------- ---------- ----------- -----------

   High             $63.3400    $50.3800    $44.6900   $42.9300    $36.1400    $30.4500   $29.5000    $27.1000
   Low               48.1900     41.2500     36.3900    35.2400     28.0500     28.0100    25.4700     24.8600

<B>Months Ended</B>         Feb. 28,    Jan. 31,   Dec. 31,    Nov. 30,    Oct. 31,   Sep. 30,
                       2005        2005       2004        2004        2004       2004
                   ----------- ----------- ---------- ----------- ----------- ---------- ----------- -----------

   High             $57.3300    $51.4000    $58.5600   $63.3400    $57.1500    $50.3800
   Low               52.1900     46.5400     48.1900    51.9600     50.8900     42.3300
</PRE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) Period beginning February 11, 2003 </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our 8.32% Notes are listed for
trading on the NYSE. The 8.32% Notes were first offered on the market January 19, 1996. As
no active trading market exists for these 8.32% Notes, no historical pricing information
is included here. </FONT></P>

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<A NAME=A168></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 10. Additional
Information </FONT></H1>

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<A NAME=A169></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Memorandum and Articles
of Association </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Articles of Incorporation and
Bylaws have previously been filed as exhibits 2.1, 2.2, and 2.3 to our Annual Report on
Form 20-F (File No. 1-12874), filed with the SEC on March 30, 2000, and are hereby
incorporated by reference into this Annual Report. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The rights, preferences and
restrictions attaching to each class of our capital stock are described in the section
entitled &#147;Description of Capital Stock&#148; of our Rule 424(b) prospectus (File No.
1-12874), filed with the SEC on June 10, 1998, and hereby incorporated by reference into
this Annual Report, provided that since the date of such prospectus (1)&nbsp;the par value
of our capital stock has been changed to $0.001 per share, (2)&nbsp;our authorized capital
stock has been increased to 725,000,000 shares of common stock and 25,000,000 shares of
Preferred Stock, (3)&nbsp;we have been domesticated in the Republic of the Marshall
Islands and (4)&nbsp;we have adopted a staggered Board of Directors, with directors
serving three-year terms. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The necessary actions required to
change the rights of holders of the stock and the conditions governing the manner in which
annual general meetings and special meetings of shareholders are convoked are described in
our Bylaws filed as exhibit 2.3 to our Annual Report on Form 20-F (File No. 1-12874),
filed with the SEC on March 30, 2000, and hereby incorporated by reference into this
Annual Report. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have in place a rights agreement
that would have the effect of delaying, deferring or preventing a change in control of
Teekay. The rights agreement has been filed as part of our Form 8-A (File No. 1-12874),
filed with the SEC on September 11, 2000, and hereby incorporated by reference into this
Annual Report. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There are no limitations on the
rights to own securities, including the rights of non-resident or foreign shareholders to
hold or exercise voting rights on the securities imposed by the laws of the Republic of
the Marshall Islands or by our Articles of Incorporation or Bylaws. </FONT></P>

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<A NAME=A170></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Material Contracts </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following is a summary of each
material contract, other than material contracts entered into in the ordinary course of
business, to which we or any of our subsidiaries is a party, for the two years immediately
preceding the date of this Annual Report: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (a) Indenture,<B> </B>dated January 29, 1996, for U.S. $225,000,000 8.32% First
          Preferred Ship Mortgage Notes due 2006, Teekay Shipping Corporation as Issuer;
          United States Trust Company of New York as Trustee; VSSI Oceans Inc., VSSI
          Atlantic Inc., VSSI Appian Inc., Senang Spirit Inc., Exuma Spirit Inc., Nassau
          Spirit Inc., and Andros Spirit Inc. as Guarantors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (b) Agreement, dated January 26, 1998, for a U.S. $200,000,000 Reducing Revolving
          Credit Facility to be made available to certain wholly-owned subsidiaries of
          Teekay Shipping Corporation by Den Norske Bank ASA, Christiania Bank og
          Kreditkasse ASA, New York Branch, and the Bank of Nova Scotia. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (c) Amended and Restated Reimbursement Agreement dated April 16, 1998 (amended May
          1999) relating to a U.S. $74,000,000 Credit facility made available by RABO
          Australia Limited to Barrington (Australia) Pty Limited, Palmerston (Australia)
          Pty Limited, VSSI Australia Limited, VSSI Transport Inc. and Alliance Chartering
          Pty Limited and Nedship Bank (America) N.V. as Guarantor. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (d) Amended and Restated Guarantee dated April 16, 1998 made by Teekay Shipping
          Corporation in favor of Nedship Bank (America) N.V. relating to the U.S.
          $74,000,000 facility granted by RABO Australia Limited and guaranteed by Nedship
          Bank (America) N.V. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (e) Agreement, dated March 26, 1999, for the amalgamation of Northwest Maritime
          Inc., a 100% owned subsidiary of Teekay Shipping Corporation, and Bona
          Shipholding Ltd. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (f) Amendment and Restatement Agreement, dated June 11, 1999, relating to a US
          $500,000,000 Revolving Loan Agreement made available to Bona Shipholding Ltd. by
          Chase Manhattan plc, Citibank International plc and various other banks. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (g) Reimbursement Agreement, dated February 16, 2001, between Karratha Spirit Pty
          Ltd and Nedship Bank (America) N.V. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (h) Agreement, dated February 16, 2001, for a U.S. $34,000,000 Term Loan Facility to
          be made available to Karratha Spirit Pty Ltd by RABO Australia Limited. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (i) Indenture dated June 22, 2001 among Teekay Shipping Corporation and The Bank of
          New York Trust Company of Florida (formerly U.S. Trust Company of Texas, N.A.)
          for U.S. $250,000,000 8.875% Senior Notes due 2011. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (j) Amendment and Restatement Agreement, dated September 14, 2001, relating to a
          U.S. $500,000,000 Revolving Loan Agreement between Bona Shipholding Ltd., Teekay
          Shipping Corporation, J.P. Morgan Securities Inc., Citibank International plc
          and various other banks. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (k) First Supplemental Indenture dated as of December 6, 2001, among Teekay Shipping
          Corporation and The Bank of New York Trust Company of Florida, N.A. for U.S.
          $100,000,000 8.875% Senior Notes due 2011. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (l) Share Sale and Purchase Agreement by and among Statoil ASA and Statpet AS and
          Norsk Teekay AS dated December 15, 2002. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (m) Supplemental Indenture No. 1 between Teekay Shipping Corporation and The Bank of
          New York, as trustee dated as of February 18, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (n) Purchase Contract Agreement between Teekay Shipping Corporation and The Bank of
          New York, as purchase contract agent dated as of February 18, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (o) Pledge Agreement between Teekay Shipping Corporation and The Bank of New York,
          as collateral agent dated as of February 18, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (p) Remarketing Agreement between Teekay Shipping Corporation and Morgan Stanley
          &amp; Co. Incorporated dated as of February 18, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (q) Underwriting Agreement between Teekay Shipping Corporation, Morgan Stanley &amp;
          Co. Incorporated and Salmon Smith Barney dated as of February 11, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (r) Agreement, dated March 10, 2003, for a U.S. $180,000,000 Secured Credit Facility
          to be made available to Cork Spirit LLC, Donegal Spirit LLC, Limerick Spirit
          LLC, Shannon Spirit LLC and Galway Spirit LLC by Den Norske Bank ASA, Deutsche
          Bank AG, DVB Bank AG and Nordea Bank Finland Plc and various other banks. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (s) Agreement, dated June 26, 2003, for a U.S. $550,000,000 Secured Reducing
          Revolving Loan Facility between Norsk Teekay Holdings Ltd., Den Norske Bank ASA
          and various other banks. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (t) Share purchase agreement dated March 15, 2004 regarding the acquisition of
          Naviera F. Tapias S.A. (renamed Teekay Shipping Spain S.L.) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (u) Agreement, dated September 1, 2004 for a U.S. $550,000,000 Credit Facility
          Agreement to be made available to Teekay Nordic Holdings Incorporated by Nordea
          Bank Finland PLC, New York Branch. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (v) Amendment dated September 30, 2004 to Agreement,  dated June 26, 2003, for a U.S.  $550,000,000 Secured
Reducing  Revolving  Loan Facility  between Norsk Teekay  Holdings  Ltd., Den Norske Bank ASA and various other
banks.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Indent Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          (w) Annual Executive Bonus Plan</FONT></P>

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<A NAME=A171></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exchange Controls and
Other Limitations Affecting Security Holders </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are not aware of any governmental
laws, decrees or regulations in the Republic of The Marshall Islands that restrict the
export or import of capital, including foreign exchange controls, or that affect the
remittance of dividends, interest or other payments to non-resident holders of our
securities. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are not aware of any limitations
on the right of non-resident or foreign owners to hold or vote our securities imposed by
the laws of the Republic of the Marshall Islands or our Articles of Incorporation and
Bylaws. </FONT></P>

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<A NAME=A172></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Taxation </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Teekay Shipping Corporation was
incorporated in the Republic of Liberia on February 9, 1979 and was domesticated in the
Republic of The Marshall Islands on December 20, 1999. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Marshall Islands Tax
Consequences. </I></B><I></I>Because Teekay and our subsidiaries do not, and do not expect
that we will, conduct business or operations in the Republic of The Marshall Islands, and
because all documentation related to the public offering of our common stock was executed
outside of the Republic of The Marshall Islands, under current Marshall Islands law, no
taxes or withholdings will be imposed by the Republic of The Marshall Islands on
distributions made to holders of shares of our common stock, so long as such persons do
not reside in, maintain offices in, nor engage in business in the Republic of The Marshall
Islands. Furthermore, no stamp, capital gains or other taxes will be imposed by the
Republic of The Marshall Islands on the purchase, ownership or disposition by such persons
of shares of our common stock. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Bahamian Tax Consequences</I>.
</B>Under current Bahamian law, no taxes or withholdings will be imposed by the
Commonwealth of the Bahamas on distributions made in respect of the shares of our common
stock, and no stamp, capital gains or other taxes will be imposed by the Commonwealth of
the Bahamas on the ownership or disposition of the shares of our common stock, as there
are no personal income or corporation taxes, capital gains taxes or death duties in the
Commonwealth of the Bahamas. </FONT></P>

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<A NAME=A173></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documents on Display </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Documents concerning us that are
referred to herein may be inspected at our principal executive headquarters at TK House,
Bayside Executive Park, West Bay Street &amp; Blake Road, P.O. Box AP-59212, Nassau, The
Bahamas. Those documents electronically filed via the Electronic Data Gathering, Analysis,
and Retrieval (or <I>EDGAR</I>) system may also be obtained from the SEC&#146;s website at
<I><U>www.sec.gov</U></I><U></U> or from the SEC public reference room at Judiciary Plaza,
450 Fifth Street, Washington, D.C. 20549. Further information on the operation of the
public reference rooms may be obtained by calling the SEC at 1-800-SEC-0330. Copies of
documents can be requested from the SEC public reference rooms for a copying fee. </FONT></P>

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<A NAME=A174></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 11. Quantitative
and Qualitative Disclosures About Market Risk </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We are exposed to market risk from
foreign currency fluctuations, changes in interest rates, 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. </FONT></P>

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<A NAME=A175></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Foreign Currency
Fluctuation Risk </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our primary economic environment is
the international shipping market. This market utilizes the U.S. Dollar as its functional
currency. Consequently, virtually all of our revenues and most of our operating costs are
in U.S. dollars. We incur certain voyage expenses, vessel operating expenses, drydocking,
and overhead costs in foreign currencies, the most significant of which are Japanese Yen,
Singapore Dollars, Canadian Dollars, Australian Dollars, British Pounds, Euro and
Norwegian Kroner. During 2004, approximately 33% of vessel and voyage costs, overhead and
drydock expenditures were denominated in these currencies. However, we have some ability
to shift the purchase of goods and services from one country to another and, thus, from
one currency to another, on relatively short notice. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We enter into forward contracts as a
hedge against changes in certain foreign exchange rates. As at December 31, 2004, we had
the following foreign currency forward contracts: </FONT></P>

<PRE>
                                                                                       Expected Maturity Date
(contract amounts in USD'000's)                                                       2005                2006
                                                                             ------------------- -------------------
Norwegian Kroner
   Contract amount                                                                $ 54,046               $5,000
   Average contractual exchange rate                                                  7.33                 7.82
Canadian Dollar
   Contract amount                                                                $ 45,151                    -
   Average contractual exchange rate                                                  1.29                    -
</PRE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the extent the hedge is effective,
changes in the fair value of the forward contract are either offset against the fair value
of assets or liabilities through income, or recognized in other comprehensive income until
the hedged item is recognized in income. The ineffective portion of a forward
contract&#146;s change in fair value will be immediately recognized in income. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Although the majority of our
transactions, assets and liabilities are denominated in U.S. Dollars, certain of our
subsidiaries have foreign currency denominated liabilities. There is a risk that currency
fluctuations will have a negative effect on the value of our cash flows. We have not
entered into any forward contracts to protect against the translation risk of our foreign
currency denominated liabilities. As at December 31, 2004, we had Euro denominated term
loans of 325.8 million Euros ($443.7 million) included in long-term debt, and Norwegian
Kroner denominated deferred income taxes of approximately 666.1 million NOK ($110.3
million) included in other long-term liabilities. Our Euro denominated revenues
approximate our Euro denominated expenses and Euro denominated loan and interest payments.
For this reason we have not entered into any Euro forward contracts. </FONT></P>

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<A NAME=A179></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest Rate Risk </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We invest our cash and marketable
securities in financial instruments with maturities of less than six months within the
parameters of our investment policy and guidelines. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We use interest rate swaps to manage
the impact of interest rate changes on earnings and cash flows. Changes in the fair value
of our interest rate swaps are either offset against the fair value of assets or
liabilities through income, or recognized in other comprehensive income until the hedged
item is recognized in income. The ineffective portion of an interest rate swap change in
fair value is immediately recognized in income. Premiums and receipts, if any, are
recognized as adjustments to interest expense over the lives of the individual contracts. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The table below provides information
about our financial instruments at December 31, 2004, which are sensitive to changes in
interest rates, including our debt and capital lease obligations and interest rate swaps. For
long-term debt and capital lease obligations, the table presents principal cash flows and related weighted average interest
rates by expected maturity dates. For interest rate swaps, the table presents notional
amounts and weighted average interest rates by expected contractual maturity dates. </FONT></P>

<PRE>
                                                               Expected Maturity Date
(in USD'000's                                                                                 There-
except for percentages)            2005        2006        2007        2008        2009       after       Rate (9)
- ------------------------------ ----------- ----------- ----------- ----------- ----------- ----------- ------------
<U>Long-Term Debt:</U>
  Fixed-Rate Debt                 45,000     149,656          -            -           -     351,530       8.07%
  Average Interest Rate            8.32%       6.09%          -            -           -      8.875%

  Variable Rate Debt
    U.S. Dollar Denominated (1)   63,418      60,472     26,384      273,288     177,751     516,769       3.34%
    Euro Denominated (2)(3)       11,059       9,342     10,023       10,753      11,536     391,025       3.35%

<U>Capital Lease Obligations:</U> (4)
  Fixed-Rate Obligations           7,978     135,313      3,355        3,537       3,709      69,274       7.81%
  Average Interest Rate (5)        7.80%       8.86%      6.13%        6.20%       6.25%       6.01%

<U>Interest Rate Swaps: (6)(4)</U>
  Contract Amount (8)            100,000           -    500,000            -     200,000     734,000       4.21%
  Average Fixed Pay Rate (1)       2.25%           -      2.79%            -       4.24%       5.44%
  Contract Amount                  6,485       7,023      7,606        8,200     140,476     158,494       6.68%
  Average Fixed Pay Rate (1)       6.76%       6.76%      6.76%        6.76%       6.96%       6.41%
  Contract Amount (Euro
    Denominated)(3)                8,340       9,342     10,023       10,753      11,536     391,025       5.90%
  Average Fixed Pay Rate (2)       5.90%       5.90%      5.90%        5.90%       5.90%       5.89%
</PRE>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Interest payments on U.S. Dollar denominated debt and interest rate swaps are based on LIBOR. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Interest payments on Euro denominated debt and interest rate swaps are based on EURIBOR. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Euro denominated amounts have been converted to U.S. Dollars using the prevailing exchange rate as of
               December 31, 2004. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Excludes capital lease obligations of $413.3 million on two of our LNG carriers.  Under the terms of these
               lease obligations, we are required to have on deposit with financial institutions an amount of cash that,
               together with the interest earned thereon, will fully fund the amount owing under the capital lease
               obligations.  Consequently, we are not subject to interest rate risk from these obligations.</FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The average interest rate is the weighted-average interest rate implicit in the capital lease obligations
               at the inception of the leases.</FONT></TD>
               </TR>
               </TABLE>
               <BR>



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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The average variable receive rate for our interest rates swaps is set monthly at
               1-month LIBOR or EURIBOR or semi-annually at the 6-month LIBOR or EURIBOR. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               In February 2005, we entered into an additional $200.0 million of interest rate
               swap agreements. Please see Item 18 &#151; Financial Statements: Note 21 &#150;
               Subsequent Events. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The inception date of the interest rate swaps maturing in 2009 is 2006. The
               inception dates of the interest rate swaps maturing after 2009 are 2006 ($478.0
               million) and 2007 ($256.0 million). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Rate refers to the weighted-average effective interest rate for our debt, including the
               margin we pay on our floating-rate debt, as at December 31, 2004 and
               average fixed pay rate for our swap agreements. The average fixed pay rate on our interest rate
               swaps excludes the margin we pay on our floating-rate debt. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A183></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commodity Price Risk </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We use bunker fuel swap contracts as
a hedge to protect against the change in the cost of forecasted bunker fuel costs for
certain vessels being time-chartered-out and for vessels servicing certain contracts of
affreightment. To the extent the hedge is effective, changes in the fair value of the
forward contract are either offset against the fair value of assets or liabilities through
income, or recognized in other comprehensive income until the hedged item is recognized in
income. The ineffective portion of a forward contract&#146;s change in fair value is
immediately recognized in income. As at December 31, 2004, we were committed to bunker
fuel swap contracts totaling 22,650 metric tonnes with a weighted-average price of $158.14
per tonne, which expire between January and December 2005. </FONT></P>

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<A NAME=A184></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Spot Market Rate Risk </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We use written forward freight
agreements as a hedge to protect against the change in spot market rates earned by some of
our vessels. As at December 31, 2004, we were committed to forward freight agreements
totaling 4.8 million metric tonnes with a notional principal amount of $40.0 million,
which expire between January and December 2005. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table sets forth
further information on the magnitude of these foreign currency 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>December 31, 2004</U>
Foreign Currency Forward Contracts             $  104,197       $  16,635       $                    $  16,635
Interest Rate Swap Agreements                   2,304,860                            158,482          (158,482)
Bunker Fuel Swap Contracts                          3,582              98                                   98
Forward Freight Agreements                         39,967                              3,276            (3,276)
Debt (including capital lease obligations)      2,744,545                          2,744,545        (2,801,553)

<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 obligations)      1,636,758                          1,636,758        (1,686,002)
</PRE>

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<A NAME=A192></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 12. Description of
Securities Other than Equity Securities </FONT></H1>

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<A NAME=A193></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Not applicable. </FONT></P>

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<A NAME=A194></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART II </FONT></H1>

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<A NAME=A195></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 13. Defaults,
Dividend Arrearages and Delinquencies </FONT></H1>

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<A NAME=A196></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>None. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Item 14.  Material Modifications to the Rights of Security Holders and Use of Proceeds</FONT></H1>

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<A NAME=A197></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>None. </FONT></P>

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<A NAME=A198></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 15. Controls and
Procedures </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conducted an evaluation of our
disclosure under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer. Based on our evaluation, we concluded that disclosure
controls and procedures were effective as of December 31, 2004. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During 2004 there was no change in
our internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our Chief Executive Officer and Chief
Financial Officer do not expect that our disclosure controls or internal controls will
prevent all error and all fraud. Although our disclosure controls and procedures were
designed to provide reasonable assurance of achieving their objectives, a control system,
no matter how well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within Teekay have been detected. These
inherent limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the control. The design of any system of
controls also is based partly on certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions. </FONT></P>

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<A NAME=A199></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 16A. Audit
Committee Financial Expert </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Board has determined that
director and Chair of the Audit Committee, Eileen A. Mercier, qualifies as an audit
committee financial expert and is independent under applicable NYSE and SEC standards. </FONT></P>

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<A NAME=A200></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 16B. Code of Ethics </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have adopted Standards for
Business Conduct that include a Code of Ethics for all employees and directors. This
document is available under &#147;Corporate Governance&#148; in the Investor Centre of our
Web site (<U>www.teekay.com</U>). We also intend to disclose any waivers to or amendments
of our Standards of Business Conduct or Code of Ethics for the benefit of our directors
and executive officers on our website. </FONT></P>

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<A NAME=A201></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 16C. Principal
Accountant Fees and Services </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our principal accountant for 2004 and
2003 was Ernst &amp; Young LLP, Chartered Accountants. The following table shows the fees
we paid or accrued for audit and other services provided by Ernst &amp; Young LLP for 2004
and 2003. </FONT></P>

<pre>
    Fees                                                                         <B>2004</B>               <B>2003</B>
                                                                           -----------------  ----------------

      Audit Fees (1)                                                           $907,777           $454,780
      Audit-Related Fees (2)                                                    395,176             76,120
      Tax Fees (3)                                                              232,640            329,570
      All Other Fees (4)                                                          1,900              1,605
                                                                           -----------------  ----------------
         Total                                                               $1,537,493           $862,075
                                                                           =================  ================
</pre>

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<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

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                    <TR VALIGN=TOP>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
                    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Audit fees represent fees for professional services provided in connection with
                    the audit of our consolidated financial statements and review of our quarterly
                    consolidated financial statements and audit services provided in connection with
                    other statutory or regulatory filings. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
                    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Audit-related fees consisted primarily of accounting consultations, employee
                    benefit plan audits, services related to business acquisitions and divestitures
                    and other attestation services. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
                    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    For 2004 and 2003, respectively, tax fees principally included international tax
                    planning fees of $62,455 and $175,290, corporate tax compliance fees of $38,849
                    and $67,070, and personal and expatriate tax services fees of $131,336 and
                    $87,210. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
                    <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    All other fees principally include subscription fees to an internet database of
                    accounting information. </FONT></TD>
                    </TR>
                    </TABLE>
                    <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Audit Committee has the authority
to pre-approve permissible audit-related and non-audit services not prohibited by law to
be performed by our independent auditors and associated fees. Engagements for proposed
services either may be separately pre-approved by the Audit Committee or entered into
pursuant to detailed pre-approval policies and procedures established by the Audit
Committee, as long as the Audit Committee is informed on a timely basis of any engagement
entered into on that basis. The Audit Committee separately pre-approved all engagements
and fees paid to our principal accountant in 2004. </FONT></P>

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<A NAME=A202></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 16D. Exemptions
from the Listing Standards for Audit Committees </FONT></H1>

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<A NAME=A203></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Not applicable. </FONT></P>

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<A NAME=A204></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 16E. Purchases of
Equity Securities by the Issuer and Affiliated Purchasers </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In November 2004, Teekay announced
that its Board of Directors had authorized the repurchase of up to 3,000,000 shares of its
Common Stock in the open market. By January 31, 2005, we had repurchased the maximum
number authorized. The following table shows the monthly stock repurchase activity: </FONT></P>

<PRE>
<B>                                                                         Total Number of       Maximum Number of
                                                                       Shares Purchased as      Shares that May
Month of Repurchase                Total Number                         Part of Publically     Yet Be Purchased
                                     of Shares        Average Price      Announced Plans or    Under the Plans or
                                     Purchased       Paid per Share          Program                Program</B>
                                 ----------------- ----------------- ----------------------- --------------------
December 2004...................     1,400,200            $43.73             1,400,200            1,599,800
January 2005....................     1,599,800             42.27             1,599,800                    0
                                 ----------------- ----------------- ----------------------- --------------------
                                     3,000,000            $42.95             3,000,000                    0
                                 ================= ================= ======================= ====================
</PRE>
<BR>
<BR>

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<A NAME=A206></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART III </FONT></H1>

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<A NAME=A207></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 17. Financial
Statements </FONT></H1>

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<A NAME=A208></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Not applicable. </FONT></P>

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<A NAME=A209></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 18. Financial Statements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following financial statements
and schedule, together with the report of Ernst &amp; Young LLP, Chartered Accountants
thereon, are filed as part of this Annual Report: </FONT></P>

<pre>
                                                                                                           <B><U>Page</U></B>

Report of Independent Registered Public Accounting Firm...................................................  F-1

<B>Consolidated Financial Statements</B>

Consolidated Statements of Income.........................................................................  F-2
Consolidated Balance Sheets...............................................................................  F-3

Consolidated Statements of Cash Flows.....................................................................  F-4

Consolidated Statements of Changes in Stockholders' Equity................................................  F-5

Notes to the Consolidated Financial Statements............................................................  F-6

Schedule A to the Consolidated Financial Statements.......................................................  F-21
</pre>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All other schedules for which
provision is made in the applicable accounting regulations of the SEC are not required,
are inapplicable or have been disclosed in the Notes to the Consolidated Financial
Statements and therefore have been omitted. </FONT></P>

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<A NAME=A212></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Item 19. Exhibits </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following exhibits are filed as
part of this Annual Report: </FONT></P>

<PRE>
   1.1  Amended and Restated Articles of Incorporation of Teekay Shipping Corporation. (9)
   1.2  Articles of Amendment of Articles of Incorporation of Teekay Shipping Corporation. (9)
   1.3  Amended and Restated Bylaws of Teekay Shipping Corporation. (9)
   2.1  Registration Rights Agreement among Teekay Shipping Corporation, Tradewinds Trust Co. Ltd., as Trustee for
        the Cirrus Trust, and Worldwide Trust Services Ltd., as Trustee for the JTK Trust. (1)
   2.2  Specimen of Teekay Shipping Corporation Common Stock Certificate. (1)
   2.3  Indenture dated January 29, 1996 among Teekay Shipping Corporation, VSSI Oceans Inc., VSSI Atlantic Inc.,
        VSSI Appian Inc., Senang Spirit Inc., Exuma Spirit Inc., Nassau Spirit Inc., Andros Spirit Inc. and United
        States Trust Company of New York, as Trustee. (5)
   2.4  Specimen of Teekay Shipping Corporation's 8.32% First Preferred Ship Mortgage Notes Due 2008. (5)
   2.5  Bahamian Statutory Ship Mortgage dated January 29, 1996 by Nassau Spirit Inc. to United States Trust
        Company of New York. (3) (5)
   2.6  Deed of Covenants dated January 29, 1996 by Nassau Spirit Inc. to United States Trust Company of New York.
        (3) (5)
   2.7  First Preferred Ship Mortgage dated January 29, 1996 by VSSI Oceans Inc. to United States Trust Company of
        New York, as Trustee. (4)
   2.8  Assignment of Time Charter dated January 29, 1996 by Nassau Spirit Inc. to United States Trust Company of
        New York, as Trustee. (3) (5)
   2.9  Assignment of Insurance dated January 29, 1996 by Nassau Spirit Inc. to United States Trust Company of New
        York, as Trustee. (3) (5)
  2.10  Pledge Agreement and Irrevocable Proxy dated January 29, 1996 by Teekay in favor of United States Trust
        Company of New York, as Trustee. (5)
  2.11  Guarantee dated January 29, 1996 by Nassau Spirit Inc. in favor of United States Trust Company of New
        York, as Trustee. (3) (5)
  2.12  Assignment of Freights and Hires dated January 29, 1996 by Nassau Spirit Inc. to United States Trust
        Company of New York, as Trustee. (3) (5)
  2.13  Cash Collateral Account Agreement dated January 29, 1996 between Nassau Spirit Inc. and United States
        Trust Company of New York, as Trustee. (3) (5)
  2.14  Investment Account Agreement dated January 29, 1996 between Teekay Shipping Corporation and United States
        Trust Company of New York, as Trustee. (5)
  2.15  Indenture dated June 22, 2001 among Teekay Shipping Corporation and The Bank of New York Trust Company of
        Florida (formerly U.S. Trust Company of Texas, N.A.). for U.S. $250,000,000 8.875% Senior Notes due 2011.
        (14)
  2.16  First Supplemental Indenture dated as of December 6, 2001, among Teekay Shipping Corporation and The Bank
        of New York Trust Company of Florida, N.A. for U.S. $100,000,000 8.875% Senior Notes due 2011. (15)
  2.17  Exchange and Registration Rights Agreement dated June 22, 2001 among Teekay Shipping Corporation and
        Goldman, Sachs &amp; Co., Morgan Stanley &amp; Co. Incorporated, Salomon Smith Barney Inc., Deutsche Banc Alex.
        Brown Inc. and Scotia Capital (USA) Inc. (14)
  2.18  Exchange and Registration Rights Agreement dated December 6, 2001 between Teekay Shipping Corporation and
        Goldman, Sachs &amp; Co. (15)
  2.19  Specimen of Teekay Shipping Corporation's 8.875% Senior Notes due 2011. (14)
  2.20  Form of Supplemental Indenture No. 1 between Teekay Shipping Corporation and The Bank of New York, as
        trustee. (18)
  2.21  Form of Purchase Contract Agreement between Teekay Shipping Corporation and The Bank of New York, as
        purchase contract agent. (18)
  2.22  Form of Pledge Agreement between Teekay Shipping Corporation and The Bank of New York, as collateral
        agent. (18)
  2.23  Form of Remarketing Agreement between Teekay Shipping Corporation and Morgan Stanley &amp; Co. Incorporated.
        (18)
  2.24  Form of Underwriting Agreement Between Teekay Shipping Corporation, Morgan Stanley &amp; Co. Incorporated and
        Salomon Smith Barney. (18)
   4.1  1995 Stock Option Plan. (1)
   4.2  Amendment to 1995 Stock Option Plan. (10)
   4.3  Amended 1995 Stock Option Plan. (12)
   4.4  Form of Indemnification Agreement between Teekay and each of its officers and directors. (1)
   4.5  Time Charter, as amended, dated February 1, 1992 between VSSI Appian Inc. and Palm Shipping Inc. (4)
   4.6  Time Charter, as amended, dated August 1, 1992 between Exuma Spirit Inc. and Palm Shipping Inc. (4)
   4.7  Time Charter, as amended, dated May 1, 1992 between Nassau Spirit Inc. and Palm Shipping Inc. (4)
   4.8  Agreement, dated January 26, 1998, for a U.S. $200,000,000 Reducing Revolving Credit Facility to be made
        available to certain wholly-owned subsidiaries of Teekay Shipping Corporation by Den Norske Bank ASA,
        Christiania Bank og Kreditkasse ASA, New York Branch, and the Bank of Nova Scotia. (7)
   4.9  Agreement, dated March 26, 1999, for the amalgamation of Northwest Maritime Inc., a 100% owned subsidiary
        of Teekay Shipping Corporation, and Bona Shipholding Ltd. (8)
  4.10  Agreement, dated April 16, 1998, for a U.S. $30,000,000 Term Loan Facility to be made available to VSSI
        Australia Limited by RABO Australia Limited. (9)
  4.11  Agreement, dated December 18, 1997, for a U.S. $44,000,000 Term Loan Facility to be made available to
        Barrington (Australia) Pty Limited and Palmerston (Australia) Pty Limited by RABO Australia Limited. (9)
  4.12  Amended and Restated Reimbursement Agreement, dated April 16, 1998, Among Barrington (Australia) Pty
        Limited, Palmerston (Australia) Pty Limited, VSSI Australia Limited, VSSI Transport Inc. and Alliance
        Chartering Pty Limited and Nedship Bank (America) N.V., The Bank of New York and Landesbank
        Schleswig-Holstein. (9)
  4.13  Amendment No. 1, dated May 1999, to Amended and Restated Reimbursement Agreement dated April 16, 1998
        among Barrington (Australia) Pty Limited, Palmerston (Australia) Pty Limited, VSSI Australia Limited, VSSI
        Transport Inc. and Alliance Chartering Pty Limited and Nedship Bank (America) N.V.,
        The Bank of New York and Landesbank Schleswig-Holstein. (9)
  4.14  Amended and Restated Agreement, date June 11, 1999, for a U.S. $500,000,000 Revolving Loan between Bona
        Shipholding Ltd., Chase Manhattan plc, Citibank International plc and various other banks. (9)
  4.15  Amendment and Restatement Agreement, dated June 11, 1999, relating to a U.S. $500,000,000 Revolving Loan
        Agreement between Bona Shipholding Ltd., Chase Manhattan plc, Citibank International plc and various other
        banks. (9)
  4.16  Rights agreement, dated as of September 8, 2000, between Teekay Shipping Corporation and The Bank of New
        York, as Rights Agent. (11)
  4.17  Reimbursement Agreement, dated January 1, 2000, between Fleet Management Inc. and Teekay Shipping
        Corporation. (12)
  4.18  Reimbursement Agreement, dated February 16, 2001, between Karratha Spirit Pty Ltd and Nedship Bank
        (America) N.V. (13)
  4.19  Agreement, dated February 16, 2001, for a U.S. $34,000,000 Term Loan Facility to be made available to
        Karratha Spirit Pty Ltd by RABO Australia Limited. (13)
  4.20  Amendment and Restatement Agreement, dated September 14, 2001, relating to a U.S. $500,000,000 Revolving
        Loan Agreement between Bona Shipholding Ltd., Teekay Shipping Corporation, J.P. Morgan Securities Inc.,
        Citibank International plc and various other banks. (17)
  4.21  Share Sale and Purchase Agreement by and among Statoil ASA and Statpet AS and Norsk Teekay AS dated
        December 15, 2002. (19)
  4.22  Agreement, dated March 10, 2003, for a U.S. $180,000,000 Secured Credit Facility to be made available to
        Cork Spirit LLC, Donegal Spirit LLC, Limerick Spirit LLC, Shannon Spirit LLC and Galway Spirit LLC by Den
        Norske Bank ASA, Deutsche Bank AG, DVB Bank AG and Nordea Bank Finland Plc and various other banks. (20)
  4.23  Agreement, dated June 26, 2003, for a U.S. $550,000,000 Secured Reducing Revolving Loan Facility between
        Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. (21)
  4.24  Share purchase agreement dated March 15, 2004 regarding the acquisition of Naviera F. Tapias S.A. (renamed
        Teekay Shipping Spain S.L.) (22)
  4.25  2003 Equity Incentive Plan. (23)
  4.26  Agreement, dated September 1, 2004 for a U.S. $550,000,000 Credit Facility Agreement to be made available
        to Teekay Nordic Holdings Incorporated by Nordea Bank Finland PLC
  4.27  Amendment dated September 30, 2004 to Agreement, dated June 26, 2003, for a U.S. $550,000,000 Secured
        Reducing Revolving Loan Facility between Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other
        banks.
  4.28  Annual Executive Bonus Plan
   8.1  List of Significant Subsidiaries
  12.1  Rule 13a-14(a)/15d-14(a) Certification of Teekay's Chief Executive Officer
  12.2  Rule 13a-14(a)/15d-14(a) Certification of Teekay's Chief Financial Officer
  13.1  Teekay Shipping Corporation Certification of Bjorn Moller, Chief Executive Officer, pursuant to 18 U.S.C.
        Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  13.2  Teekay Shipping Corporation Certification of Peter Evensen, Chief Financial Officer, pursuant to 18 U.S.C.
        Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  15.1  Letter from Ernst &amp; Young LLP, as independent chartered accountants, dated April 7, 2005, regarding
        audited financial information.
</PRE>

<HR WIDTH="100%" SIZE="1">

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on
               Form F-1 (Registration No. 33-7573-4), filed with the SEC on July 14, 1995, and
               hereby incorporated by reference to such Registration Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on
               Form F-1 (Registration No. 33-68680), as declared effective by the SEC on
               November 29, 1993, and hereby incorporated by reference to such Registration
               Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A schedule attached to this exhibit identifies all other documents not required
               to be filed as exhibits because such other documents are substantially identical
               to this exhibit. The schedule also sets forth material details by which the
               omitted documents differ from this exhibit. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on
               Form F-3 (Registration No. 33-65139), filed with the SEC on January 19, 1996,
               and hereby incorporated by reference to such Registration Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No. 1-12874), filed with the SEC on June 4, 1996, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(6) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No. 1-12874), filed with the SEC on June 11, 1997, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(7) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No. 1-12874), filed with the SEC on May 20, 1998, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(8) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No.1-12874), filed with the SEC on June 11, 1999, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(9) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No.1-12874), filed with the SEC on March 30, 2000, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(10) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Form 6-K (File No.1-12874),
               filed with the SEC on May 2, 2000, and hereby incorporated by reference to such
               Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(11) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Form 8-A (File No.1-12874),
               filed with the SEC on September 11, 2000, and hereby incorporated by reference
               to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(12) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No.1-12874), filed with the SEC on April 2, 2001, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(13) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Form 6-K (File No.1-12874),
               filed with the SEC on May 24, 2001, and hereby incorporated by reference to such
               Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(14) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on
               Form F-4 (Registration No. 333-64928), filed with the SEC on July 11, 2001, and
               hereby incorporated by reference to such Registration Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(15) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on
               Form F-4 (Registration No. 333-76922), filed with the SEC on January 17, 2002,
               and hereby incorporated by reference to such Registration Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(16) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on
               Form F-4, as Amended (Registration No. 333-76922), filed with the SEC on
               February 5, 2002, and hereby incorporated by reference to such Registration
               Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(17) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Annual Report on Form 20-F
               (File No.1-12874), filed with the SEC on March 29, 2002, and hereby incorporated
               by reference to such Annual Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(18) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Report on Form&nbsp;6-K
               (File No.1-12874), filed with the SEC on February&nbsp;12, 2003, and hereby
               incorporated by reference to such Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(19) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Report on Form 6-K (File
               No.1-12874), filed with the SEC on April 1, 2003, and hereby incorporated by
               reference to such Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(20) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Report on Form 6-K (File
               No.1-12874), filed with the SEC on May 15, 2003, and hereby incorporated by
               reference to such Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(21) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Report on Form 6-K (File
               No. 1-12874), filed with the SEC on August 14, 2003, and hereby incorporated by
               reference to such Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(22) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Report on Form 6-K (File
               No. 1-12874), filed with the SEC on May 14, 2004, and hereby incorporated by
               reference to such Report. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(23) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Previously filed as an exhibit to the Company&#146;s Registration Statement on Form S-8 (File
               No. 333-11956), filed with the SEC on October 6, 2004, and hereby incorporated by
               reference to such Registration Statement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


<BR><BR><BR><BR>
<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Workstation" -->
<P align=center><FONT face="Times New Roman, Times, Serif" size=2><B>SIGNATURE</B> </FONT></P>

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

<P><FONT face="Times New Roman, Times, Serif" size=2>The registrant hereby certifies that it meets all of
 the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
 to sign this Annual Report on its behalf. </FONT></P>

<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD vAlign=bottom width="45%"><FONT face="Times New Roman, Times, Serif" size=2></FONT> </TD>
<TD vAlign=top width="55%"><FONT face="Times New Roman, Times, Serif" size=2>
&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><BR></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P align=left><FONT face="Times New Roman, Times, Serif" size=2>Dated: April 7, 2005 </FONT></P>
<BR><BR><BR><BR><BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A219></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the Board of Directors and
Stockholders 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=2>We have audited the accompanying
consolidated balance sheets of <B>Teekay Shipping Corporation and subsidiaries </B>as of
December 31, 2004 and 2003, and the related consolidated statements of income, changes in
stockholders&#146; equity and cash flows for each of the three years in the period ended
December 31, 2004. Our audits also included the financial schedule listed in the Index:
Item 18. These financial statements and schedule are the responsibility of the
Company&#146;s management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. We were not engaged to
perform an audit of the Company&#146;s internal control over financial reporting. Our
audit included consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company&#146;s internal
control over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In our opinion, based on our audits,
the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of Teekay Shipping Corporation and subsidiaries at
December 31, 2004 and 2003, and the consolidated results of their operations and their
cash flows for each of the three years ended December 31, 2004 in conformity with U.S.
generally accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth therein. </FONT></P>

<BR><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD vAlign=top width="45%"><FONT face="Times New Roman, Times, Serif" size=2>Vancouver, Canada,<BR>February 18, 2005<BR></FONT></TD>
<TD vAlign=top width="55%"><FONT face="Times New Roman, Times, Serif" size=2>/s/ ERNST &amp; YOUNG LLP<BR>Chartered Accountants<BR></FONT></TD></TR>
</TABLE>

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



<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A221></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES <BR>
CONSOLIDATED STATEMENTS OF INCOME<BR>
(in thousands of U.S. dollars, except share and per share amounts) </FONT></H1>

<PRE>
<B>                                                                Year Ended        Year Ended         Year Ended
                                                               December 31,      December 31,       December 31,
                                                                   2004              2003               2002
                                                                     $                 $                 $</B>
                                                              ---------------- ------------------ -----------------

<B>VOYAGE REVENUES</B>                                                   2,219,238          1,576,095           783,327
- ------------------------------------------------------------- ---------------- ------------------ -----------------

<B>OPERATING EXPENSES</B>
Voyage expenses                                                     432,395            394,656          239,455
Vessel operating expenses                                           218,489            210,696          168,035
Time-charter hire expense                                           457,180            304,623           49,949
Depreciation and amortization                                       237,498            191,237          149,296
General and administrative                                          130,742             85,147           57,246
Vessel write-downs and (gain) loss on sale
    of vessels <I>(note 19)</I>                                            (79,254)            90,389                -
Restructuring charge <I>(note 15 )</I>                                       1,002              6,383                -
- ------------------------------------------------------------- ---------------- ------------------ -----------------
<B>Total operating expenses</B>                                          1,398,052          1,283,131          663,981
- ------------------------------------------------------------- ---------------- ------------------ -----------------
<B>Income from vessel operations</B>                                       821,186            292,964          119,346
- ------------------------------------------------------------- ---------------- ------------------ -----------------

<B>OTHER ITEMS</B>
Interest expense                                                   (121,518)           (80,999)         (57,974)
Interest income                                                      18,528              3,921            3,494
Equity income from joint ventures                                    13,730              6,970            4,523
Gain (loss) on sale of marketable securities <I>(note 6)</I>                93,175                517           (1,130)
Other - net <I>(note 15)</I>                                               (67,661)           (46,009)         (14,868)
- ------------------------------------------------------------- ---------------- ------------------ -----------------
<B>Total other items</B>                                                   (63,746)          (115,600)         (65,955)
- ------------------------------------------------------------- ---------------- ------------------ -----------------

<B>Net income</B>                                                          757,440            177,364           53,391
- ------------------------------------------------------------- ---------------- ------------------ -----------------

<B>Earnings per common share</B> <I>(note 20)</I>
o Basic                                                               9.14                2.22             0.67
o Diluted                                                             8.63                2.18             0.66

<B>Weighted average number of common shares</B>
o Basic                                                         82,829,336          79,986,746       79,261,994
o Diluted                                                       87,729,037          81,466,294       80,504,792
============================================================= ================ ================== =================
</PRE>
<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>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A229></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES<BR>
CONSOLIDATED BALANCE SHEETS<BR>
(in thousands of U.S. dollars)<BR></FONT></H1>


<PRE>
<B>                                                                                     As at             As at
                                                                                  December 31,      December 31,
                                                                                     2004              2003
                                                                                       $                 $</B>
                                                                               ----------------- ----------------
<B>ASSETS</B>
<B>Current</B>
Cash and cash equivalents <I>(note 9)</I>                                                    427,037           292,284
Restricted cash <I>(note 11)</I>                                                              96,087             2,672
Accounts receivable                                                                   210,089           146,523
Prepaid expenses and other assets                                                      54,717            39,054
Vessels held for sale <I>(note 19)</I>                                                       129,952                 -
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total current assets</B>                                                                  917,882           480,533
- ------------------------------------------------------------------------------ ----------------- ----------------

Marketable securities <I>(note 6)</I>                                                              -            95,511
Restricted cash <I>(note 11)</I>                                                             352,725                 -

<B>Vessels and equipment</B> <I>(note 9)</I>
At cost, less accumulated depreciation of
     $960,597 (2003 -  $1,034,747)                                                  2,613,379         2,386,642
Vessels under capital leases, at cost, less accumulated
     depreciation of $11,047 (2003 - $438) <I>(note 11)</I>                                  665,331            37,562
Advances on newbuilding contracts <I>(note 17)</I>                                           252,577           150,656
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total vessels and equipment</B>                                                         3,531,287         2,574,860
- ------------------------------------------------------------------------------ ----------------- ----------------
Net investment in direct financing leases <I>(note 4)</I>                                    109,215            73,073
Investment in joint ventures <I>(note 5)</I>                                                  59,637            54,392
Other assets                                                                           85,893            60,333
Intangible assets - net <I>(note 7)</I>                                                      277,511           118,588
Goodwill <I>(note 7)</I>                                                                     169,590           130,754
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total assets</B>                                                                        5,503,740         3,588,044
============================================================================== ================= ================

<B>LIABILITIES AND STOCKHOLDERS' EQUITY</B>
<B>Current</B>
Accounts payable                                                                       61,607            51,817
Accrued liabilities <I>(note 8)</I>                                                          144,415           119,594
Current portion of long-term debt <I>(note 9)</I>                                            119,453           102,062
Current obligation under capital leases <I>(notes 11 and 17)</I>                              88,934             1,159
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total current liabilities</B>                                                             414,409           274,632
- ------------------------------------------------------------------------------ ----------------- ----------------
Long-term debt <I>(note 9)</I>                                                             1,988,551         1,498,044
Long-term obligation under capital leases <I>(note 11)</I>                                   547,607            35,493
Other long-term liabilities <I>(notes 1 and 10)</I>                                          301,091           112,726
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total liabilities</B>                                                                   3,251,658         1,920,895
- ------------------------------------------------------------------------------ ----------------- ----------------
Commitments and contingencies <I>(notes 10, 11, 16 and 17)</I>

<B>Minority interest</B>                                                                      14,724            15,322

<B>Stockholders' equity</B>
Capital stock <I>(note 13)</I>                                                               534,938           492,653
Retained earnings                                                                   1,758,552         1,095,650
Accumulated other comprehensive (loss) income                                         (56,132)           63,524
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total stockholders' equity</B>                                                          2,237,358         1,651,827
- ------------------------------------------------------------------------------ ----------------- ----------------
<B>Total liabilities and stockholders' equity</B>                                          5,503,740         3,588,044
============================================================================== ================= ================
</PRE>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A241></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES <BR>
CONSOLIDATED STATEMENTS OF CASH FLOWS <BR>
(in thousands of U.S. dollars) </FONT></H1>


<PRE>
<B>                                                                   Year Ended       Year Ended       Year Ended
                                                                  December 31,     December 31,     December 31,
                                                                      2004             2003             2002
                                                                        $                $               $</B>
                                                                ---------------- ---------------- ---------------
Cash and cash equivalents provided by (used for)

<B>OPERATING ACTIVITIES</B>                                                  757,440          177,364           53,391
Net income
Non-cash items:
    Depreciation and amortization                                     237,498          191,237          149,296
    (Gain) loss on sale of vessels                                    (79,254)          (1,188)               -
    Gain on sale of marketable securities                             (93,175)            (517)           1,130
    Loss on write-down of vessels                                           -           91,577                -
   Loss on write-down of marketable securities                              -            4,910                -
    Loss on repurchase of bonds <I>(note 15)</I>                                 769            5,385                -
    Equity income (net of dividends received:
      December 31, 2004 - $12,576;
      December 31, 2003 - $7,420;
      December 31, 2002 - $1,748)                                      (1,154)             450           (2,775)
    Income taxes <I>(note 15)</I>                                             35,048           36,501           11,413
    Other - net                                                        16,971           (3,191)          (5,049)
Change in non-cash working capital items related to
  operating activities <I>(note 18)</I>                                      (26,550)          (4,256)           7,038
Expenditures for drydocking                                           (32,889)         (42,697)         (34,913)
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>Net operating cash flow</B>                                               814,704          455,575          179,531
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>FINANCING ACTIVITIES</B>
Proceeds from long-term debt                                        1,631,181        1,993,270          255,185
Capitalized loan costs                                                 (9,960)         (12,442)               -
Scheduled repayments of long-term debt                               (150,314)         (62,240)         (51,830)
Prepayments of long-term debt                                      (1,731,223)      (1,466,815)          (8,000)
Repayments of capital lease obligations                               (66,109)            (345)               -
Decrease (increase) in restricted cash                                  8,342            6,113             (952)
Issuance of Common Stock upon exercise of stock options                51,279           25,015            4,221
Repurchase of Common Stock                                            (61,237)               -           (1,547)
Cash dividends paid                                                   (42,362)         (35,719)         (34,073)
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>Net financing cash flow</B>                                              (370,403)         446,837          163,004
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels and equipment                               (548,587)        (372,433)        (135,650)
Proceeds from sale of vessels and equipment                           440,556          242,111                -
Proceeds from sale of marketable securities                           135,357            9,642            6,675
Purchase of marketable securities                                           -          (37,291)               -
Purchase of Teekay Shipping Spain S.L.,
   net of cash acquired of $11,191 <I>(note 3)</I>                          (286,993)               -                -
Purchase of Navion AS <I>(note 4)</I>                                              -         (704,734)         (76,000)
Purchase of intangible assets                                               -           (7,250)               -
Decrease (increase) in investment in joint ventures                    (4,369)          25,500          (26,000)
Purchase of PetroTrans Holdings Ltd. <I>(note 5)</I>                            (357)         (25,050)               -
Net investment in direct financing leases <I>(note 4)</I>                    (43,892)         (20,322)               -
Other                                                                  (1,263)          (4,926)          (1,885)
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>Net investing cash flow</B>                                              (309,548)        (894,753)        (232,860)
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>Increase in cash and cash equivalents</B>                                 134,753            7,659          109,675
Cash and cash equivalents, beginning of the period                    292,284          284,625          174,950
- --------------------------------------------------------------- ---------------- ---------------- ---------------

<B>Cash and cash equivalents, end of the period</B>                          427,037          292,284          284,625
=============================================================== ================ ================ ===============
</PRE>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A248></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES <BR>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS&#146; EQUITY <BR>
(in thousands of U.S. dollars) </FONT></H1>

<PRE>
<B>                                                                           Accumulated
                                                                              Other
                                     Thousands                               Compre-        Compre-        Total
                                     of Common     Common     Retained       hensive        hensive    Stockholders'
                                       Shares       Stock     Earnings    Income (Loss)     Income        Equity
                                          #            $           $              $            $              $</B>
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

<B>Balance as at December 31, 2001</B>         79,100     467,341      935,660       (4,801)                   1,398,200
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

Net income                                                       53,391                      53,391        53,391
Other comprehensive income:
  Unrealized loss on marketable
    securities                                                                  (239)          (239)         (239)
  Reclassification adjustment for
    loss on marketable securities
    included in net income                                                       737            737           737
Unrealized gain on derivative instruments
    <I>(note 16)</I>                                                                  3,023          3,023         3,023
Reclassification adjustment for gain on
    derivative instruments <I>(note 16)</I>                                          (1,815)        (1,815)       (1,815)
                                                                                          -----------
Comprehensive income                                                                         55,097
                                                                                          -----------

Dividends declared                                              (34,079)                                  (34,079)
Reinvested dividends                         2           6                                                      6
Exercise of stock options                  380       4,221                                                  4,221
Repurchase of Common Stock                 (98)       (580)        (967)                                   (1,547)
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

<B>Balance as at December 31, 2002</B>         79,384     470,988      954,005      (3,095)                    1,421,898
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

Net income                                                      177,364                     177,364       177,364
Other comprehensive income:
  Unrealized gain on marketable
    securities                                                               53,540          53,540        53,540
  Reclassification adjustment for
    loss on marketable securities
    included in net income                                                    4,899           4,899         4,899
  Unrealized gain on derivative
    instruments <I>(note 16)</I>                                                     8,639           8,639         8,639
  Reclassification adjustment for
    gain on derivative instruments
    <I>(note 16)</I>                                                                  (459)           (459)         (459)
                                                                                          -----------
Comprehensive income                                                                        243,983
                                                                                          -----------
Dividends declared                                              (35,719)                                  (35,719)
Reinvested dividends                         2           3                                                      3
Exercise of stock options                1,764      25,015                                                 25,015
7.25% Premium Equity Participating Security
    Units contract adjustment fee                   (4,803)                                                (4,803)
Issuance of Common Stock <I>(note 13)</I>          72       1,450                                                  1,450
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

<B>Balance as at December 31, 2003</B>         81,222     492,653    1,095,650      63,524                     1,651,827
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

Net income                                                      757,440                     757,440       757,440
Other comprehensive income:
  Unrealized gain on marketable
    securities                                                               39,369          39,369        39,369
  Reclassification adjustment for
    gain on marketable securities
    included in net income                                                  (92,539)        (92,539)      (92,539)
  Unrealized loss on derivative instruments
   <I>(note 16)</I>                                                                (94,822)        (94,822)      (94,822)
  Reclassification adjustment for loss on
    derivative instruments <I>(note 16)</I>                                         28,336          28,336        28,336
                                                                                          -----------
Comprehensive income                                                                        637,784
                                                                                          -----------
Dividends declared                                             (42,366)                                  (42,366)
Reinvested dividends                        1            3                                                      3
100% Stock dividend                                     41          (41)                                        -
Exercise of stock options               3,125       51,280                                                 51,280
Issuance of Common Stock <I>(note 13)</I>          3           67                                                     67
Repurchase of Common Stock <I>(note 13)</I>   (1,400)      (9,106)     (52,131)                                  (61,237)
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------

<B>Balance as at December 31, 2004</B>        82,951      534,938     1,758,552    (56,132)                    2,237,358
- ----------------------------------- ------------- ---------- ------------ --------------- ----------- --------------
</PRE>

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<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>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A263></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS <BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2><B>1.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Summary of Significant Accounting Policies</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=2><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=2>
The
consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. 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 (the
&#147;Company&#148;). Significant intercompany balances and transactions have been
eliminated upon consolidation. </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=2>
The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates. </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=2>
Certain
of the comparative figures have been reclassified to conform with the presentation adopted
in the current period. </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=2>
<B>Reporting currency</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=2>
The
consolidated financial statements are stated in U.S. Dollars because the Company operates
in international shipping markets, the Company&#146;s primary economic environment, which
typically utilize the U.S. Dollar as the functional currency. Transactions involving other
currencies during the year are converted into U.S. Dollars using the exchange rates in
effect at the time of the transactions. At the balance sheet date, monetary assets and
liabilities that are denominated in currencies other than the U.S. Dollar are translated
to reflect the year-end exchange rates. Resulting gains or losses are reflected separately
in the accompanying consolidated statements of income. </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=2>
<B>Operating revenues and expenses</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=2>
The
Company recognizes revenues from time charters and bareboat charters daily over the term
of the charter as the applicable vessel operates under the charter. The Company does not
recognize revenue during days that the vessel is off-hire. All voyage revenues from voyage
charters are recognized on a percentage of completion method. The Company uses a
discharge-to-discharge basis in determining percentage of completion for all spot voyages,
and voyages servicing contracts of affreightment (&#147;COAs&#148;) whereby it recognizes
revenue ratably from when product is discharged (unloaded) at the end of one voyage to
when it is discharged after the next voyage. The Company does not begin recognizing voyage
revenue until a charter has been agreed to by the customer and the Company, even if the
vessel has discharged its cargo and is sailing to the anticipated load port on its next
voyage. Shuttle tanker voyages servicing COAs with offshore oil fields commence 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. Estimated losses on
voyages are provided for in full at the time such losses become evident. The consolidated
balance sheets reflect the deferred portion of revenues and expenses, which will be earned
in subsequent periods. </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=2>
Voyage
expenses are all expenses unique to a particular voyage, including bunker fuel expenses,
port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions.
Vessel operating expenses include crewing, repairs and maintenance, insurance, stores,
lube oils and communication expenses. Voyage expenses are recognized ratably over the
duration of the voyage, and vessel operating expenses are recognized when incurred. </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=2>
<B>Cash
and cash equivalents</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=2>
The
Company classifies all highly-liquid investments with a maturity date of three months or
less when purchased as cash and cash equivalents. </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=2>
Cash
interest paid during the years ended December 31, 2004, 2003 and 2002 totaled $130.1
million, $81.9 million and $65.3 million, respectively. </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=2>
<B>Marketable securities</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=2>
The
Company&#146;s investments in marketable securities are classified as available-for-sale
securities and are carried at fair value. Net unrealized gains and losses on
available-for-sale securities are reported as a component of other comprehensive income. </FONT></TD>
</TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A271></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d) <BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></H1>

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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=2>
<B>Vessels and equipment</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=2>
All
pre-delivery costs incurred during the construction of newbuildings, including interest,
supervision and technical costs, are capitalized. The acquisition cost and all costs
incurred to restore used vessel purchases to the standard required to properly service the
Company&#146;s customers are capitalized. </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=2>
Depreciation
is calculated on a straight-line basis over a vessel&#146;s estimated useful life, less an
estimated residual value. Depreciation is calculated using an estimated useful life of 25
years for crude oil tankers and 35 years for liquefied natural gas (&#147;LNG&#148;)
carriers from the date the vessel is delivered from the shipyard, or a shorter period if
regulations prevent us from operating the vessels for 25 years or 35 years, respectively.
Depreciation of vessels and equipment for the years ended December 31, 2004, 2003 and 2002
aggregated $189.4 million, $152.4 million and $127.5 million, respectively. Depreciation
and amortization includes depreciation on all owned vessels and vessels accounted for as
capital leases. (see Note 19). </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=2>
Interest
costs capitalized to vessels and equipment for the years ended December 31, 2004, 2003 and
2002 aggregated $9.9 million, $8.5 million and $6.0 million, respectively. </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=2>
Gains
on vessels sold and leased back under capital leases are deferred and amortized over the
remaining estimated useful life of the vessel. Losses on vessels sold and leased back
under capital leases are recognized immediately when the fair value of the vessel at the
time of sale-leaseback is less than its book value. In such case, the Company would
recognize a loss in the amount by which book value exceeds fair value. </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=2>
Generally,
the Company drydocks each vessel every two and a half to five years. In addition, a
shipping society classification intermediate survey is performed on the Company&#146;s LNG
carriers between the second and third year of the five-year drydocking period. The Company
capitalizes a substantial portion of the costs incurred during drydocking and for the
survey and amortizes those costs on a straight-line basis from the completion of a
drydocking or intermediate survey to the estimated completion of the next drydocking. The
Company expenses costs related to routine repairs and maintenance incurred during
drydocking that do not improve or extend the useful lives of the assets. When significant
drydocking expenditures occur prior to the expiration of the original amortization period,
the remaining unamortized balance of the original drydocking cost and any unamortized
intermediate survey costs are expensed in the month of the subsequent drydocking.
Amortization of drydocking expenditures for the years ended December 31, 2004, 2003 and
2002 aggregated $23.5 million, $26.4 million and $21.8 million, respectively. </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=2>
The
Company reviews vessels and equipment for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable.
Recoverability of these assets is measured by comparison of their carrying amount to
future undiscounted cash flows the assets are expected to generate over their remaining
useful lives. If vessels and equipment are considered to be impaired, the impairment to be
recognized equals the amount by which the carrying value of the assets exceeds their fair
market value (see Note 19). </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=2>
<B>Direct financing leases</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=2>
The
Company assembles, installs, operates and leases equipment that reduces volatile organic
compound emissions (&#147;VOC Equipment&#148;) during loading, transportation and storage
of oil and oil products. Leasing of the VOC Equipment is accounted for as a direct
financing lease, with lease payments received being allocated between the net investment
in the lease and other income using the effective interest method so as to produce a
constant periodic rate of return over the lease term. </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=2>
<B>Investment in joint ventures</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=2>
The
Company has a 50% participating interest in eight joint venture companies (2003 &#151;
five). Five of these joint ventures each own one shuttle tanker. One of the joint
ventures, which was formed on April 30, 2004, will pursue new business in the oil and gas
shipping sectors that relate only to the Spanish market or are led by Spanish entities or
entities controlled by a Spanish company (see Note 3). One joint venture has a first right
of refusal on Statoil&#146;s oil transportation requirements at the prevailing market rate
until December 31, 2007 (see Note 4). One joint venture is a lightering company acquired
on September 30, 2003 (see Note 5). The joint ventures are 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. </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=2>
<B>Investment in the Panamax OBO Pool</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Default" -->
<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=2>
All
Panamax oil/bulk/ore carriers (&#147;OBOs&#148;) owned by the Company were operated
through a pool that was managed by the Company until its termination in 2003, when the
Company sold all of its OBO carriers. The participants in the pool were the companies
contributing vessel capacity to it. The voyage revenues and expenses of these vessels have
been included on a 100% basis in the consolidated financial statements. The minority pool
participants&#146; share of the results has been deducted as time charter hire expense
prior to termination of the pool. </FONT></TD>
</TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A276></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2>
<B>Loan costs</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Project" -->
<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=2>
Loan
costs, including fees, commissions and legal expenses, which are presented as other assets
are capitalized and amortized on a straight-line basis over the term of the relevant loan.
Amortization of loan costs is included in interest expense. </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=2>
<B>Derivative instruments</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Project" -->
<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=2>
The
Company utilizes derivative financial instruments to reduce risk from foreign currency
fluctuations, changes in interest rates, changes in spot market rates for vessels and
changes in bunker fuel prices and does not use them for trading purposes. Statement of
Financial Accounting Standards No. 133 <I>(&#147;SFAS 133&#148;) </I> &#147;Accounting for
Derivative Instruments and Hedging Activities,&#148; which was amended in June 2000 by
SFAS No. 138 and in May 2003 by SFAS No. 149, establishes accounting and reporting
standards for derivatives instruments and hedging activities. </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Project" -->
<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=2>
Derivative
instruments are recorded as other assets or other long-term liabilities, measured at fair
value. Derivatives that are not hedges or are not designated as hedges are adjusted to
fair value through income. If the derivative is a hedge, depending upon the nature of the
hedge, changes in the fair value of the derivatives are either offset against the fair
value of assets, liabilities or firm commitments through income, or recognized in other
comprehensive income (loss) until the hedged item is recognized in income. The ineffective
portion of a derivative&#146;s change in fair value is immediately recognized in income
(see Note 16). </FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Sub 2 Left-TNR" FSL="Project" -->
<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=2>
<B>Goodwill and intangible assets</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 2-TNR" FSL="Project" -->
<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=2>
Goodwill
and indefinite lived intangible assets are not amortized, but reviewed for impairment
annually, or more frequently if impairment indicators arise. Intangible assets with finite
lives are amortized over their useful lives. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company&#146;s intangible assets consist primarily of time charter contracts acquired as
part of the purchase of Teekay Shipping Spain S.L (&#147;Teekay Spain&#148;) and COAs
acquired as part of the purchase of Navion AS (&#147;Navion&#148;). The time charter
contracts are being amortized on a straight line basis over the life of the contracts. The
COAs are being amortized over the life of the COAs, with the amount amortized each year
being weighted based on the projected revenue to be earned from the COAs. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Income taxes</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
legal jurisdictions in which Teekay and the majority of its subsidiaries are incorporated
do not impose income taxes upon shipping-related activities. The Company&#146;s Australian
shipowning subsidiaries, its Canadian subsidiary Teekay Canadian Tankers Ltd., its
Norwegian subsidiaries UNS and Navion and its Spanish subsidiary Teekay Spain are subject
to income taxes (see Note 15). Included in other long-term liabilities are deferred income
taxes of $121.4 million at December 31, 2004, $78.2 million at December 31, 2002, and
$43.7 million at December 31, 2002. The Company accounts for such taxes using the
liability method pursuant to Statement of Financial Accounting Standards No. 109,
&#147;Accounting for Income Taxes.&#148; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Accounting for Stock-Based Compensation</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Under
Statement of Financial Accounting Standards No. 123 (&#147;SFAS 123&#148;),
&#147;Accounting for Stock-Based Compensation,&#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 (see also &#147;Recent Accounting
Pronouncements&#148; below). 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 is recognized under APB 25. </FONT></TD>
</TR>
</TABLE>
<BR>

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

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<A NAME=A282></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></h1>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
following table illustrates the effect on net income and earnings per share if the Company
had applied the fair value recognition provisions of SFAS 123 to stock-based employee
compensation (see Note 13). </FONT></TD>
</TR>
</TABLE>
<BR>

<PRE>
<B>                                                               Year Ended           Year Ended         Year Ended
                                                              December 31,         December 31,       December 31,
                                                                  2004                 2003               2002
                                                                    $                   $                   $</B>
                                                        -------------------- ------------------- ------------------
     Net income - as reported...........................        757,440              177,364              53,391
     Less: Total stock-based compensation expense.......          8,996                8,243               7,538
                                                        -------------------- ------------------- ------------------
     Net income - pro forma.............................        748,444              169,121              45,853
                                                        ==================== =================== ==================

     Basic earnings per common share:
     As reported........................................           9.14                 2.22                0.67
     Pro forma..........................................           9.04                 2.11                0.58

     Diluted earnings per common share:
     As reported........................................           8.63                 2.18                0.66
     Pro forma..........................................           8.53                 2.08                0.57
</PRE>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
For
the purpose of the above pro forma calculations, the fair value of each option granted was
estimated on the date of the grant using the Black-Scholes option-pricing model. The
following weighted-average assumptions were used in computing the fair value of the
options granted: risk-free average interest rates of 2.7% for the year ended December 31,
2004; 2.8% for the year ended December 31, 2003 and 4.7% for the year ended December 31,
2002, respectively; dividend yield of 3.0%; expected volatility of 30%; and expected lives
of five years. </FONT></TD>
</TR>
</TABLE>
<BR>

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<A NAME=A284></A>
<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=2>
<B>Comprehensive income</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company follows Statement of Financial Accounting Standards No. 130, &#147;Reporting
Comprehensive Income,&#148; which establishes standards for reporting and displaying
comprehensive income and its components in the consolidated financial statements. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Recent Accounting Pronouncements</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On
December 16, 2004, the Financial Accounting Standards Board (&#147;FASB&#148;) issued FASB
Statement No. 123(R) (&#147;SFAS 123(R)&#148;), <I>Share-Based Payment</I>, which is a
revision of FASB Statement No. 123, <I>Accounting for </I> <I>Stock-Based
Compensation</I>. SFAS 123(R) supersedes APB 25. SFAS 123(R) requires all share-based
payments to employees, including grants of employee stock options, to be recognized in the
income statement based on their fair values. Pro forma disclosure is no longer an
acceptable alternative. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
SFAS
123(R) must be adopted no later than July 1, 2005. Early adoption will be permitted in
periods in which financial statements have not yet been issued. The Company expects to
adopt SFAS 125(R) on July 1, 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=2>
SFAS 123(R) permits public companies to adopt its requirements using one of the following two
methods: </FONT></TD>
</TR>
</TABLE>
<BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A &#147;modified prospective&#148; method in which compensation cost is
               recognized beginning with the effective date based on (a) the requirements of
               SFAS 123(R) for all share-based payments granted after the effective date and
               (b) the requirements of SFAS 123 for all awards granted to employees prior to
               the effective date of SFAS 123(R) that remain unvested on the effective date; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A &#147;modified retrospective&#148; method which includes the requirements of
               the modified prospective method described above, but also permits entities to
               restate based on the amounts previously recognized under SFAS 123 for purposes
               of pro forma disclosures either (a) all prior periods presented or (b) prior
               interim periods of the year of adoption. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Company plans to adopt SFAS 123(R) using the modified-prospective method.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
adoption of SFAS 123(R)&#145;s fair value method will have a significant impact on our
result of operations, although it will have not impact on our overall financial position.
The impact of adoption of SFAS 123(R) cannot be predicted at this time because it will
depend on levels of share-based payments granted in the future. However, had we adopted
SFAS (R) in prior periods, the impact of that standard would have approximated the impact
of SFAS 123 as described in the disclosure of pro forma net income and earnings per share
in the above table. </FONT></TD>
</TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A286></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#151; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></H1>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Segment Reporting</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company is engaged in the international marine transportation of crude oil, clean
petroleum products and LNG through the operation of its tankers and LNG carriers. All of
the Company&#146;s revenues are earned in international markets. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
One
customer, an international oil company, accounted for 17% ($373.7 million) of the
Company&#146;s consolidated voyage revenues during the year ended December 31, 2004. One
customer, an international oil company, accounted for 15% ($239.5 million) of the
Company&#146;s consolidated voyage revenues during the year ended December 31, 2003. No
customer accounted for more than 10% of the Company&#146;s consolidated voyage revenues
during the year ended December 31, 2002. No other customer accounted for more than 10% of
the Company&#146;s consolidated voyage revenues during the fiscal periods presented
herein. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has three reportable segments: its spot tanker segment, its fixed-rate tanker
segment, and its fixed-rate LNG segment. The Company&#146;s spot tanker segment consists
of conventional crude oil tankers and product carriers operating in 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
tanker segment consists of shuttle tankers, floating storage and offtake vessels, liquid
petroleum gas carriers and conventional crude oil and product tankers subject to
long-term, fixed-rate time-charter contracts or contracts of affreightment. The
Company&#146;s fixed-rate LNG segment consists of LNG carriers subject to long-term,
fixed-rate time-charter contracts. The Company had no LNG operations prior to the
acquisition of Teekay Spain on April 30, 2004 (see Note 3). 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. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
following tables present results for these segments for the years ended December 31, 2004,
2003 and 2002.</FONT></TD>
</TR>
</TABLE>
<BR>

<PRE>
     ---------------------------------------------------- ------------- -------------- --------------- -------------
     <B>                                                         Spot       Fixed-Rate      Fixed-Rate
                                                             Tanker        Tanker           LNG</B>
     Year ended December 31, 2004                           <B>Segment       Segment          Segment        Total
                                                               $              $              $              $</B>
     ---------------------------------------------------- ------------- -------------- --------------- -------------

     Voyage revenues - external.......................... 1,450,791        725,061        43,386       2,219,238
     Voyage expenses....................................    355,116         77,058           221         432,395
     Vessel operating expenses..........................     93,394        117,586         7,509         218,489
     Time-charter hire expense..........................    263,122        194,058             -         457,180
     Depreciation and amortization......................     95,570        129,074        12,854         237,498
     General and administrative (1) ....................     70,371         56,431         3,940         130,742
     Vessel write-downs/(gain) loss on sale of vessels..    (72,101)        (7,153)            -         (79,254)
     Restructuring charge...............................      1,002              -             -           1,002
                                                          ------------- -------------- --------------- -------------
     Income from vessel operations......................    644,317        158,007        18,862         821,186
                                                          ============= ============== =============== =============

     Voyage revenues - intersegment.....................          -          4,607             -           4,607
     Equity income......................................      7,040          6,690             -          13,730
     Investments in joint ventures at December 31, 2004.     29,034         30,603             -          59,637
     Total assets at December 31, 2004..................  1,119,302      2,080,855     1,517,027       4,717,184
     Expenditures for vessels and equipment (2) ........    214,572        191,085       142,930         548,587
</PRE>

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


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<A NAME=A289></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></H1>


<PRE>
     ---------------------------------------------------- ------------- -------------- --------------- -------------
<B>                                                              Spot       Fixed-Rate      Fixed-Rate
                                                             Tanker        Tanker           LNG</B>
     Year ended December 31, 2003                           <B>Segment        Segment        Segment         Total
                                                               $              $              $              $</B>
     ---------------------------------------------------- ------------- -------------- --------------- -------------

     Voyage revenues - external.........................   1,081,974       494,121              -      1,576,095
     Voyage expenses....................................     342,928        51,728              -        394,656
     Vessel operating expenses..........................     126,261        84,435              -        210,696
     Time-charter hire expense..........................     168,344       136,279              -        304,623
     Depreciation and amortization......................     106,374        84,863              -        191,237
     General and administrative (1) ....................      53,338        31,809              -         85,147
     Vessel write-downs/(gain) loss on sale of vessels..      90,326            63              -         90,389
     Restructuring charge...............................       4,382         2,001              -          6,383
                                                          ------------- -------------- --------------- -------------
     Income from vessel operations......................     190,021       102,943              -        292,964
                                                          ============= ============== =============== =============

     Voyage revenues - intersegment.....................           -         8,499              -          8,499
     Equity income......................................       1,441         5,529              -          6,970
     Investments in joint ventures at December 31, 2003.      26,345        28,047              -         54,392
     Total assets at December 31, 2003..................   1,144,087     1,798,617              -      2,942,704
     Expenditures for vessels and equipment (2) ........      28,684       343,749              -        372,433

     ---------------------------------------------------- ------------- -------------- --------------- -------------
<B>                                                              Spot       Fixed-Rate      Fixed-Rate
                                                             Tanker        Tanker           LNG</B>
     Year ended December 31, 2002                           <B>Segment        Segment        Segment         Total
                                                               $              $              $              $</B>
     ---------------------------------------------------- ------------- -------------- --------------- -------------

     Voyage revenues - external.........................     632,281       151,046              -        783,327
     Voyage expenses....................................     234,376         5,079              -        239,455
     Vessel operating expenses..........................     127,953        40,082              -        168,035
     Time-charter hire expense..........................      49,949             -              -         49,949
     Depreciation and amortization......................     105,407        43,889              -        149,296
     General and administrative (1) ....................      47,188        10,058              -         57,246
                                                          ------------- -------------- --------------- -------------
     Income from vessel operations......................      67,408        51,938              -        119,346
                                                          ============= ============== =============== =============

     Voyage revenues - intersegment.....................           -             -              -              -
     Equity income (loss)...............................       (711)         5,234              -          4,523
     Investments in joint ventures at December 31, 2002.           -        56,354              -         56,354
     Total assets at December 31, 2002..................   1,424,863       785,227              -      2,210,090
     Expenditures for vessels and equipment.............      90,966        44,684              -        135,650
</PRE>


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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Excludes vessels purchased as part of the Company&#146;s acquisition of Teekay
               Spain in April 2004, and Navion AS in April 2003. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
A
reconciliation of total segment assets to amounts presented in the consolidated balance
sheets is as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                                   December 31,       December 31,
                                                                                      2004               2003
                                                                                        $                  $</B>
                                                                               ------------------ ------------------

      Total assets of all segments..........................................        4,717,184          2,942,704
      Cash, restricted cash and marketable securities........................         428,437            390,467
      Accounts receivable and other assets...................................         358,119            254,873
                                                                               ------------------ ------------------
         Consolidated total assets...........................................       5,503,740          3,588,044
                                                                               ================== ==================
</pre>






<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A294></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES<BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2><B>3.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Acquisition of Teekay
Shipping Spain S.L.</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On
April 30, 2004, the Company acquired all of the outstanding shares of Naviera F. Tapias
S.A. and its subsidiaries and renamed it Teekay Shipping Spain, S.L. Teekay Spain engages
in the marine transportation of crude oil and LNG. The Company acquired Teekay Spain for
$298.2 million in cash, plus the assumption of debt and remaining newbuilding commitments.
Management believes the acquisition of the Teekay Spain business has provided the Company
with a strategic platform from which to expand its presence in the liquefied natural gas
(&#147;LNG&#148;) shipping sector and immediate access to reputable LNG operations. The
Company anticipates this will benefit it when bidding on future LNG projects. These
benefits contributed to the recognition of goodwill. In the transaction, Teekay also
entered into an agreement with an entity controlled by the former controlling shareholder
of Teekay Spain to establish a 50/50 joint venture that will pursue new business in the
oil and gas shipping sectors that relate only to the Spanish market or are led by Spanish
entities or entities controlled by a Spanish company. Teekay Spain&#146;s results of
operations have been consolidated with the Company&#146;s results commencing May 1, 2004. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
at December 31, 2004, the Company&#146;s LNG fleet consisted of four LNG vessels. All four
vessels were contracted under long-term, fixed-rate time charters to major Spanish energy
companies. As at December 31, 2004, Teekay Spain&#146;s conventional crude oil tanker
fleet consisted of five Suezmax tankers and two newbuildings scheduled for delivery in
2005. Four Suezmax tankers and one newbuilding are contracted under long-term,
fixed-rate time charters with a major Spanish oil company. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
following table summarizes the fair value of the assets acquired and liabilities assumed
by the Company at April 30, 2004, the date of the Teekay Spain acquisition. </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                                                         As at
                                                                                                    April 30, 2004
                                                                                                           $</B>
                                                                                                   ------------------

     <B>ASSETS</B>
     Cash, cash equivalents and short-term restricted cash                                                 85,092
     Other current assets                                                                                   7,415
     Vessels and equipment                                                                                821,939
     Restricted cash &#150; long term                                                                          311,664
     Other assets &#150; long-term                                                                              15,355
     Intangible assets subject to amortization:
        Time-charter contracts (weighted average remaining useful life of
        19.2 years)                                                                                       183,052
     Goodwill ($3.6 million fixed-rate tanker segment and $35.7 million
        fixed-rate LNG segment)                                                                            39,279
     ----------------------------------------------------------------------------- --------------- ------------------
     <B>Total assets acquired</B>                                                                              1,463,796
     ============================================================================= =============== ==================
     <B>LIABILITIES</B>
     Current liabilities                                                                                   98,428
     Long-term debt                                                                                       668,733
     Obligations under capital leases                                                                     311,011
     Other long-term liabilities                                                                           87,439
     ----------------------------------------------------------------------------- --------------- ------------------
     <B>Total liabilities assumed</B>                                                                          1,165,611
     ============================================================================= =============== ==================
     <B>Net assets acquired (cash consideration)</B>                                                             298,185
     ============================================================================= =============== ==================
</pre>





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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The following table shows comparative summarized consolidated pro forma
               financial information for the Company for the years ended December 31, 2004 and
               2003, giving effect to the acquisition of 100% of the outstanding shares in
               Teekay Spain as if it had taken place on January 1 of each of the periods
               presented: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<pre>
<B>                                                                                         Pro Forma
                                                                                  Year Ended December 31,
                                                                               2004                    2003
                                                                            (unaudited)            (unaudited)
                                                                                 $                      $</B>
                                                                       ---------------------- -----------------------

     Voyage revenues..................................................     2,259,956                1,662,804
     Net income (1)...................................................       769,240                  104,820
     Earnings per share
     - Basic..........................................................          9.29                     1.31
     - Diluted........................................................          8.77                     1.29
</pre>


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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The results of Teekay Spain for the four months ended April 30, 2004 and the
               year ended December 31, 2003 included foreign exchange gains of $18.0 million
               and foreign exchange losses of $71.5 million, respectively. Substantially all of
               these foreign exchange gains and losses were unrealized. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<BR>
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<BR>
<BR>
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<A NAME=A302></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></H1>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Acquisition of Navion AS</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 credit 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>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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
December 31, 2004, consisted of eight owned and 12 chartered-in vessels (excluding six
vessels chartered-in from the Company&#146;s shuttle tanker subsidiary Ugland Nordic
Shipping AS (&#147;UNS&#148;), and other subsidiaries of the Company), 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. Subsequent to the
acquisition, the operations of UNS and the shuttle tanker operations of Navion were
combined into one business unit, Teekay Navion Shuttle Tankers. The projected benefits
resulting from the combined operations as well as possible growth opportunities in the
North Sea and elsewhere in the world resulted in the recognition of goodwill.
Navion&#146;s modern, chartered-in, conventional tanker fleet, which as of December 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>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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>
<BR>

<pre>
          <B>ASSETS</B>
          Current assets                                                                                  64,457
          Vessels and equipment                                                                          543,003
          Net investment in direct financing leases                                                       45,558
          Other assets &#150; long-term                                                                         3,835
          Intangible assets subject to amortization:
             Contracts of affreightment (15-year sum-of-years declining balance)                         117,000
          Goodwill (fixed-rate tanker segment)                                                            40,033
     ---------------------------------------------------------------------------------------------- -----------------
          Total assets acquired                                                                          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>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
following table shows comparative summarized consolidated pro forma financial information
for the Company for the year ended December 31, 2003, giving effect to the acquisition of
100% of the outstanding shares in Navion as if the acquisition had taken place on January
1 of each of the years presented: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                                                 Pro Forma
                                                                                         Year Ended December 31,
                                                                                         2003              2002
                                                                                      (unaudited)      (unaudited)
                                                                                           $                $</B>
                                                                                 ---------------- -----------------
          Voyage revenues........................................................     1,804,528        1,453,650
          Net income.............................................................       223,403           69,401
          Net income per common share
            -   Basic ...........................................................          2.79             0.88
            -   Diluted..........................................................          2.74             0.86
</pre>

<BR>
<BR>
<BR>
<BR>
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<A NAME=A313></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2><B>5.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Acquisition of 50% of PetroTrans Holdings Ltd.</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 five
year period following the transaction. During 2004, the Company paid $0.4 million in earn
out payments. The Company funded this acquisition with available cash. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 (the &#147;service
vessel&#148;) alongside the larger tanker, typically with both vessels underway. Once the
oil cargo is transferred to the service vessel, the service vessel transports the oil
cargo to the port. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Investments in Marketable Securities</B> </FONT></TD>
</TR>
</TABLE>
<BR>
<pre>
<B>                                                                                     Gross           Approximate
                                                                                  Unrealized         Market and
                                                                   Cost              Gains         Carrying Values
                                                                    $                  $                  $</B>
                                                             ----------------- ------------------ ------------------
     December 31, 2003
     Available-for-sale equity securities..................        42,180           53,331                95,511
                                                             ================= ================== ==================
</pre>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Marketable
securities at December 31, 2003 represent 5,812,000 shares in A/S Dampskibsselskabet Torm
(&#147;Torm&#148;) and 351,221 shares in Nordic American Tanker Shipping Ltd. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
the year ended December 31, 2004, the Company sold its investment in marketable securities
for proceeds of $135.4 million, which resulted in a gain on sale of marketable securities
of $93.2 million. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Goodwill and Intangible Assets</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
changes in the carrying amount of goodwill for the year ended December 31, 2004 for the
Company&#146;s reporting segments, are as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                          Fixed-         Fixed-
                                             Spot          Rate           Rate
                                            Tanker        Tanker           LNG
                                            Segment       Segment        Segment         Other          Total
                                                $             $              $              $              $</B>
                                        -------------- -------------- -------------- -------------- --------------
      Balance as of January 1, 2004....         -          128,575              -         2,179         130,754
      Goodwill acquired................         -            3,648         35,631           137          39,416
      Goodwill impairment .............         -                -              -          (580)           (580)
                                        -------------- -------------- -------------- -------------- --------------
      Balance as of December 31, 2004..         -          132,223         35,631         1,736         169,590
                                        ============== ============== ============== ============== ==============
</pre>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As at December 31, 2004 intangible assets consisted of: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                           Weighted-Average      Gross Carrying     Accumulated       Net Carrying
                                         Amortization Period         Amount        Amortization          Amount
                                               (years)                 $                 $                 $</B>
                                        ---------------------- ------------------ ---------------- -------------------
      Contracts of affreightment.......         10.2                 124,250           (30,880)           93,370
      Time-charter contracts...........         19.2                 182,552            (4,095)          178,457
      Intellectual property............          7.0                   7,701            (2,017)            5,684
                                        ---------------------- ------------------ ---------------- -------------------
                                                15.4                 314,503           (36,992)          277,511
                                        ====================== ================== ================ ===================
</pre>

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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Aggregate
amortization expense of intangible assets for the year ended December 31, 2004 was
approximately $25.7 million ($13.4 million &#150; 2003). Amortization of intangible assets
for the five fiscal years subsequent to December 31, 2004 is expected to be $25.2 million
(2005), $22.3 million (2006), $21.3 million (2007), $20.3 million (2008), and $19.3
million (2009). </FONT></TD>
</TR>
</TABLE>
<BR>

<BR>
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<BR>
<BR>
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<A NAME=A324></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2><B>8.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Accrued Liabilities</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                                   December 31,      December 31,
                                                                                       2004              2003
                                                                                         $                $</B>
                                                                                  ---------------- -----------------

     Voyage and vessel........................................................          79,566           63,362
     Interest.................................................................          21,137           26,351
     Payroll and benefits.....................................................          43,712           29,881
                                                                                  ---------------- -----------------
                                                                                       144,415          119,594
                                                                                  ================ =================
</pre>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>9.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Long-Term Debt</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                                   December 31,      December 31,
                                                                                       2004              2003
                                                                                         $                $</B>
                                                                                  ---------------- -----------------

     Revolving Credit Facilities..............................................         530,000          430,000
     First Preferred Ship Mortgage Notes (8.32%) due through 2006.............          50,906          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 .................................         351,530          351,765
     USD denominated Term Loans due through 2022 .............................         588,080          565,277
     Euro denominated Term Loans due through 2023 ............................         443,738                -
                                                                                  ---------------- -----------------
                                                                                     2,108,004        1,600,106
     Less current portion.....................................................         119,453          102,062
                                                                                  ---------------- -----------------
                                                                                     1,988,551        1,498,044
                                                                                  ================ =================
</pre>

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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
of December 31, 2004, the Company had eight long-term revolving credit facilities (the
&#147;Revolvers&#148;) available, which, as at such date, provided for borrowings of up to
$1,361.2 million, of which $831.2 million was undrawn. Interest payments are based on
LIBOR (December 31, 2004: 2.6%; December 31, 2003: 1.2%) plus a margin depending on the
financial leverage of the Company; at December 31, 2004, the margins ranged between 0.60%
and 0.93% (2003 &#150; 0.50% and 1.25%). The total amount available under the Revolvers
reduces by $142.2 million (2005), $165.2 million (2006), $130.1 million (2007), $444.3
million (2008), $39.4 million (2009) and $440.0 million (thereafter). All of the Revolvers
are collateralized by first priority mortgages granted on 52 of the Company&#146;s
vessels, together with other related collateral, and include a guarantee from Teekay for
all amounts outstanding under the Revolvers. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 three of the
Company&#146;s Aframax tankers, together with certain other related collateral, and are
guaranteed by the three 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 December 31, 2004, the fair value of these net assets approximated
$117.4 million. The 8.32% Notes are also subject to a sinking fund, which retires $45.0
million principal amount on each February 1, commencing 2004. During 2004, the Company
repurchased and cancelled a principal amount of $13.4 million of the 8.32% Notes.
Condensed financial information regarding Teekay, the 8.32% Notes Guarantor Subsidiaries,
and non-guarantor subsidiaries of Teekay is set out in Schedule A of these consolidated
financial statements. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 6,534,300 and 7,982,150 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>
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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
net proceeds of the offering of the Equity Units have been allocated between the notes and
the forward contracts in proportion to their respective fair market values at the time of
the issuance. The present value of the Equity Units contract adjustment payments have been
charged to stockholders&#146; equity, with an offsetting credit to liabilities. This
liability is accreted over three years by interest charges to the income statement based
on a constant rate calculation. Subsequent contract adjustment payments reduce this
liability. Upon settlement of each forward contract, the $25 received on each purchase
contract will be credited to stockholders&#146; equity in conjunction with the issuance of
the requisite number of shares of the Company&#146;s Common Stock. </FONT></TD>
</TR>
</TABLE>
<BR>

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

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<A NAME=A331></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></H1>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Before
the issuance of the Company&#146;s Common Stock upon settlement of the purchase contracts,
the purchase contracts will be reflected in the Company&#146;s diluted earnings per share
calculations using the treasury stock method. Under this method, the number of shares of
the Company&#146;s Common Stock used in calculating diluted earnings per share is deemed
to be increased by the excess, if any, of the number of shares that would be issued upon
settlement of the purchase contracts (based on the settlement formula applied at the end
of the reporting period) over the number of shares that could be purchased by the Company
in the market (at the average market price during the period) using the proceeds
receivable upon settlement. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
8.875% Senior Notes due July 15, 2011 (the &#147;8.875% Notes&#148;) rank equally in right
of payment with all of Teekay&#146;s existing and future senior unsecured debt and senior
to Teekay&#146;s existing and future subordinated debt. The 8.875% Notes are not
guaranteed by any of Teekay&#146;s subsidiaries and effectively rank behind all existing
and future secured debt of Teekay and other liabilities, secured and unsecured, of its
subsidiaries. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has several term loans outstanding, which, as at December 31, 2004, totaled $588.1
million (USD denominated) and 325.8 million Euros ($443.7 million). As part of certain
capital leases, the Company has two long-term time-charter contracts that are denominated
in Euros, the funds from which will be used to repay the associated Euro denominated term
loans. Interest payments on the U.S. Dollar denominated term loans are based on LIBOR
(December 31, 2004: 2.6%; December 31, 2003: 1.2%) plus a margin. Interest payments on the
EURO denominated term loans are based on EURIBOR (December 31, 2004: 2.1%) plus a margin.
At December 31, 2004, the margins ranged between 0.50% and 1.3%. The term loans reduce in
monthly, quarterly or semi-annual payments with varying maturities through 2023. 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.
Certain term loans of UNS totaling $16.8 million and certain term loans of Teekay Spain
totaling $787.1 million are not guaranteed by Teekay. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
weighted average effective interest rate on the Company&#146;s long term debt as at
December 31, 2004 was 4.6% (December 31, 2003 &#150; 4.5%). These rates do not reflect the
effect of our interest rate swaps. (see Note 16) </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 December 31, 2004, to $892.8 million. Certain loan agreements require that a minimum
level of free cash be maintained. As at December 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 (excluding undrawn revolving credit lines with less than 6
months to maturity) be maintained. As at December 31, 2004, this amount was $205.8
million. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
aggregate annual long-term debt principal repayments required to be made for the five
fiscal years subsequent to December 31, 2004 are $119.5 million (2005), $219.5 million
(2006), $36.4 million (2007), $284.0 million (2008), $189.3 million (2009) and $1,259.3
million (thereafter). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>10.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Operating Leases</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Charters-out</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Time
charters and bareboat charters of the Company&#146;s vessels to third parties are
accounted for as operating leases. As at December 31, 2004, minimum scheduled future
revenues to be received on time charters and bareboat charters currently in place are
approximately $5,516.3 million, comprised of $395.8 million (2005), $337.3 million (2006),
$352.2 million (2007), $351.5 million (2008), $349.8 million (2009) and $3,729.7 million
(thereafter). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
minimum scheduled future revenues should not be construed to reflect total charter hire
revenues for any of the years. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Charters-in</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
at December 31, 2004, minimum commitments under vessel operating leases are approximately
$1,249.3 million, comprised of $365.5 million (2005), $289.3 million (2006), $197.3
million (2007) $120.9 million (2008), $83.5 million (2009) and $192.8 million
(thereafter). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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
was included in other long-term liabilities and is being amortized over the 7-year term of
the leases. </FONT></TD>
</TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A335></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2><B>11.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Capital Leases and
Restricted Cash </B> </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><B>&nbsp;</B></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>Capital
Leases</I></B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I>Aframax
and Suezmax Tankers. </I>As at December 31, 2004, the Company was a party to capital
leases on one Aframax tanker and four Suezmax tankers. Under the terms of the lease
arrangements &#150; which include the Company&#146;s contractual right to full operation
of the vessels pursuant to bareboat charters &#150; the Company is required to purchase
these vessels at the end of their respective lease terms for a fixed price. As at December
31, 2004, the remaining commitments under these capital leases, including the purchase
obligations, approximated $282.7 million (including imputed interest of $59.6 million),
repayable as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>             Year                                                                                    Commitment
</B>     ---------------------                                                                      ------------------
             2005          .................................................................     $ 25.1 million
             2006          .................................................................      149.9 million
             2007          .................................................................        8.0 million
             2008          .................................................................        8.0 million
             2009          .................................................................        7.9 million
          Thereafter       .................................................................       83.8 million
</pre>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<I>LNG
Carriers.</I> As at December 31, 2004, the Company was a party to capital leases on two
LNG carriers, which are structured as &#147;Spanish tax leases&#148;. Under the terms of
the Spanish tax leases, the Company will purchase these vessels at the end of their
respective lease terms in 2006 and 2011, both of which purchase obligations have been
fully funded with restricted cash deposits described below. As at December 31, 2004, the
weighted-average interest rate implicit in the Spanish tax leases was 5.7%. As at December
31, 2004, the commitments under these capital leases, including the purchase obligations,
approximated 365.3 million Euros ($497.7 million) (including imputed interest of 61.9
million Euros, ($84.4 million)), repayable as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>             Year                                                                          Commitment</B>
     ---------------------                                               -------------------------------------------
             2005          ............................................       77.1 million Euros ($105.0  million)
             2006          ............................................      123.2 million Euros ($167.8 million)
             2007          ............................................       23.3 million Euros  ($31.7 million)
             2008          ............................................       24.4 million Euros  ($33.3 million)
             2009          ............................................       25.6 million Euros  ($34.9 million)
          Thereafter       ............................................       91.7 million Euros ($125.0 million)
</pre>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B><I>Restricted Cash</I></B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Under
the terms of the Spanish tax leases for our LNG carriers, the Company is required to have
on deposit with financial institutions an amount of cash that approximates the present
value of the remaining amounts owing under the leases (including the obligations to
purchase the LNG carriers at the end of the lease periods). This amount was 309.5 million
Euros ($421.6 million) as at December 31, 2004. These cash deposits are restricted to
being used for capital lease payments and have been fully funded with term loans (see Note
9) and a Spanish government grant. The interest rates earned on the deposits approximate
the interest rate implicit in the Spanish tax leases. As at December 31, 2004, the
weighted-average interest rate earned on the deposits was 5.3%. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company also maintains restricted cash deposits relating to certain term loans and other
obligations. As at December 31, 2004, this amount was $27.2 million (2003 &#150; $2.7
million). </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>12.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Fair Value of Financial Instruments</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Long-term
debt</B> &#150; The fair values of the Company&#146;s fixed-rate long-term debt are either
based on quoted market prices or estimated using discounted cash flow analyses, based on
rates currently available for debt with similar terms and remaining maturities. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Interest
rate swap agreements, foreign exchange contracts, bunker fuel swap contracts and freight
forward agreements</B> &#150; The fair value of these financial instruments, used
for hedging purposes, is the estimated amount that the Company would receive or pay to
terminate the agreements at the reporting date, taking into account current interest
rates, foreign exchange rates, bunker fuel prices, spot market rates for vessels, and the
current credit worthiness of the swap counter parties. </FONT></TD>
</TR>
</TABLE>
<BR>

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

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<A NAME=A342></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2>
The estimated fair value of the Company&#146;s financial instruments is as follows:</FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                            December 31, 2004                 December 31, 2003
                                                        Carrying          Fair           Carrying            Fair
                                                         Amount           Value           Amount            Value
                                                           $                $                $                $</B>
                                                     --------------- ---------------- ---------------- -----------------
     Cash and cash equivalents, marketable
       securities, and restricted cash .............     875,849          875,849        390,467          390,467
     Long-term debt (including capital
       lease obligations)...........................  (2,744,545)      (2,801,553)    (1,636,758)      (1,686,002)
     Derivative instruments (note 16) ..............
       Interest rate swap agreements ...............    (158,482)        (158,482)        (9,953)          (9,953)
       Foreign currency contracts ..................      16,635           16,635         20,944           20,944
       Bunker fuel swap contracts...................          98               98            183              183
       Freight forward agreements ..................      (3,276)          (3,276)        (1,178)          (1,178)
</pre>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company transacts all of its derivative instruments through investment grade rated
financial institutions and requires no collateral from these institutions. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>13.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Capital Stock</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
authorized capital stock of Teekay at December 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 December 31, 2004, Teekay had 82,951,275 shares of
Common Stock and no shares of Preferred Stock issued and outstanding. On May 17, 2004,
Teekay effected a two-for-one stock split relating to its common stock. All earnings per
share and share capital amounts disclosed in these financial statements give effect to
this stock split retroactively. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In
November 2004, Teekay announced that its Board of Directors had authorized the repurchase
of up to 3,000,000 shares of its Common Stock in the open market. As at December 31, 2004,
Teekay had repurchased 1,400,200 shares of Common Stock since such authorization at an
average price of $43.73 per share. In January 2005, Teekay repurchased an additional
1,599,800 shares at an average price of $42.27, for a total of 3,000,000 shares
repurchased. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 December
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;) 6,716,413 shares of
Common Stock for issuance upon exercise of options or equity awards granted or to be
granted. During the years ended December 31, 2004, 2003, and 2002, the Company granted
options under the Plans to acquire up to 833,840, 2,119,160, and 2,052,050 shares of
Common Stock, respectively, to certain eligible officers, employees, and directors of the
Company. The options under the Plans have a 10-year term and vest equally over three years
from the grant date, except for one grant of 50,000 options which will vest 100% on
December 31, 2006. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
2004, the Company granted 14,260 shares of restricted stock awards (2003 &#150; 10,000) to
certain of the Company&#146;s Directors. The stock will be released from a forfeiture
provision equally over three years from the date of the award. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
2003, the Company granted 72,500 shares of restricted stock with a fair value of $1.4
million, based on the quoted market price, as compensation to one of the Company&#146;s
executive officers. </FONT></TD>
</TR>
</TABLE>
<BR>

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

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<A NAME=A346></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></h1>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
A
summary of the Company&#146;s stock option activity and related information for the years
ended December 31, 2004, 2003 and 2002, is as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                     December 31, 2004        December 31, 2003         December 31, 2002</B>
                                  ------------------------ ------------------------- -------------------------
<B>                                               Weighted-                 Weighted-                 Weighted-
                                                Average                   Average                   Average
                                   Options     Exercise     Options      Exercise     Options      Exercise
                                   (000's)      Price       (000's)       Price       (000's)       Price
                                      #           $            #            $            #            $</B>
                                  ---------- ------------- ----------- ------------- ---------- --------------

 Outstanding-beginning of year..     7,254       17.18         7,014      15.73          5,480      14.02
 Granted........................       834       33.67         2,119      19.55          2,052      19.56
 Exercised......................    (3,125)      16.41        (1,764)     14.17           (380)     11.08
 Forfeited......................      (242)      19.39          (115)     19.64           (138)     16.93
                                  ----------               -----------               ----------
 Outstanding-end of year........     4,721       20.47         7,254      17.18          7,014      15.73
                                  ----------               -----------               ----------

 Exercisable - end of year .....     1,980       15.82         3,328      14.20          3,478      12.49
                                  ==========               ===========               ==========
 Weighted-average fair value
   of options granted during
   the year (per option) .......                  9.60                     4.23                      4.90
</pre>


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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Exercise
prices for the options outstanding as of December 31, 2004 ranged from $8.44 per share to
$34.37 per share. These options have a weighted-average remaining contractual life of 7.1
years. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Further
details regarding the Company&#146;s outstanding and exercisable stock options at December
31, 2004 are as follows: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                Outstanding Options              Exercisable Options</B>
                                     -------------------------------------------------------------------------
<B>                                                    Weighted-       Weighted-                      Weighted-
                                                     Average         Average                      Average
                                      Options       Remaining       Exercise       Options        Exercise
                                      (000's)         Life            Price        (000's)         Price
  Range of Exercise Prices               #           (years)            $             #              $</B>
  ---------------------------------- ----------- ---------------- -------------- ------------- ---------------
  $ 8.44 - $ 9.99                        339           4.6             8.46          339            8.46
  $10.00 - $14.99                        548           4.1            12.54          548           12.54
  $15.00 - $19.99                      2,534           7.6            19.45          638           19.14
  $20.00 - $24.99                        471           6.3            20.57          455           20.59
  $25.00 - $29.99                          -             -               -             -               -
  $30.00 - $34.37                        829           9.2            33.67            -               -
                                     -----------                                -------------
                                       4,721           7.1            20.47        1,980           15.82
                                     ===========                                =============
</pre>


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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>14.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Related Party Transactions </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
at December 31, 2004, Resolute Investments, Inc. (or <I>Resolute</I>) owned 39.3% of our
outstanding Common Stock. Two of our directors, C. Sean Day, who is also Chair of our
Board, and Bruce Bell, are directors and the Chairman and Vice President, respectively, of
Resolute. Two additional directors, Thomas Kuo-Yuen Hsu and Axel Karlshoej, are among the
Managing Directors of The Kattegat Trust Company Limited, which is the trustee of the
trust that owns all of Resolute&#146;s outstanding equity. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Payments
made by the Company to Resolute, Oceanic Bank and Trust Limited, a Bahamian bank and trust company,
or companies related through common ownership in respect of port agent services, legal and administration
fees, shared office costs, and consulting fees for the years ended December 31, 2004, 2003 and 2002 totaled
$0.5 million, $0.5 million, and $0.9 million respectively.  In addition to being a director of Resolute, Bruce
Bell is also the Managing Director of Ocanic Bank and Trust Limited.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In
1993 the Company purchased all of the issued and outstanding shares of Palm Shipping Inc.
(now Teekay Chartering Limited) from an affiliate of Resolute Investments, Inc. During the
year ended December 31, 2002, the Company accrued and expensed in other (loss) income $
6.0 million as a settlement of a contingent payment, that was required under the terms of
the Palm Shipping acquisition agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A352></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES<BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</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=2><B>15.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Other Loss</B></FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                      Year Ended     Year Ended     Year Ended
                                                                     December 31,   December 31,   December 31,
                                                                         2004           2003           2002
                                                                          $               $             $</B>
                                                                    --------------- -------------- -------------
     Income tax expense............................................     (35,048)        (36,501)       (11,413)
     Loss on bond repurchase.......................................        (769)         (5,385)             -
     Foreign exchange (loss) gain..................................     (42,704)         (3,855)         3,897
     Write-down in the carrying value of marketable securities.....           -          (4,910)             -
     Miscellaneous.................................................      10,860           4,642         (7,352)
                                                                    --------------- -------------- -------------
                                                                        (67,661)        (46,009)       (14,868)
                                                                    =============== ============== =============
</pre>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
the year ended December 31, 2004, the Company incurred $1.0 million of restructuring and
severance costs associated with the closure of the Company&#146;s office in Oslo, Norway.
During the year ended December 31, 2003, the Company incurred $6.4 million of
restructuring costs associated with closure of the Company&#146;s offices in Oslo, Norway
and Melbourne, Australia, and severance costs related to the termination of seafaring
staff. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>16.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Derivative Instruments and Hedging Activities</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company hedges portions of its forecasted expenditures denominated in foreign currencies
with foreign exchange forward contracts and a portion of its bunker fuel expenditures with
bunker fuel swap contracts. As at December 31, 2004, the Company was committed to foreign
exchange contracts for the forward purchase of approximately Norwegian Kroner 435.5
million and Canadian Dollars 58.3 million for U.S. Dollars at an average rate of Norwegian
Kroner 7.38 per U.S. Dollar and Canadian Dollar 1.29 per U.S. Dollar, respectively. The
foreign exchange forward contracts mature as follows: $99.2 million in 2005; and $5.0
million in 2006. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company hedges a portion of its bunker fuel expenditures with bunker fuel swap contracts.
As at December 31, 2004, the Company was committed to bunker fuel swap contracts totalling
22,650 metric tonnes with a weighted-average price of $158.14 per tonne. The fuel swap
contracts expire between January and December 2005. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
at December 31, 2004, the Company was committed to the following interest rate swap
agreements related to its LIBOR and EURIBOR based debt, whereby certain of the
Company&#146;s floating rate debt was swapped with fixed-rate obligations: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                                          Weighted-
                                                             Interest                      Average         Fixed
                                                               Rate         Principal     Remaining       Interest
                                                               Index         Amount         Term            Rate
                                                                                $          (years)         (%)(1)</B>
                                                           -------------- -------------- ------------ --------------
     U.S. Dollar denominated interest rate swaps                LIBOR         600,000          0.8          2.8
     U.S. Dollar denominated interest rate swaps (2)            LIBOR         934,000          9.0          5.4
     U.S. Dollar denominated interest rate swaps (3)            LIBOR         328,459         21.4          6.7
     Euro denominated interest rate swaps (4) (5)              EURIBOR        442,401         19.4          5.9
         _____________________________________________________________________________
 </pre>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Excludes the margin the Company pays on its variable-rate debt (see Note 9). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Inception dates of swaps are 2006 ($600.0 million) and 2007 ($334.0 million). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(3) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Principal amounts reduce monthly to zero by the maturity dates of the swap
               agreements. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(4) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Principal amount reduces monthly to 70.1 million Euros ($95.5 million) by the
               maturity dates of the swap agreements. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(5) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Principal amount is the U.S. Dollar equivalent of 324.8 million Euros. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 December 31, 2004, the Company was committed to forward
freight agreements totaling 4.8 million metric tonnes with a notional principal amount of
$40.0 million. The forward freight agreements expire between January and December 2005. </FONT></TD>
</TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A360></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
TEEKAY SHIPPING CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></h1>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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, bunker fuel swap
contracts, and forward freight agreements; however, the Company does not anticipate
non-performance by any of the counter parties. </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=2>
During
the year ended December 31, 2004, the Company recognized a net gain of $0.9 million (2003
&#150; net gain of $0.5 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) income,
respectively. </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=2>
As
at December 31, 2004, the Company estimates, based on current foreign exchange rates,
bunker fuel prices, interest rates and spot market rates for vessels, that it will
reclassify approximately $24.9 million of net loss on derivative instruments from
accumulated other comprehensive income to earnings during the next 12 months due to actual
voyage, vessel operating, drydocking and general and administrative expenditures and the
payment of interest expense associated with the floating-rate debt. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
at December 31, 2004 and 2003, the Company&#146;s accumulated other comprehensive (loss)
income consisted of the following components: </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                        December 31, 2004        December 31, 2003
                                                                                $                        $</B>
                                                                       ---------------------- ----------------------
     Unrealized (losses) gains on derivative instruments............           (56,132)                10,193
     Unrealized gain on marketable securities.......................                 -                 53,331
                                                                       ---------------------- ----------------------
                                                                               (56,132)                63,524
                                                                       ====================== ======================
</pre>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>17.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Commitments and Contingencies</B> </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
As
at December 31, 2004, the Company was committed to the construction of seven Aframax
tankers, two Suezmax tankers, three product tankers and three LNG carriers scheduled for
delivery between January 2005 and March 2008, at a total cost of approximately $1,050.6
million, excluding capitalized interest. As of December 31, 2004, payments made towards
these commitments totaled $239.4 million, excluding $13.2 million of capitalized interest
and other miscellaneous construction costs. Long-term financing arrangements existed for
$749.6 million of the unpaid cost of these vessels. It is the Company&#146;s intention to
finance the remaining unpaid amount of $61.6 million through incremental debt or surplus
cash balances, or a combination thereof. As of December 31, 2004, the remaining payments
required to be made under these newbuilding contracts were $363.7 million in 2005, $255.9
million in 2006, $140.9 million in 2007, and $50.7 million in 2008. Two of the Aframax
tankers will be subject to 10-year long-term charters to Skaugen PetroTrans Inc., a joint
venture of the Company, upon delivery in 2008. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Under
the terms of the joint venture agreement with an entity controlled by the former
controlling shareholder of Teekay Spain, Teekay will make capital contributions to the
joint venture company of $50.0 million in share premium. In the event that Teekay has not
contributed the $50.0 million equity prior to April 30, 2007, it will be required to pay
the other partner an amount no more than $25.0 million calculated by a pre-determined
formula based on the occurrence of certain future events. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Company has been awarded a contract by a consortium of major oil companies to construct
and install on six of its shuttle tankers volatile compound emissions plants, which reduce
emissions during cargo operations. These plants are leased to the consortium of major oil
companies. The construction and installation of these plants are expected to be completed
by the end of 2005 at a total cost of approximately $91.3 million. As at December 31,
2004, the remaining payments required to be made towards these commitments totaled $31.5
million. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay
and certain subsidiaries of Teekay have guaranteed their share of the outstanding mortgage
debt in four 50%-owned joint venture companies. As of December 31, 2004, Teekay and these
subsidiaries had guaranteed $99.6 million of such debt, or 50% of the total $199.1 million
in outstanding mortgage debt of the joint venture companies. The outstanding mortgage debt
has maturity dates ranging from May 2008 to June 2014. These joint venture companies own
an aggregate of five shuttle tankers. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
On
November 24, 2004, the Company announced that its wholly-owned subsidiary, Teekay LNG
Partners L.P. (&#147;Teekay LNG Partners&#148;), had filed a registration statement with
the U.S. Securities and Exchange Commission for an initial public offering of its common
units. Teekay LNG Partners is a Marshall Islands limited partnership recently formed by
the Company as part of its strategy to expand its operations in the LNG shipping sector.
Teekay LNG Partners will provide LNG and crude oil marine transportation services under
long-term, fixed-rate contracts with major energy and utility companies through its fleet
of four LNG carriers and five Suezmax class crude oil tankers, primarily consisting of
vessels the Company obtained through its acquisition of Teekay Spain in April 2004. After
the offering, the Company currently anticipates that it will own approximately an 81
percent interest in the partnership (including its 2% general partner interest), which
would be reduced to approximately 79 percent if the underwriters exercise in full their
over-allotment option. </FONT></TD>
</TR>
</TABLE>
<BR>

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

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<A NAME=A363></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)</FONT></h1>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
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 believes that it maintains
appropriate liability insurance that limits the exposure and enables the Company to
recover any future amounts paid, less any deductible amounts pursuant to the terms of the
respective policies, the amounts of which are not considered material. </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2><B>18.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Change in Non-Cash Working Capital Items Related to Operating Activities</B> </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                                 Year Ended      Year Ended       Year Ended
                                                                December 31,    December 31,     December 31,
                                                                    2004            2003             2002
                                                                     $                $                $</B>
                                                               --------------- ---------------- ----------------

     Accounts receivable....................................         (60,494)        (26,587)         (13,508)
     Prepaid expenses and other assets......................          (1,189)          9,474           (5,002)
     Accounts payable.......................................          11,484          14,627           27,375
     Accrued liabilities....................................          23,649          (1,770)          (1,827)
                                                               --------------- ---------------- ----------------
                                                                     (26,550)         (4,256)           7,038
                                                               =============== ================ ================
</pre>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>19.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Vessel Sales, Vessels Held for Sale and Vessel Write-downs</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
2004, the Company sold 10 Aframax tankers built between 1988 and 1993, two Suezmax tankers
built in 1989 and 1991, one 1993 built Very Large Crude Carrier, and one 1982 built
shuttle tanker. The results for the year ended December 31, 2004 include a gain on sale
from these vessels totaling $76.9 million. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
December 2004, the Company entered into agreements to sell eight Aframax tankers built
between 1989 and 1991, and one 1986 built shuttle tanker, all scheduled to be delivered in
the first quarter of 2005. The Company expects to record a gain of approximately $86.6
million relating to their sale. These vessels were reclassified on the December 31, 2004
balance sheet from vessels and equipment to vessels held for sale. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In
December 2003, the Company also 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 seven-year term of the leases. The amortization of this deferred gain was $2.4 million
in 2004. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
During
2003, the Company sold eight 1980&#145;s-built Aframax tankers and eight 1980&#145;s-built
Panamax oil/bulk/ore carriers. The results for the year ended December 31, 2003 include a
$34.7 million write-down in the book value of these vessels, partially offset by a $1.2
million gain on sale from these vessels. </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In
2003 the International Maritime Organization (&#147;IMO&#148;), the United Nations&#146;
global maritime regulatory body, announced stricter regulations governing the tanker
industry on a worldwide basis. The IMO regulations, which became effective April 5,
2005, will accelerate the mandatory phase-out of single-hull tankers as well as impose a
more rigorous inspection regime for older tankers. As a result of these regulations, the
Company recorded a $56.9 million non-cash write-down in the fourth quarter of 2003, and
reduced the estimated useful lives from 25 years to approximately 21 years for its two
remaining vessels affected by these regulatory changes. </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=2><B>20.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Earnings Per Share</B>  </FONT></TD>
</TR>
</TABLE>
<BR>

<pre>
<B>                                                       Year Ended       Year Ended       Year Ended
                                                      December 31,     December 31,     December 31,
                                                          2004             2003             2002
                                                           $                 $                $</B>
                                                    ----------------- ---------------- ----------------

  Net income available for common stockholders....        757,440          177,364           53,391
                                                    ================= ================ ================

  Weighted average number of common shares........     82,829,336       79,986,746       79,261,994
  Dilutive effect of employee stock options and
  restricted stock awards.........................      2,189,053        1,479,548        1,242,798
  Dilutive effect of Equity Units.................      2,710,648                -                -
                                                    ----------------- ---------------- ----------------
  Common stock and common stock equivalents.......     87,729,037       81,466,294       80,504,792
                                                    ================= ================ ================

  Earnings per common share:
    - Basic.......................................           9.14             2.22             0.67
    - Diluted.....................................           8.63             2.18             0.66
</pre>

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

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<A NAME=A371></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS &#150; (Cont&#146;d)<BR>
(all tabular amounts stated in thousands of U.S. dollars, other than share or per share data)
</FONT></H1>

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<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
For
the years ended December 31, 2003 and 2002, the anti-dilutive effect of 3.3 million and
1.8 million shares attributable to outstanding stock options and the Equity Units were
excluded from the calculation of diluted earnings per share. For the year ended December
31, 2004, no outstanding stock options or Equity Units were anti-dilutive. </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2><B>21.</B></FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>Subsequent Events</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               In February 2005 the Company entered into $200.0 million of interest rate swap
               agreements related to its LIBOR-based debt whereby certain of the Company&#146;s
               floating-rate debt will be swapped with fixed-rate obligations with a
               weighted-average interest rate of approximately 4.5% commencing in February,
               2005 and maturing in February 2015. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               During the first quarter of 2005, the Company entered into agreements to sell
               three Aframax tankers built in 1988 and 1989, two Suezmax tankers, one built in
               1990 and one under construction, and one Shuttle tanker built in 1991. The
               Company expects that the total proceeds from the sale of these vessels will be
               approximately $212.5 million. These vessels are scheduled to be delivered to the
               buyers between March 2005 and July 2005. The Company expects to record gains
               totaling approximately $43.5 million relating to the sale of these vessels. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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

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<A NAME=A372></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SCHEDULE A</B> </FONT></P>

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<A NAME=A373></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS<BR>
(in thousands of U.S. dollars) </FONT></H1>




<pre>
                                                            <B>Year Ended December 31, 2004</B>
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>                                                     8.32% Notes                                        Teekay
                                       Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                   Shipping Corp.   Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $                $               $               $                $</B>
                                  ----------------- -------------- ---------------- --------------- ----------------

Voyage revenues                                          64,765       2,199,627          (45,154)      2,219,238
Operating expenses                       15,140          25,841       1,402,225          (45,154)      1,398,052
                                  ----------------- -------------- ---------------- --------------- ----------------
     (Loss) income from vessel          (15,140)         38,924         797,402                -         821,186
operations
Net interest expense                    (48,963)              -         (54,027)               -        (102,990)
Equity in net income of
     subsidiaries                       811,509               -               -         (811,509)              -
Other income (loss)                      10,034             (32)         29,242                -          39,244
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Net income</B>                              757,440          38,892         772,617         (811,509)        757,440
Retained earnings, beginning
     of the year                      1,095,650           5,107       1,343,883       (1,348,990)      1,095,650
Retained earnings adjustment (1)              -          (9,544)          9,544                -               -
Dividends declared                      (42,407)              -               -                -         (42,407)
Repurchase of Common Stock              (52,131)              -               -                -         (52,131)
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Retained earnings, end
     of the year</B>                      1,758,552          34,455       2,126,044       (2,160,499)      1,758,552
                                  ================= ============== ================ =============== ================
</pre>

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               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               During 2003 and 2004, the Company repurchased $129.1 million of the 8.32% Notes.
               Consequently, four of the Company&#146;s guarantor subsidiaries were released
               from the guarantee of the 8.32% Notes during the second quarter of 2004. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<pre>
                                                            <B>Year Ended December 31, 2003</B>
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>                                                     8.32% Notes                                        Teekay
                                       Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                   Shipping Corp.   Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $                $               $               $                $</B>
                                  ----------------- -------------- ---------------- --------------- ----------------

Voyage revenues                               -          59,571       1,565,727          (49,203)      1,576,095
Operating expenses                       13,417          41,335       1,277,582          (49,203)      1,283,131
                                  ----------------- -------------- ---------------- --------------- ----------------
     (Loss) income from vessel
     operations                         (13,417)         18,236         288,145                -         292,964
Net interest expense                    (35,326)              -         (41,752)               -         (77,078)
Equity in net income of
     subsidiaries                       216,690               -               -         (216,690)              -
Other income (loss)                       9,417             (17)        (47,922)               -         (38,522)
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Net income</B>                              177,364          18,219         198,471         (216,690)        177,364
Retained earnings (deficit),
     beginning of the year              954,005         (13,112)      1,145,412       (1,132,300)        954,005
Dividends declared                      (35,719)              -               -                -         (35,719)
Repurchase of Common Stock                    -               -               -                -               -
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Retained earnings,
     end of the year</B>                  1,095,650           5,107       1,343,883       (1,348,990)      1,095,650
                                  ================= ============== ================ =============== ================
</pre>

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<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>
<A NAME=A382></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(See Note 9) </FONT></P>

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


<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A383></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SCHEDULE A</B> </FONT></P>

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<A NAME=A384></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION AND SUBSIDIARIES <BR>
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS &#151; (Cont&#146;d)<BR>
(in thousands of U.S. dollars) </FONT></H1>

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

Voyage revenues                               -          36,480         889,079         (142,232)        783,327
Operating expenses                       17,191          34,314         754,708         (142,232)        663,981
                                  ----------------- -------------- ---------------- --------------- ----------------
     (Loss) income from vessel          (17,191)          2,166         134,371                -         119,346
operations
Net interest expense                    (41,575)              -         (12,905)               -         (54,480)
Equity in net income of
     subsidiaries                       111,177               -               -         (111,177)              -
Other income (loss)                         980               -         (12,455)               -         (11,475)
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Net income</B>                               53,391           2,166         109,011         (111,177)         53,391
Retained earnings (deficit),
     beginning of the year              935,660         (15,278)      1,036,401       (1,021,123)        935,660
Dividends declared                      (34,079)              -               -                -         (34,079)
Repurchase of Common Stock                 (967)              -               -                -            (967)
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Retained earnings (deficit),
     end of the year</B>                    954,005         (13,112)      1,145,412       (1,132,300)        954,005
                                  ================= ============== ================ =============== ================
</pre>

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<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>
<A NAME=A391></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(See Note 9)</FONT></P>

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

<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A392></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SCHEDULE A</B> </FONT></P>

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<A NAME=A393></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION
AND SUBSIDIARIES <BR>
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME <BR>
(in thousands of U.S. dollars) </FONT></H1>


<pre>
                                                            <B>Year Ended December 31, 2004</B>
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>                                                     8.32% Notes                                        Teekay
                                       Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                   Shipping Corp.   Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $                $               $               $                $</B>
                                  ----------------- -------------- ---------------- --------------- ----------------

Net income                              757,440          38,892         772,617         (811,509)        757,440
Other comprehensive income
   Unrealized gain on
     available-for-sale securities            -               -          39,369                -          39,369
   Reclassification adjustment
     for gain on available-
     for-sale securities
     included in net income                   -               -         (92,539)               -         (92,539)
   Unrealized loss on derivative
     instruments                              -               -         (94,822)               -         (94,822)
   Reclassification adjustment for
     loss on derivative instruments           -               -          28,336                -          28,336
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Comprehensive income</B>                    757,440          38,892         652,961         (811,509)        637,784
                                  ================= ============== ================ =============== ================</pre>
<pre>
                                                            <B>Year Ended December 31, 2003</B>
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>                                                     8.32% Notes                                        Teekay
                                       Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                     Shipping Corp. Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $                $               $               $                $</B>
                                  ----------------- -------------- ---------------- --------------- ----------------

Net income                              177,364          18,219         198,471         (216,690)        177,364
Other comprehensive income
   Unrealized gain on
     available-for-sale securities            -               -          53,540                -          53,540
   Reclassification adjustment
     for loss on available-
     for-sale securities
     included in net income                   -               -           4,899                -           4,899
   Unrealized gain on derivative
     instruments                              -               -           8,639                -           8,639
   Reclassification adjustment for
     gain on derivative instruments           -               -            (459)               -            (459)
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Comprehensive income</B>                    177,364          18,219         265,090         (216,690)        243,983
                                  ================= ============== ================ =============== ================</pre>
<pre>
                                                            <B>Year Ended December 31, 2002</B>
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>                                                     8.32% Notes                                        Teekay
                                       Teekay         Guarantor     Non-Guarantor                   Shipping Corp.
                                   Shipping Corp.   Subsidiaries    Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $                $               $               $                $</B>
                                  ----------------- -------------- ---------------- --------------- ----------------

Net income                               53,391           2,166         109,011         (111,177)         53,391
Other comprehensive income
   Unrealized loss on
     available-for-sale securities            -               -            (239)               -            (239)
   Reclassification adjustment
     for loss on available-
     for-sale securities
     included in net income                   -               -             737                -             737
   Unrealized gain on derivative
     instruments                              -               -           3,023                -           3,023
   Reclassification adjustment for
     gain on derivative instruments           -               -          (1,815)               -          (1,815)
                                  ----------------- -------------- ---------------- --------------- ----------------
<B>Comprehensive income</B>                     53,391           2,166         110,717         (111,177)         55,097
                                  ================= ============== ================ =============== ================
</pre>

<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>
<!-- MARKER FORMAT-SHEET="Head Sub 1 Left-TNR" FSL="Default" -->
<A NAME=A407></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(See Note 9)</FONT></P>

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

<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A408></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SCHEDULE A</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A409></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION
AND SUBSIDIARIES<BR>
CONDENSED BALANCE SHEETS<BR>
(in thousands of U.S. dollars) </FONT></H1>

<pre>
<B>                                                              As at December 31, 2004</B>
                                 ----------------------------------------------------------------------------------
<B>                                                    8.32% Notes                                        Teekay
                                      Teekay         Guarantor    Non-Guarantor                    Shipping Corp.
                                  Shipping Corp.    Subsidiaries   Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $               $              $                $                $</B>
                                 ------------------ ------------ ----------------- --------------- ----------------
     <B>ASSETS</B>
Cash and cash equivalents                      -            -           427,037              -           427,037
Other current assets                       5,292          326           630,227       (145,000)          490,845
                                 ------------------ ------------ ----------------- --------------- ----------------
     Total current assets                  5,292          326         1,057,264       (145,000)          917,882
Vessels and equipment (net)                    -       86,525         3,531,287        (86,525)        3,531,287
Advances due from subsidiaries           135,617            -                 -       (135,617)                -
Investment in direct financing
  leases                                       -            -           109,215              -           109,215
Other assets (principally
  restricted cash and
  investments in subsidiaries)         2,726,786            -           438,618     (2,726,786)          438,618
Investment in joint ventures                   -            -            59,637              -            59,637
Intangible assets - net                        -            -           277,511              -           277,511
Goodwill                                       -            -           169,590              -           169,590
                                 ------------------ ------------ ----------------- --------------- ----------------
                                       2,867,695       86,851         5,643,122     (3,093,928)        5,503,740
                                 ================== ============ ================= =============== ================
     <B>LIABILITIES &amp;  STOCKHOLDERS'
     EQUITY</B>
Current liabilities                       26,120        1,062           532,227       (145,000)          414,409
Long-term debt and other long-term
  liabilities                            548,085            -         2,289,164              -         2,837,249
Due (from) to affiliates                       -      (94,594)          594,374       (499,780)                -
                                 ------------------ ------------ ----------------- --------------- ----------------
     Total liabilities                   574,205      (93,532)        3,415,765       (644,780)        3,251,658
                                 ------------------ ------------ ----------------- --------------- ----------------
Minority Interest                              -            -            14,724              -            14,724
Stockholders' Equity
Capital stock                            534,938           11             5,955         (5,966)          534,938
Contributed capital                            -      145,917           136,766       (282,683)                -
Retained earnings                      1,758,552       34,455         2,126,044     (2,160,499)        1,758,552
Accumulated other comprehensive
  loss                                         -            -           (56,132)             -           (56,132)
                                 ------------------ ------------ ----------------- --------------- ----------------
     Total stockholders' equity        2,293,490      180,383         2,212,633     (2,449,148)        2,237,358
                                 ------------------ ------------ ----------------- --------------- ----------------
                                       2,867,695       86,851         5,643,122     (3,093,928)        5,503,740
                                 ================== ============ ================= =============== ================
</pre>
<pre>
                                                              <B>As at December 31, 2003</B>
                                 ----------------------------------------------------------------------------------
<B>                                                    8.32% Notes                                        Teekay
                                      Teekay         Guarantor    Non-Guarantor                    Shipping Corp.
                                  Shipping Corp.    Subsidiaries   Subsidiaries     Eliminations   &amp; Subsidiaries
                                         $               $              $                $                $</B>
                                 ------------------ ------------ ----------------- --------------- ----------------
     <B>ASSETS</B>
Cash and cash equivalents                      -            -           292,284              -           292,284
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
                                 ================== ============ ================= =============== ================</pre>
<pre>
<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>

<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>
<!-- MARKER FORMAT-SHEET="Head Sub 1 Left-TNR" FSL="Default" -->
<A NAME=A420></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(See Note 9)</FONT></P>

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


<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A421></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SCHEDULE A</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A422></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING CORPORATION
AND SUBSIDIARIES <BR>
CONDENSED STATEMENTS OF CASH FLOWS <BR>
(in thousands of U.S. dollars) </FONT></H1>

<pre>
<B>                                                           Year Ended December 31, 2004</B>
                                  --------------------------------------------------------------------------------
<B>                                                  8.32% Notes                                         Teekay
                                      Teekay       Guarantor     Non-Guarantor                    Shipping Corp.
                                  Shipping Corp.  Subsidiaries    Subsidiaries    Eliminations    &amp; Subsidiaries
                                        $              $               $                $               $</B>
                                  --------------- ------------- ----------------- -------------- -----------------
Cash and cash equivalents
  provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     operating activities               (62,726)      48,384          829,046                          814,704
                                  --------------- ------------- ----------------- -------------- -----------------
<B>FINANCING ACTIVITIES</B>
Net proceeds from
  long-term debt                              -            -        1,621,221                 -      1,621,221
Scheduled repayments of
  long-term debt                        (58,408)           -         (158,015)                -       (216,423)
Prepayments of long-term
  debt                                        -            -       (1,731,223)                -     (1,731,223)
Other                                   121,134      (48,159)        (116,953)                -        (43,978)
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     financing activities                62,726      (48,159)        (384,970)                -       (370,403)
                                  --------------- ------------- ----------------- -------------- -----------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels
  and equipment                               -         (225)        (548,362)                -       (548,587)
Purchase of Teekay Shipping
  Spain S.L.                                  -            -         (286,993)                -       (286,993)
Proceeds from dispositions
  of vessels and equipment                    -            -          440,556                 -        440,556
Other                                         -            -           85,476                 -         85,476
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     investing activities                     -         (225)        (309,323)                -       (309,548)
                                  --------------- ------------- ----------------- -------------- -----------------
<B>Increase in cash and cash
  equivalents</B>                                 -            -          134,753                 -        134,753
Cash and cash equivalents,
  beginning of the year                       -            -          292,284                 -        292,284
                                  --------------- ------------- ----------------- -------------- -----------------
<B>Cash and cash equivalents,
  end of the year</B>                             -            -          427,037                 -        427,037
                                  =============== ============= ================= ============== =================</pre>
<pre>
<B>                                                           Year Ended December 31, 2003</B>
                                  --------------------------------------------------------------------------------
<B>                                                  8.32% Notes                                         Teekay
                                      Teekay       Guarantor     Non-Guarantor                    Shipping Corp.
                                  Shipping Corp.  Subsidiaries    Subsidiaries    Eliminations    &amp; Subsidiaries
                                        $              $               $                $               $</B>
                                  --------------- ------------- ----------------- -------------- -----------------
Cash and cash equivalents
  provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     operating activities               (25,377)      28,996          451,956                 -        455,575
                                  --------------- ------------- ----------------- -------------- -----------------
<B>FINANCING ACTIVITIES</B>
Net proceeds from
  long-term debt                         80,594            -        1,900,234                 -      1,980,828
Scheduled repayments of
  long-term debt                              -            -          (62,585)                -        (62,585)
Prepayments of long-term
  debt                                        -            -       (1,466,815)                -     (1,466,815)
Other                                   (55,217)     (28,572)          79,198                 -         (4,591)
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     financing activities                25,377      (28,572)         450,032                 -        446,837
                                  --------------- ------------- ----------------- -------------- -----------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels
  and equipment                               -         (424)        (372,009)                -       (372,433)
Purchase of Navion AS                         -            -         (704,734)                -       (704,734)
Proceeds from dispositions of
  vessels and equipment                       -                       242,111                 -        242,111
Other                                         -            -          (59,697)                -        (59,697)
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     investing activities                     -         (424)        (894,329)                -       (894,753)
                                  --------------- ------------- ----------------- -------------- -----------------
<B>Increase in cash and
  cash equivalents</B>                            -            -            7,659                 -          7,659
Cash and cash equivalents,
  beginning of the year                       -            -          284,625                 -        284,625
                                  --------------- ------------- ----------------- -------------- -----------------
<B>Cash and cash equivalents,
  end of the year</B>                             -            -          292,284                 -        292,284
                                  =============== ============= ================= ============== =================</pre>
<pre>
<B>                                                              Year Ended December 31, 2002</B>
                                  --------------------------------------------------------------------------------
<B>                                                  8.32% Notes                                         Teekay
                                      Teekay       Guarantor     Non-Guarantor                    Shipping Corp.
                                  Shipping Corp.  Subsidiaries    Subsidiaries    Eliminations    &amp; Subsidiaries
                                        $              $               $                $               $</B>
                                  --------------- ------------- ----------------- -------------- -----------------
Cash and cash equivalents
  provided by (used for)
<B>OPERATING ACTIVITIES</B>
                                  --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     operating activities               (51,914)      16,531          214,914                 -        179,531
                                  --------------- ------------- ----------------- -------------- -----------------
<B>FINANCING ACTIVITIES</B>
Net proceeds from
  long-term debt                              -            -          255,185                 -        255,185
Scheduled repayments of
  long-term debt                              -            -          (51,830)                -        (51,830)
Prepayments of long-term
  debt                                        -            -           (8,000)                -         (8,000)
Other                                    51,914      (14,953)         (69,312)                -        (32,351)
                                   --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     financing activities                51,914      (14,953)         126,043                 -        163,004
                                   --------------- ------------- ----------------- -------------- -----------------

<B>INVESTING ACTIVITIES</B>
Expenditures for vessels
  and equipment                               -       (1,578)        (134,072)                -       (135,650)
Purchase of Navion AS                         -            -          (76,000)                -        (76,000)
Other                                         -            -          (21,210)                -        (21,210)
                                   --------------- ------------- ----------------- -------------- -----------------
     Net cash flow from
     investing activities                     -       (1,578)        (231,282)                -       (232,860)
                                   --------------- ------------- ----------------- -------------- -----------------
<B>Increase in cash and
  cash equivalents</B>                            -            -          109,675                 -        109,675
Cash and cash equivalents,
  beginning of the year                       -            -          174,950                 -        174,950
                                   --------------- ------------- ----------------- -------------- -----------------
<B>Cash and cash equivalents,
  end of the year</B>                             -            -          284,625                 -        284,625
                                   =============== ============= ================= ============== =================
</pre>

<!-- MARKER FORMAT-SHEET="Footnote Rule-TNR" FSL="Project" -->
<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A440></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(See Note 9) </FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 4.28</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<A NAME=A317></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Teekay Shipping Corporation<BR>
Annual Executive Bonus Plan </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A319></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Summary</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Annual Executive Bonus Plan (the
&#147;Plan&#148;) of Teekay Shipping Corporation (the &#147;Company&#148;) is a variable
cash incentive program designed to: </FONT></P>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Attract, retain and motivate a high-caliber executive leadership team;
</FONT></TD>
</TR>
</TABLE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Pay competitively and consistently within an appropriately defined market;
</FONT></TD>
</TR>
</TABLE>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Align executive compensation with shareholder interests; and
</FONT></TD>
</TR>
</TABLE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Focus on matching reward with the executive&#146;s performance and the Company&#146;s
financial performance in the fiscal year through comparison to established targets and the
financial performance of peer companies.
</FONT></TD>
</TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A320></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Eligibility</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Participants are approved solely at
the discretion of the Compensation and Human Resources Committee (the
&#147;Committee&#148;). </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A321></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Administration</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Committee is responsible for
administering the Plan. The Committee has the authority to review and recommend for Board
approval the inception of the Plan and its operation, including but not limited to, the
authority to: </FONT></P>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Review and approve any amendments to the Plan;
</FONT></TD>
</TR>
</TABLE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Adopt rules for the administration, interpretation and application of the Plan;
</FONT></TD>
</TR>
</TABLE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Interpret, amend or revoke any such rules;
</FONT></TD>
</TR>
</TABLE>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Approve eligible participants; and
</FONT></TD>
</TR>
</TABLE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Review and approve annual bonus awards.
</FONT></TD>
</TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Chief Executive Officer ("CEO") will administer and interpret
this plan under the authority of the Committee as its delegate, and make recommendations
to the Committee in the exercise of its powers. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A322></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Award Determination</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Committee, in its sole
discretion, will approve &#147;target bonuses&#148; for each participant. These target
bonuses are a percentage of the participant&#146;s base salary which ranges
between 35 to 60% of annual base salary.  The target bonuses are
adjusted upwards or downwards based upon a &#147;Performance Factor&#148;, which is
comprised of an Individual Performance Factor (&#147;IPF&#148;) (33% weighting) and a
Company Performance Factor (&#147;CPF&#148;) (67% weighting). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For each participant in the Plan, the
CEO approves an IPF that reflects the participant&#146;s performance relative to the individual performance expectations for the
performance period. Individual performance expectations vary to reflect each
executive&#146;s role in the Company. A participant's performance can result in an IPF between 0 and 2.0.</FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Committee approves the CPF
by assessing the Company's financial performance against pre-established annual
goals for the following components: </FONT></P>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Total shareholder return (&#147;TSR&#148;) relative to the TSR of Company&#146;s peer group (1);
</FONT></TD>
</TR>
</TABLE>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Return on invested capital (&#147;ROIC&#148;) for the Company&#146;s spot tanker segment
relative to ROIC of the Company&#146;s spot tanker peer group (1); and
</FONT></TD>
</TR>
</TABLE>

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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=3>&#149; </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
ROIC for each of the Company&#146;s segments relative to its weighted average cost of capital
(&#147;WACC&#148;) (2).
</FONT></TD>
</TR>
</TABLE>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The CPF is based on a weighted-average of the performance factors for these components.</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A323></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Award Payouts</U> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless otherwise determined by the
Committee, the bonus period will be for the most recently completed fiscal year and will be paid
on an annual basis, typically in March of the following year. Although there is no maximum bonus that
any participant may receive under the Plan, the Committee has the authority to recalibrate
the bonus formula to achieve compensation levels that are within intended ranges based
upon compensation benchmarking surveys. </FONT></P>

<HR SIZE="1" ALIGN="Left" WIDTH="15%">

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
This component of the CPF results in a performance factor between 0 and 2.0.
</FONT></TD>
</TR>
</TABLE>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
This component of the CPF results in a performance factor of 1.0 when the ROIC for each of the Company&#146;s segments
is equivalent to its WACC. The performance factor increases 0.5 for each percentage point that
ROIC is greater than WACC. There is no maximum performance factor; however, if ROIC is less than WACC
this performance factor is zero.
</FONT></TD>
</TR>
</TABLE>



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


<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A441></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 8.1</B></FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A442></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
List of Significant Subsidiaries</FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following is a list of the
Company&#146;s significant subsidiaries as at March 15, 2005. </FONT></P>

<pre>
<B>                                                                                  State or         Proportion of
                                                                              Jurisdiction of        Ownership
                                                                               <U>Incorporation</U>          Interest</B>
<B><U>Name of Significant Subsidiary</U></B>

BONA SHIPHOLDING LTD...............................................          BERMUDA                    100%
IUM SHIPMANAGEMENT AS..............................................          NORWAY                      51%
NAVION OFFSHORE LOADING AS.........................................          NORWAY                     100%
NAVION SHIPPING LTD................................................          MARSHALL ISLANDS           100%
NORSK TEEKAY AS....................................................          NORWAY                     100%
NORSK TEEKAY HOLDINGS LTD..........................................          MARSHALL ISLANDS           100%
SINGLE SHIP COMPANIES (3)..........................................          AUSTRALIA                  100%
SINGLE SHIP COMPANIES (4)..........................................          SPAIN                      100%
SINGLE SHIP LIMITED LIABILITY COMPANIES (63).......................          MARSHALL ISLANDS           100%
TEEKAY CHARTERING LIMITED..........................................          MARSHALL ISLANDS           100%
TEEKAY LIGHTERING SERVICES LLC.....................................          MARSHALL ISLANDS           100%
TEEKAY NAVION OFFSHORE LOADING PTE LTD.............................          SINGAPORE                  100%
TEEKAY NORDIC HOLDINGS INC.........................................          MARSHALL ISLANDS           100%
TEEKAY NORGE AS....................................................          NORWAY                     100%
TEEKAY NORWAY AS...................................................          NORWAY                     100%
TEEKAY SHIPPING (CANADA) LTD.......................................          CANADA                     100%
TEEKAY SHIPPING LIMITED............................................          BAHAMAS                    100%
TEEKAY SHIPPING SPAIN SL...........................................          SPAIN                      100%
UGLAND NORDIC SHIPPING AS..........................................          NORWAY                     100%
</pre>

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


<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A447></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 12.1</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A448></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Bjorn Moller, President and Chief
Executive Officer of the company, certify that: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- 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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          I have reviewed this report on Form 20-F of Teekay Shipping Corporation; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Based on my knowledge, this report does not contain any untrue statement of a
               material fact or omit to state a material fact necessary to make the statements
               made, in light of the circumstances under which such statements were made, not
               misleading with respect to the period covered by this report; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Based on my knowledge, the financial statements, and other financial information
               included in this report, fairly present in all material respects the financial
               condition, results of operations and cash flows of the registrant as of, and
               for, the periods presented in this report; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The company&#146;s other certifying officer and I are responsible for
               establishing and maintaining disclosure controls and procedures (as defined in
               Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the company, including its consolidated
               subsidiaries, is made known to us by others within those entities, particularly
               during the period in which this report is being prepared; </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Evaluated the effectiveness of the company&#146;s disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation; and </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Disclosed in this report any change in the company&#146;s internal control over
               financial reporting that occurred during the period covered by the report that
               has materially affected, or is reasonably likely to materially affect, the
               company&#146;s internal control over financial reporting; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The company&#146;s other certifying officer and I have disclosed, based on our
               most recent evaluation of internal control over financial reporting, to the
               company&#146;s auditors and the audit committee of the company&#146;s board of
               directors (or persons performing the equivalent functions): </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 5- 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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           All significant deficiencies and material weaknesses in the design or operation
          of internal control over financial reporting which are reasonably likely to
          adversely affect the company&#146;s ability to record, process, summarize and
          report financial information; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 5- TNR" FSL="Default" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           Any fraud, whether or not material, that involves management or other employees
          who have a significant role in the company&#146;s internal control over
          financial reporting. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<BR><BR><BR><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD vAlign=top width="65%"><FONT face="Times New Roman, Times, Serif" size=2>Dated:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;April 7, 2005</FONT></TD>
<TD vAlign=top width="35%"><FONT face="Times New Roman, Times, Serif" size=2>By:&nbsp;&nbsp;<U>/s/ Bjorn Moller&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Bjorn Moller<BR>
President and Chief Executive Officer</FONT> </TD></TR>
</TABLE>

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


<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A449></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 12.2</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A450></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Peter Evensen, Executive Vice
President and Chief Financial Officer of the company, certify that: </FONT></P>

         <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          I have reviewed this report on Form 20-F of Teekay Shipping Corporation; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Based on my knowledge, this report does not contain any untrue statement of a
               material fact or omit to state a material fact necessary to make the statements
               made, in light of the circumstances under which such statements were made, not
               misleading with respect to the period covered by this report; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Based on my knowledge, the financial statements, and other financial information
               included in this report, fairly present in all material respects the financial
               condition, results of operations and cash flows of the registrant as of, and
               for, the periods presented in this report; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The company&#146;s other certifying officer and I are responsible for
               establishing and maintaining disclosure controls and procedures (as defined in
               Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have: </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Designed such disclosure controls and procedures, or caused such disclosure
               controls and procedures to be designed under our supervision, to ensure that
               material information relating to the company, including its consolidated
               subsidiaries, is made known to us by others within those entities, particularly
               during the period in which this report is being prepared; </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Evaluated the effectiveness of the company&#146;s disclosure controls and
               procedures and presented in this report our conclusions about the effectiveness
               of the disclosure controls and procedures, as of the end of the period covered
               by this report based on such evaluation; and </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Disclosed in this report any change in the company&#146;s internal control over
               financial reporting that occurred during the period covered by the report that
               has materially affected, or is reasonably likely to materially affect, the
               company&#146;s internal control over financial reporting; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The company&#146;s other certifying officer and I have disclosed, based on our
               most recent evaluation of internal control over financial reporting, to the
               company&#146;s auditors and the audit committee of the company&#146;s board of
               directors (or persons performing the equivalent functions): </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 5- 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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           All significant deficiencies and material weaknesses in the design or operation
          of internal control over financial reporting which are reasonably likely to
          adversely affect the company&#146;s ability to record, process, summarize and
          report financial information; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 5- TNR" FSL="Default" -->
          <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
               <TR VALIGN=TOP>
               <TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
               <TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           Any fraud, whether or not material, that involves management or other employees
          who have a significant role in the company&#146;s internal control over
          financial reporting. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<BR><BR><BR><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD vAlign=top width="65%"><FONT face="Times New Roman, Times, Serif" size=2>Dated:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;April 7, 2005</FONT></TD>
<TD vAlign=top width="35%"><FONT face="Times New Roman, Times, Serif" size=2>By:&nbsp;&nbsp;<U>/s/ Peter Evensen&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Peter Evensen<BR>
Executive Vice President and Chief Financial Officer </FONT></TD></TR>
</TABLE>

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


<!-- MARKER FORMAT-SHEET="Head Right-TNR" FSL="Project" -->
<A NAME=A451></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 13.1</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A452></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT TO<BR>
18 U.S.C. SECTION 1350,<BR>
AS ADOPTED PURSUANT TO SECTION 906<BR>
OF THE SARBANES-OXLEY ACT OF 2002 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the annual report
of Teekay Shipping Corporation (the &#147;<B><I>Company</I></B><I></I>&#148;) on Form 20-F
for the year ended December&nbsp;31, 2004 as filed with the Securities and Exchange
Commission on the date hereof (the &#147;<B><I>Form 20-F</I></B>&#148;), I Bjorn
Moller, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. &sect;1350,
as adopted pursuant to &sect;906 of the Sarbanes-Oxley Act of 2002, that: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;
          The Form 20-F fully complies with the requirements of Section 13(a) or 15(d) of
          the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)&nbsp;&nbsp;&nbsp;&nbsp;
          The information contained in the Form 20-F fairly presents, in all material
          respects, the financial condition and results of operations of the Company. </FONT></P>

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<A NAME=A456></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Dated: April 7, 2005 </FONT></P>
<BR>
<BR>
<BR>
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<A NAME=A457></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
By: <U>/s/ Bjorn Moller   </U><BR>
Bjorn Moller<BR>
President and Chief Executive Officer </FONT></P>

<BR>
<BR>
<BR>
<BR>
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<A NAME=A460></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 13.2</B> </FONT></P>

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<A NAME=A461></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATION PURSUANT TO<BR>
18 U.S.C. SECTION 1350, <BR>
AS ADOPTED PURSUANT TO SECTION 906 <BR>
OF THE SARBANES-OXLEY ACT OF 2002 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with the annual report
of Teekay Shipping Corporation (the &#147;<B><I>Company</I></B><I></I>&#148;) on Form 20-F
for the year ended December&nbsp;31, 2004 as filed with the Securities and Exchange
Commission on the date hereof (the &#147;<B><I>Form 20-F</I></B>&#148;), I Peter
Evensen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C.
&sect;1350, as adopted pursuant to &sect;906 of the Sarbanes-Oxley Act of 2002, that: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)&nbsp;&nbsp;&nbsp;&nbsp;
          The Form 20-F fully complies with the requirements of Section 13(a) or 15(d) of
          the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(2)&nbsp;&nbsp;&nbsp;&nbsp;
          The information contained in the Form 20-F fairly presents, in all material
          respects, the financial condition and results of operations of the Company. </FONT></P>

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<A NAME=A465></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dated: April 7, 2005 </FONT></P>
<BR>
<BR>
<BR>
<BR>

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<A NAME=A466></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By: <U>/s/ Peter Evensen    </U> <BR>
Peter Evensen<BR>
Executive Vice President and Chief Financial Officer </FONT></P>

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



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<A NAME=A469></A>
<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXHIBIT 15.1</B></FONT></P>

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<A NAME=A470></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ACKNOWLEDGEMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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 S-8 No. 333-119564) pertaining to the 2003 Equity Incentive
Plan and the Amended 1995 Stock Option Plan of Teekay, in the Registration Statement (Form
F-3 No. 333-102594) and related Prospectus of Teekay for the registration of up to
$500,000,000 of its common stock, preferred stock, warrants, stock purchase contracts,
stock purchase units or debt securities and in the Registration Statement (Form F-3 No.
33-97746) and related Prospectus of Teekay for the registration of 2,000,000 shares of
Teekay common stock under its Dividend Reinvestment Plan of our report dated February 18,
2005, with respect to the consolidated financial statements and the financial schedule of
Teekay included in the Annual Report (Form 20-F) for the year ended December 31, 2004. </FONT></P>

<BR><BR><BR><BR>
<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0>
<TR>
<TD vAlign=top width="65%"><FONT face="Times New Roman, Times, Serif" size=2>Vancouver, Canada,<BR>
April 7, 2005 </FONT></TD>
<TD vAlign=top width="35%"><FONT face="Times New Roman, Times, Serif" size=2>/s/ ERNST &amp; YOUNG LLP<BR>
Chartered Accountants</FONT><BR></TD></TR>
</TABLE>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>form20fexhibit_credfacility.htm
<DESCRIPTION>EXHIBIT - CREDIT FACILITY AGREEMENT
<TEXT>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></P>

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<A NAME=A001></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></P>

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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONFORMED COPY</B></FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1 SEPTEMBER 2004 </FONT></H1>
<BR>
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<A NAME=A004></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>US$500,000,000 </FONT></H1>

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<A NAME=A005></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></H1>

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<A NAME=A006></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CREDIT FACILITY
AGREEMENT</B><BR><BR>between </FONT></P>


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<A NAME=A007></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></H1>
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<A NAME=A008></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>TEEKAY SHIPPING CORPORATION</B><BR>as Parent Guarantor </FONT></P>

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<A NAME=A009></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></H1>

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<A NAME=A010></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>TEEKAY NORDIC HOLDINGS
INCORPORATED</B><BR>as Original Borrower </FONT></P>

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<A NAME=A011></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></H1>

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<A NAME=A012></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NORDEA BANK FINLAND
PLC, NEW YORK BRANCH</B><BR>as Bookrunner </FONT></P>

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<A NAME=A013></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></H1>

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<A NAME=A014></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH and DNB NOR BANK ASA </B><BR>as Lead Arrangers </FONT></P>

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<A NAME=A015></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></H1>

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<A NAME=A016></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>NORDEA BANK FINLAND
PLC, NEW YORK BRANCH</B><BR>as Administrative Agent
and as Security Trustee </FONT></P>
<BR>
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<A NAME=A017></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE SUBSIDIARY
GUARANTORS </FONT></H1>

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<A NAME=A018></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and </FONT></P>

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<A NAME=A019></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE LENDERS </FONT></H1>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>WHITE &amp; CASE</B><BR></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7-11 Moorgate<BR>London EC2R 6HH</B></FONT></P>


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<HR ALIGN=LEFT WIDTH=100% SIZE=4 NOSHADE>



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<A NAME=A023></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>TABLE OF CONTENTS </FONT></H1>

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

<PRE>
1.    DEFINITIONS AND INTERPRETATION.............................................................................1

2.    THE CREDIT FACILITY.......................................................................................22

3.    CONDITIONS................................................................................................23

4.    DRAWDOWN..................................................................................................24

5.    SCHEDULED COMMITMENT REDUCTIONS AND REPAYMENTS............................................................25

6.    CANCELLATION..............................................................................................26

7.    VOLUNTARY PREPAYMENT......................................................................................27

8.    MANDATORY COMMITMENT REDUCTIONS AND PREPAYMENTS...........................................................28

9.    INTEREST..................................................................................................29

10.      MARKET DISRUPTION AND ALTERNATIVE INTEREST RATES.......................................................30

11.      FEES...................................................................................................31

12.      TAXES..................................................................................................32

13.      TAX RECEIPTS...........................................................................................33

14.      INCREASED COSTS........................................................................................33

15.      ILLEGALITY.............................................................................................34

16.      REPRESENTATIONS AND WARRANTIES.........................................................................35

17.      FINANCIAL INFORMATION..................................................................................40

18.      FINANCIAL CONDITION....................................................................................43

19.      COVENANTS..............................................................................................44

20.      SALE AND LEASEBACK.....................................................................................52

21.      ADDITIONAL OBLIGORS AND NEW VESSELS....................................................................55

22.      EVENTS OF DEFAULT......................................................................................56

23.      DEFAULT INTEREST.......................................................................................60

24.      GUARANTEE AND INDEMNITY................................................................................61

25.      ADMINISTRATIVE AGENT AND OBLIGORS' AGENT...............................................................64

26.      BORROWERS' INDEMNITIES.................................................................................70

27.      CURRENCY OF ACCOUNT....................................................................................71

28.      PAYMENTS...............................................................................................72

29.      SHARING AMONG THE FINANCE PARTIES......................................................................73

30.      CALCULATIONS AND ACCOUNTS..............................................................................74

31.      ASSIGNMENTS AND TRANSFERS..............................................................................76

32.      COSTS AND EXPENSES.....................................................................................78

33.      REMEDIES AND WAIVERS...................................................................................79

34.      NOTICES AND DELIVERY OF INFORMATION....................................................................79

35.      ENGLISH LANGUAGE.......................................................................................82

36.      PARTIAL INVALIDITY.....................................................................................82

37.      AMENDMENTS.............................................................................................82

38.      THIRD PARTY RIGHTS.....................................................................................84

39.      COUNTERPARTS...........................................................................................84

40.      GOVERNING LAW..........................................................................................84

41.      JURISDICTION...........................................................................................84


SCHEDULE 1 LENDERS AND COMMITMENTS..............................................................................86

SCHEDULE 2 FORM OF TRANSFER CERTIFICATE.........................................................................88

SCHEDULE 3......................................................................................................92
         PART I - CONDITIONS PRECEDENT TO FIRST DRAWDOWN........................................................92
         PART II - CONDITIONS SUBSEQUENT DOCUMENTS..............................................................95
         PART III - FORM OF OFFICER'S CERTIFICATE...............................................................96
         PART IV - INITIAL SECURITY DOCUMENTS..................................................................100

SCHEDULE 4 FORM OF DRAWDOWN REQUEST............................................................................101

SCHEDULE 5 ASSOCIATED COSTS RATE...............................................................................103

SCHEDULE 6.....................................................................................................106
         PART I - PERMITTED SALE AND LEASEBACK.................................................................106
         PART II - FORM OF ACCESSION NOTICE....................................................................107
         PART III - ACCESSION DOCUMENTS........................................................................110
         PART IV - FORM OF NOVATION DEED.......................................................................113

SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE......................................................................116

SCHEDULE 8 COMMITMENT REDUCTION SCHEDULE.......................................................................117

SCHEDULE 9 COLLATERAL VESSELS..................................................................................118

SCHEDULE 10 COLLATERAL VESSEL PROVISIONS.......................................................................121


</PRE>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THIS AGREEMENT</B> is dated 1
September 2004 (this &#147;<B>Agreement</B>&#148;) and made between:</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(1)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>TEEKAY SHIPPING CORPORATION</B>, a Republic of Marshall Islands
          corporation<B> </B>(the &#147;<B>Parent Guarantor</B>&#148;)' </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(2)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>TEEKAY NORDIC HOLDINGS INCORPORATED</B>, a Republic of Marshall Islands
          corporation (the &#147;<B>Original </B> Borrower&#148;);</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(3)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NORDEA BANK FINLAND PLC, NEW YORK BRANCH</B> (the
          &#147;<B>Bookrunner</B>&#148;);</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(4)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NORDEA BANK FINLAND PLC, NEW YORK BRANCH and DNB NOR BANK ASA </B>(the
          &#147;<B>Lead Arrangers</B>&#148;);</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(5)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NORDEA BANK FINLAND PLC, NEW YORK BRANCH</B> (as agent for and on behalf of
          the Finance Parties, the <B>&#147;Administrative Agent</B>&#148;);</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(6)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NORDEA BANK FINLAND PLC, NEW YORK BRANCH </B>(as security trustee for and on
          behalf of the Finance Parties, the &#147;<B>Security Trustee</B>&#148;); </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(7)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B> THE SUBSIDIARY GUARANTORS</B> (as defined below); and</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(8)</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B> THE LENDERS </B>(as defined below).</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>DEFINITIONS AND INTERPRETATION</B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Definitions</B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as otherwise defined, in this
Agreement the following terms have the meanings set out below. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Accession Notice</B>&#148;
means a duly completed accession notice in the form of Part II of Schedule 6 (<I>Form of
Accession Notice</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Additional Appraisal
Package</B>&#148; means an appraisal relating to a Collateral Vessel provided or to be
provided pursuant to and in accordance with Clause 17.6 (<I>Additional Appraisal
Package</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Additional Obligor</B>&#148;
means the Leaseback Borrower or any Substitute Vessel Owner, in each case, as the context
may require. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Advance</B>&#148;<B>
</B>means, save as otherwise provided in this Agreement, an advance made or to be made (as
from time to time reduced by repayment) by the Lenders under Tranche A and/or Tranche B,
as the case may be. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Affiliate</B>&#148;<B>
</B>means in relation to a person, any other person directly or indirectly controlling,
controlled by or under direct or indirect common control with that person, and for these
purposes &#147;<B>control</B>&#148; shall be construed so as to include the ownership,
either directly or indirectly and legally or beneficially, of more than 33% of the issued
share capital of a company or the ability to control, either directly or indirectly, the
affairs or the composition of the board of directors (or equivalent of it) of a company
and &#147;<B>controlling</B>&#148;, &#147;<B>controlled by</B>&#148; and <B>&#147;under
common control with</B>&#148; shall be construed accordingly. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Annual Appraisal
Package</B>&#148; means an appraisal prepared in relation to a Collateral Vessel provided
or to be provided pursuant to Clause 17.5 (<I>Annual Appraisal Packages</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Appraisal Package</B>&#148;
means in respect of a Collateral Vessel, the Initial Appraisal Package or if applicable,
the most recent Annual Appraisal Package or Additional Appraisal Package (as the case may
be), relating to such Collateral Vessel. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Approved Valuer</B>&#148;
means any one of H. Clarkson &amp; Co Ltd, Simpson Spence &amp; Young Shipbrokers Ltd,
Fearnley AS, R.S. Platou AS or P. Bassoe AS or such other valuer as may be approved from
time to time by the Administrative Agent. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Associated Costs
Rate</B>&#148;<B> </B>means, in relation to any Advance or Unpaid Sum, the rate determined
in accordance with Schedule 5 (<I>Associated Costs Rate</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Authorisation</B>&#148;<B>
</B>means an authorisation, consent, approval, resolution, licence, exemption, filing,
notarisation or registration. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Available
Commitments</B>&#148; means the aggregate of the Tranche A Available Commitments and the
Tranche B Available Commitments. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Available Credit</B>&#148;
means, on any day, the sum of Free Liquidity and the aggregate of all amounts available to
be drawn by members of the Group under any revolving credit lines (excluding undrawn
revolving credit lines with less than 6 months to maturity) including, as applicable,
pursuant to this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Bareboat Charters</B>&#148;
means the bareboat charter arrangements in force at the date of this Agreement relating to
the Collateral Vessels &#145;Nordic Brasilia&#146;, &#145;Nordic Spirit&#146;,
&#145;Petroatlantic&#146; and &#145;Petronordic&#146;, together with any other bareboat
charters entered into from time to time pursuant to and in accordance with Clause 19.10(a)
<I>(Chartering</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Borrowers</B>&#148;<B>
</B>means the Original Borrower and (if applicable) the Leaseback Borrower and
&#147;<B>Borrower</B>&#148; means either of them, as the context requires. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Break Costs</B>&#148;<B>
</B>means the amount (if any) by which: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the interest which a Lender should have received for the period from the date of
          receipt of all or any part of its participation in an Advance or Unpaid Sum to
          the last day of the current Interest Period or Term in respect of that Advance
          or Unpaid Sum, had the principal amount of such Advance or Unpaid Sum received
          been paid on the last day of that Interest Period or Term; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A026></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>exceeds: </FONT></P>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount which that Lender would be able to obtain by placing an amount equal
          to the principal amount of such Advance or Unpaid Sum received or recovered by
          it on deposit with a leading bank in the London interbank market for a period
          starting on the Business Day following such receipt or recovery and ending on
          the last day of the current Interest Period or Term. </FONT></TD>
          </TR>
          </TABLE>
          <BR>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Business Day</B>&#148;<B>
</B>means a day (other than a Saturday or Sunday) on which banks generally are open for
business in London and New York. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Centre of Main
Interests</B>&#148; has the meaning given to it in Article 3(1) of Council Regulation (EC)
NO 1346/2000 of 29 May, 2000 on Insolvency Proceedings. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A027></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Change of
Control&#148; means: </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in respect of the Parent Guarantor, any person or two or more persons acting in
          concert (excluding Resolute Investments Inc. or any successor thereto) acquires: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               legally or beneficially and either directly or indirectly, more than 50% of the
               entire issued share capital of the Parent Guarantor; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the right or ability to control, either directly or indirectly, the affairs or
               the composition of the majority of the board of directors (or equivalent of it)
               of the Parent Guarantor; </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in respect of the Original Borrower, the Parent Guarantor ceases to own:</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               legally or beneficially and either directly or indirectly, the entire issued
               share capital of the Original Borrower; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the right or ability to control, either directly or indirectly, the affairs or
               the composition of the board of directors (or equivalent of it) of the Original
               Borrower; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in respect of the Leaseback Borrower, any change in the constitution or identity
          of the partnership of the Leaseback Borrower which has not been previously
          approved by the Administrative Agent (acting reasonably), provided that this
          paragraph shall not apply to a transfer of an equity interest in the Leaseback
          Borrower by an entity (x) to another member of its group or (y) to a member of
          the Group, if the completion of such transfer has been notified to the
          Administrative Agent within 10 Business Days following the occurrence of the
          same, </FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in each case by virtue of ownership
of share capital, contract or otherwise. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Charterer</B>&#148; means, from
time to time, each member of the Group or (if applicable) the Leaseback Group which has
entered into a Relevant Third Party Charter with a third party in respect of a Collateral
Vessel to the extent that such Relevant Third Party Charter remains in effect at the
relevant time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Collateral Vessels</B>&#148;
means the Tranche A Vessels and the Tranche B Vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Collateral Vessel
Provisions</B>&#148; means each of the terms and conditions contained in Schedule 10
(<I>Collateral Vessel Provisions</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Commitment</B>&#148;<B>
</B>means, in relation to a Lender at any time, its Tranche A Commitment and/or its
Tranche B Commitment, as the context may require. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Commitment Reduction
Date</B>&#148; means each of the dates referred to in the applicable column of Schedule 8
<I>(Commitment Reduction Schedule</I>), provided that if any such day is not a Business
Day, the Commitment Reduction Date will be the next succeeding Business Day in the then
current calendar month (if there is one) or the immediately preceding Business Day (if
there is not). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Compliance
Certificate</B>&#148;<B> </B>means a certificate substantially in the form set out in
Schedule 7 (<I>Form of Compliance Certificate</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Credit Facility</B>&#148;
means the credit facility to be provided to the Borrowers pursuant to Clause 2.1
(<I>Revolving Credit Facility</I>) and Clause 2.2 (<I>Consolidation on Leaseback
Completion Date</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Cross Guarantee
Obligations</B>&#148; means, from time to time, the aggregate of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Tranche A Obligations; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Tranche B Obligations; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all other amounts due and payable to any Finance Party by the Borrowers (or
          either of them) under the Finance Documents, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in each case, as applicable at the
relevant time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Cross Guarantors</B>&#148;
means the Original Borrower and the Subsidiary Guarantors (excluding the Tranche A Vessel
Owners). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Default</B>&#148; means an
Event of Default or any event or circumstance which (with the expiry of a grace period,
the giving of notice, the making of any determination under any of the Finance Documents
or any combination of any of the foregoing) would be an Event of Default. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Disposal Date</B>&#148; in
relation to a sale or other disposal to a third party of a Collateral Vessel and except as
otherwise provided, means the date on which such sale or other disposal is completed by
delivery of that Collateral Vessel to the relevant person acquiring such Collateral
Vessel. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Document of
Compliance</B>&#148; has the meaning given to it in the ISM Code. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Drawdown Date</B>&#148;<B>
</B>means the date on which an Advance is (or is requested to be) made under this
Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Drawdown
Request</B>&#148;<B> </B>means a duly completed notice in the form set out in Schedule 4
(<I>Form of Drawdown Request</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Earnings</B>&#148; in
relation to a Collateral Vessel, means: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all freights, hires and any other moneys whatsoever which may at any time be
          earned by, or become payable to or for the account of, its owner and which arise
          out of or as a result of the ownership or operation of the relevant Collateral
          Vessel by such owner or its agents (net of normal brokerage commissions); </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all moneys and claims for moneys due and to become due to its owner under, and
          all claims for damages arising out of the breach of, any charter or contract of
          affreightment which may be entered into in relation to the relevant Collateral
          Vessel and any and all claims and causes of action for money, losses or damages
          that may accrue to or belong to such owner and which arise out of or which are
          in any way connected with the present or future use, operation or management of
          such Collateral Vessel; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all moneys and claims for moneys due and to become due to its owner, and all
          claims for damages in respect of a requisition for hire (other than a
          requisition for hire constituting a total loss) or use of the relevant
          Collateral Vessel or its owner&#146;s interest therein. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Encumbrance</B>&#148; means:</FONT></P>


<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a mortgage, charge, pledge, lien or other encumbrance or security interest
          securing any obligation of any person; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any arrangement under which money or claims to, or the benefit of, a bank or
          other account may be applied, set-off or made subject to a combination of
          accounts so as to effect payment of sums owed or payable to any person; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other type of preferential arrangement (including title transfer and
          retention arrangements) having a similar effect. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Event of
Default</B>&#148;<B> </B>means any of the events or circumstances described as such in
Clause 22 (<I>Events of Default</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Affiliate</B>&#148; means an agent or employee of a Subsidiary Guarantor or a person in a
contractual relationship with a Subsidiary Guarantor in respect of the Collateral Vessel
owned by it (including, without limitation, the operation of or the carriage of cargo of
such Collateral Vessel). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Approvals</B>&#148; means any present or future permit, licence, approval, ruling,
variance, exemption or other authorisation required under the applicable Environmental
Laws. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Claim</B>&#148; means any and all enforcement, clean-up, removal, administrative,
governmental, regulatory or judicial actions, orders, demands or investigations instituted
or completed pursuant to any Environmental Laws or Environmental Approvals together with
any claims made by any third person relating to damage, contribution, loss or injury
resulting from any Environmental Incident. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Incident</B>&#148; means:</FONT></P>


<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any release of Environmentally Sensitive Material from a Collateral Vessel; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any incident in which Environmentally Sensitive Material is released from a
          vessel other than such Collateral Vessel and which involves a collision between
          that Collateral Vessel and such other vessel or some other incident of
          navigation or operation, in either case, in connection with which the relevant
          Collateral Vessel is actually or potentially liable to be arrested, attached,
          detained or injuncted and/or where any guarantor, any manager (or any
          sub-manager of such Collateral Vessel) or any of its officers, employees or
          other persons retained or instructed by it (or such sub-manager) are at fault or
          allegedly at fault or otherwise liable to any legal or administrative action; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other incident in which Environmentally Sensitive Material is released
          otherwise than from such Collateral Vessel and in connection with which that
          Collateral Vessel is actually or potentially liable to be arrested and/or where
          any guarantor, any manager (or any sub-manager of the relevant Collateral
          Vessel) or any of its officers, employees or other persons retained or
          instructed by it (or such sub-manager) are at fault or allegedly at fault or
          otherwise liable to any legal or administrative action. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental Laws</B>&#148;
means all present and future laws, regulations, treaties and conventions of any applicable
jurisdiction which: </FONT></P>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          have as a purpose or effect the protection of, and/or prevention of harm or
          damage to, the environment; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          relate to the carriage of Environmentally Sensitive Material or to actual or
          threatened releases of Environmentally Sensitive Material; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          provide remedies or compensation for harm or damage to the environment; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=+95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          relate to Environmentally Sensitive Materials or health or safety matters. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmentally Sensitive
Material</B>&#148; means (i) oil and oil products and (ii) any other waste, pollutant,
contaminant or other substance (including any liquid, solid, gas, ion, living organism or
noise) that may be harmful to human health or other life or the environment or a nuisance
to any person or that may make the enjoyment, ownership or other territorial control of
any affected land, property or waters more costly for such person to a material degree. </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Facility
Office</B>&#148;  means:</FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in relation to the Administrative Agent, the office identified with its
          signature below or such other office as it may, from time to time, select for
          performance of its agency function 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in relation to a Lender, the office from time to time designated by it to the
          Administrative Agent for the purposes of this Agreement (or, in the case of a
          Transferee, at the end of the Transfer Certificate to which it is a party as
          Transferee) or such other office as such Lender may from time to time select. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Fees Letter</B>&#148;<B>
</B>means the fees letter dated 11 June 2004 from Nordea Bank Finland Plc, New York Branch
(as Bookrunner, Lead Arrangers and Administrative Agent) to the Borrower. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Finance
Documents&#148;</B> means: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          this Agreement, any Novation Deeds, Accession Notices, Transfer Certificates and
          the Fees Letter; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Security Trust Deed; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Security Documents; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other agreement or document entered into or executed pursuant to or
          contemplated by any of the foregoing documents; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other agreement or document designated a &#147;Finance Document&#148; in
          writing by the Administrative Agent with the agreement of an Obligor. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Finance Parties</B>&#148;<B>
</B>means the Administrative Agent, the Bookrunner, the Lead Arrangers, the Security
Trustee and the Lenders and &#147;<B>Finance Party</B>&#148; means any of them. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Financial
Indebtedness</B>&#148; means any Indebtedness of any person for or in respect of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          moneys borrowed or raised; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          amounts raised under any acceptance credit facility; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          amounts raised pursuant to any note purchase facility or the issue of bonds,
          notes, debentures, loan stock or similar instruments; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          amounts raised pursuant to any issue of shares of the relevant person which are
          expressed to be redeemable; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount of any liability in respect of leases or hire purchase contracts
          which would, in accordance with GAAP, be treated as finance or capital leases; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount of any liability in respect of any purchase price for assets or
          services, the payment of which is deferred for a period in excess of one hundred
          and eighty (180) days; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all reimbursement obligations whether contingent or not in respect of amounts
          paid under a letter of credit or similar instrument; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all interest rate, currency swap and similar agreements obliging the making of
          payments, whether periodically or upon the happening of a contingency (and the
          value of such Indebtedness shall be the mark-to-market valuation of such
          transaction at the relevant time); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          amounts raised under any other transaction (including, without limitation, any
          forward sale or purchase agreement) having the commercial effect of a borrowing;
          and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(j)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any guarantee of Indebtedness falling within paragraphs (a) to (i) above. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Financial Quarter</B>&#148;
means the period commencing on the day immediately following any Quarter Date in each
year, and ending on the next succeeding Quarter Date. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Free Liquidity</B>&#148;
means, on any date, the aggregate of: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          cash and cash equivalents; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          marketable securities,</FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>to which the Parent Guarantor shall
have free, immediate and direct access and as may be ascertained from the balance sheets
contained in the annual or quarterly statements for the Group provided to the Lenders
under this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>GAAP</B>&#148;<B> </B>means
generally accepted accounting principles in the United States of America. </FONT></P>

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<A NAME=A032></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>GMT</B>&#148;means
Greenwich Mean Time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Group</B>&#148;<B> </B>means
the Parent Guarantor and its Subsidiaries from time to time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Guarantors</B>&#148;<B>
</B>means the Subsidiary Guarantors, the Parent Guarantor and following the Leaseback
Completion Date, the Original Borrower and &#147;<B>Guarantor</B>&#148; means any one of
them, as the context requires. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Holding Company</B>&#148;<B>
</B>means a company, corporation or partnership of which another company, corporation or
partnership is a Subsidiary. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Increased
Cost</B>&#148;means:</FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any reduction in the rate of return from the Credit Facility or on a Finance
          Party&#146;s (or an Affiliate&#146;s) overall capital; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any additional or increased cost; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any reduction of any amount due and payable under any Finance Document, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>which is incurred or suffered by a
Finance Party or any of its Affiliates to the extent that it is attributable to that
Finance Party having agreed to make available its Commitment or having funded or performed
its obligations under any Finance Document. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Indebtedness</B>&#148;<B>
</B>includes any obligation (whether incurred as principal or as surety) for the payment
or repayment of money, whether present or future, actual or contingent (including interest
and other charges relating to it). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Initial Appraisal
Package</B>&#148; means, in relation to a Collateral Vessel, a written estimate (to be
provided pursuant to Clause 3.1 (<I>Conditions Precedent</I>)) confirmed in writing by an
Approved Valuer and dated no more than 30 days prior to its delivery to the Administrative
Agent as to <I>inter alia</I> the Market Value of the relevant Collateral Vessel as at the
date of such estimate. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Initial Security
Documents</B>&#148;<B> </B>means the documents listed in Part IV of Schedule 3 (<I>Initial
Security Documents</I>). </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Instructing
Group</B>&#148;means: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          before the making of any Advance under this Agreement, a Lender or group of
          Lenders whose Available Commitments amount in aggregate to more than 66 2/3% of
          all the Available Commitments; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          thereafter, a Lender or group of Lenders to whom in aggregate more than 66 2/3%
          of the aggregate amount of the Outstandings are (or if there are no Outstandings
          at such time, immediately prior to repayment of all such Outstandings, were
          then) owed. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Interest Period</B>&#148;<B>
</B>means, save as otherwise provided in this Agreement, any of those periods mentioned in
Clause 9.1 (<I>Interest Periods following Leaseback Completion Date</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Intra-Group Charter
Party</B>&#148; means each of the persons being party to an Intra-Group Charter from time
to time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Intra-Group
Charters</B>&#148; means the chartering agreements or other arrangements between members
of the Group in effect from time to time in respect of the Collateral Vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>ISM Code</B>&#148; means the
International Management Code for the Safe Operation of Ships and for Pollution Prevention
adopted by the International Maritime Organisation. </FONT></P>

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<A NAME=A035></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Law</B>&#148; means any: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          common or customary law; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          constitution, decree, judgment, legislation, order, ordinance, regulation,
          statute, treaty or other legislative measure in any jurisdiction; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          present or future directive, regulation, practice, concession or requirement
          which has the force of law and which is issued by any governmental body, agency
          or department or any central bank or other fiscal, monetary, regulatory,
          self-regulatory or other authority or agency. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Leaseback Borrower</B>&#148;
has the meaning given to it in Part I of Schedule 6 (<I>Permitted Sale and Leaseback</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Leaseback Completion
Date</B>&#148; means the Business Day specified by the Administrative Agent in the
Leaseback Completion Date Notice on which the completion of the Permitted Sale and
Leaseback is deemed to have occurred for the purposes of this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Leaseback Completion Date
Notice</B>&#148; has the meaning given to it in Clause 20.3 (<I>Leaseback Completion
Date</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Leaseback
Disclosures</B>&#148; means the documents and other information relating to the Permitted
Sale and Leaseback provided by the Parent Guarantor to the Lenders (through the
Administrative Agent) prior to the date of this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Leaseback Group</B>&#148;
means the Leaseback Borrower and each of the Tranche A Vessel Owners. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Leaseback Period</B>&#148;
means the period commencing on the date of this Agreement and ending on the first
anniversary of such date. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Lender</B>&#148;<B>
</B>means a person which: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          is named in Schedule 1 (<I>Lenders and Commitments</I>); or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          has become a party to this Agreement in accordance with the provisions of Clause
          31 (<I>Assignments and </I> <I>Transfers</I>), </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>which (in each case) has not ceased
to be a party to this Agreement in accordance with the terms of this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>LIBOR</B>&#148;<B>
</B>means, in relation to any amount owed by an Obligor under this Agreement on which
interest for a given period is to accrue: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the rate per annum which appears on the Telerate page 3750 (British
          Bankers&#146; Association Interest Settlement Rates) (or such other page as may
          replace such page 3750 on such system or on any other system of the information
          vendor for the time being designated by the British Bankers&#146; Association to
          calculate the BBA Interest Settlement Rate (as defined in the British
          Bankers&#146; Association&#146;s Recommended Terms and Conditions dated August
          1985)) for such period at or about 11.00 a.m. on the Quotation Date for such
          period; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if no such rate is displayed, the arithmetic mean (rounded upwards, if not
          already such a multiple, to one sixteenth of a percent) of the rates (as
          notified to the Administrative Agent) at which each of the Reference Banks was
          offering to prime banks in the London interbank market deposits in dollars for
          such period at or about 11.00 a.m. on the Quotation Date for such period. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Loss or Sale Commitment
Reduction</B>&#148; in relation to a total loss or sale (or other disposal to a third
party) of a Collateral Vessel, means an amount equal to: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Total Tranche A Commitments (in the case of a Tranche A Vessel) or the Total
          Tranche B Commitments (in the case of a Tranche B Vessel); multiplied by </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the applicable fraction, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and for the purposes of this
definition, &#147;<B>applicable fraction</B>&#148; shall mean the Market Value of the
relevant Collateral Vessel divided by the aggregate Market Value of all such Tranche A
Vessels or Tranche B Vessels (as the case may be). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>MAP Pollution</B>&#148;
means mortgagee additional perils (pollution) insurance. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Margin</B>&#148;<B>
</B>means 0.70% per annum. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Market Value</B>&#148;
means, in relation to one or more Collateral Vessels (as the context may require) at any
time, the appraised value thereof in dollars determined on the basis of a sale (for cash
and prompt delivery) by a willing seller to a willing buyer, free of any contract of
affreightment, charter and encumbrances and at arm&#146;s length on normal commercial
terms, being the appraised value referred to in the Appraisal Package relating to each
such Collateral Vessel. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Material Adverse
Effect</B>&#148; means a material adverse change in, or a material adverse effect on: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the financial condition, assets, prospects or business of any Obligor or on the
          consolidated financial condition, assets, prospects or business of the Group; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the ability of any Obligor (or if applicable, the Parent Guarantor on its
          behalf) to perform and comply with its obligations under any Finance Document or
          to avoid any Default; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the validity, legality or enforceability of any Finance Document; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the validity, legality or enforceability of any Security expressed to be created
          pursuant to any Security Document or the priority and ranking of any such
          Security, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>provided that, in determining whether
any of the foregoing circumstances shall constitute such a material adverse change or
material adverse effect for the purposes of this definition, the Finance Parties shall
consider such circumstance in the context of (x) the Group taken as a whole and (y) the
ability of the Parent Guarantor to perform each of its obligations under the Finance
Documents. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Material
Subsidiary</B>&#148;means: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Original Borrower and each Subsidiary Guarantor; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other Subsidiary of the Parent Guarantor or of the Leaseback Borrower (as
          the case may be) whose assets, as determined in accordance with GAAP and as
          shown from the most recent financial statements available to the Administrative
          Agent relating to it, as multiplied by the Relevant Percentage in respect of
          such Subsidiary, equal or exceed 10% of the aggregate value of the assets of the
          Group or the Leaseback Group (as the case may be) as determined in accordance
          with GAAP and as shown from the most recently available financial statements of
          the Group or the Leaseback Group (as applicable), </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>provided that: </FONT></P>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in respect of any Subsidiary of the Parent Guarantor or of the Leaseback
               Borrower (as applicable), only the value of its assets as multiplied by the
               Relevant Percentage in respect of such Subsidiary shall be taken into account in
               the computation of the value of the assets of the Group or the Leaseback Group
               (as the case may be); and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               a statement by the auditors of the Parent Guarantor or (if applicable) the
               Leaseback Borrower to the effect that, in their opinion, a Subsidiary of the
               Parent Guarantor or the Leaseback Borrower (as the case may be) is or is not or
               was or was not at any particular time a Material Subsidiary shall, in the
               absence of manifest error, be conclusive and binding on each of the parties to
               this Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Maturing Advance</B>&#148;
has the meaning given to it in Clause 5.1(d) (<I>Commitment Reduction and Repayment</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Maturity Date</B>&#148;
means the date falling on the tenth anniversary of this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Member State</B>&#148; means
a member of the European Community. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>MII</B>&#148; means
mortgagee interest insurance. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Necessary
Authorisations</B>&#148;<B> </B>means all Authorisations of any person including any
government or other regulatory authority required by applicable Law to enable it to: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          lawfully enter into and perform its obligations under the Transaction Documents
          to which it is party; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          ensure the legality, validity, enforceability or admissibility in evidence in
          England and, if different, its jurisdiction of incorporation, of such
          Transaction Documents to which it is party; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          carry on its business from time to 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=2>&#147;<B>New Vessel</B>&#148; means
any vessel which: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           is a conventional tanker or shuttle tanker, of aframax or suezmax size, with a
          double hull; </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           has a Market Value equal to or greater than; </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               1 times (in the case of a vessel built in 1998 or later);  </FONT></TD>
               </TR>
               </TABLE>
               <BR>



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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               1.25 times (in the case of a vessel built in 1997 or 1996); or </FONT></TD>
               </TR>
               </TABLE>
               <BR>



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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                1.50 times (in the case of a vessel built in 1995 or earlier), </FONT></TD>
               </TR>
               </TABLE>
               <BR>



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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B></B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                that of the Collateral Vessel or Collateral Vessels (taken together) which such vessel
substitutes or is to substitute, pursuant to Clause 19.12(b)(ii) (<I>Disposal of Assets
and Collateral Vessel Substitution</I>);</FONT></TD>
               </TR>
               </TABLE>
               <BR>



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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          is registered with a Pre-Approved Flag and has a classification with a
          Pre-Approved Classification Society (or such other flag and/or classification
          society as may be acceptable to the Administrative Agent); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          has been built no earlier than 1992, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in each case, as determined by the
Administrative Agent (in consultation with the Parent Guarantor) on the basis of such
information as may be required by the Administrative Agent for the purposes of such
determination pursuant to Clause 17.6 (<I>Additional Appraisal Package</I>) or otherwise
provided that, notwithstanding the foregoing criteria, for the purposes of a substitution
of the Nordic Sarita for the Collateral Vessel &#145;Falster Spirit&#146; pursuant to and
in accordance with Clause 19.12(b)(ii) (<I>Disposal of Assets and Collateral Vessel
Substitution</I>), the Nordic Sarita shall constitute a &#147;New Vessel&#148; for the
purposes of this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Nordic Sarita</B>&#148;
means the Suezmax double hull shuttle tanker built in 1986 at the Daewoo yard with a dwt
of 124,472 which (as at the date of this Agreement) is owned by Ugland Nordic Shipping AS
and is registered on Norwegian flag. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Novation Deed</B>&#148;<B>
</B>means a duly completed novation deed substantially in the form of Part IV of Schedule
6 (<I>Form of Novation Deed</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Obligors</B>&#148;<B>
</B>means the Borrowers and the Guarantors and &#147;<B>Obligor</B>&#148; means any of
them. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Obligors&#146;
Agent</B>&#148;<B> </B>means the Parent Guarantor in its capacity as agent for the
Obligors, pursuant to Clause 25.17 <I>(Obligors&#146; Agent</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Original Consolidated
Financial Statements</B>&#148;<B> </B>means the audited consolidated financial statements
of the Parent Guarantor in respect of its financial year ended 31 December 2003. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Original
Guarantors</B>&#148; means the Subsidiary Guarantors being original parties to this
Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Original
Obligors</B>&#148;<B> </B>means the Original Guarantors, the Parent Guarantor and the
Original Borrower. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Other Parties</B>&#148; has
the meaning given to it in Clause 21.2 (<I>Novation of Leaseback Borrower</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Outstandings</B>&#148;<B>
</B>means, at any time, the aggregate outstanding amount (if any) of all Advances, at such
time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Participating Member
State</B>&#148;<B> </B>means any member of the European Community that at the relevant
time has adopted the euro as its lawful currency in accordance with legislation of the
European Community relating to Economic and Monetary Union. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Permitted Liens</B>&#148; in
relation to a Collateral Vessel, means: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          liens for master and crew&#146;s wages, liens in respect of salvage (including
          contract salvage) and general average; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          other liens covered by insurance, repairer&#146;s liens and liens incurred in
          the ordinary course of trading such Collateral Vessel, of an aggregate amount
          not exceeding $5,000,000. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Permitted Sale and
Leaseback</B>&#148; means a sale and leaseback transaction entered into or to be entered
into pursuant to and in accordance with Clause 20 (<I>Sale and Leaseback</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Petrobras</B>&#148; means
Petr&oacute;leo Brasileiro S.A. and/or any of its Subsidiaries and Affiliates. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Pre-Approved Classification
Societies</B>&#148; means Det Norske Veritas, Lloyd&#146;s Register of Shipping and The
American Bureau of Shipping. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Pre-Approved Flag</B>&#148;
means a vessel registration in a Pre-Approved Jurisdiction, NIS or (solely in the case of
the Collateral Vessels &#145;Nordic Brasilia&#146; and &#145;Nordic Spirit&#146; or any
other Collateral Vessels on bareboat charter to Petrobras in accordance with this
Agreement) Brazil. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Pre-Approved
Jurisdiction</B>&#148; means the Marshall Islands, the Bahamas, Liberia and the Cayman
Islands. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Proportion</B>&#148;<B>
</B>in relation to a Lender, means: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in relation to an Advance to be made under this Agreement, the proportion borne
          by such Lender&#146;s Available Commitments in respect of the Credit Facility to
          all the Available Commitments; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in relation to an Advance or Advances outstanding under this Agreement, the
          proportion borne by such Lender&#146;s share of such Advance or Advances to the
          amount of all Advances for the time being; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if paragraph (a) does not apply and there are no Outstandings, the proportion
          borne by the aggregate of such Lender&#146;s Available Commitments to all the
          Available Commitments (or if the Available Commitments are then zero, by its
          Available Commitment to all of the Available Commitments immediately prior to
          their reduction to zero); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if paragraph (b) does not apply and there are any Outstandings, the proportion
          borne by such Lender&#146;s share of the Outstandings to the amount of all the
          Outstandings for the time being. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Quarter Date</B>&#148;<B>
</B>means any of 31 March, 30 June, 30 September and 31 December. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Quotation Date</B>&#148;<B>
</B>means, in relation to any period for which an interest rate is to be determined, 2
Business Days before the first day of that period. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Recovering Finance
Party</B>&#148; has the meaning given to it in Clause 29.1 (<I>Payments to Finance
Parties</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Reference Banks</B>&#148;<B>
</B>means the principal London offices of HSBC Bank plc, The Royal Bank of Scotland plc
and Lloyds TSB Bank plc or such other bank or banks as may be appointed as such by the
Administrative Agent after consultation with the Parent Guarantor. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Relevant
Percentage</B>&#148; means, in respect of any Subsidiary of the Parent Guarantor or the
Leaseback Borrower (as applicable) at any time, the percentage of the equity share capital
or the partnership capital, as the case may be, of such Subsidiary which is beneficially
owned (free from Encumbrances) by the Parent Guarantor or the Leaseback Borrower (as the
case may be) at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Relevant Third Party
Charters</B>&#148; means the Third Party Time Charters and the Bareboat Charters which,
from time to time, have an unexpired term in excess of 36 months, at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Rollover Advance</B>&#148;
has the meaning given to it in Clause 5.1(d) (<I>Commitment Reduction and Repayment</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Rollover Date</B>&#148;
means in relation to any Advance (or if the Leaseback Completion Date has occurred, any
Tranche B Advance), the last day of its Term provided that, if any such day is not a
Business Day, the Rollover Date will be the next succeeding Business Day in the then
current calendar month (if there is one) or the preceding Business Day (if there is not). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Safety Management
Certificate</B>&#148; has the meaning given to it in the ISM Code. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Security</B>&#148;<B>
</B>means a mortgage, charge, pledge, lien or encumbrance or other security interest
securing any obligation of any person or any other agreement or arrangement having a
similar effect. </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Security
Documents</B>&#148;  means:</FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each of the Initial Security Documents; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other document (executed at any time) conferring or evidencing any
          Encumbrance, guarantee or other assurance against financial loss for, or in
          respect of, any of the obligations of the Obligors (or any of them) under this
          Agreement (including, but not limited to, any vessel mortgage or deed of
          covenant delivered in respect of such obligations pursuant to this Agreement
          which is not an Initial Security Document); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other document executed at any time pursuant to any covenant in any of the
          Security Documents referred to in paragraph (a) or (b) above. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Security Trust
Deed</B>&#148; means the security trust deed entered into or to be entered into in
relation to this Agreement between<I> </I>the Parent Guarantor and the Finance Parties. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Sharing Payment</B>&#148;
has the meaning given to it in Clause 29.1 (<I>Payments to Finance Parties</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Subsidiary</B>&#148;<B>
</B>of a company, corporation or partnership means any company, corporation or
partnership: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          more than 50% of the issued share capital or equity capital of which is legally
          or beneficially owned, directly or indirectly, by the first-mentioned company,
          corporation or partnership; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          where the first-mentioned company, corporation or partnership owns the right or
          ability to control directly or indirectly the affairs or the composition of the
          board of directors (or equivalent of it, if applicable) of such company or
          corporation; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          which is a Subsidiary of another Subsidiary of the first-mentioned company,
          corporation or partnership. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Subsidiary
Guarantors</B>&#148; means the entities named under the heading &#145;Vessel and
Owner&#146; in Schedule 9 (<I>Collateral Vessels</I>) as the owners of the relevant
Collateral Vessels and each Substitute Vessel Owner which has acceded to this Agreement as
a Subsidiary Guarantor (excluding any Superseded Guarantor or other entity which has
ceased to be a Subsidiary Guarantor in accordance with this Agreement). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Substitute Vessel
Owner</B>&#148; means a Subsidiary (or entity which is to become a Subsidiary) of the
Parent Guarantor or the Leaseback Borrower (as applicable) to whom ownership of a
Collateral Vessel is (or is to be) transferred pursuant to and in accordance with
sub-paragraph (i) or (ii) (as the case may be) of Clause 19.12(b) (<I>Disposal of Assets
and Collateral Vessel Substitution</I>), in each case, as the context may require. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Superseded
Guarantor</B>&#148; means a Subsidiary Guarantor which has transferred (or is to transfer)
the Collateral Vessel owned by it pursuant to and in accordance with sub-paragraph (i) or
(ii) (as the case may be) of Clause 19.12(b) (<I>Disposal of Assets and Collateral Vessel
Substitution</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Supplemental Leaseback
Disclosures</B>&#148; means any documents or other information relating to the Permitted
Sale and Leaseback delivered from time to time following the execution of this Agreement
pursuant to Clause 20.4 <I>(Supplemental Leaseback Disclosures</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Term</B>&#148; in relation
to an Advance, means the period for which such Advance is borrowed, as specified in the
relevant Drawdown Request or as otherwise provided pursuant to this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Third Party Time
Charters</B>&#148; means each time charter from time to time entered into in respect of a
Collateral Vessel between a member of the Group or (if applicable) the Leaseback Group and
a third party. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Total Debt</B>&#148; means
the aggregate of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount calculated in accordance with GAAP shown as each of &#147;long term
          debt&#148;, &#147;short term debt&#148; and &#147;current portion of long term
          debt&#148; on the latest consolidated balance sheet of the Parent Guarantor; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount of any liability in respect of any lease or hire purchase contract
          entered into by the Parent Guarantor and/or any of its Subsidiaries which would,
          in accordance with GAAP, be treated as a finance or capital lease. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Total Loss Date</B>&#148; in
relation to the total loss of a Collateral Vessel, means: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if it consists of an actual total loss, at noon GMT on the actual date of loss
          or, if that is not known, on the date on which the Collateral Vessel was last
          heard of; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if it consists of a requisitioning for title, at noon GMT on the date on which
          the same is expressed to take effect by the person making the same; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if it consists of a constructive, compromised, arranged or agreed total loss, at
          noon GMT on the date on which a notice of abandonment of the Collateral Vessel
          is given to her insurers for the time being or (if her insurers for the time
          being do not admit liability in respect of such claim for total loss) at the
          time on which a total loss is subsequently adjudged to have occurred by a
          competent court or arbitration tribunal or liability in respect thereof as a
          total loss is admitted by insurers. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Total Tranche A
Commitments</B>&#148; means, at any time, the aggregate of the Tranche A Commitments of
the Lenders at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Total Tranche B
Commitments</B>&#148; means, at any time, the aggregate of the Tranche B Commitments of
the Lenders at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A</B>&#148; has the
meaning given to it in Clause 2.1(a) (<I>Revolving Credit Facility</I>). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A Available
Commitment</B>&#148; means, in relation to a Lender, at any time and save as otherwise
provided in this Agreement, its Tranche A Commitment at such time adjusted to take account
of: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any cancellation or reduction of it or any transfer by such Lender or any
          transfer to it, in each case, pursuant to the terms of 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in the case of any proposed Advance, the proportion of any other Advance
          corresponding to Tranche A which, pursuant to any other Drawdown Request, is to
          be made on or before the proposed Drawdown Date, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>less the amount of its share of the
Tranche A Outstandings at such time, provided always that such amount shall not be less
than zero. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A
Commitment</B>&#148; means, in relation to a Lender at any time, and save as otherwise
provided in this Agreement (including by virtue of the operation of Clause 20.6(b)(i)
(<I>Collateral Vessel Conversion</I>)), the amount set opposite its name in the relevant
column of Schedule 1 (<I>Lenders and Commitments</I>) or as specified in the Transfer
Certificate pursuant to which such Lender becomes a party to this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A</B> <B>Commitment
Reduction</B>&#148; means the amount referred to in the applicable column in Schedule 8
(<I>Commitment Reduction Schedule</I>) in respect of Tranche A for such Commitment
Reduction Date, adjusted to reflect the effect of the operation (if any) of Clause
20.6(b)(ii) (<I>Collateral Vessel Conversion</I>). </FONT></P>

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<A NAME=A038></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Tranche Adjustment
Amount&#148; means: </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the aggregate Market Value of the Tranche B Vessels which are to be the subject
          of the relevant conversion; divided by </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the aggregate Market Value of all the Tranche B Vessels immediately prior to
          such conversion; multiplied by </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the aggregate Tranche B Commitments or (for the purposes of an adjustment to the
          Tranche A Outstandings or Tranche B Outstandings (as the case may be) under
          Clause 20.6(b)(i) (<I>Collateral Vessel Conversion</I>)) the Tranche B
          Outstandings immediately prior to such conversion, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>as determined by the Administrative
Agent (in consultation with the Parent Guarantor) on the basis of the Additional Appraisal
Packages required by the Administrative Agent for the purposes of such determination
pursuant to Clause 17.6 (<I>Additional Appraisal Package</I>) or such other Appraisal
Packages as the Administrative Agent may select. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A
Obligations</B>&#148; means, at any time, the Tranche A Outstandings and all interest
(including default interest) accrued but unpaid in respect of Tranche A at the relevant
time pursuant to this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A
Outstandings</B>&#148; means, at the relevant time, the aggregate outstanding principal
amount of the Tranche A Advances, at such time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A Vessel
Owners</B>&#148; means, as applicable from time to time, the Subsidiary Guarantors being
the owners of the Tranche A Vessels. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche A Vessels</B>&#148;
means the vessels referred to under the heading &#145;Vessel and Owner&#146; in Schedule 9
(<I>Collateral Vessels</I>) (subject to any substitution (in relation to a New Vessel) or
conversion (from a Tranche B Vessel) or disposal from time to time of such vessels
pursuant to and in accordance with Clause 19.12(b) (<I>Disposal of Assets and Collateral
Vessel Substitution</I>) and/or Clause 20.6 (<I>Collateral Vessel Conversion</I>)). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B</B>&#148; has the
meaning given to it in Clause 2.1(b) (<I>Revolving Credit Facility</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B Available
Commitment</B>&#148; means, in relation to a Lender, at any time and save as otherwise
provided in this Agreement, its Tranche B Commitment at such time adjusted to take account
of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any cancellation or reduction of it or any transfer by such Lender or any
          transfer to it, in each case, pursuant to the terms of this Agreement; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in the case of any proposed Advance, the proportion of any other Advance
          corresponding to Tranche B which, pursuant to any other Drawdown Request, is to
          be made on or before the proposed Drawdown Date, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>less the amount of its share of the
Tranche B Outstandings at such time, provided always that such amount shall not be less
than zero. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B
Commitment</B>&#148; means, in relation to a Lender at any time, and save as otherwise
provided in this Agreement (including by virtue of the operation of Clause 20.6(b)(i)
(<I>Collateral Vessel Conversion</I>)), the amount set opposite its name in the relevant
column of Part I of Schedule 1 (<I>Lenders and Commitments</I>) or as specified in the
Transfer Certificate pursuant to which such Lender becomes a party to this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B</B> <B>Commitment
Reduction</B>&#148; means the amount referred to in the applicable column in Schedule 8
(<I>Commitment Reduction Schedule</I>) in respect of Tranche B for such Commitment
Reduction Date, adjusted to reflect the operation (if any) of Clause 20.6(b)(ii)
(<I>Collateral Vessel Conversion</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B
Obligations</B>&#148; means, at any time, the Tranche B Outstandings, together with all
interest (including default interest) accrued but unpaid in respect of Tranche B at the
relevant time pursuant to this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B
Outstandings</B>&#148; means, at any time, the aggregate outstanding amount of the Tranche
B Advances, at such time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Tranche B Vessels</B>&#148;
means the vessels referred to under the heading &#145;Vessel and Owner&#146; in Schedule 9
(<I>Collateral Vessels</I>) (subject to any substitution (in relation to a New Vessel) or
conversion (to a Tranche A Vessel) or disposal from time to time of such vessels pursuant
to and in accordance with Clause 19.12(b) (<I>Disposal of Assets and Collateral Vessel
Substitution</I>) and/or Clause 20.6 (<I>Collateral Vessel Conversion</I>)). </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Transaction
Documents</B>&#148;means: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Finance Documents; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Relevant Third Party Charters. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Transfer
Certificate</B>&#148;<B> </B>means a duly completed transfer certificate in the form set
out in Schedule 2 (<I>Form of Transfer Certificate</I>) and signed by a Lender and a
Transferee whereby such Lender seeks to procure the transfer to such Transferee of all or
a part of such Lender&#146;s rights, benefits and obligations under this Agreement as
contemplated in Clause 31 (<I>Assignments and Transfers</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Transfer Date</B>&#148;<B>
</B>means, in relation to any Transfer Certificate, the date for the making of the
transfer as specified in such Transfer Certificate. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Transferee</B>&#148;<B>
</B>means a person to which a Lender seeks to transfer all or part of its rights, benefits
and obligations under this Agreement pursuant to and in accordance with Clause 31
(<I>Assignments and Transfers</I>). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Unpaid Sum</B>&#148; means
any sum due and payable by an Obligor under any Finance Document but unpaid. </FONT></P>

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<A NAME=A041></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.2 &nbsp;&nbsp;&nbsp;&nbsp;Accounting
Expressions </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All accounting expressions which are
not otherwise defined in this Agreement shall be construed in accordance with GAAP. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A042></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.3 &nbsp;&nbsp;&nbsp;&nbsp;Construction
(General) </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless a contrary indication appears,
any reference in this Agreement to: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the &#147;<B>Administrative
Agent</B>&#148;, the &#147;<B>Bookrunner</B>&#148;, a &#147;<B>Lead Arranger</B>&#148;,
the &#147;<B>Security Trustee</B>&#148; or a &#147;<B>Lender</B>&#148; shall be construed
so as to include their respective and any subsequent successors, transferees and permitted
assigns in accordance with their respective interests; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>continuing</B>&#148;<B>
</B>in relation to a Default shall be construed as meaning that <B>(a)</B> the
circumstances constituting such Default continue unremedied and <B>(b)</B> neither the
Administrative Agent (being duly authorised to do so) nor the Lenders have waived such of
its or their rights under this Agreement as arise as a result of that event; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the &#147;<B>equivalent</B>&#148;<B>
</B>on any given date in one currency (the &#147;<B>first currency</B>&#148;) of an amount
denominated in another currency (the &#147;<B>second currency</B>&#148;) is a reference to
the amount of the first currency which could be purchased with the second currency at the
Administrative Agent&#146;s spot rate of exchange for the purchase of the first currency
with the second currency in the London foreign exchange market at or about 11a.m. on such
date; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>month</B>&#148;<B> </B>is a
reference to a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next succeeding calendar month save that, where any
such period would otherwise end on a day which is not a Business Day, it shall end on the
next succeeding Business Day, unless that day falls in the calendar month succeeding that
in which it would otherwise have ended, in which case it shall end on the immediately
preceding Business Day provided that, if a period starts on the last Business Day in a
calendar month or if there is no numerically corresponding day in the month in which that
period ends, that period shall end on the last Business Day in that later month (and
references to &#147;<B>months</B>&#148; shall be construed accordingly); </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a &#147;<B>person</B>&#148; shall be
construed as a reference to any person, firm, company, corporation, government, state or
agency of a state or any association or partnership (whether or not having separate legal
personality) of two or more of the foregoing; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>tax</B>&#148;<B> </B>shall
be construed so as to include all present and future taxes, charges, imposts, duties,
levies, deductions or withholdings of any kind whatsoever, or any amount payable on
account of or as security for any of the foregoing, by whomsoever on whomsoever and
wherever imposed, levied, collected, withheld or assessed together with any penalties,
additions, fines, surcharges or interest relating to it and &#147;<B>taxes</B>&#148;<B>
</B>and &#147;<B>taxation</B>&#148;<B> </B>shall be construed accordingly; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>VAT</B>&#148;<B> </B>shall
be construed as value added tax including any equivalent or analogous tax which may apply
from time to time in the relevant place; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a &#147;<B>wholly-owned
Subsidiary</B>&#148; of a company, corporation or partnership shall be construed as a
reference to any company, corporation or partnership which has no other members or
partners except that other company, corporation or partnership and that other
company&#146;s, corporation&#146;s or partnership&#146;s wholly-owned Subsidiaries or
nominees for that other company, corporation or partnership or its wholly-owned
Subsidiaries; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the &#147;<B>winding-up</B>&#148;,
&#147;<B>dissolution</B>&#148;, &#147;<B>administration</B>&#148; or
&#147;<B>reorganisation</B>&#148; of a company, corporation or partnership shall be
construed so as to include any equivalent or analogous proceedings under the Law of the
jurisdiction in which such person is incorporated or any jurisdiction in which such person
carries on business, including the seeking of liquidation, winding-up, reorganisation,
dissolution, administration, arrangement, adjustment, protection from creditors or relief
of debtors. </FONT></P>

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<A NAME=A043></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.4 &nbsp;&nbsp;&nbsp;&nbsp;Construction
(Maritime) </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless the contrary indication
appears, any reference in this Agreement to: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>arrest</B>&#148; (as a noun)
includes any arrest, detention, attachment, distraint, restraint, impounding or filing of
a libel and &#147;<B>arrest</B>&#148; (as a verb) shall be construed accordingly; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>contract of
affreightment</B>&#148; means any contract or engagement of affreightment or for the
carriage or transportation of cargo relating to a vessel or vessels entered from time to
time by the owner of such vessel or any person on its behalf; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>requisition for
title</B>&#148; (as a verb) includes, in relation to an asset, to compulsorily acquire,
expropriate, nationalise, seize, capture, forfeit, condemn as a prize or otherwise act so
as to divest the owner thereof of title thereto and noun forms of such verb shall be
construed accordingly; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>total loss</B>&#148; in
relation to a vessel, shall be construed so as to include <B>(a)</B> any actual,
constructive, agreed, arranged or compromised total loss of such vessel including such as
may occur during a requisition for hire of that vessel and <B>(b)</B> the requisition for
title of such vessel (otherwise than by requisition for hire) by any government or other
competent authority or by any person acting or purporting to act by the authority of the
same and from which such vessel has not been released within a period of ninety days
following the occurrence of such event; and </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a &#147;<B>vessel</B>&#148; or a
&#147;<B>Collateral Vessel</B>&#148; includes her boilers, engines, machinery, masts,
spares, boats, anchors, chains, tackle, apparel, furniture, fittings, freights, computers
and other equipment and all other appurtenances belonging or appertaining to her (whether
owned at the date of this Agreement or acquired later and whether or not on board but
excluding such as may be leased to the owner of such vessel) and all additions,
replacements and improvements thereto. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A044></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.5 &nbsp;&nbsp;&nbsp;&nbsp;Currency </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>US$</B>&quot;,
&#147;<B>$</B>&#148; and &#147;<B>dollar</B>&#148; denote the lawful currency for the time
being of the United States of America and &#147;<B>&#128;</B>&#148; and
&#147;<B>euro</B>&#148; denote the lawful currency for the time being of each
Participating Member State. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A045></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.6 &nbsp;&nbsp;&nbsp;&nbsp;Statutes </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any reference in this Agreement to a
statute or a statutory provision shall, save where a contrary intention is specified, be
construed as a reference to such statute or statutory provision as the same shall have
been, or may be, amended or re-enacted. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A046></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.7 &nbsp;&nbsp;&nbsp;&nbsp;Time </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any reference in this Agreement to a
time shall, unless otherwise specified, be construed as a reference to New York time. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A047></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.8 &nbsp;&nbsp;&nbsp;&nbsp;References to
Agreements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless otherwise stated, any
reference in this Agreement to any agreement or document (including any reference to this
Agreement) shall be construed as a reference to: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          such agreement or document as amended, varied, novated or supplemented from time
          to time; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other agreement or document whereby such agreement or document is so
          amended, varied, supplemented or novated; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other agreement or document entered into pursuant to or in accordance with
          any such agreement or document. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A048></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THE CREDIT FACILITY
</FONT></H1>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1&nbsp;&nbsp;&nbsp;&nbsp; Revolving Credit
Facility </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Lenders grant to the Original
Borrower, upon the terms and subject to the conditions of this Agreement, a revolving
credit facility in a maximum aggregate amount of US$500,000,000 comprising two tranches as
follows: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          US$320,000,000 (&#147;<B>Tranche A</B>&#148;); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          US$180,000,000 (&#147;<B>Tranche B</B>&#148;), </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in each case, subject to any
adjustment to the amount of such tranches during the Leaseback Period pursuant to and in
accordance with Clause 20.6 (<I>Collateral Vessel Conversion</I>). </FONT></P>

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<A NAME=A049></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2 &nbsp;&nbsp;&nbsp;&nbsp;Consolidation on
Leaseback Completion Date </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On the Leaseback Completion Date,
each Tranche A Advance shall be converted and consolidated into a single Advance, which
shall be deemed to have been advanced to the Leaseback Borrower (in place of the Original
Borrower) on the Leaseback Completion Date and shall have a single Term commencing on such
date and ending on the Maturity Date. </FONT></P>

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<A NAME=A050></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3 &nbsp;&nbsp;&nbsp;&nbsp;Purpose </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Credit Facility is to be applied by the Borrowers: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to refinance existing Indebtedness relating to the Collateral Vessels; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          for the general corporate purposes of the Parent Guarantor and its Subsidiaries
          and following the occurrence of the Leaseback Completion Date, those of the
          Leaseback Group. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Borrowers shall apply all amounts borrowed under this Agreement in or
          towards satisfaction of the purposes referred to in paragraph (a) above and none
          of the Finance Parties shall be obliged to concern themselves with such
          application. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A051></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.4 &nbsp;&nbsp;&nbsp;&nbsp;Several Obligations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The obligations of each Finance Party
under this Agreement are several and the failure by a Finance Party to perform any of its
obligations under this Agreement shall not affect the obligations of any of the Obligors
towards any other party to this Agreement nor shall any other party be liable for the
failure by such Finance Party to perform its obligations under this Agreement. </FONT></P>

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<A NAME=A052></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.5 &nbsp;&nbsp;&nbsp;&nbsp;Several Rights </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The rights of each Finance Party are
several and any debt arising under this Agreement at any time from an Obligor to any
Finance Party shall be a separate and independent debt. Each Finance Party may, except as
otherwise stated in this Agreement, separately enforce its rights under this Agreement. </FONT></P>

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<A NAME=A053></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONDITIONS </FONT></H1>

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<A NAME=A054></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1 &nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The obligations of the Finance Parties to make an Advance under this Agreement
               shall be conditional upon the Administrative Agent having confirmed to the
               Parent Guarantor that it has received the documents and other evidence listed in
               Part I of Schedule 3 (<I>Conditions Precedent to first Drawdown</I>) (excluding
               the Relevant Documents, in the case of an Advance to be made solely under
               Tranche A but without prejudice to Clause 11.1 (<I>Commitment Fee</I>)) and that
               each is satisfactory, in form and substance, to the Administrative Agent. The
               Administrative Agent shall notify the Parent Guarantor and the Lenders promptly
               upon being so satisfied. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               For the purposes of this Clause 3.1, &#147;<B>Relevant Documents</B>&#148;
               means: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any documents and other evidence to be executed and/or delivered by Golar-Nor
               Offshore AS, Fronape International Company or Petrobras (in each case) as third
               party charterer under the Relevant Third Party Charter to which such entity is a
               party; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               deeds of covenant in respect of the Collateral Vessels being subject to a
               Bareboat Charter as at the date of 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any notices to be delivered by members of the Group to any of the third parties
               referred to in the foregoing sub-paragraph (i), </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in each case, to the extent required by paragraphs 5(c) or 10 under Part I or paragraphs 2
and 4 under Part IV of Schedule 3 (<I>Conditions Precedent to first Drawdown</I>).</FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A055></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2 &nbsp;&nbsp;&nbsp;&nbsp;Conditions Subsequent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall procure
(and each relevant Obligor shall ensure) that as soon as practicable after the initial
Drawdown Date and in any event within 10 days thereafter, there shall have been delivered
to the Administrative Agent each of the documents listed in Part II of Schedule 3
(<I>Conditions Subsequent Documents</I>), each in form and substance satisfactory to the
Administrative Agent. The Administrative Agent shall notify the Parent Guarantor and the
Lenders promptly upon being so satisfied. </FONT></P>

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<A NAME=A056></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DRAWDOWN </FONT></H1>

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<A NAME=A057></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1 &nbsp;&nbsp;&nbsp;&nbsp;Conditions to each
Advance </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Save as otherwise provided in this
Agreement, an Advance will be made by the Lenders to the Original Borrower if: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Administrative Agent has received from the Original Borrower a duly
          completed Drawdown Request for that Advance not later than 10.00 a.m. on a day
          which is not more than 10 nor less than 3 Business Days prior to the proposed
          Drawdown Date for such Advance, receipt of which shall oblige the Original
          Borrower to borrow the amount requested on the date stated upon the terms and
          subject to the conditions contained in this Agreement; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the proposed Drawdown Date for the Advance is a Business Day which precedes the
          Maturity Date; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          immediately following the making of such Advance, there will be no more than 6
          Advances outstanding; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the proposed amount of such Advance is equal to the amount of the corresponding
          Available Commitments or less than such amount but equal to a minimum amount of
          US$5,000,000 and an integral multiple of US$1,000,000; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each of the representations and warranties made in Clause 16 (<I>Representations
          and Warranties</I>) is true and will continue to be true, in each case, in all
          respects, following the making of the relevant Advance, provided that, any such
          representation which expressly relates to a given date or period shall be
          required to be true solely in respect of that date or period; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the proposed Term or Interest Period (as applicable) of such Advance is a period
          of 1, 3 or 6 months or such other period as each of the Lenders may agree (but
          in each such case) ending on or before the Maturity Date; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          no Default (or in the case of a Rollover Advance, Event of Default) has occurred
          and is continuing or would result from the making of the relevant Advance; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in the case of an Advance, other than in the case of a Rollover Advance, the
          interest rate applicable to such Advance&#146;s first Interest Period or Term
          (as the case may be) will not have to be determined under Clause 10 (<I>Market
          Disruption and Alternative Interest Rates</I>). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A058></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.2 &nbsp;&nbsp;&nbsp;&nbsp;Lenders&#146;
Participations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Lender will participate through
its Facility Office in each Advance made pursuant to Clause 4.1 (<I>Conditions to each
Advance</I>) in its respective Proportion. </FONT></P>

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<A NAME=A059></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SCHEDULED COMMITMENT
REDUCTIONS AND REPAYMENTS </FONT></H1>

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<A NAME=A060></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.1 &nbsp;&nbsp;&nbsp;&nbsp;Commitment Reduction
and Repayment </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Original Borrower shall repay the full amount of each Advance made to it on
          the last day of its Term. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Leaseback Borrower shall repay the Advance made to it in instalments by
          repaying an amount equal to the Tranche A Commitment Reduction on each
          Commitment Reduction Date. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Without prejudice to the obligations of the Borrowers in sub-paragraph (a) and
          (b) above, the Total Tranche A Commitments and the Total Tranche B Commitments
          of the Lenders shall be reduced (on the basis of each Lender&#146;s Proportion)
          pursuant to a cancellation thereof in an amount equal to the Tranche A
          Commitment Reduction or Tranche B Commitment Reduction as applicable on such
          Commitment Reduction Date and each Borrower shall (in respect of each Advance
          made to it) repay an amount necessary to ensure that the Tranche A Outstandings
          and the Tranche B Outstandings applicable on such date do not exceed the Total
          Tranche A Commitments and the Total Tranche B Commitments respectively, in each
          case, in effect following such cancellation. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Without prejudice to the Original Borrower&#146;s obligation to repay the full
          amount of each Advance made to it on the last day of its Term, where, on the
          same day on which the Original Borrower is due to repay an Advance (a
          &#147;<B>Maturing Advance</B>&#148;) it has also requested that an Advance be
          made to it (a &#147;<B>Rollover </B> Advance&#148;), subject to the Lenders
          being obliged to make such Rollover Advance under Clause 4.1 <I>(Conditions to
          each Advance</I>) (taking into account the amount of the Maturing Advance, for
          the purposes of paragraph (d) of such Clause, but without prejudice to paragraph
          (c) of this Clause 5.1 (<I>Commitment </I> <I>Reduction and Repayment</I>)), the
          amount to be so repaid and the amount to be so drawn down shall be netted off
          against each other so that the amount which the Original Borrower is actually
          required to repay or, as the case may be, the amount which the Lenders are
          actually required to advance to the Original Borrower, shall be the net amount
          remaining after such netting off. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A061></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.2 &nbsp;&nbsp;&nbsp;&nbsp;Cancellation on
Maturity Date </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to the provisions
of Clause 5.1 (<I>Commitment Reduction and Repayment</I>), on the Maturity Date, the
Borrowers shall repay the Tranche A Obligations and the Original Borrower shall repay the
Tranche B Obligations (if any) which remain due and payable by them respectively on such
date. </FONT></P>

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<A NAME=A062></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.3 &nbsp;&nbsp;&nbsp;&nbsp;Confirmation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Prior to each Commitment Reduction
Date, the Administrative Agent shall confirm, by notice to the Borrowers, the amounts (if
any) which are to fall due from them on such Commitment Reduction Date under this Clause 5
(<I>Scheduled Commitment Reductions and Repayments</I>) provided that, a failure on the
part of the Administrative Agent to deliver such a notice, shall not affect the
obligations of the relevant Borrower in respect of such amounts which have fallen due. </FONT></P>

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<A NAME=A063></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.4 &nbsp;&nbsp;&nbsp;&nbsp;Reborrowing </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Without prejudice to paragraph (b) of this Clause 5.4, the Leaseback Borrower
          may not reborrow any part of Tranche A which is repaid or prepaid. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Subject to Clause 4.1 (<I>Conditions to each Advance</I>) and the other
          provisions of this Agreement, the Original Borrower may reborrow any part of the
          Credit Facility which is repaid (provided that, for the avoidance of doubt, this
          paragraph (b) shall not apply to Tranche A if the Leaseback Completion Date has
          occurred). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CANCELLATION</FONT></H1>

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<A NAME=A064></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.1 &nbsp;&nbsp;&nbsp;&nbsp;Voluntary
Cancellation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Original Borrower may, by giving
to the Administrative Agent not less than 3 Business Days&#146; prior written notice to
that effect, cancel the whole or any part of the Available Commitments and any such
cancellation shall reduce the relevant Available Commitments of the Lenders rateably,
provided that, such cancellation shall be in respect of the aggregate of all Available
Commitments or an integral multiple of US$5,000,000. </FONT></P>

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<A NAME=A065></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.2 &nbsp;&nbsp;&nbsp;&nbsp;Notice of
Cancellation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any notice of cancellation given by
the Original Borrower pursuant to Clause 6.1 (<I>Voluntary Cancellation</I>) shall be
irrevocable and shall specify the date upon which such cancellation is to be made and the
amount of such cancellation. </FONT></P>

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<A NAME=A066></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.3 &nbsp;&nbsp;&nbsp;&nbsp;Cancellation of
Available Commitments </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          On the Maturity Date, any Available Commitments in respect of the Credit
          Facility shall automatically be cancelled and the Commitment of each Lender in
          relation to the Credit Facility shall automatically be reduced to zero. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          On the Leaseback Completion Date, any Tranche A Available Commitments shall
          automatically be cancelled and the Commitment of each of the Lenders
          representing such Tranche A Available Commitments shall automatically be reduced
          to zero. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;VOLUNTARY PREPAYMENT</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A067></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.1 &nbsp;&nbsp;&nbsp;&nbsp;Voluntary Prepayment </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A Borrower owing any Outstandings
shall, if it has given the Administrative Agent at least 5 Business Days&#146; prior
written notice to that effect, prepay such Outstandings, in whole or in part (but if in
part, in a minimum amount of US$5,000,000 and an integral multiple of US$1,000,000),
together with accrued interest on the amount prepaid without premium or penalty but
subject to the payment of any Break Costs. </FONT></P>

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<A NAME=A068></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.2 &nbsp;&nbsp;&nbsp;&nbsp;Right of Prepayment
and Cancellation in relation to a single Lender </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any sum payable to any Lender by
an Obligor is required to be increased under Clause 12.1 (<I>Tax Gross-up</I>) or a Lender
claims indemnification from an Obligor under the provisions of Clause 12.2 (<I>Tax
Indemnity</I>) or Clause 14.1 <I>(Increased Costs</I>) and within six months thereafter
the Administrative Agent receives from such Obligor, while the circumstances giving rise
to such increase or indemnification continue, at least 5 Business Days&#146; prior notice
of its intention to repay or to cause to be repaid such Lender&#146;s share of the
Outstandings, the relevant Obligor shall immediately upon the expiry of such 5 Business
Day period (or if earlier, in the case of any particular Advance, on the last day of the
then current Interest Period or Term (as the case may be) relating to such Advance), repay
such Lender&#146;s portion of each Advance together with any Break Costs accruing in
relation thereto. </FONT></P>

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<A NAME=A069></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.3 &nbsp;&nbsp;&nbsp;&nbsp;Application of
Voluntary Prepayments </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any amounts prepaid pursuant to Clause 7.1 (<I>Voluntary Prepayment</I>), shall
          be applied by the Administrative Agent, in or towards the repayment of the
          relevant Outstandings, following which (solely in respect of Tranche A
          Outstandings, if the Leaseback Completion Date has occurred and otherwise
          without prejudice to Clause 5.4 (<I>Reborrowing</I>)) each of the Tranche A
          Commitment Reductions shall immediately be reduced on a <I>pro rata </I>basis,
          pursuant to a cancellation thereof in an amount equal to such prepayment. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any amounts prepaid pursuant to Clause 7.2 (<I>Right of Prepayment and
          Cancellation in relation to a single </I> <I>Lender</I>), shall be applied by
          the Administrative Agent, in or towards the discharge of the applicable share of
          the Outstandings owed to the relevant Lender on the date of such repayment until
          the same are repaid in full, following which each of the remaining Tranche A
          Commitment Reductions and Tranche B Commitment Reductions shall immediately be
          reduced on a <I>pro rata </I>basis in an aggregate amount equal to the
          Commitment of such Lender, pursuant to a cancellation thereof. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A070></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.4 &nbsp;&nbsp;&nbsp;&nbsp;Notice of Prepayment </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any notice of prepayment given by a
Borrower or the Parent Guarantor as the case may be pursuant to Clause 7.1 <I>(Voluntary
Prepayment</I>) shall be irrevocable, shall specify the date upon which such repayment is
to be made and the amount of such repayment and shall oblige the relevant Borrower to make
such repayment, and the Parent Guarantor to ensure that such repayment is made, on such
date. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A071></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>7.5 &nbsp;&nbsp;&nbsp;&nbsp;Restrictions on
Repayment </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No Obligor shall repay or prepay all
or any part of any Advance, except at the times and in the manner expressly provided for
in this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A072></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MANDATORY COMMITMENT
REDUCTIONS AND PREPAYMENTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A073></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.1 &nbsp;&nbsp;&nbsp;&nbsp;Total Loss or Sale </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               If a Collateral Vessel is sold or otherwise disposed of to a third party,
               including a deemed disposal pursuant to Clause 19.14(b)(ii)
               (<I>Registration</I>) or an indirect disposal by way of a transfer of a
               controlling interest in the relevant person being the owner of such Collateral
               Vessel or any of its Holding Companies (other than pursuant to and in accordance
               with Clause 19.12(b) (<I>Disposal of Assets and </I> <I>Collateral Vessel
               Substitution</I>)), or is the subject of a total loss, the Total Tranche A
               Commitments (in the case of a Tranche A Vessel) or the Total Tranche B
               Commitments (in the case of a Tranche B Vessel) shall be reduced pursuant to a
               cancellation thereof in an amount equal to the Loss or Sale Commitment Reduction
               and the Original Borrower or (in respect of a Tranche A Vessel following the
               Leaseback Completion Date), the Leaseback Borrower, shall prepay an amount
               necessary to ensure that the Tranche A Outstandings or the Tranche B
               Outstandings (as applicable) do not exceed the Total Tranche A Commitments or
               the Total Tranche B Commitments (as the case may be), such amount to be applied
               in or towards the discharge of such Tranche A Outstandings or Tranche B
               Outstandings at such time, in accordance with Clause 8.2 (<I>Application of
               Mandatory Prepayments</I>), together with accrued interest on the amount prepaid
               without premium or penalty but subject to the payment of any Break Costs arising
               in respect of such prepayment, provided that, no prepayment shall be required to
               be made under this Clause 8.1 (<I>Total Loss </I> <I>or Sale</I>) if: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               on the Disposal Date or the Total Loss Date (as the case may be), the aggregate
               Market Value of (x) all the remaining Collateral Vessels, exceeds 143% of the
               aggregate Commitments at such time (if the Leaseback Completion Date has not
               occurred and/or if the relevant Collateral Vessel is a Tranche A Vessel) or (y)
               all the remaining Tranche B Vessels, exceeds 143% of the aggregate Tranche B
               Commitments at such time (if the Leaseback Completion Date has occurred and the
               relevant Collateral Vessel is a Tranche B Vessel); or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the relevant Collateral Vessel has been replaced by one or more other vessels
               pursuant to and in accordance with Clause 19.12(b) (<I>Disposal of Assets and
               Collateral Vessel Substitution</I>) (x) in the case of a total loss, within six
               months of the Total Loss Date or (y) in the case of a sale or other disposal to
               a third party, on or before the Disposal Date. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A prepayment required under this Clause 8.1 shall be payable: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in the case of a sale or other disposition of a Collateral Vessel, on the
               Disposal Date (provided that in the case of a deemed disposal pursuant to Clause
               19.14(b) (<I>Registration</I>), such prepayment shall be payable within 30 days
               following the relevant Disposal Date); or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in the case of a total loss of a Collateral Vessel, on the earlier of the date
               on which the requisition compensation or insurance proceeds in respect of the
               relevant total loss have been received by or on behalf of an Obligor or the
               Security Trustee and the date which falls six months after the Total Loss Date. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A074></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>8.2 &nbsp;&nbsp;&nbsp;&nbsp;Application of
Mandatory Prepayments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any amount prepaid pursuant to Clause
8.1 (<I>Total Loss or Sale</I>), shall be applied by the Administrative Agent, in or
towards the discharge of the Tranche A Outstandings or the Tranche B Outstandings (as the
case may be) <I>pro </I>rata to the aggregate amount of such Outstandings on the date of
such prepayment until the same are repaid in full, following which each of the Tranche A
Commitment Reductions or Tranche B Commitment Reductions (as applicable) shall immediately
be reduced on a <I>pro rata </I>basis, pursuant to a cancellation thereof in an amount
equal to such prepayment. </FONT></P>

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<A NAME=A075></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INTEREST </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A076></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.1 &nbsp;&nbsp;&nbsp;&nbsp;Interest Periods
following Leaseback Completion Date </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>With effect from the Leaseback
Completion Date, the period for which the Tranche A Advance is outstanding shall be
divided into successive periods (each an &#147;<B>Interest Period</B>&#148;) each of which
(other than the first) shall start on the last day of the preceding such period. </FONT></P>

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<A NAME=A077></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.2 &nbsp;&nbsp;&nbsp;&nbsp;Duration </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The duration of each Interest Period or Term (as applicable) shall, save as
          otherwise provided in this Agreement, be 1, 3 or 6 months, in each case as the
          relevant Borrower may, by not less than 5 Business Days&#146; prior notice to
          the Administrative Agent, select or such other period as the Lenders may agree,
          provided that, if that Borrower fails to give such notice of selection in
          relation to an Interest Period or Term (as the case may be), the duration of
          that Interest Period or Term shall, subject to the other provisions of this
          Clause 9 (<I>Interest</I>), be 3 months. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any Interest Period or Term that would otherwise end during the month preceding
          or extend beyond a Commitment Reduction Date or (if applicable) the Leaseback
          Completion Date relating to the relevant Outstandings, shall be of such duration
          that it shall end on the Commitment Reduction Date or the Leaseback Completion
          Date (as the case may be). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A078></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.3 &nbsp;&nbsp;&nbsp;&nbsp;Payment of Interest </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          On the last day of its Term (and, if such Term of any Advance exceeds 3 months,
          on the expiry of each period of 3 months during such Term) the Original Borrower
          shall pay accrued interest on each Advance made to it (or, following the
          Leaseback Completion Date, each Tranche B Advance). </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          On the last day of each Interest Period (or if such day is not a Business Day,
          on the immediately succeeding Business Day in the then current calendar month
          (if there is one) or the preceding Business Day (if there is not)), and if the
          relevant Interest Period exceeds 3 months, on the expiry of each 3 month period
          during that Interest Period, the Leaseback Borrower shall pay accrued interest
          on the Tranche A Advance made to it. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A079></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.4 &nbsp;&nbsp;&nbsp;&nbsp;Interest Rate for
Advances </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The rate of interest applicable to an
Advance during each Term or Interest Period (as applicable) relating to it shall be the
rate per annum which is the sum of: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Margin; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Associated Costs Rate for such Advance; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          LIBOR, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>for such Interest Period or Term (as
the case may be). </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A080></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MARKET DISRUPTION
AND ALTERNATIVE INTEREST RATES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A081></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1 &nbsp;&nbsp;&nbsp;&nbsp;Market Disruption </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If, in relation to any Interest
Period or Term: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          at or about 11.00 a.m. on the Quotation Date for such Interest Period or Term,
          paragraph (b) of the definition of LIBOR applies and none or only one of the
          Reference Banks supplies a rate for the purpose of determining LIBOR for the
          relevant period; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          before the close of business in London on the Quotation Date for such Interest
          Period or Term, the Administrative Agent has been notified by a Lender to whom,
          or each of a group of Lenders, to whom in aggregate, 35% or more of the relevant
          Advance is owed (or, in the case of an undrawn Advance, if made, would be owed)
          that the cost to it of obtaining matching deposits for the relevant Advance in
          the London interbank market would be in excess of LIBOR,</FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>then the Administrative Agent shall
notify the Parent Guarantor and the Lenders of such event and, notwithstanding anything to
the contrary in this Agreement, Clause 10.2 (<I>Substitute Interest Period and Interest
Rate</I>) shall apply (if the relevant Advance is a Rollover Advance). If either paragraph
(a) or (b) applies to a proposed Advance (other than a Rollover Advance), such Advance
shall not be made. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A082></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.2 &nbsp;&nbsp;&nbsp;&nbsp;Substitute Interest
Period and Interest Rate </FONT></H1>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               If paragraph (a) of Clause 10.1 (<I>Market Disruption</I>) applies, the duration
               of the relevant Interest Period or Term shall be 1 month or, if less, such that
               it shall end on the next succeeding Commitment Reduction Date. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               If either paragraph of Clause 10.1 (<I>Market Disruption</I>) applies to an
               Advance, the rate of interest applicable to each Lender&#146;s Portion of such
               Advance during the relevant Interest Period or Term shall (subject to any
               agreement reached pursuant to Clause 10.3 (<I>Alternative Rate</I>)) be the rate
               per annum which is the sum of: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Margin; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the rate per annum notified to the Administrative Agent by such Lender as soon
               as practicable after the commencement of such Interest Period or Term to be that
               which expresses as a percentage rate per annum the cost to such Lender of
               funding from whatever sources it may select its portion of such Advance during
               such Interest Period or Term; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Associated Costs Rate, if any, applicable to such Lender&#146;s
               participation in the relevant Advance. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A083></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.3 &nbsp;&nbsp;&nbsp;&nbsp;Alternative Rate </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A084></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           Clause 10.1 (Market
Disruption) applies; or  </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          by reason of circumstances affecting the London interbank market during any
          period of 3 consecutive Business Days, LIBOR is not available to prime banks in
          the London interbank market, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>then, if the Administrative Agent or
the Parent Guarantor so requires, the Administrative Agent and the Parent Guarantor shall
enter into negotiations with a view to agreeing an alternative basis: </FONT></P>


<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          for determining the rate of interest from time to time applicable to Advances;
          and/or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          upon which the Advances may be maintained (whether in dollars or some other
          currency) thereafter, </FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and any such alternative basis that
is agreed shall take effect in accordance with its terms and be binding on each party to
this Agreement, provided that the Administrative Agent may not agree any such alternative
basis without the prior consent of each Lender. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A086></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FEES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A087></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.1 &nbsp;&nbsp;&nbsp;&nbsp;Commitment Fee </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Original Borrower shall pay to
the Administrative Agent for distribution to the Lenders on the basis of each such
Lender&#146;s Proportion, an annual commitment fee equal to 0.40% which shall accrue on a
daily basis for the period from the date of this Agreement up to and including the
Maturity Date in respect of the aggregate of the Available Commitments applicable on each
such day and shall be payable quarterly in arrears. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A088></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>11.2 &nbsp;&nbsp;&nbsp;&nbsp;Other Fees </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall pay to the
Administrative Agent (or shall procure the payment of) the other fees specified in the
Fees Letter, at the times, and in the manner, set out in such letter. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A089></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TAXES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A090></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.1 &nbsp;&nbsp;&nbsp;&nbsp;Tax Gross-up </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All sums payable by an Obligor under
any Finance Document shall be paid in full without set-off or counterclaim or any
restriction or condition and, except to the extent required by any law or regulation, free
and clear of any deduction or withholding on account of tax or otherwise. If an Obligor or
any other related person is required by any law or regulation to make any such deduction
or withholding, the relevant Obligor shall, together with the relevant payment, pay such
additional amount as will ensure that the person to which the relevant sum is owed
receives and is entitled to retain, free and clear of any such deduction or withholding,
the full amount which it would have received if no such deduction or withholding had been
required. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A091></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.2 &nbsp;&nbsp;&nbsp;&nbsp;Tax Indemnity </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to the provisions
of Clause 12.1 (<I>Tax Gross-up</I>), if any Finance Party (or its Affiliate) or the
Administrative Agent on its behalf is required to make any payment on account of tax (not
being a tax imposed on and calculated by reference to the net income paid to and received
by its Facility Office by the jurisdiction in which it is incorporated or in which its
Facility Office is located) or otherwise on or in relation to any sum received or
receivable hereunder by such Finance Party or Affiliate or the Administrative Agent on its
behalf (including any sum received or receivable under this Clause 12 (<I>Taxes</I>)) or
any liability in respect of any such payment is asserted, imposed, levied or assessed
against such Finance Party or Affiliate or the Administrative Agent on its behalf, the
Parent Guarantor shall, upon demand of the Administrative Agent, promptly indemnify such
Finance Party or Affiliate against such payment or liability, together with any interest,
penalties, costs and expenses payable or incurred in connection therewith. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A092></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.3 &nbsp;&nbsp;&nbsp;&nbsp;Claims by Finance
Parties </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A Lender intending to make a claim
pursuant to Clause&nbsp;12.2 (<I>Tax Indemnity</I>) shall notify the Administrative Agent
of the event by reason of which it is entitled to do so and provide a reasonable written
explanation of the basis and calculation of such claim, whereupon the Administrative Agent
shall notify the Parent Guarantor, provided that nothing herein shall require such Lender
to disclose any confidential information relating to the organisation of its affairs. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A093></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>12.4 &nbsp;&nbsp;&nbsp;&nbsp;Tax Credits </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In the event that an additional
payment is made under Clause 12.1 (<I>Tax Gross-up</I>) or Clause 12.2 (<I>Tax
Indemnity</I>) and a Finance Party, in its sole discretion, determines that it has
received or been granted a credit against relief or remission for, or repayment of, any
relevant tax paid or payable by it in respect of or calculated with reference to the
deduction or withholding giving rise to the relevant payment or liability, that Finance
Party shall, to the extent that it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to the relevant Obligor such
amount as that Finance Party shall, in its sole discretion, have concluded to be
attributable to the relevant payment or liability. Any such payment shall be conclusive
evidence of the amount due to the relevant Obligor hereunder and shall be accepted by such
Obligor in full and final settlement of its rights of reimbursement hereunder in respect
of the relevant payment or liability. Nothing herein contained shall interfere with the
right of a Finance Party to arrange its tax affairs in whatever manner it thinks fit and,
in particular, no Finance Party shall be under any obligation to claim credit, relief,
remission or repayment from or against its corporate profits or similar tax liability in
respect of the amount of the relevant payment or liability in priority to any other
claims, reliefs, credits or deductions available to it. Any such reimbursement to be made
by a Finance Party pursuant to this Clause 12.4 shall be made as soon as possible after
such credit or remission or repayment has, in the reasonable opinion of the relevant
Finance Party, been received or granted. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A094></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TAX RECEIPTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A095></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13.1 &nbsp;&nbsp;&nbsp;&nbsp;Notification of
Requirement to Deduct Tax </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If, at any time, an Obligor is
required by law to make any deduction or withholding from any sum payable by it hereunder
(or if thereafter there is any change in the rates at which or the manner in which such
deductions or withholdings are calculated), such Obligor shall promptly notify the
Administrative Agent. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A096></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>13.2 &nbsp;&nbsp;&nbsp;&nbsp;Evidence of Payment
of Tax </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If an Obligor makes any payment
hereunder in respect of which it is required to make any deduction or withholding, it
shall pay the full amount required to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable law and shall
deliver to the Administrative Agent for each Finance Party, within thirty days after it
has made such payment to the applicable authority, an original receipt (or a certified
copy thereof) or other appropriate document issued by such authority evidencing the
payment to such authority of all amounts so required to be deducted or withheld in respect
of that Finance Party&#146;s share of such payment. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A097></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;INCREASED COSTS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A098></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14.1 &nbsp;&nbsp;&nbsp;&nbsp;Increased Costs </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to Clause 14.3
(<I>Exceptions</I>), the Parent Guarantor shall, within 3 Business Days of a demand by the
Administrative Agent, pay for the account of a Finance Party, the amount of any Increased
Cost incurred by that Finance Party or any of its Affiliates as a result (directly or
indirectly) of: </FONT></P>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the introduction or implementation of or any change in (or in the
          interpretation, administration or application of) any Law, regulation, practice
          or concession or any directive, requirement, request or guidance (whether or not
          having the force of Law) of any central bank, including the European Central
          Bank, the Financial Services Authority or any other fiscal, monetary, regulatory
          or other authority; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          compliance with any Law, regulation, practice, concession or any such directive,
          requirement, request or guidance made after the date of this Agreement. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A099></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14.2 &nbsp;&nbsp;&nbsp;&nbsp;Increased Costs
Claims </FONT></H1>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          A Finance Party intending to make a claim pursuant to Clause 14.1 (<I>Increased
          Costs</I>) shall, as soon as reasonably practicable after becoming aware of the
          circumstances giving rise to such claim, notify the Administrative Agent of the
          event giving rise to the claim and provide a reasonable written explanation of
          the basis and calculation of such claim to the Administrative Agent, following
          which the Administrative Agent shall promptly notify the Parent Guarantor. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Finance Party shall, as soon as practicable after a demand by the
          Administrative Agent, provide a certificate confirming the amount (if any) of
          its Increased Costs. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A100></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>14.3 &nbsp;&nbsp;&nbsp;&nbsp;Exceptions </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Clause 14.1 (<I>Increased Costs</I>)
does not apply to the extent any Increased Cost is: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          compensated for by Clause 12.2 (<I>Tax Indemnity</I>); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          compensated for by the payment of the Associated Costs Rate; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          attributable to the wilful breach by the relevant Finance Party or any of its
          Affiliates of any Law or regulation. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>15. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ILLEGALITY</FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If it becomes unlawful in any
relevant jurisdiction for a Lender to perform any of its obligations as contemplated by
this Agreement or to fund or maintain its participation in any Advance: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          that Lender shall promptly notify the Administrative Agent upon becoming aware
          of that event; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          upon the Administrative Agent notifying the Parent Guarantor, the Available
          Commitments of that Lender will immediately be cancelled and its Commitments
          reduced to zero and such Lender shall not thereafter be obliged to participate
          in any Advance; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each Borrower shall repay that Lender&#146;s participation in the Advances made
          to that Borrower on the last day of the current Interest Period or Term for each
          Advance occurring after the Administrative Agent has notified the Parent
          Guarantor or, if earlier, the date specified by the Lender in the notice
          delivered to the Administrative Agent (being no earlier than the last day of any
          applicable grace period permitted by Law), together with accrued interest and
          all other amounts owing to that Lender under the Finance Documents. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REPRESENTATIONS AND WARRANTIES</FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor (and in the case of
Clause 16.18(d) (<I>Ownership, Security, Intra-Group Charters and Relevant Third Party
Charters</I>), the Parent Guarantor on behalf of each Intra-Group Charter Party) makes the
representations and warranties set out in this Clause 16 to each Finance Party on the date
of this Agreement, on each Drawdown Date and on the last day of each Interest Period and
Term (other than Clause 16.2 (<I>No Deductions or Withholding</I>) which shall be made
only on the date of this Agreement) by reference to the facts and circumstances then
existing on such date, and acknowledges that each Finance Party has entered into this
Agreement in reliance on such representations and warranties. </FONT></P>

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<A NAME=A101></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.1 &nbsp;&nbsp;&nbsp;&nbsp;Status and Due
Authorisation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>It is a corporation or limited
liability company (or in the case of the Leaseback Borrower, a limited liability
partnership) duly organised or formed under the laws of its jurisdiction of incorporation,
organisation or formation (as the case may be) with power to enter into the Finance
Documents and to exercise its rights and perform its obligations under the Finance
Documents and all corporate and other action required to authorise its execution of the
Finance Documents and its performance of its obligations thereunder has been duly taken. </FONT></P>

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<A NAME=A102></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.2 &nbsp;&nbsp;&nbsp;&nbsp;No Deductions or
Withholding </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the laws of its jurisdiction of
incorporation or organisation in force at the date hereof, it will not be required to make
any deduction or withholding from any payment it may make under any of the Finance
Documents. </FONT></P>

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<A NAME=A103></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.3 &nbsp;&nbsp;&nbsp;&nbsp;Claims Pari Passu </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the laws of its jurisdiction of
incorporation or organisation in force at the date hereof, its Indebtedness hereunder
will, to the extent that it exceeds the realised value of any Security granted in respect
of its Indebtedness hereunder, rank at least <I>pari passu</I> with all its other
unsecured Indebtedness save that which is preferred solely by any bankruptcy, insolvency
or other similar laws of general application. </FONT></P>

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<A NAME=A104></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.4 &nbsp;&nbsp;&nbsp;&nbsp;No Immunity </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In any proceedings taken in its
jurisdiction of incorporation in relation to any of the Finance Documents, it will not be
entitled to claim for itself or any of its assets immunity from suit, execution,
attachment or other legal process. </FONT></P>

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<A NAME=A105></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.5 &nbsp;&nbsp;&nbsp;&nbsp;Governing Law and
Judgments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In any proceedings taken in its
jurisdiction of incorporation or organisation in relation to any of the Finance Documents
in which there is an express choice of the law of a particular country as the governing
law thereof, that choice of law and any judgment or (if applicable) arbitral award
obtained in that country will be recognised and enforced. </FONT></P>

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<A NAME=A106></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.6 &nbsp;&nbsp;&nbsp;&nbsp;Validity and
Admissibility in Evidence </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at the date hereof, all acts,
conditions and things required to be done, fulfilled and performed in order <B>(a) </B>to
enable it lawfully to enter into, exercise its rights under and perform and comply with
the obligations expressed to be assumed by it in the Transaction Documents, <B>(b)</B> to
ensure that the obligations expressed to be assumed by it in the Transaction Documents are
legal, valid and binding and <B>(c)</B> to make the Transaction Documents admissible in
evidence in its jurisdiction of incorporation or organisation, have been done, fulfilled
and performed. </FONT></P>

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<A NAME=A107></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.7 &nbsp;&nbsp;&nbsp;&nbsp;No Filing or Stamp
Taxes </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Under the laws of its jurisdiction of
incorporation or organisation in force at the date hereof, it is not necessary that any of
the Finance Documents be filed, recorded or enrolled with any court or other authority in
its jurisdiction of incorporation or organisation (other than the Registrar of Companies
for England and Wales or the relevant maritime registry, to the extent applicable, in
respect of any Security Document) or that any stamp, registration or similar tax be paid
on or in relation to any of the Finance Documents. </FONT></P>

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<A NAME=A108></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.8 &nbsp;&nbsp;&nbsp;&nbsp;Binding Obligations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The obligations expressed to be
assumed by it in the Finance Documents are legal and valid obligations, binding on it in
accordance with the terms of the Finance Documents and no limit on its powers will be
exceeded as a result of the borrowings, granting of security or giving of guarantees
contemplated by the Finance Documents or the performance by it of any of its obligations
thereunder. </FONT></P>

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<A NAME=A109></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.9 &nbsp;&nbsp;&nbsp;&nbsp;No Winding-up </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Neither the Parent Guarantor nor the
Leaseback Borrower (if applicable) nor any Material Subsidiary have taken any corporate
action nor have any other steps been taken or legal proceedings been started or (to the
best of the Parent Guarantor&#146;s (and if applicable, the Leaseback Borrower&#146;s)
knowledge and belief) threatened against the Parent Guarantor, the Leaseback Borrower or
any Material Subsidiary for its winding-up, dissolution, administration or reorganisation
or for the appointment of a receiver, administrator, administrative receiver, trustee or
similar officer of it or of any or all of its assets or revenues which might have a
material adverse effect on the business or financial condition of the Group or (if
applicable) the Leaseback Group taken as a whole. </FONT></P>

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<A NAME=A110></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.10 &nbsp;&nbsp;&nbsp;&nbsp;Solvency </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Neither the Parent Guarantor nor the Leaseback Borrower (as applicable) nor any
          Material Subsidiary is unable, or admits or has admitted its inability, to pay
          its debts or has suspended making payments in respect of any of its debts. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Neither the Parent Guarantor nor the Leaseback Borrower (as applicable) nor any
          Material Subsidiary, by reason of actual or anticipated financial difficulties,
          has commenced, or intends to commence, negotiations with one or more of its
          creditors with a view to rescheduling any of its Indebtedness. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The value of the assets of each of the Parent Guarantor and the Leaseback
          Borrower (as applicable) and of each Material Subsidiary of the Parent Guarantor
          or the Leaseback Borrower (as the case may be) is not less than its liabilities
          (taking into account contingent and prospective liabilities). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          No moratorium has been, or may, in the reasonably foreseeable future be,
          declared in respect of any Indebtedness of the Parent Guarantor, the Leaseback
          Borrower or any Material Subsidiary. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A111></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.11 &nbsp;&nbsp;&nbsp;&nbsp;No Material
Defaults </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Without prejudice to paragraph (b) of this Clause 16.11, neither the Parent
          Guarantor nor the Leaseback Borrower (if applicable) nor any Material Subsidiary
          is in breach of or in default under any agreement to which it is a party or
          which is binding on it or any of its assets to an extent or in a manner which
          might have a material adverse effect on the business or financial condition of
          the Group or the Leaseback Group (as the case may be) taken as a whole. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          No Default is continuing or might reasonably be expected to result from the
          making of any Advance. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A112></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.12 &nbsp;&nbsp;&nbsp;&nbsp;No Material
Proceedings </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No action or administrative
proceeding of or before any court, arbitral body or agency which is not covered by
adequate insurance or which might have a material adverse effect on the business or
financial condition of the Group or (if applicable) the Leaseback Group taken as a whole
has been started or is reasonably likely to be started. </FONT></P>

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<A NAME=A113></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.13 &nbsp;&nbsp;&nbsp;&nbsp;Original
Consolidated Financial Statements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Original Consolidated Financial
Statements and all other annual financial statements relating to the Group and (if
applicable) the Leaseback Group required to be delivered under Clause 17.1 (<I>Annual
Financial Statements</I>), were each prepared in accordance with GAAP and such annual
financial statements and all quarterly financial statements (as applicable) required to be
delivered under Clause 17.2 (<I>Quarterly Financial Statements</I>) give (in conjunction
with the notes thereto) a true and fair view of (in the case of annual financial
statements) or fairly represent (in the case of quarterly financial statements) the
financial condition of the Group and (if applicable) the Leaseback Group at the date as of
which they were prepared and the results of the Group&#146;s and (if applicable) the
Leaseback Group&#146;s operations during the financial year then ended. </FONT></P>

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<A NAME=A114></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.14 &nbsp;&nbsp;&nbsp;&nbsp;No Material
Adverse Change </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Since the publication of the last
financial statements relating to the Group or (if applicable) the Leaseback Group
delivered pursuant to this Agreement, there has been no material adverse change in the
business or financial condition of the Group or the Leaseback Group (as the case may be)
taken as a whole. </FONT></P>

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<A NAME=A115></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.15 &nbsp;&nbsp;&nbsp;&nbsp;No Undisclosed
Liabilities </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>As at the date to which the Original
Consolidated Financial Statements were prepared neither the Parent Guarantor nor the
Leaseback Borrower (as applicable) nor any Material Subsidiary had any material
liabilities (contingent or otherwise) which were not disclosed thereby (or by the notes
thereto) or reserved against therein nor any unrealised or anticipated losses arising from
commitments entered into by it which were not so disclosed or reserved against therein. </FONT></P>

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<A NAME=A116></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.16 &nbsp;&nbsp;&nbsp;&nbsp;No Obligation to
Create Security </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Its execution of the Finance
Documents and its exercise of its rights and performance of its obligations thereunder
will not result in the existence of nor oblige the Parent Guarantor nor the Leaseback
Borrower (as applicable) nor any Material Subsidiary to create any Encumbrance over all or
any of its present or future revenues or assets, other than pursuant to the Finance
Documents. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A117></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.17 &nbsp;&nbsp;&nbsp;&nbsp;No Breach </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Its execution of the Finance
Documents and its exercise of its rights and performance of its obligations under any of
the Finance Documents do not constitute and will not result in any breach of any agreement
or treaty to which it is a party. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A118></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.18 &nbsp;&nbsp;&nbsp;&nbsp;Ownership,
Security, Intra-Group Charters and Relevant Third Party Charters </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Each Obligor (other than the Parent Guarantor and (if the Leaseback Completion
               Date has occurred) any Tranche A Vessel Owner and the Leaseback Borrower) is a
               wholly-owned Subsidiary of the Parent Guarantor. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Subject to the occurrence of the Leaseback Completion Date, each Tranche A
               Vessel Owner is or (pursuant to the Permitted Sale and Leaseback) will be a
               wholly-owned Subsidiary of the Leaseback Borrower. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Each Obligor is the legal and beneficial owner of all assets and other property
               which it purports to charge, mortgage, pledge, assign or otherwise secure
               pursuant to each Security Document and those Security Documents to which it is a
               party create and give rise to valid and effective Security having the ranking
               expressed in those Security Documents. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Without prejudice to the generality of Clause 16.1 (<I>Status and Due
               Authorisation</I>), Clause 16.6 (<I>Validity </I> <I>and Admissibility in
               Evidence</I>) and Clause 16.8 (<I>Binding Obligations</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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               each Intra-Group Charter Party is a wholly-owned Subsidiary of the Parent
               Guarantor and the Parent Guarantor has the right and/or ability to control,
               either directly or indirectly, the affairs or composition of the board of
               directors (or equivalent of it) of such Intra-Group Charter Party; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in respect of each Collateral Vessel being subject to a Relevant Third Party
               Charter, such Relevant Third Party Charter together with each applicable
               Intra-Group Charter comprise the only chartering arrangements relating to such
               Collateral Vessel to which any member of the Group is a party and the
               Intra-Group Charter Parties are the only persons being party to such Intra-Group
               Charters; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               pursuant to and in accordance with the Intra-Group Charters and under applicable
               Law, each Charterer has a valid and enforceable right to enter into and perform
               its obligations under each of the Relevant Third Party Charters to which it is a
               party and to provide valid, enforceable and perfected Security in favour of the
               Security Trustee in respect of such Relevant Third Party Charters; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the copies of the Relevant Third Party Charters which are delivered to the
               Administrative Agent from time to time, represent all of the Relevant Third
               Party Charters in effect at such time. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A119></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.19 &nbsp;&nbsp;&nbsp;&nbsp;Necessary
Authorisations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Necessary Authorisations required
by it, are in full force and effect, and it is in compliance with the material provisions
of each such Necessary Authorisation relating to it and, to the best of its knowledge,
none of the Necessary Authorisations relating to it are the subject of any pending or
threatened proceedings or revocation. </FONT></P>

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<A NAME=A120></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.20 &nbsp;&nbsp;&nbsp;&nbsp;Money Laundering </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any amount borrowed hereunder, and
the performance of its obligations hereunder and under the other Finance Documents, will
be for its own account and will not involve any breach by it of any law or regulatory
measure relating to &#147;money laundering&#148; as defined in Article 1 of the Directive
(91/308/EEC) of the Council of the European Communities. </FONT></P>

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<A NAME=A121></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.21 &nbsp;&nbsp;&nbsp;&nbsp;Centre of Main
Interests </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Where an Obligor is incorporated in a
Member State, its Centre of Main Interests is the place in which its registered office is
situated. </FONT></P>

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<A NAME=A122></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>16.22 &nbsp;&nbsp;&nbsp;&nbsp;Representations
Limited </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The representation and warranties of
the Obligors in this Clause 16 (<I>Representations and Warranties</I>) are subject to: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the principle that equitable remedies are remedies which may be granted or
          refused at the discretion of the court; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the limitation of enforcement by laws relating to bankruptcy, insolvency,
          liquidation, reorganisation, court schemes, moratoria, administration and other
          laws generally affecting or limiting the rights of creditors; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the time barring of claims under any applicable limitation acts; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the possibility that a court may strike out provisions for a contract as being
          invalid for reasons of oppression, undue influence or similar; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other reservations or qualifications of law expressed in any legal opinions
          obtained by the Lenders in connection with the Credit Facility. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL INFORMATION</FONT></H1>


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<A NAME=A123></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.1 &nbsp;&nbsp;&nbsp;&nbsp;Annual Financial
Statements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall, as soon
as the same become available, but in any event within 120 days after the end of its
financial year, deliver to the Administrative Agent for distribution to the Lenders, its
audited consolidated financial statements and if the Leaseback Completion Date has
occurred, the audited consolidated financial statements of the Leaseback Borrower, in each
case, for such financial year. </FONT></P>

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<A NAME=A124></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.2 &nbsp;&nbsp;&nbsp;&nbsp;Quarterly Financial
Statements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall, as soon
as the same become available, but in any event within 90 days after the end of each
Quarter Date, deliver to the Administrative Agent for distribution to the Lenders, its
unaudited consolidated financial statements for such quarterly period (and if the
Leaseback Completion Date has occurred, the unaudited consolidated financial statements of
the Leaseback Borrower for such quarterly period). </FONT></P>

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<A NAME=A125></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.3 &nbsp;&nbsp;&nbsp;&nbsp;Other Financial
Information </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall from time
to time, promptly on the request of the Administrative Agent, furnish the Administrative
Agent for distribution to the Lenders, with such information about the business and
financial condition of the Group and (if applicable) the Leaseback Group as the
Administrative Agent may reasonably require. </FONT></P>

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<A NAME=A126></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.4 &nbsp;&nbsp;&nbsp;&nbsp;Requirements as to
Financial Statements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall ensure
that: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               each set of financial statements delivered by it pursuant to Clause 17.1
               (<I>Annual Financial Statements</I>) and Clause 17.2 (<I>Quarterly Financial
               Statements</I>), is certified by a duly authorised representative of the Parent
               Guarantor (in the case of annual financial statements) as giving a true and fair
               view of (or in the case of quarterly financial statements, as fairly
               representing), its financial condition or, as the case may be, the financial
               condition of the Group or (if applicable) the Leaseback Group as at the end of
               the period to which those financial statements relate and of the results of its
               operations or, as the case may be, those of the Group or the Leaseback Group (as
               the case may be), during such period; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               each set of financial statements delivered by it pursuant to Clause 17.1
               (<I>Annual Financial Statements</I>) and (in the case of sub-paragraph (i) and
               (iii) below), Clause 17.2 (<I>Quarterly Financial Statements</I>): </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is prepared in accordance with GAAP, consistently applied; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               has been audited by an internationally recognised firm of independent auditors
               qualified to audit accounts in accordance with GAAP; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is accompanied by a Compliance Certificate signed by a duly authorised
               representative of the Parent Guarantor. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A127></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.5 &nbsp;&nbsp;&nbsp;&nbsp;Annual Appraisal
Packages </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall, on each
date on which it is required to deliver annual financial statements under Clause 17.1
(<I>Annual Financial Statements</I>), deliver to the Administrative Agent a written
estimate of the Market Value of each of the Collateral Vessels made by an Approved Valuer
on a date not more than thirty days prior to such date for delivery to the Administrative
Agent, such estimate to be provided at the sole cost of the Parent Guarantor. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A128></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.6 &nbsp;&nbsp;&nbsp;&nbsp;Additional
Appraisal Package </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to Clause 17.5
(<I>Annual Appraisal Packages</I>), prior to the substitution of a New Vessel for an
existing Collateral Vessel pursuant to Clause 19.12(b) (<I>Disposal of Assets and
Collateral Vessel Substitution</I>), the conversion of a Tranche B Vessel to a Tranche A
Vessel pursuant to Clause 20.6 (<I>Collateral Vessel Conversion</I>) or the sale or other
disposal to a third party of a Collateral Vessel pursuant to Clause 8.1 (<I>Total Loss or
</I>Sale), the Parent Guarantor shall deliver to the Administrative Agent promptly upon
request, a written estimate of the Market Value of the Collateral Vessels (including, as
applicable, any New Vessel) made by an Approved Valuer on a date not more than thirty days
prior to such date for delivery to the Administrative Agent, such estimate to be provided
at the sole cost of the Parent Guarantor. </FONT></P>

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<A NAME=A129></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.7 &nbsp;&nbsp;&nbsp;&nbsp;Appraisals Binding </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any Appraisal Package delivered
pursuant to this Agreement shall be binding and conclusive as regards each of the
Obligors. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A130></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.8 &nbsp;&nbsp;&nbsp;&nbsp;Information
Concerning Appraisals </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Obligors shall (and the Parent
Guarantor shall procure that each other Obligor shall) promptly provide the Administrative
Agent and the Approved Valuer with any information which the Administrative Agent or such
Approved Valuer may reasonably request in relation to the preparation of an Appraisal
Package (or part thereof) and, if the Obligors fail to provide the information by the date
specified in the relevant request, such Appraisal Package may be prepared on any basis
which the Approved Valuer or the Administrative Agent considers prudent. </FONT></P>

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<A NAME=A131></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.9 &nbsp;&nbsp;&nbsp;&nbsp;Information
Concerning Collateral Vessels, Subsidiary Guarantors and Borrowers </FONT></H1>

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<A NAME=A132></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor will: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          provide to the Administrative Agent on request, copies of the classification
          certificates of each Collateral Vessel and her machinery and of all material
          damage or survey reports on such Collateral Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          keep full, proper and up-to-date books of account, documents, records, data and
          other information (including, if applicable, computer programmes) in respect of
          the Collateral Vessel, each Subsidiary Guarantor and each Borrower or procure
          that such managers and other officers of such Collateral Vessel, Subsidiary
          Guarantor or Borrower do so, and permit the Administrative Agent for itself and
          as agent for and on behalf of the other Finance Parties or any persons nominated
          by the Administrative Agent in such capacity on reasonable notice to inspect and
          (subject to the provision by the Administrative Agent of a confidentiality
          undertaking acceptable to the Parent Guarantor (acting reasonably)) copy and
          make extracts from the same, or procure that such managers or other officers do
          so and promptly upon request of the Administrative Agent, furnish satisfactory
          evidence that the wages and allotments and the insurance and pension
          contributions of the master and crew are being promptly and regularly paid; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly notify the Administrative Agent of any occurrence whereby a Collateral
          Vessel has become, or is, with the passage of time or otherwise, likely to
          become, a total loss and furnish the Administrative Agent with full information
          of any casualty or other accident or damage to such Collateral Vessel involving
          an amount in excess of US$3,000,000 (or its equivalent in any other currency); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          notify the Administrative Agent of any material requirement or recommendation
          made by any insurer or classification society or by any competent authority
          which is not complied with within any time limit specified by such person (as
          such requirement or reccomendation may be extended or modified from time to
          time) or, if no such time limit is specified, as soon as reasonably practicable;
          and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          notify the Administrative Agent of any intention to lay-up a Collateral Vessel. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A133></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.10 &nbsp;&nbsp;&nbsp;&nbsp;Other Information </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to the other
provisions of this Clause 17 (<I>Financial Information</I>), each Obligor shall (and the
Parent Guarantor shall procure that each of the other Obligors shall) from time to time on
the request of the Administrative Agent, provide the Administrative Agent with such
information about the business of the Group and (if applicable) the Leaseback Group and
its financial condition or any member of the Group or the Leaseback Group, as the case may
be (including such member&#146;s business) as the Administrative Agent may reasonably
require. </FONT></P>

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<A NAME=A134></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>17.11 &nbsp;&nbsp;&nbsp;&nbsp;&#147;Know your
Customer&#148; Checks </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               If: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the introduction of or any change in (or in the interpretation, administration
               or application of) any law or regulation made after the date of this Agreement; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any change in the status of an Obligor or the composition of the shareholders of
               an Obligor after the date of this Agreement; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               a proposed assignment or transfer by a Lender in accordance with Clause 31
               (<I>Assignments and Transfers</I>) of any of its rights and/or obligations under
               this Agreement to a party that is not a Lender prior to such assignment or
               transfer, </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               obliges the Administrative Agent or any Lender (or, in the case of paragraph (iii) above, any
prospective new Lender) to comply with &#147;know your customer&#148; or similar
identification procedures in circumstances where the necessary information is not already
available to it, each Obligor shall (and the Parent Guarantor shall procure that each
other Obligor shall) promptly upon the request of the Administrative Agent or such Lender
supply, or procure the supply of, such documentation and other evidence as is reasonably
requested by the Administrative Agent (for itself or on behalf of such Lender) or such
Lender (for itself or, in the case of the event described in paragraph (iii) above, on
behalf of any prospective new Lender) in order for the Administrative Agent, such Lender
or, in the case of the event described in paragraph (iii) above, any prospective new
Lender, to carry out and be satisfied with the results of all necessary &#147;know your
customer&#148; or other checks in relation to any relevant person pursuant to the
transactions contemplated in the Finance Documents.</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Lender shall promptly upon the request of the Administrative Agent supply,
          or procure the supply of, such documentation and other evidence as is reasonably
          requested by the Administrative Agent (for itself) in order for the
          Administrative Agent to carry out and be satisfied with the results of all
          necessary &#147;know your customer&#148; or other checks on Lenders or
          prospective new Lenders pursuant to the transactions contemplated in the Finance
          Documents. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A135></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>18. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL CONDITION </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall ensure
that, at all times, the financial condition of the Group, as evidenced by the financial
statements of the Parent Guarantor provided pursuant to Clause 17.1 (<I>Annual Financial
Statements</I>) and Clause 17.2 (<I>Quarterly Financial Statements</I>) shall be such
that: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Free Liquidity is at least US$100,000,000; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           Available Credit is at least 7.5% of Total Debt, </FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>provided that, following any change
in GAAP, the Administrative Agent (on the instructions of an Instructing Group and in
consultation with the Parent Guarantor) may require an amendment to the foregoing
financial covenants which it deems logical and necessary having regard to the nature of
such changes in policy and the intended substance of such financial covenants. </FONT></P>

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<A NAME=A136></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COVENANTS </FONT></H1>

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<A NAME=A137></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.1 &nbsp;&nbsp;&nbsp;&nbsp;Stock Exchange </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor shall maintain a
listing of its equity share capital on a recognised stock exchange acceptable to the
Administrative Agent. </FONT></P>

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<A NAME=A138></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.2 &nbsp;&nbsp;&nbsp;&nbsp;Consolidation </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Subject to paragraph (b) of this Clause 19.2, no member of the Group or (if the
               Leaseback Completion Date has occurred) the Leaseback Group shall merge or
               consolidate with any other entity. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Paragraph (a) of this Clause 19.2 shall not apply in the case of a merger or
               consolidation between: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Parent Guarantor and any other entity where the Parent Guarantor is to be
               the only surviving entity; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Original Borrower (or any of its Subsidiaries) and the Parent Guarantor in
               accordance with the foregoing sub-paragraph (i) of this Clause 19.2. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A139></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.3 &nbsp;&nbsp;&nbsp;&nbsp;Maintenance of
Legal Validity </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) obtain, comply with the terms of
and do all that is necessary to maintain in full force and effect all authorisations,
approvals, licences and consents required in or by the laws and regulations of its
jurisdiction of incorporation or organisation and all other applicable jurisdictions, to
enable it lawfully to enter into and perform its obligations under the Finance Documents
and to ensure the legality, validity, enforceability or admissibility in evidence of the
Finance Documents in its jurisdiction of incorporation or organisation and all other
applicable jurisdictions. </FONT></P>

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<A NAME=A140></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.4 &nbsp;&nbsp;&nbsp;&nbsp;Notification of
Default </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) promptly, upon becoming aware of
the same, inform the Administrative Agent of the occurrence of any Default and, upon
receipt of a written request to that effect from the Administrative Agent, confirm to the
Administrative Agent that, save as previously notified to the Administrative Agent or as
notified in such confirmation, no Default has occurred. </FONT></P>

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<A NAME=A141></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.5 &nbsp;&nbsp;&nbsp;&nbsp;Claims Pari Passu </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) ensure that at all times the claims
of the Finance Parties against it under this Agreement rank at least <I>pari passu</I>
with the claims of all its other unsecured creditors save those whose claims are preferred
by any bankruptcy, insolvency, liquidation, winding-up or other similar laws of general
application. </FONT></P>

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<A NAME=A142></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.6 &nbsp;&nbsp;&nbsp;&nbsp;Management of
Collateral Vessels </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) ensure that each Collateral Vessel
which it owns is at all times technically and commercially managed by a member of the
Group or (if applicable) the Leaseback Group (excluding any Collateral Vessels being the
subject of a Bareboat Charter). </FONT></P>

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<A NAME=A143></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.7 &nbsp;&nbsp;&nbsp;&nbsp;Classification </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) ensure that each Collateral Vessel
which it owns maintains the highest classification required for the purpose of the
relevant trade of such Collateral Vessel which shall be with a Pre-Approved Classification
Society or such other society as may be acceptable to the Administrative Agent, in each
case, free from any overdue recommendations and conditions affecting that Collateral
Vessel&#146;s class. </FONT></P>

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<A NAME=A144></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.8 &nbsp;&nbsp;&nbsp;&nbsp;Financial
Indebtedness </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Subject to paragraph (d) of this Clause 19.8, other than pursuant to the Finance
          Documents, neither the Leaseback Borrower (if applicable) nor any Subsidiary
          Guarantor shall (and the Parent Guarantor shall procure that no Subsidiary
          Guarantor shall) incur any Financial Indebtedness except (subject to paragraph
          (b) of this Clause 19.8) any such Indebtedness owed to any member of the Group
          or the Leaseback Group (if any), provided that: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          such inter-group Financial Indebtedness is unsecured and fully subordinated in
          right of payment to the rights of each of the Finance Parties under the Finance
          Documents in accordance with paragraph (c) of this Clause 19.8; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each Subsidiary Guarantor and the Leaseback Borrower may incur Financial
          Indebtedness in the ordinary course of operating the Collateral Vessel owned by
          it provided that in respect of each such Subsidiary Guarantor or the Leaseback
          Borrower (as the case may be), the aggregate of such Financial Indebtedness does
          not exceed US$1,000,000 in the case of each such Collateral Vessel at any time. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          No member of the Leaseback Group may incur any Financial Indebtedness to any
          member of the Group (other than for the purposes of an investment in the
          Leaseback Borrower, which (subject to paragraph (c) of this Clause 19.8) is
          fully subordinated to the rights of each of the Finance Parties under the
          Finance Documents, by a member of the Group pursuant to the Permitted Sale and
          Leaseback) and no member of the Group other than the Parent Guarantor may incur
          any Financial Indebtedness to any member of the Leaseback Group. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          To the extent permitted under the foregoing provisions of this Clause 19.8, any
          member of the Group and/or the Leaseback Group (as applicable) may service
          Financial Indebtedness owed to any other member of the Group and/or the
          Leaseback Group (as the case may be) in accordance with the terms of such
          Financial Indebtedness, provided that, on any day on which an amount remains due
          and payable by an Obligor under any Finance Document, such amount shall be
          discharged in preference to any such Financial Indebtedness owed by such Obligor
          to another member of the Group and/or (as applicable) the Leaseback Group which
          is also due and payable on such day and notwithstanding the foregoing provisions
          of this Clause 19.8, following the occurrence of an Event of Default which is
          continuing, any payment by an Obligor in respect of Financial Indebtedness owed
          to another member of the Group and/or (as applicable) the Leaseback Group shall
          require the prior consent of the Security Trustee. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any Obligor may enter into an interest rate hedge, currency swap or similar
          arrangement for a notional amount not exceeding the Outstandings as applicable
          from time to time. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A145></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.9 &nbsp;&nbsp;&nbsp;&nbsp;Certificate of
Financial Responsibility </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Subsidiary Guarantor shall (and
the Parent Guarantor shall procure that each Subsidiary Guarantor shall) obtain and
maintain a certificate of financial responsibility in relation to any Collateral Vessel
which it owns, which is to call the United States of America. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A146></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.10 &nbsp;&nbsp;&nbsp;&nbsp;Chartering </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Subject to paragraph (b) of this Clause 19.10 and without prejudice to any other
          Security required to be provided in connection with any charter or contract of
          affreightment for a Collateral Vessel pursuant to the Finance Documents, each
          Obligor may enter into any charter party (including one or more bareboat
          charters) and/or contract of affreightment of any type or duration, in respect
          of any vessel, provided that, the entry into a bareboat charter with Petrobras
          in respect of a Collateral Vessel after the date of this Agreement shall require
          the prior consent of an Instructing Group. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          In relation to each Relevant Third Party Charter in effect from time to time (to
          the extent that the same was not required to be provided pursuant to and in
          accordance with Clause 3.1 (<I>Conditions </I> Precedent)), the Parent Guarantor
          shall procure the delivery to the Security Trustee of an Encumbrance in relation
          to such Relevant Third Party Charter (including in respect of the Earnings of
          the relevant Collateral Vessel), such Encumbrance to be provided in form and
          substance reasonably satisfactory to the Security Trustee, provided that such
          Encumbrance shall not restrict the operation by the relevant Obligors of the
          accounts into which such Earnings are to be paid from time to time unless an
          Event of Default has occurred and is continuing, in which case, the Parent
          Guarantor shall pay (or shall procure that) all amounts standing to the credit
          of such accounts representing such Earnings shall be applied promptly, as the
          Security Trustee may direct. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Without prejudice to paragraph (d) of this Clause 19.10, following the
          occurrence of an Event of Default which is continuing, each Subsidiary Guarantor
          being the owner of a Collateral Vessel which is the subject of one or more
          Intra-Group Charters shall (and the Parent Guarantor shall procure that each
          Subsidiary Guarantor and any other Intra-Group Charter Party shall): </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          effect the immediate and unconditional suspension of each and every right and
          remedy whatsoever available to it (whether in respect of charter hire due and
          payable for the time being or otherwise); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          except as otherwise permitted with the prior consent of the Security Trustee, at
          all times thereafter, maintain such suspension in full; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          take all such steps as are necessary in the reasonable determination of the
          Security Trustee in connection with any enforcement of the Security created in
          respect of the relevant Collateral Vessel pursuant to the Security Documents
          (including, without limitation, to terminate any Intra-Group Charters relating
          to such Collateral Vessel and to ensure that the Security Trustee is able to
          freely deal with that Collateral Vessel for the purposes of such enforcement). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Parent Guarantor (for itself and on behalf of each Intra-Group Charter
          Party) and each Subsidiary Guarantor acknowledges and agrees that each of the
          rights and remedies of the Intra-Group Charter Parties which arise from time to
          time pursuant to the Intra-Group Charters are and shall at all times be fully
          subordinate in right of payment to the rights and remedies of the Finance
          Parties under the Finance Documents so that the Intra-Group Charter Parties may
          make payments falling due and payable from time to time under the Intra-Group
          Charters to which they are a party in accordance with the terms of such
          Intra-Group Charters but on any day on which an amount remains due and payable
          by an Obligor or a Charterer under a Finance Document, such amount shall be
          discharged in preference to any such amount owed by such Obligor or such
          Charterer to an Intra-Group Charter Party which is also due and payable on such
          day. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A147></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.11 &nbsp;&nbsp;&nbsp;&nbsp;Negative Pledge </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Neither the Leaseback Borrower (if
applicable) nor any Subsidiary Guarantor shall (and the Parent Guarantor shall procure
that no Subsidiary Guarantor shall) create, or permit to subsist, any Encumbrance (other
than pursuant to the Finance Documents) over all or any part of its present or future
revenues or assets, other than: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          an Encumbrance which has been the subject of the prior approval of an
          Instructing Group; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          an Encumbrance arising either by operation of law or in the ordinary course of
          business of such Subsidiary Guarantor or the Leaseback Borrower (as the case may
          be) which is discharged in the ordinary course of business; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a Permitted Lien. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A148></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.12 &nbsp;&nbsp;&nbsp;&nbsp;Disposal of Assets
and Collateral Vessel Substitution </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Subject to paragraph (b) of this Clause 19.12, neither the Leaseback Borrower
               (if applicable) nor any Subsidiary Guarantor shall (and the Parent Guarantor
               shall procure that no Subsidiary Guarantor shall) sell, lease, transfer or
               otherwise dispose of, by one or more transactions (whether related or not), the
               whole or any part of its revenues or assets (and the Parent Guarantor shall
               procure that no member of the Group or (if applicable) the Leaseback Group
               otherwise disposes of a Collateral Vessel, including indirectly by way of a
               transfer of any equity interest), other than: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the sale of a Collateral Vessel to a third party where (x) the net proceeds of
               such sale will be sufficient for the relevant Borrower to make any prepayment
               required pursuant to and in accordance with Clause 8.1 (<I>Total Loss or
               Sale</I>) (when taken together with any additional portion of such prepayment to
               be funded by the Group or (if applicable) the Leaseback Group in accordance with
               this Agreement) or (y) no prepayment will be required in relation to such sale
               by virtue of sub-paragraph (i) or (ii) of Clause 8.1(a) (<I>Total Loss or
               Sale</I>); or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               pursuant to the Permitted Sale and Leaseback. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Subject to compliance with Clause 17.6 (<I>Additional Appraisal Package</I>) and
               Clause 21 (<I>Additional Obligors </I> <I>and New Vessels</I>) (and provided
               that no Default has occurred and is continuing), the Parent Guarantor may at any
               time (by notice to the Lenders (through the Administrative Agent)) elect: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to transfer the ownership of a Tranche A Collateral Vessel from the Subsidiary
               Guarantor being the current owner of such vessel to another entity (such other
               entity to be (x) incorporated or established in a Pre-Approved Jurisdiction or
               other jurisdiction acceptable to the Administrative Agent and (y) a Subsidiary
               of the Parent Guarantor); or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to substitute one or more New Vessels for any of the existing Collateral Vessels
               by way of a transfer of the ownership of such New Vessel (or the entity which
               owns it) to the Parent Guarantor or any of its Subsidiaries (provided that, any
               such Subsidiary is incorporated or established in a Pre-Approved Jurisdiction or
               other jurisdiction acceptable to the Administrative Agent), following which, the
               Security Trustee at the expense of the Parent Guarantor shall effect the release
               of such existing Collateral Vessel from the mortgage and other Security (as
               applicable) created over it pursuant to the Security Documents. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A149></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.13 &nbsp;&nbsp;&nbsp;&nbsp;Sale and Leaseback </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except pursuant to the Permitted Sale
and Leaseback, no Obligor shall (and the Parent Guarantor shall procure that no other
Obligor shall) sell, transfer or otherwise dispose of any of its assets on terms whereby
such asset is or may be leased to or reacquired or acquired by any member of the Group or
(if applicable) the Leaseback Group, in circumstances where the transaction is entered
into primarily as a method of raising finance or of financing the acquisition cost of an
asset, except for assets acquired in the ordinary course of trade. </FONT></P>

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<A NAME=A150></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.14 &nbsp;&nbsp;&nbsp;&nbsp;Registration </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               No Subsidiary Guarantor shall (and the Parent Guarantor shall procure that no
               Subsidiary Guarantor shall) change or permit a change to the flag of the
               Collateral Vessel which it owns other than to a Pre-Approved Flag or such other
               flag as may be acceptable to the Administrative Agent. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               In relation to any Collateral Vessel from time to time on charter to Petrobras
               and (provided that such charter has been entered into in accordance with this
               Agreement) subject to the prior delivery by the Security Trustee to the Parent
               Guarantor of a quiet enjoyment undertaking satisfactory to the Parent Guarantor
               in favour of Petrobras in respect of such Collateral Vessel: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               where pursuant to any Law a registration is required to be effected and
               maintained at the Brazilian Special Registry in respect of such Collateral
               Vessel, within 60 days of the completion of such registration (or if later,
               within 60 days of the delivery by the Security Trustee of the aforementioned
               quiet enjoyment undertaking relating to such Collateral Vessel), the Parent
               Guarantor shall procure the delivery to the Security Trustee by the relevant
               Subsidiary Guarantor in form and substance satisfactory to the Security Trustee,
               of a power of attorney authorising the Security Trustee to cancel such
               registration or de-register such Collateral Vessel from such register following
               the occurrence of any event which entitles the relevant member of the Group or
               Leaseback Group to withdraw that Collateral Vessel from such charter or
               otherwise repossess it or to terminate such charter; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               if the Parent Guarantor fails to deliver any such power of attorney in
               accordance with sub-paragraph (i) above, immediately upon the expiry of such 60
               day period, the relevant Collateral Vessel shall for the purposes of this
               Agreement be deemed to have been disposed of (the day immediately following such
               expiry being the Disposal Date) and the relevant Borrower shall comply with its
               obligations under Clause 8 (<I>Mandatory Commitment Reductions and
               Prepayments</I>). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A151></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.15 &nbsp;&nbsp;&nbsp;&nbsp;ISM Compliance </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) comply (and procure that the
manager of each Collateral Vessel which it owns, if not managed by it, complies) in all
material respects with the ISM Code or any replacement thereof and in particular (without
prejudice to the generality of the foregoing) shall ensure that it holds (or procures that
such other manager holds) a valid and current Document of Compliance issued pursuant to
the ISM Code and a valid and current Safety Management Certificate issued in respect of
such Collateral Vessel pursuant to the ISM Code and such Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall), promptly upon request, supply the
Administrative Agent with copies of the same. </FONT></P>

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<A NAME=A152></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.16 &nbsp;&nbsp;&nbsp;&nbsp;Necessary
Authorisations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to Clause 19.15
(<I>ISM Compliance</I>) or any other specific provision of the Finance Documents relating
to an Authorisation, each Obligor shall (and the Parent Guarantor shall procure that each
other member of the Group and (if applicable) the Leaseback Group shall): </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          obtain, comply with and do all that is necessary to maintain in full force and
          effect all Necessary Authorisations (if a failure to do the same may cause a
          Material Adverse Effect); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly upon request, supply certified copies to the Administrative Agent of
          all Necessary Authorisations. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A153></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.17 &nbsp;&nbsp;&nbsp;&nbsp;Compliance with
Applicable Laws </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other member of the Group and (if applicable) each
member of the Leaseback Group shall) comply with all applicable laws to which it may be
subject, if a failure to do the same may have a Material Adverse Effect. </FONT></P>

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<A NAME=A154></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.18 &nbsp;&nbsp;&nbsp;&nbsp;Loans and
Guarantees </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Neither the Leaseback Borrower (if
applicable) nor any Subsidiary Guarantor shall (and the Parent Guarantor shall procure
that no Subsidiary Guarantor shall) make any loans, grant any credit (save in the ordinary
course of business) or give any guarantee or indemnity (except pursuant to the Finance
Documents) to or for the benefit of any person or otherwise voluntarily assume any
liability, whether actual or contingent, in respect of any obligation of any other person,
otherwise than to another member of the Group and/or the Leaseback Group in accordance
with Clause 19.8 (<I>Financial Indebtedness</I>). </FONT></P>

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<A NAME=A155></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.19 &nbsp;&nbsp;&nbsp;&nbsp;Dividends </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Following the occurrence of a Default
which is continuing, no Obligor shall (and the Parent Guarantor shall procure that no
other Obligor shall) pay, make or declare any dividend or other distribution. </FONT></P>

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<A NAME=A156></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.20 &nbsp;&nbsp;&nbsp;&nbsp;Financial
Assistance and Fraudulent Conveyance </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Parent Guarantor will ensure that
all payments and provision of guarantees, security and other assistance by and between
members of the Group and/or (if applicable) the Leaseback Group have been and will be made
in compliance with applicable local laws and regulations concerning fraudulent conveyance,
financial assistance by a company for the acquisition of or subscription for its own
shares or the shares of its parent or any other company or concerning the protection of
shareholders&#146; capital. </FONT></P>

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<A NAME=A157></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.21 &nbsp;&nbsp;&nbsp;&nbsp;Other Business </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except to the extent expressly
permitted by the Finance Documents, neither of the Borrowers nor any Subsidiary Guarantor
shall (and the Parent Guarantor shall procure that no Subsidiary Guarantor shall) carry on
any business other than that of owning, chartering and operating vessels or, in the case
of the Borrowers, being a Holding Company or other owner of persons doing the same. </FONT></P>

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<A NAME=A158></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.22 &nbsp;&nbsp;&nbsp;&nbsp;Insurance </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Obligors shall (and the Parent Guarantor shall procure that the other
          Obligors shall) maintain hull and machinery insurance and war risks in respect
          of: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Collateral Vessels, in an aggregate amount equal to not less than the
          greater of (x) 110% of the aggregate of the Commitments and (y) the aggregate
          Market Value of such Collateral Vessels; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each Collateral Vessel, in an amount equal to not less than the Market Value of
          such Collateral Vessel. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Obligors shall (and the Parent Guarantor shall procure that the other
          Obligors shall) maintain oil pollution and protection and indemnity insurance on
          the Collateral Vessels in an aggregate amount equal to at least US$1,000,000,000
          in respect of each incident or where (in the reasonable opinion of an
          Instructing Group, which shall take into consideration the price at which such
          cover can be obtained in the market) such insurance cannot be obtained in the
          international insurance market following due diligence (other than where the
          absence of available cover is caused by a history of accidents and/or spillage
          in respect of certain of the Collateral Vessels and/or their owners), such
          insurance shall be for an aggregate amount equal to at least US$500,000,000 in
          respect of each incident (or such other amount as may be agreed by an
          Instructing Group). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          For the avoidance of doubt, the Obligors shall not be required to maintain MII
          or MAP Pollution in respect of any Collateral Vessel. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A159></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.23 &nbsp;&nbsp;&nbsp;&nbsp;Collateral Vessel
Provisions </FONT></H1>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each deed of covenant or (if a deed of covenant is not required in the relevant
          jurisdiction) each mortgage to be delivered in relation to a Collateral Vessel
          pursuant to this Agreement (other than each Collateral Vessel being subject to a
          Bareboat Charter as at the date of this Agreement), shall incorporate all of the
          Collateral Vessel Provisions, subject only to such amendments as are necessary
          for the purposes of the governing law of such deed of covenant or mortgage (as
          the case may be). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Obligor shall (and the Parent Guarantor shall procure that each other
          Obligor shall) comply with each such mortgage and (if applicable) deed of
          covenant to which it is a party, including (without limitation) the Collateral
          Vessel Provisions (as applicable) contained therein. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A160></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.24 &nbsp;&nbsp;&nbsp;&nbsp;Centre of Main
Interests </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No Obligor shall (and the Parent
Guarantor shall procure that no other Obligor shall), without the prior written consent of
an Instructing Group, transfer or allow to change its Centre of Main Interests. </FONT></P>

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<A NAME=A161></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>19.25 &nbsp;&nbsp;&nbsp;&nbsp;Further Assurance </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Obligor shall (and the Parent
Guarantor shall procure that each other Obligor shall) at its own expense, promptly take
all such action as the Administrative Agent or the Security Trustee may reasonably require
for the purpose of perfecting or protecting any Finance Party&#146;s rights with respect
to the Security created or evidenced (or intended to be created or evidenced) by the
Security Documents. </FONT></P>

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<A NAME=A162></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SALE AND LEASEBACK </FONT></H1>

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<A NAME=A163></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20.1 &nbsp;&nbsp;&nbsp;&nbsp;Permitted Sale and
Leaseback </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On or before the expiry of the
Leaseback Period and subject to Clause 20.2 (<I>Conditions</I>), the Parent Guarantor may
enter into a sale and leaseback transaction in respect of all of the Tranche A Vessels. </FONT></P>

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<A NAME=A164></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20.2 &nbsp;&nbsp;&nbsp;&nbsp;Conditions </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A sale and leaseback transaction
under Clause 20.1 (<I>Permitted Sale and Leaseback</I>) shall require the approval of an
Instructing Group unless in relation to such transaction: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each of the representations made in Clause 16 (<I>Representations and
          Warranties</I>) is true and will continue to be true, in each case, in all
          respects, following the completion of such transaction, provided that any such
          representation which expressly relates to a given date or period shall be
          required to be true solely in respect of that date or period; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          no Default has occurred and is continuing or will result from the completion of
          such transaction; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the structure of such transaction reflects the description contained in Part I
          of Schedule 6 (<I>Permitted </I> <I>Sale and Leaseback</I>) as further
          supplemented by the Leaseback Disclosures; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          on (or where applicable, prior to, if the same will not materially prejudice the
          interests of the Lenders) the completion of such transaction: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          pursuant to and in accordance with Clause 21.2 (<I>Novation of Leaseback
          Borrower</I>), the Original Borrower will be released from and the Leaseback
          Borrower will assume its rights and obligations in respect of each of the
          Tranche A Obligations; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to the extent applicable (but without prejudice to Clause 24.10 (<I>Limitation
          upon Permitted Sale and </I> <I>Leaseback</I>)), pursuant to and in accordance
          with Clause 19.12(b) (<I>Disposal of Assets and </I> <I>Collateral Vessel
          Substitution</I>), the relevant Subsidiary Guarantors will be released from (and
          the relevant Substitute Vessel Owners will assume) liability as Guarantors in
          respect of the Tranche A Obligations; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to the extent necessary, the relevant Obligors shall (and the Parent Guarantor
          shall procure that each other Obligor shall) provide such additional or
          alternative security in favour of the Security Trustee and such other documents
          (in each case, in a form and substance satisfactory to it) as will be required
          to ensure <I>inter alia </I>that on (and if applicable, prior to) completion of
          such transaction, the Lenders have the benefit of a security package
          substantially the same as that which the Obligors purported to provide pursuant
          to the Security Documents prior to such completion, including (to the extent
          applicable in the relevant jurisdiction where the ownership of a Collateral
          Vessel is to be transferred by a Subsidiary Guarantor for the purposes of such
          transaction), but not limited to, a vessel mortgage and deed of covenant in
          respect of such Collateral Vessel from the relevant Substitute Vessel Owner
          (each of which complies with Clause 19.23(a) (<I>Collateral Vessel
          Provisions</I>)); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Administrative Agent has received a legal opinion (in form and substance
          satisfactory to it) relating to the Leaseback Borrower in respect of each of (x)
          the relevant local law applicable to (aa) the jurisdiction of incorporation or
          establishment of the Leaseback Borrower and (bb) such transaction (y) the tax
          structure and treatment of the Leaseback Group and (z) the Finance Documents
          (including, without limitation, the Novation Deed, any Accession Notice and any
          Security Document) entered into by the Obligors for the purposes of the
          completion of the Permitted Sale and Leaseback in accordance with this
          Agreement; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the interest rate applicable to the first Interest Period of the Tranche A
          Advance will not have to be determined under Clause 10 (<I>Market Disruption and
          Alternative Interest Rates</I>), </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>provided that (x) it shall be the
sole responsibility of the Parent Guarantor to demonstrate that the conditions in this
Clause 20.2 have been met in relation to the Permitted Sale and Leaseback (y) any
determination by the Administrative Agent under this Clause 20.2 shall be made solely on
the basis of the relevant evidence made available to it at the applicable time by any
person and (z) without prejudice to Clause 25.9(a) (<I>Exclusion of Liability</I>), the
Administrative Agent shall be entitled to rely on the <I>prima facie </I>accuracy,
completeness and efficacy of any such evidence, without incurring any liability to any
person in connection with the same. </FONT></P>

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<A NAME=A165></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20.3 &nbsp;&nbsp;&nbsp;&nbsp;Leaseback
Completion Date </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to (i) the satisfaction of
the conditions contained in Clause 20.2 (<I>Conditions</I>) and (ii) the receipt of all
information required by the Administrative Agent under Clause 20.5 (<I>Information
Required by Administrative Agent</I>), the Administrative Agent, by notice to the Parent
Guarantor and each Lender (the &#147;<B>Leaseback Completion Date Notice</B>&#148;), shall
confirm the Leaseback Completion Date (which shall be a date falling no earlier than 10
Business Days following the delivery of such notice by the Administrative Agent). </FONT></P>

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<A NAME=A166></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20.4 &nbsp;&nbsp;&nbsp;&nbsp;Supplemental
Leaseback Disclosures </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Promptly upon receipt of any
information whatsoever which would warrant a material change to the description of the
Permitted Sale and Leaseback as contained in Part I of Schedule 6 (<I>Permitted Sale and
Leaseback</I>) and/or the Leaseback Disclosures, the Parent Guarantor shall procure the
prompt delivery of such information to the Lenders (through the Administrative Agent). </FONT></P>

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<A NAME=A167></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20.5 &nbsp;&nbsp;&nbsp;&nbsp;Information
Required by Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In addition to any Supplemental
Leaseback Disclosures, during the Leaseback Period, the Parent Guarantor shall regularly
provide the Administrative Agent with such accurate and up to date information relating to
the preparations for the completion of the Permitted Sale and Leaseback (whether or not
requested by the Administrative Agent) for the purposes of its compliance with the
provisions of Clause 20.3 (<I>Leaseback Completion Date</I>), including (but not limited
to) any information concerning the proposed timing for the completion of the Permitted
Sale and Leaseback and any steps required to be taken by any party to a Finance Document
in relation to such completion. </FONT></P>

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<A NAME=A168></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>20.6 &nbsp;&nbsp;&nbsp;&nbsp;Collateral Vessel
Conversion </FONT></H1>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               At any time during the Leaseback Period, a Subsidiary Guarantor (or the Parent
               Guarantor on its behalf) may elect to convert the Tranche B Vessel (if any)
               owned by it into a Tranche A Vessel (subject to the provision of at least 10
               Business Days prior notice to the Administrative Agent, such notice to specify
               the date on which the conversion is to take effect in accordance with this
               Clause 20.6). </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Immediately upon such conversion: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Total Tranche A Commitments and the Tranche A Outstandings shall be
               increased, and the Total Tranche B Commitments and the Tranche B Outstandings
               shall be reduced; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               each Tranche A Commitment Reduction shall be increased and each Tranche B
               Commitment Reduction shall be reduced, </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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               <TR VALIGN=TOP>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in each case, on the basis of each Lender&#146;s Proportion by an aggregate amount equal to
the Tranche Adjustment Amount. Following an adjustment pursuant to this paragraph (b), the
Administrative Agent shall deliver to the Borrowers and the Lenders, details of the
principal repayments required to be made from time to time under Clause 5 (<I>Scheduled
Commitment Reductions and Repayments</I>) in the form of Schedule 8 (<I>Commitment
Reduction Schedule</I>), as amended to reflect such adjustment provided that, a failure on
the part of the Administrative Agent to deliver such a notice, shall not affect the
obligations of the relevant Borrower in respect of such amounts which are to fall due.</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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<A NAME=A169></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADDITIONAL OBLIGORS
AND NEW VESSELS </FONT></H1>

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<A NAME=A170></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.1 &nbsp;&nbsp;&nbsp;&nbsp;Accession Documents </FONT></H1>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Prior to any disposal of a Collateral Vessel to a Substitute Vessel Owner
          pursuant to Clause 19.12(b)(i) (<I>Disposal of Assets and Collateral Vessel
          Substitution</I>) (whether in relation to the Permitted Sale and Leaseback or
          otherwise), the Parent Guarantor shall procure that there is delivered to the
          Administrative Agent an Accession Notice duly executed by itself, each Borrower
          (as applicable) and the relevant Substitute Vessel Owner, together with the
          documents set out in Part III of Schedule 6 <I>(Accession Documents</I>) (in
          each case, to the extent reasonably required by the Administrative Agent). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Prior to any substitution of a New Vessel for one or more existing Collateral
          Vessels pursuant to Clause 19.12(b)(ii) (<I>Disposal of Assets and Collateral
          Vessel Substitution</I>) (whether in relation to the Permitted Sale and
          Leaseback or otherwise), the Parent Guarantor shall procure that there is
          delivered to the Administrative Agent the documents set out in Part III of
          Schedule 6 (<I>Accession Documents</I>) (in each case, to the extent reasonably
          required by the Administrative Agent). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A171></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.2 &nbsp;&nbsp;&nbsp;&nbsp;Novation of
Leaseback Borrower </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to the liability of
the Parent Guarantor and the Cross Guarantors in respect of the Cross Guarantee
Obligations and subject to the delivery to the Administrative Agent of a duly executed
Novation Deed and to the provisions of Clause 21.1 (<I>Accession Documents</I>), with
effect from the Leaseback Completion Date: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Original Borrower and the other parties to this Agreement (the
          &#147;<B>Other Parties</B>&#148;), shall be released from any further
          obligations towards one another in respect of Tranche A and their respective
          rights against one another in relation to Tranche A and the Tranche A
          Obligations shall be cancelled (such rights and obligations being referred to in
          this Clause 21.2 as &#147;<B>relevant obligations</B>&#148;); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Leaseback Borrower and the Other Parties shall assume obligations towards
          one another and/or acquire rights against one another which differ from the
          relevant obligations only insofar as the Leaseback Borrower and the Other
          Parties have assumed and/or acquired the same in place of the Original Borrower
          and the Other Parties; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Leaseback Borrower and the Other Parties shall acquire the same rights and
          benefits and assume the same obligations between themselves as they would have
          acquired and assumed had the Leaseback Borrower been an original party to this
          Agreement as a Borrower in respect of Tranche A and the Tranche A Obligations,
          with the rights, benefits and obligations acquired or assumed by it as a result
          of such transfer (but subject always to Clause 24.10 (<I>Limitation upon
          Permitted Sale and Leaseback</I>)); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Leaseback Borrower shall become a party to this Agreement as the Borrower in
          respect of Tranche A and the Tranche A Obligations. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A172></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>21.3 &nbsp;&nbsp;&nbsp;&nbsp;Accession of
Substitute Vessel Owners </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In respect of any Substitute Vessel
Owner, upon delivery of a duly executed Accession Notice to the Administrative Agent (but
subject to compliance by the Parent Guarantor with Clause 21.1 (<I>Accession
Documents</I>)), the Substitute Vessel Owner being party to it, the other Obligors
(including, if applicable, the Leaseback Borrower) and the Finance Parties, will assume
such obligations towards one another and/or acquire such rights against each other as they
would each have assumed or acquired had such Substitute Vessel Owner been an original
party to this Agreement as a Guarantor, such Substitute Vessel Owner shall become a party
to this Agreement as a Guarantor and in relation to any Superseded Guarantor, such
Superseded Guarantor shall cease to be a party to this Agreement and to be liable in
respect of any obligations which would otherwise accrue to it from the date of such
release under Clause 24 (<I>Guarantee and Indemnity</I>). </FONT></P>

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<A NAME=A173></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EVENTS OF DEFAULT </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each of Clauses 22.1 (<I>Failure to
Pay</I>) to Clause 22.18 (<I>Change of Control</I>) describes the circumstances which
constitute an Event of Default for the purposes of this Agreement. </FONT></P>

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<A NAME=A174></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.1 &nbsp;&nbsp;&nbsp;&nbsp;Failure to Pay </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          An Obligor fails to pay any amount of principal due from it under this Agreement
          at the time, in the currency and otherwise in the manner specified herein
          provided that, if such Obligor can demonstrate to the reasonable satisfaction of
          the Administrative Agent that it has given all necessary instructions to effect
          such payment and the non-receipt thereof is attributable solely to an error in
          the banking system, such payment shall instead be deemed to be due, solely for
          the purposes of this paragraph (a), within 3 Business Days of the date on which
          it actually fell due under this Agreement. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          An Obligor fails to pay any other amount due from it under a Finance Document
          and such failure continues unremedied for 5 Business Days or, in the case of
          sums payable on demand, 10 Business Days, after such demand has been duly made
          on the relevant Obligor. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A175></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.2 &nbsp;&nbsp;&nbsp;&nbsp;Misrepresentation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any representation or statement made
by any Obligor in any Finance Document to which it is a party or in any notice or other
document, certificate or statement delivered by it pursuant thereto or in connection
therewith is or proves to have been incorrect or misleading, where the circumstances
causing the same give rise to a Material Adverse Effect. </FONT></P>

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<A NAME=A176></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.3 &nbsp;&nbsp;&nbsp;&nbsp;Specific Covenants </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An Obligor fails duly to perform or
comply with any of the obligations expressed to be assumed by it under Clause 19.1
(<I>Stock Exchange</I>), Clause 19.2 (<I>Consolidation</I>), Clause 19.3 (<I>Maintenance
of Legal Validity</I>), Clause 19.5 <I>(Claims Pari Passu</I>), Clause 19.6 (<I>Management
of Collateral Vessels</I>), Clause 19.8 (<I>Financial Indebtedness</I>), Clause 19.11
(<I>Negative Pledge</I>), Clause 19.12 (<I>Disposal of Assets and Collateral Vessel
Substitution</I>), Clause 19.13 (<I>Sale and Leaseback</I>), Clause 19.18 (<I>Loans and
Guarantees</I>), Clause 19.20 (<I>Financial Assistance and Fraudulent </I>Conveyance) or
Clause 19.22 (<I>Insurance</I>). </FONT></P>

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<A NAME=A177></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.4 &nbsp;&nbsp;&nbsp;&nbsp;Financial Condition </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An Obligor fails duly to perform or
comply with any of its obligations under Clause 18 (<I>Financial Condition</I>) at any
time. </FONT></P>

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<A NAME=A178></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.5 &nbsp;&nbsp;&nbsp;&nbsp;Other Obligations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An Obligor fails duly to perform or
comply with any of the obligations expressed to be assumed by it in any Transaction
Document (other than those referred to in Clause 22.3 (<I>Specific Covenants</I>) or
Clause 22.4 (<I>Financial Condition</I>)) and such failure is not remedied within 30 days
after the Administrative Agent has given notice thereof to the Parent Guarantor. </FONT></P>

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<A NAME=A179></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.6 &nbsp;&nbsp;&nbsp;&nbsp;Cross Default </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any Indebtedness of a member of the
Group or (if applicable) the Leaseback Group is not paid when due (or within any
applicable grace period) or any Indebtedness of a member of the Group or (as the case may
be) the Leaseback Group is declared to be or otherwise becomes due and payable prior to
its specified maturity where (in either case) the aggregate of all such unpaid or
accelerated Indebtedness of members of the Group or (if applicable) the Leaseback Group is
equal to or greater than US$50,000,000 or its equivalent in any other currency. </FONT></P>

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<A NAME=A180></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.7 &nbsp;&nbsp;&nbsp;&nbsp;Insolvency and
Rescheduling </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An Obligor is unable to pay its debts
as they fall due, commences negotiations with any one or more of its creditors with a view
to the general readjustment or rescheduling of its Indebtedness or makes a general
assignment for the benefit of its creditors or a composition with its creditors. </FONT></P>

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<A NAME=A181></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.8 &nbsp;&nbsp;&nbsp;&nbsp;Winding-up </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An Obligor takes any corporate action
or other steps are taken or legal proceedings are started for its winding-up, dissolution,
administration or re-organisation or for the appointment of a liquidator, receiver,
administrator, administrative receiver, conservator, custodian, trustee or similar officer
of it or of any or all of its revenues or assets or any moratorium is declared or sought
in respect of any of its Indebtedness. </FONT></P>

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<A NAME=A182></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.9 &nbsp;&nbsp;&nbsp;&nbsp;Execution or
Distress </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any Obligor fails to comply with or pay any sum due from it (within 30 days of
          such amount falling due) under any final judgment or any final order made or
          given by any court or other official body of a competent jurisdiction in an
          aggregate amount equal to or greater than US$50,000,000 (or its equivalent in
          any other currency), being a judgment or order against which there is no right
          of appeal or if a right of appeal exists, where the time limit for making such
          appeal has expired. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any execution or distress is levied against, or an encumbrancer takes possession
          of, the whole or any part of, the property, undertaking or assets of an Obligor
          in an aggregate amount equal to or greater than US$50,000,000 (or its equivalent
          in any other currency), other than any execution or distress which is being
          contested in good faith and which is either discharged within 30 days or in
          respect of which adequate security has been provided within 30 days to the
          relevant court or other authority to enable the relevant execution or distress
          to be lifted or released. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Notwithstanding the foregoing paragraphs of this Clause 22.9, any levy of any
          distress on or any arrest, condemnation, confiscation, requisition for title or
          use, compulsory acquisition, seizure, detention or forfeiture of a Collateral
          Vessel (or any part thereof) or any exercise or purported exercise of any lien
          or claim on or against a Collateral Vessel where the release of or discharge the
          lien or claim on or against such Collateral Vessel has not been procured within
          30 days. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A183></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.10 &nbsp;&nbsp;&nbsp;&nbsp;Similar Events </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any event occurs which, under the
laws of any jurisdiction, has a similar or analogous effect to any of those events
mentioned in Clause 22.7 (<I>Insolvency and Rescheduling</I>), Clause 22.8
(<I>Winding-up</I>) or Clause 22.9 (<I>Execution or Distress</I>). </FONT></P>

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<A NAME=A184></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.11 &nbsp;&nbsp;&nbsp;&nbsp;Insurance </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Insurance is not maintained in
respect of any Collateral Vessel in accordance with the terms of the Collateral Vessel
Provisions or (in the case of each Collateral Vessel being subject to a Bareboat Charter
as at the date of this Agreement) the applicable agreements (if any) delivered to the
Administrative Agent pursuant to paragraph 5 under Part IV of Schedule 3 (<I>Initial
Security Documents</I>). </FONT></P>

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<A NAME=A185></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.12 &nbsp;&nbsp;&nbsp;&nbsp;Environmental
Matters </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any Environmental Claim is pending or made against it or any of its
          Environmental Affiliates or in connection with a Collateral Vessel, where such
          Environmental Claim has a Material Adverse Effect. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any actual Environmental Incident occurs in connection with a Collateral Vessel,
          where such Environmental Incident has a Material Adverse Effect. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A186></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.13 &nbsp;&nbsp;&nbsp;&nbsp;Repudiation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any Obligor repudiates any Finance
Document to which it is a party or does or causes to be done any act or thing evidencing
an intention to repudiate any such Finance Document. </FONT></P>

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<A NAME=A187></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.14 &nbsp;&nbsp;&nbsp;&nbsp;Validity and
Admissibility </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At any time any act, condition or
thing required to be done, fulfilled or performed in order: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to enable any Obligor lawfully to enter into, exercise its rights under and
          perform the respective obligations expressed to be assumed by it in the Finance
          Documents; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to ensure that the obligations expressed to be assumed by each Obligor in the
          Finance Documents are legal, valid and binding; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to make the Finance Documents admissible in evidence in any applicable
          jurisdiction is not done, fulfilled or performed within 30 days after
          notification from the Administrative Agent to the relevant Obligor requiring the
          same to be done, fulfilled or performed. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A188></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.15 &nbsp;&nbsp;&nbsp;&nbsp;Illegality </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At any time it is or becomes unlawful
for any Obligor to perform or comply with any or all of its obligations under the Finance
Documents to which it is a party or any of the obligations of the relevant Obligor
hereunder are not or cease to be legal, valid and binding and such illegality is not
remedied or mitigated to the satisfaction of the Administrative Agent within 30 days after
it has given notice thereof to the relevant Obligor. </FONT></P>

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<A NAME=A189></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.16 &nbsp;&nbsp;&nbsp;&nbsp;Material Adverse
Change </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At any time there shall occur a
change in the financial condition of any Obligor which, in the reasonable opinion of an
Instructing Group, materially impairs such Obligor&#146;s ability to discharge its
obligations under the Finance Documents to which it is a party in the manner provided
therein and such change, if capable of remedy, is not so remedied within 15 Business Days
of the delivery of a notice confirming such change by the Administrative Agent to the
relevant Obligor. </FONT></P>

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<A NAME=A190></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.17 &nbsp;&nbsp;&nbsp;&nbsp;Qualifications of
Financial Statements </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The auditors of the Group or the
Leaseback Group qualify their report on any audited consolidated financial statements of
the Group or the Leaseback Group (as the case may be) in any regard which, in the opinion
of the Administrative Agent, is material in the context of the Finance Documents and the
transactions contemplated thereby. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A191></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.18 &nbsp;&nbsp;&nbsp;&nbsp;Change of Control </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A Change of Control occurs in
relation to the Parent Guarantor or either Borrower. </FONT></P>

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<A NAME=A192></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.19 &nbsp;&nbsp;&nbsp;&nbsp;Acceleration </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon the occurrence of an Event of
Default and while the same is continuing at any time thereafter, the Administrative Agent
may (and, if so instructed by an Instructing Group, shall) by written notice to the Parent
Guarantor: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          declare all or any part of the Outstandings to be immediately due and payable
          (whereupon the same shall become so payable together with accrued interest
          thereon and any other sums then owed by any Obligor under the Finance Documents)
          or declare all or any part of the Outstandings to be due and payable on demand
          of the Administrative Agent; and/or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          declare that any undrawn portion of the Credit Facility shall be cancelled,
          whereupon the same shall be cancelled and the corresponding Commitment of each
          Lender shall be reduced to zero; and/or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          exercise or direct the Security Trustee to exercise any rights and remedies in
          existence or arising under the Finance Documents. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A193></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>22.20 &nbsp;&nbsp;&nbsp;&nbsp;Repayment on Demand </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If, pursuant to paragraph (a) of
Clause 22.19 (<I>Acceleration</I>), the Administrative Agent declares all or any part of
the Outstandings to be due and payable on demand of the Administrative Agent, then, and at
any time thereafter, the Administrative Agent may (and, if so instructed by an Instructing
Group, shall) by written notice to the Parent Guarantor: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          require repayment of all or the relevant part of the Advances on such date as it
          may specify in such notice (whereupon the same shall become due and payable on
          such date together with accrued interest thereon and any other sums then owed by
          any Obligor under the Finance Documents) or withdraw its declaration with effect
          from such date as it may specify in such notice; and/or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          select as the duration of any Interest Period or Term which begins whilst such
          declaration remains in effect a period of 6 months or less. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<A NAME=A194></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DEFAULT INTEREST</FONT></H1>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23.1 &nbsp;&nbsp;&nbsp;&nbsp;Consequences of
Non-Payment </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any sum due and payable by an
Obligor under this Agreement is not paid on the due date therefor in accordance with the
provisions of Clause 28 (<I>Payments</I>) or if any sum due and payable by an Obligor
pursuant to a judgment of any court in connection with this Agreement is not paid on the
date of such judgment, the period beginning on such due date or, as the case may be, the
date of such judgment and ending on the Business Day on which the obligation of such
Obligor to pay the Unpaid Sum is discharged shall be divided into successive periods, each
of which (other than the first) shall start on the last day of the preceding such period
(which shall be a Business Day) and the duration of each of which shall (except as
otherwise provided in this Clause 23 (<I>Default Interest</I>)) be selected by the
Administrative Agent. </FONT></P>

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<A NAME=A195></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23.2 &nbsp;&nbsp;&nbsp;&nbsp;Default Rate </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>During each such period relating
thereto as is mentioned in Clause 23.1 (<I>Consequences of Non-Payment</I>) an Unpaid Sum
shall bear interest at the rate per annum which is the sum from time to time of 2%, the
Margin, the Associated Costs Rate at such time and LIBOR on the Quotation Date therefor,
provided that: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if, for any such period, LIBOR cannot be determined, the rate of interest
          applicable to each Lender&#146;s portion of such Unpaid Sum shall be the rate
          per annum which is the sum of 2%, the Margin and the Associated Costs Rate at
          such time and the rate per annum shall be that notified to the Administrative
          Agent by such Lender as soon as practicable after the beginning of such period
          as being that which expresses as a percentage rate per annum the cost to such
          Lender of funding from whatever sources it may select its portion of such Unpaid
          Sum during such period; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if such Unpaid Sum is all or part of an Advance which became due and payable on
          a day other than the last day of an Interest Period or Term relating thereto,
          the first Interest Period applicable to it shall be of a duration equal to the
          unexpired portion of that Interest Period or Term and the rate of interest
          applicable thereto from time to time during such Interest Period shall be that
          which exceeds by 2% the rate which would have been applicable to it had it not
          so fallen due. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A196></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23.3 &nbsp;&nbsp;&nbsp;&nbsp;Maturity of Default
Interest </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any interest which shall have accrued
under Clause 23.2 (<I>Default Rate</I>) in respect of an Unpaid Sum shall be due and
payable and shall be paid by the Obligor owing such sum at the end of the period by
reference to which it is calculated or on such other dates as the Administrative Agent may
specify by written notice to such Obligor. </FONT></P>

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<A NAME=A197></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>23.4 &nbsp;&nbsp;&nbsp;&nbsp;Construction of
Unpaid Sum </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any Unpaid Sum shall (for the
purposes of this Clause 23 (<I>Default Interest</I>), Clause 14 (<I>Increased Costs</I>),
Clause 26 (<I>Borrowers&#146; Indemnities</I>) and Schedule 5 (<I>Associated Costs
Rate</I>)) be treated as an advance and accordingly in those provisions the term
&#147;<B>Advance</B>&#148; includes any Unpaid Sum and the term &#147;<B>Interest
Period</B>&#148; and &#147;<B>Term</B>&#148;, in relation to an Unpaid Sum, includes each
such period relating thereto as is mentioned in Clause 23.1 <I>(Consequences of
Non-Payment</I>). </FONT></P>

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<A NAME=A198></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GUARANTEE AND
INDEMNITY </FONT></H1>

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<A NAME=A199></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.1 &nbsp;&nbsp;&nbsp;&nbsp;Guarantee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to Clause 24.10
(<I>Limitation upon Permitted Sale and Leaseback</I>), each Guarantor irrevocably and
unconditionally guarantees, jointly and severally, to each of the Finance Parties the due
and punctual payment by the Borrowers (and either of them) (or in the case of the Original
Borrower in its capacity as a Guarantor, by the Leaseback Borrower) of all sums payable by
any of them under each of the Finance Documents and agrees that promptly on demand it will
pay to the Administrative Agent each and every sum of money which either Borrower (or in
the case of the Original Borrower in its capacity as a Guarantor, the Leaseback Borrower)
is at any time liable to pay to any Finance Party under or pursuant to any Finance
Document which is due but unpaid. </FONT></P>

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<A NAME=A200></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.2 &nbsp;&nbsp;&nbsp;&nbsp;Indemnity </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to Clause 24.10
(<I>Limitation upon Permitted Sale and Leaseback</I>), each Guarantor irrevocably and
unconditionally agrees, jointly and severally, as primary obligor and not only as surety,
to indemnify and hold harmless each Finance Party on demand by the Administrative Agent
from and against any loss incurred by such Finance Party as a result of any of the
obligations of either Borrower (or in the case of the Original Borrower in its capacity as
a Guarantor, the Leaseback Borrower) under or pursuant to any Finance Document being or
becoming void, voidable, unenforceable or ineffective as against that Borrower for any
reason whatsoever (whether or not known to that Finance Party or any other person) the
amount of such loss being the amount which the Finance Party suffering it would otherwise
have been entitled to recover from such Borrower. </FONT></P>

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<A NAME=A201></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.3 &nbsp;&nbsp;&nbsp;&nbsp;Continuing and
Independent Obligations </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to Clause 24.10
(<I>Limitation upon Permitted Sale and Leaseback</I>), the obligations of each Guarantor
under this Agreement shall constitute and be continuing obligations which shall not be
released or discharged by any intermediate payment or settlement of all or any of the
obligations of either Borrower under the Finance Documents, shall continue in full force
and effect until the unconditional and irrevocable payment and discharge in full of all
amounts owing by either Borrower under each of the Finance Documents and are in addition
to and independent of, and shall not prejudice or merge with, any other security (or right
of set-off) which any Finance Party may at any time hold in respect of such obligations or
any of them. </FONT></P>

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<A NAME=A202></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.4 &nbsp;&nbsp;&nbsp;&nbsp;New Accounts </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If the Administrative Agent makes
demand of the Guarantors or any of them pursuant to this Clause 24 (<I>Guarantee and
Indemnity</I>): </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Administrative Agent may open a new account or accounts in respect of the
          liabilities of either Borrower to which this guarantee relates or any of them
          (and if it does not do so it shall be treated as if it had done so at the time
          it made such demand); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          thereafter any amounts paid by a Borrower (or any other person) to the
          Administrative Agent in respect of the liabilities of either Borrower under any
          of the Finance Documents shall be credited (or be treated as having been
          credited) to a new account and not as having been applied in or towards payment
          of such liabilities or any of them. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A203></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.5 &nbsp;&nbsp;&nbsp;&nbsp;Avoidance of
Payments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Where any release, discharge or other
arrangement in respect of any obligation of a Borrower, or any Security any Finance Party
may hold therefor, is given or made in reliance on any payment or other disposition which
is avoided or must be repaid (whether in whole or in part) in an insolvency, liquidation
or otherwise and whether or not any Finance Party has conceded or compromised any claim
that any such payment or other disposition will or should be avoided or repaid (in whole
or in part), the provisions of this Clause 24 (<I>Guarantee and Indemnity</I>) shall
continue as if such release, discharge or other arrangement had not been given or made. </FONT></P>

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<A NAME=A204></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.6 &nbsp;&nbsp;&nbsp;&nbsp;Immediate Recourse </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>None of the Finance Parties shall be
obliged, before exercising or enforcing any of the rights conferred upon them in respect
of the Guarantors by this Agreement or by Law, to seek to recover amounts due from either
Borrower or to exercise or enforce any other rights or Security any of them may have or
hold in respect of any of the obligations of the Borrowers (or either of them) under any
of the Finance Documents. </FONT></P>

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<A NAME=A205></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.7 &nbsp;&nbsp;&nbsp;&nbsp;Waiver of Defences </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Neither the obligations of the
Guarantors contained in this Agreement nor the rights, powers and remedies conferred on
the Finance Parties in respect of the Guarantors by this Agreement or by Law shall be
discharged, impaired or otherwise affected by: </FONT></P>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the winding-up, dissolution, administration or re-organisation of either
          Borrower or any other person or any change in the status, function, control or
          ownership of either Borrower or any such other person; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any of the obligations of either Borrower or any other person under any Finance
          Document or any security held by any Finance Party therefor being or becoming
          illegal, invalid, unenforceable or ineffective in any respect; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any time or other indulgence being granted to or agreed (i) to or with a
          Borrower or any other person in respect of its obligations or (ii) in respect of
          any security granted under any Finance Document; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any amendment to, or any variation, waiver or release of, any obligation of, or
          any security granted by, a Borrower or any other person under any Finance
          Document; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any total or partial failure to take, or perfect, any security proposed to be
          taken in respect of the obligations of a Borrower or any other person under a
          Finance Document; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any total or partial failure to realise the value of, or any release, discharge,
          exchange or substitution of, any security held by any Finance Party in respect
          of a Borrower&#146;s obligations under any Finance Document; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other act, event or omission which might operate to discharge, impair or
          otherwise affect any of the obligations of any of the Guarantors under the
          Finance Documents or any of the rights, powers or remedies conferred upon the
          Finance Parties or any of them thereby or by Law. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A206></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.8 &nbsp;&nbsp;&nbsp;&nbsp;No Competition </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any rights which any Guarantor may at
any time have by way of contribution or indemnity in relation to any of the obligations of
a Borrower under any of the Finance Documents or to claim or prove as a creditor of a
Borrower or any other person or its estate in competition with the Finance Parties or any
of them, shall (so long as there remains any sums owed by the Borrowers or either of them
under any of the Finance Documents) be exercised by such Guarantor only if and to the
extent that the Administrative Agent so requires and in such manner and upon such terms as
the Administrative Agent may specify and each Guarantor shall hold any moneys, rights or
Security held or received by it as a result of the exercise of any such rights on trust
for the Administrative Agent for application in or towards payment of any sums at any time
owed by the Borrowers or either of them under any of the Finance Documents as if such
moneys, rights or Security were held or received by the Administrative Agent under this
Agreement. </FONT></P>

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<A NAME=A207></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.9 &nbsp;&nbsp;&nbsp;&nbsp;Appropriation </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No Finance Party shall be obliged to
apply any sums held or received by it in respect of the obligations of the Borrowers (or
either of them) under any of the Finance Documents in or towards payment of amounts owing
under any of the Finance Documents, and any such sum may, in the relevant Finance
Party&#146;s discretion (but always acting in good faith), be credited to a suspense or
impersonal account and held in such account pending the application from time to time (as
the relevant Finance Party may think fit) of such sums in or towards the discharge of such
liabilities owed to it under the Finance Documents as such Finance Party may select. </FONT></P>

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<A NAME=A208></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>24.10 &nbsp;&nbsp;&nbsp;&nbsp;Limitation upon
Permitted Sale and Leaseback </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>With effect from the Leaseback
Completion Date (if any), but without prejudice to the obligations of the Parent Guarantor
and the Cross Guarantors in respect of the Cross Guarantee Obligations, the obligations of
the Tranche A Vessel Owners under this Clause 24 (<I>Guarantee and Indemnity</I>) shall be
limited to the Tranche A Obligations outstanding from time to time, any payment by a
Tranche A Vessel Owner pursuant to this Clause 24 (<I>Guarantee and Indemnity</I>) shall
be applied as and when required pursuant to this Agreement in or towards the discharge of
the Tranche A Obligations and it is agreed and acknowledged that the maximum amount
recoverable from the Tranche A Vessel Owners collectively under Clause 24.1
(<I>Guarantee</I>) and Clause 24.2 (<I>Indemnity</I>) with effect from the Leaseback
Completion Date shall not exceed the aggregate of the Tranche A Obligations. </FONT></P>

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<A NAME=A209></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ADMINISTRATIVE AGENT
AND OBLIGORS&#146; AGENT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A210></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.1 &nbsp;&nbsp;&nbsp;&nbsp;Appointment of the
Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each of the other Finance Parties
appoints the Administrative Agent to act as its agent under and in connection with the
Finance Documents and authorises the Administrative Agent to exercise the rights, powers,
authorities and discretions specifically delegated to it under or in connection with the
Finance Documents together with any other incidental rights, powers, authorities and
discretions. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A211></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.2 &nbsp;&nbsp;&nbsp;&nbsp;Duties of the
Administrative Agent </FONT></H1>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent shall promptly inform each Lender of the contents of
          any notice or document received by it in its capacity as Administrative Agent
          from any of the Obligors under this Agreement. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent shall promptly notify the Lenders of the occurrence of
          any Event of Default or any default by an Obligor in the due performance of or
          compliance with its obligations under any Finance Document upon becoming aware
          of the same. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          If so instructed by an Instructing Group, the Administrative Agent shall refrain
          from exercising any power or discretion vested in it as agent under any Finance
          Document. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The duties of the Administrative Agent under the Finance Documents are, save to
          the extent otherwise expressly provided, solely mechanical and administrative in
          nature. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A212></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.3 &nbsp;&nbsp;&nbsp;&nbsp;Role of Bookrunner
and Lead Arrangers </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as specifically provided in
the Finance Documents, the Bookrunner and the Lead Arrangers shall have no obligations of
any kind to any other party under or in connection with any Finance Document. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A213></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.4 &nbsp;&nbsp;&nbsp;&nbsp;No Fiduciary Duties </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Nothing in the Finance Documents constitutes the Administrative Agent, either of
          the Lead Arrangers or the Bookrunner as a trustee or fiduciary of any other
          person. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent, the Lead Arrangers or the Bookrunner shall not be
          bound to account to any Lender for any sum or the profit element of any sum
          received by it for its own account. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A214></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.5 &nbsp;&nbsp;&nbsp;&nbsp;Business with the
Group </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent, the Lead
Arrangers and the Bookrunner may accept deposits from, lend money to and generally engage
in any kind of banking or other business with any member of the Group and (if applicable)
the Leaseback Group. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A215></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.6 &nbsp;&nbsp;&nbsp;&nbsp;Discretion of the
Administrative Agent </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent may rely on: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any representation, notice or document believed by it to be genuine, correct and
          appropriately authorised; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any statement made by a director, authorised signatory or employee of any person
          regarding any matters which may reasonably be assumed to be within his knowledge
          or within his power to verify. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent may assume, unless it has received notice to the
          contrary in its capacity as agent for the Lenders, that: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          no Default has occurred; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any right, power, authority or discretion vested in this Agreement upon any
          party, the Lenders or an Instructing Group has not been exercised; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any notice or request made by the Parent Guarantor is made on behalf of and with
          the consent and knowledge of all the Obligors. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent may engage, pay for and rely on the advice or services
          of any lawyers, accountants, surveyors or other experts. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent may act in relation to the Finance Documents through
          its personnel and agents. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A216></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.7 &nbsp;&nbsp;&nbsp;&nbsp;Instructing
Group&#146;s Instructions </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Unless a contrary indication appears in a Finance Document, the Administrative
          Agent shall (i)&nbsp;act in accordance with any instructions given to it by an
          Instructing Group (or, if so instructed by an Instructing Group, refrain from
          acting or exercising any right, power, authority or discretion vested in it as
          Administrative Agent) and (ii) shall&nbsp;not be liable for any act (or
          omission) if it acts (or refrains from taking any action) in accordance with
          such an instruction of an Instructing Group. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Unless a contrary indication appears in a Finance Document, any instructions
          given by an Instructing Group will be binding on all the Finance Parties. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent may refrain from acting in accordance with the
          instructions of an Instructing Group (or, if appropriate, all the Lenders) until
          it has received such security or collateral as it may require for any cost, loss
          or liability which it may incur in complying with such instructions. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          In the absence of instructions from an Instructing Group (or, if appropriate,
          the Lenders), the Administrative Agent may act (or refrain from taking action)
          as it considers to be in the best interest of the Lenders. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent is not authorised to act on behalf of a Lender in any
          legal or arbitration proceedings relating to any Finance Document without first
          obtaining the Lender&#146;s consent to do so. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A217></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.8 &nbsp;&nbsp;&nbsp;&nbsp;No Responsibility </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent and the Lead
Arrangers are not responsible for: </FONT></P>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the adequacy, accuracy and/or completeness of any information (whether oral or
          written) supplied by any Finance Party or an Obligor or any other person in or
          in connection with any Finance Document; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the legality, validity, effectiveness, adequacy or enforceability of any Finance
          Document or any other agreement, arrangement or document entered into, made or
          executed in anticipation of or in connection with any Finance Document. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A218></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.9 &nbsp;&nbsp;&nbsp;&nbsp;Exclusion of
Liability </FONT></H1>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Without limiting paragraph (b) of this Clause 25.9, the Administrative Agent
          will not be liable for any action taken by it under or in connection with any
          Finance Document, unless directly caused by its gross negligence or wilful
          misconduct. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each of the Lenders agrees that it will not take any proceedings, or assert or
          seek to assert any claim, against any officer, employee or agent of the
          Administrative Agent in respect of any claim it might have against the
          Administrative Agent or in respect of any act or omission of any kind by that
          officer, employee or agent in relation to any Finance Document and agrees that
          any officer, employee or agent of the Administrative Agent may enforce this
          provision. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent will not be liable for any delay (or any related
          consequences) in crediting an account with an amount required under the Finance
          Documents to be paid by it if it has taken all necessary steps as soon as
          reasonably practicable to comply with the regulations or operating procedures of
          any recognised clearing or settlement system used by it for that purpose. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A219></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.10 &nbsp;&nbsp;&nbsp;&nbsp;Lender&#146;s
Indemnity </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Lender shall (in its relevant
Proportion (as determined at all times for these purposes in accordance with paragraph (c)
of the definition of &#147;Proportion&#148;)) indemnify the Administrative Agent from time
to time on demand by the Administrative Agent against any cost, loss or liability incurred
by the Administrative Agent (otherwise than by reason of its gross negligence or wilful
misconduct) in acting as Administrative Agent under the Finance Documents (unless it has
been reimbursed therefor by an Obligor pursuant to the terms of the Finance Documents). </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A220></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.11 &nbsp;&nbsp;&nbsp;&nbsp;Resignation </FONT></H1>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent may resign and appoint one of its Affiliates acting
          through an office in New York City or London as successor Administrative Agent
          by giving notice to the Lenders and the Parent Guarantor. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Alternatively, the Administrative Agent may resign without having designated a
          successor as agent under paragraph (a) above (and shall do so if so required by
          an Instructing Group) by giving notice to the Lenders and the Parent Guarantor,
          in which case an Instructing Group (after consultation with the Parent
          Guarantor) may appoint a successor Administrative Agent. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          If an Instructing Group has not appointed a successor Administrative Agent in
          accordance with paragraph (b) above within 30 days after notice of resignation
          was given, the Administrative Agent (after consultation with the Parent
          Guarantor) may appoint a successor Administrative Agent (acting through an
          office in New York City or London). </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The retiring Administrative Agent shall, at the Parent Guarantor&#146;s cost,
          make available to its successor such documents and records and provide such
          assistance as its successor may reasonably request for the purposes of
          performing its functions as Administrative Agent under the Finance Documents. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The resignation notice of the Administrative Agent shall only take effect upon
          the appointment of a successor Administrative Agent. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Upon the appointment of a successor, the retiring Administrative Agent shall be
          discharged from any further obligation in respect of the Finance Documents but
          shall remain entitled to the benefit of this Clause 25 (<I>Administrative Agent
          and Obligors&#146; Agent</I>). The Administrative Agent&#146;s successor and
          each of the other parties to this Agreement shall have the same rights and
          obligations amongst themselves as they would have had if such successor
          Administrative Agent had been an original party as the Administrative Agent. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A221></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.12 &nbsp;&nbsp;&nbsp;&nbsp;Confidentiality </FONT></H1>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Administrative Agent (in acting as agent for the Finance Parties) shall be
          regarded as acting through its respective agency division which in each case
          shall be treated as a separate entity from any other of its divisions or
          departments. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          If information is received by another division or department of the
          Administrative Agent, it may be treated as confidential to that division or
          department and the Administrative Agent shall not be deemed to have notice of
          it. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Notwithstanding any other provision of any Finance Document to the contrary, the
          Finance Parties are not obliged to disclose to any other person (i) any
          confidential information or (ii) any other information if the disclosure would,
          or might in its reasonable opinion, constitute a breach of any Law. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A222></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.13 &nbsp;&nbsp;&nbsp;&nbsp;Facility Office </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent may treat
each Lender as a Lender, entitled to payments under this Agreement and acting through its
Facility Office, unless it has received not less than 5 Business Days&#146; prior notice
from that Lender to the contrary in accordance with the terms of this Agreement. </FONT></P>

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<A NAME=A223></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.14 &nbsp;&nbsp;&nbsp;&nbsp;Lenders&#146;
Associated Costs Details </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Lender shall supply the
Administrative Agent with any information required by the Administrative Agent in order to
calculate the Associated Costs Rate in accordance with Schedule 5 (<I>Associated Costs
Rate</I>). </FONT></P>

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<A NAME=A224></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.15 &nbsp;&nbsp;&nbsp;&nbsp;Credit Appraisal
by the Lenders </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without affecting the responsibility
of any Obligor for information supplied by it or on its behalf in connection with any
Finance Document, each Lender confirms to the Administrative Agent, the Lead Arrangers and
the Bookrunner that it has been, and will continue to be, solely responsible for making
its own independent appraisal and investigation of all risks arising under or in
connection with any Finance Document including but not limited to: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the financial condition, status and nature of each member of the Group and (if
          applicable) the Leaseback Group; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the legality, validity, effectiveness, adequacy or enforceability of any Finance
          Document and any other agreement, arrangement or document entered into, made or
          executed in anticipation of, under or in connection with any Finance Document; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          whether that Lender has recourse, and the nature and extent of that recourse,
          against any party or any of its respective assets under or in connection with
          any Finance Document, the transactions contemplated by the Finance Documents or
          any other agreement, arrangement or document entered into, made or executed in
          anticipation of, under or in connection with any Finance Document; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the adequacy, accuracy and/or completeness of any information provided by the
          Administrative Agent, the Lead Arrangers, the Bookrunner or by any other person
          under or in connection with any Finance Document, the transactions contemplated
          by the Finance Documents or any other agreement, arrangement or document entered
          into, made or executed in anticipation of, under or in connection with any
          Finance Document. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A225></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.16 &nbsp;&nbsp;&nbsp;&nbsp;Deduction from
Amounts Payable by the Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any party owes an amount to the
Administrative Agent under any Finance Document, the Administrative Agent may, after
giving notice to that party, deduct an amount not exceeding that amount from any payment
to that party which the Administrative Agent would otherwise be obliged to make under the
Finance Documents and apply the amount deducted in or towards satisfaction of the amount
owed. For the purposes of the Finance Documents, that party shall be regarded as having
received such payment without any such deduction. </FONT></P>

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<A NAME=A226></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.17 &nbsp;&nbsp;&nbsp;&nbsp;Obligors&#146;
Agent </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Each Obligor (other than the Parent Guarantor) irrevocably authorises the Parent
               Guarantor to act on its behalf as its agent in relation to the Finance Documents
               and irrevocably authorises: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Parent Guarantor on its behalf to supply all information concerning itself,
               its financial condition and otherwise to the relevant persons contemplated under
               this Agreement and to give all notices and instructions to execute on its behalf
               any Finance Document and to enter into any agreement in connection with the
               Finance Documents notwithstanding that the same may affect such Obligor, without
               further reference to or the consent of such Obligor; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               each Finance Party to give any notice, demand or other communication to be given
               to or served on such Obligor pursuant to the Finance Documents to the Parent
               Guarantor on its behalf, </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                and in each such case, such Obligor will be bound thereby as though such Obligor itself had
supplied such information, given such notice and instructions, executed such Finance
Document and agreement or received any such notice, demand or other communication.</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Every act, omission, agreement, undertaking, settlement, waiver, notice or other
          communication given or made by the Obligors&#146; Agent under any Finance
          Document, or in connection with this Agreement (whether or not known to any
          other Obligor and whether occurring before or after such Obligor became an
          Obligor under this Agreement), shall be binding for all purposes on all other
          Obligors as if the other Obligors had expressly made, given or concurred with
          the same. In the event of any conflict between any notices or other
          communications of the Obligors&#146; Agent and any other Obligor, those of the
          Obligors&#146; Agent shall prevail. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A227></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>25.18 &nbsp;&nbsp;&nbsp;&nbsp;Co-operation with
the Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Lender and each Obligor will
co-operate with the Administrative Agent to complete any legal requirements imposed on the
Administrative Agent in connection with the performance of its duties under this Agreement
and shall supply any information requested by the Administrative Agent in connection with
the proper performance of those duties. </FONT></P>

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<A NAME=A228></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BORROWERS&#146;
INDEMNITIES </FONT></H1>

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<A NAME=A229></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26.1 &nbsp;&nbsp;&nbsp;&nbsp;General Indemnities </FONT></H1>

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<A NAME=A230></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Borrower undertakes
to indemnify: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each of the Finance Parties against any cost, claim, loss, expense (including
          legal fees and disbursements) or liability, which any of them may sustain or
          incur as a consequence of the occurrence of any Default; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each Lender against any loss it may suffer or incur as a result of its funding
          or making arrangements to fund its portion of an Advance requested by a Borrower
          under this Agreement but not made by reason of the operation of any one or more
          of the provisions of this Agreement (save as a result of the gross negligence or
          wilful default of the relevant Lender). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A231></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>26.2 &nbsp;&nbsp;&nbsp;&nbsp;Break Costs </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Borrower shall, within 3 Business Days of demand by the Administrative
          Agent on behalf of a Finance Party, pay to that Finance Party its Break Costs
          attributable to all or any part of any Advance or Unpaid Sum being paid by that
          Borrower on a day other than the last day of an Interest Period or Term for that
          Advance or Unpaid Sum. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Lender shall, as soon as reasonably practicable after a demand by the
          Administrative Agent, provide a certificate confirming the amount of its Break
          Costs for any Interest Period or Term in which they accrue. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<A NAME=A232></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>27. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CURRENCY OF ACCOUNT</FONT></H1>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>27.1 &nbsp;&nbsp;&nbsp;&nbsp;Currency </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The dollar is the currency of account
and payment for each and every sum at any time due from any Obligor under this Agreement
provided that: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each repayment of any Outstandings or Unpaid Sum (or part of it) shall be made
          in the currency in which those Outstandings or Unpaid Sum are denominated on
          their due date; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          interest shall be payable in the currency in which the sum in respect of which
          such interest is payable was denominated when that interest accrued; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each payment in respect of costs and expenses shall be made in the currency in
          which the same were incurred; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each payment pursuant to Clause 12.2 (<I>Tax Indemnity</I>) or Clause 14.1
          (<I>Increased Costs</I>) shall be made in the currency specified by the Finance
          Party claiming under it. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A233></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>27.2 &nbsp;&nbsp;&nbsp;&nbsp;Currency Indemnity </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any sum due from an Obligor under
this Agreement or any order or judgment given or made in relation to this Agreement has to
be converted from the currency (the &#147;<B>first currency</B>&#148;) in which the same
is payable under this Agreement or under such order or judgment into another currency (the
&#147;<B>second currency</B>&#148;) for the purpose of (a)&nbsp;making or filing a claim
or proof against such Obligor, (b)&nbsp;obtaining an order or judgment in any court or
other tribunal or (c)&nbsp;enforcing any order or judgment given or made in relation to
this Agreement, the Parent Guarantor shall indemnify and hold harmless each of the persons
to whom such sum is due from and against any loss suffered or incurred as a result of any
discrepancy between (x)&nbsp;the rate of exchange used for such purpose to convert the sum
in question from the first currency into the second currency and (y)&nbsp;the rate or
rates of exchange at which such person may in the ordinary course of business purchase the
first currency with the second currency upon receipt of a sum paid to it in satisfaction,
in whole or in part, of any such order, judgment, claim or proof. </FONT></P>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PAYMENTS</FONT></H1>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28.1 &nbsp;&nbsp;&nbsp;&nbsp;Payment to the
Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On each date on which this Agreement
requires an amount to be paid by an Obligor or any of the Lenders under this Agreement,
such Obligor or, as the case may be, such Lender shall make the same available to the
Administrative Agent by payment in same day funds (or such other funds as may for the time
being be customary for the settlement of transactions in the relevant currency) to such
account or bank as the Administrative Agent may have specified for this purpose and any
such payment which is made for the account of another person shall be made in time to
enable the Administrative Agent to make available such person&#146;s portion of it to such
other person in accordance with Clause 28.2 (<I>Same Day Funds</I>). </FONT></P>

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<A NAME=A236></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28.2 &nbsp;&nbsp;&nbsp;&nbsp;Same Day Funds </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Save as otherwise provided in this
Agreement, each payment received by the Administrative Agent for the account of another
person shall be made available by the Administrative Agent to such other person (in the
case of a Lender, for the account of its Facility Office) for value the same day by
transfer to such account of such person with such bank in London or New York as such
person shall have previously notified to the Administrative Agent for this purpose. </FONT></P>

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<A NAME=A237></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28.3 &nbsp;&nbsp;&nbsp;&nbsp;Clear Payments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any payment required to be made by an
Obligor under this Agreement shall be calculated without reference to any set-off or
counterclaim and shall be made free and clear of, and without any deduction for or on
account of, any set-off or counterclaim. </FONT></P>

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<A NAME=A238></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28.4 &nbsp;&nbsp;&nbsp;&nbsp;Partial Payments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If the Administrative Agent receives
a payment that is insufficient to discharge all the amounts then due and payable by an
Obligor under the Finance Documents, the Administrative Agent shall, unless otherwise
instructed by an Instructing Group, apply that payment towards the obligations of that
Obligor under the Finance Documents in the following order: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>first</B>, in or towards payment <I>pro rata</I> of any unpaid fees, costs
          and expenses incurred by the Administrative Agent under the Finance Documents; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>secondly</B>, in or towards payment <I>pro rata</I> of any accrued interest
          or commission due but unpaid under any Finance Document; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>thirdly</B>, in or towards payment <I>pro rata </I>of any principal due but
          unpaid under any Finance Document; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>fourthly</B>, in or towards payment <I>pro rata</I> of any other sum due but
          unpaid under the Finance Documents, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and such application shall override
any appropriation made by an Obligor. </FONT></P>

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<A NAME=A239></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>28.5 &nbsp;&nbsp;&nbsp;&nbsp;Indemnity </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Where a sum is to be paid under this
Agreement to the Administrative Agent for the account of another person, the
Administrative Agent shall not be obliged to make the same available to that other person
(or to enter into or perform any exchange contract in connection therewith) until it has
been able to establish to its satisfaction that it has actually received such sum, but if
it does so and it proves to be the case that it had not actually received such sum, then
the person to whom such sum (or the proceeds of such exchange contract) was (or were) so
made available shall on request refund the same to the Administrative Agent together with
an amount sufficient to indemnify and hold harmless the Administrative Agent from and
against any cost or loss it may have suffered or incurred by reason of its having paid out
such sum (or the proceeds of such exchange contract) prior to its having received such
sum. </FONT></P>


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<A NAME=A240></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SHARING AMONG THE
FINANCE PARTIES </FONT></H1>

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<A NAME=A241></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29.1 &nbsp;&nbsp;&nbsp;&nbsp;Payments to Finance
Parties </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If a Finance Party (a
&#147;<B>Recovering Finance Party</B>&#148;) receives or recovers any amount from an
Obligor other than in accordance with Clause 28 (<I>Payments</I>) and applies that amount
to a payment due under the Finance Documents then: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Recovering Finance Party shall, within 3 Business Days, notify details of
          the receipt or recovery to the Administrative Agent; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Administrative Agent shall determine whether the receipt or recovery is in
          excess of the amount the Recovering Finance Party would have been paid had the
          receipt or recovery been received or made by the Administrative Agent and
          distributed in accordance with Clause 28.4 (<I>Partial Payments</I>), without
          taking account of any tax which would be imposed on the Administrative Agent in
          relation to the receipt, recovery or distribution; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Recovering Finance Party shall, within 3 Business Days of demand by the
          Administrative Agent, pay to the Administrative Agent an amount (the
          &#147;<B>Sharing Payment</B>&#148;) equal to such receipt or recovery less any
          amount which the Administrative Agent determines may be retained by the
          Recovering Finance Party as its share of any payment to be made, in accordance
          with Clause 28.4 (<I>Partial Payments</I>). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A242></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29.2 &nbsp;&nbsp;&nbsp;&nbsp;Redistribution of
Payments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent shall treat
the Sharing Payment as if it had been paid by the relevant Obligor and distribute it
between the Finance Parties (other than the Recovering Finance Party) in accordance with
Clause 28.4 (<I>Partial Payments</I>). </FONT></P>

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<A NAME=A243></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29.3 &nbsp;&nbsp;&nbsp;&nbsp;Recovering Finance
Party&#146;s Rights </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          On a distribution by the Administrative Agent under Clause 29.2
          (<I>Redistribution of Payments</I>), the Recovering Finance Party will be
          subrogated to the rights of the Finance Parties which have shared in the
          redistribution. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          If and to the extent that the Recovering Finance Party is not able to rely on
          its rights under paragraph (a) above, the relevant Obligor shall be liable to
          the Recovering Finance Party for a debt equal to the Sharing Payment which is
          immediately due and payable. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A244></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29.4 &nbsp;&nbsp;&nbsp;&nbsp;Reversal of
Redistribution </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any part of the Sharing Payment
received or recovered by a Recovering Finance Party becomes repayable and is repaid by
that Recovering Finance Party, then: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each Finance Party which has received a share of the relevant Sharing Payment
          pursuant to Clause 29.2 <I>(Redistribution of Payments</I>)<I> </I>shall, upon
          the request of the Administrative Agent, pay to the Administrative Agent for the
          account of that Recovering Finance Party an amount equal to its share of the
          Sharing Payment (together with an amount as is necessary to reimburse that
          Recovering Finance Party for its share of any interest on the Sharing Payment
          which that Recovering Finance Party is required to pay); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          that Recovering Finance Party&#146;s rights of subrogation in respect of any
          reimbursement shall be cancelled and the relevant Obligor will be liable to the
          reimbursing Finance Party for the amount so reimbursed. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A245></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>29.5 &nbsp;&nbsp;&nbsp;&nbsp;Exceptions </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               This Clause 29 (<I>Sharing Among the Finance Parties</I>) shall not apply to the
               extent that the Recovering Finance Party would not, after making any payment
               pursuant hereto, have a valid and enforceable claim against the relevant
               Obligor. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A Recovering Finance Party is not obliged to share with any other Finance Party
               under any amount which the Recovering Finance Party has received or recovered as
               a result of taking legal or arbitration proceedings, if: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               it notified such other Finance Party of the legal or arbitration proceedings;
               and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               such other Finance Party had an opportunity to participate in those legal or
               arbitration proceedings but did not do so as soon as reasonably practicable
               having received notice of it or did not take separate legal or arbitration
               proceedings. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CALCULATIONS AND ACCOUNTS</FONT></H1>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.1 &nbsp;&nbsp;&nbsp;&nbsp;Day Count Convention </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interest and commitment fees shall
accrue from day to day and shall be calculated on the basis of a year of 360 days and the
actual number of days elapsed. </FONT></P>

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<A NAME=A247></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.2 &nbsp;&nbsp;&nbsp;&nbsp;Reference Banks </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Save as otherwise provided in this
Agreement, on any occasion a Reference Bank or Lender fails to supply the Administrative
Agent with an interest rate quotation required of it under the foregoing provisions of
this Agreement, the rate for which such quotation was required shall be determined from
those quotations which are supplied to the Administrative Agent. </FONT></P>

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<A NAME=A248></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.3 &nbsp;&nbsp;&nbsp;&nbsp;Maintain Accounts </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Lender shall maintain in
accordance with its usual practice accounts evidencing the amounts from time to time lent
by and owing to it under this Agreement. </FONT></P>

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<A NAME=A249></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.4 &nbsp;&nbsp;&nbsp;&nbsp;Control Accounts </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent shall
maintain on its books a control account or accounts in which shall be recorded: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount of any Advance or Unpaid Sum and each Lender&#146;s share in it; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount of all principal, interest and other sums due or to become due from
          each of the Obligors to any of the Lenders under the Finance Documents and each
          Lender&#146;s share in it; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the amount of any sum received or recovered by the Administrative Agent under
          this Agreement and each Lender&#146;s share in it. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A250></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.5 &nbsp;&nbsp;&nbsp;&nbsp;Prima Facie Evidence </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In any legal action or proceeding
arising out of or in connection with this Agreement, the entries made in the accounts
maintained pursuant to Clause 30.3 (<I>Maintain Accounts</I>) and Clause 30.4 (<I>Control
Accounts</I>) shall be <I>prima facie</I> evidence of the existence and amounts of the
specified obligations of the Obligors. </FONT></P>

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<A NAME=A251></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.6 &nbsp;&nbsp;&nbsp;&nbsp;Certificate of
Finance Party </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A certificate of a Finance Party as
to the amount for the time being required to indemnify it against any Tax Liability
pursuant to Clause 12.2 (<I>Tax Indemnity</I>) or any Increased Cost pursuant to Clause
14.1 (<I>Increased Costs</I>) shall be <I>prima facie</I> evidence of the existence and
amounts of the specified obligations of the Obligors. </FONT></P>

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<A NAME=A252></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>30.7 &nbsp;&nbsp;&nbsp;&nbsp;Certificate of the
Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A certificate of the Administrative
Agent as to the amount at any time due from either Borrower under this Agreement (or the
amount which, but for any of the obligations of either Borrower under this Agreement being
or becoming void, unenforceable or ineffective, at any time, would have been due from such
Borrower under this Agreement) shall, in the absence of manifest error, be <I>prima facie
</I>evidence for the purposes of Clause 24 <I>(Guarantee and Indemnity</I>). </FONT></P>

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<A NAME=A253></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ASSIGNMENTS AND
TRANSFERS </FONT></H1>

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<A NAME=A254></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.1 &nbsp;&nbsp;&nbsp;&nbsp;Successors and Assignees </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Agreement shall be binding upon
and enure to the benefit of each party to this Agreement and its or any subsequent
successors, permitted assignees and Transferees. </FONT></P>

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<A NAME=A255></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.2 &nbsp;&nbsp;&nbsp;&nbsp;Assignment or
Transfers by Obligors </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except pursuant to and in accordance
with Clause 20 (<I>Sale and Leaseback</I>) and Clause 21 (<I>Additional Obligors and New
Vessels</I>), none of the rights, benefits and obligations of an Obligor under this
Agreement shall be capable of being assigned or transferred, and each Obligor undertakes
not to seek to assign or transfer any of its rights, benefits and obligations under this
Agreement. </FONT></P>

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<A NAME=A256></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.3 &nbsp;&nbsp;&nbsp;&nbsp;Assignments or
Transfers by Lenders </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any Lender may, at any time and at
its own cost, assign all or any of its rights and benefits under the Finance Documents in
accordance with Clause 31.4 (<I>Assignments</I>) or transfer all or any of its rights,
benefits and obligations under the Finance Documents in accordance with Clause 31.5
(<I>Transfer Certificate</I>) provided that such assignment or transfer: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is the subject of the prior approval of the Borrowers (which approval shall not
               be unreasonably withheld); and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the principal amount to be assigned or transferred by the relevant Lender: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is at least US$5,000,000; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               consists of Tranche A Commitment and Tranche B Commitment (in each case, if any)
               which corresponds <I>pro </I> <I>rata </I>to such Lender&#146;s respective
               participation in the Tranche A Commitments and Tranche B Commitments of all the
               Lenders, as applicable immediately prior to such assignment or transfer. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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<A NAME=A257></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.4 &nbsp;&nbsp;&nbsp;&nbsp;Assignments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any Lender wishes to assign all or
any of its rights and benefits under the Finance Documents, unless and until the relevant
assignee has agreed with the other Finance Parties that it shall be under the same
obligations towards each of them as it would have been under if it had been an original
party to the Finance Documents as a Lender, such assignment shall not become effective and
the other Finance Parties shall not be obliged to recognise such assignee as having the
rights against each of them which it would have had if it had been such a party to this
Agreement. </FONT></P>

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<A NAME=A258></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.5 &nbsp;&nbsp;&nbsp;&nbsp;Transfer Certificate </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any Lender wishes to transfer all
or any of its rights, benefits and/or obligations under the Finance Documents, such
transfer may be effected by novation through the delivery to the Administrative Agent of a
duly completed and duly executed Transfer Certificate in which event, on the later of the
Transfer Date specified in such Transfer Certificate and the fifth Business Day after (or
such earlier Business Day endorsed by the Administrative Agent on such Transfer
Certificate falling on or after) the date of delivery of such Transfer Certificate to the
Administrative Agent: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to the extent that in such Transfer Certificate the Lender party to it seeks to
          transfer its rights, benefits and obligations under the Finance Documents, each
          of the Obligors and such Lender shall be released from further obligations
          towards one another under the Finance Documents and their respective rights
          against one another shall be cancelled (such rights and obligations being
          referred to in this Clause 31.5 as &#147;<B>discharged rights and
          obligations</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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          each of the Obligors and the Transferee party to it shall assume obligations
          towards one another and/or acquire rights against one another which differ from
          the discharged rights and obligations only insofar as such Obligor and such
          Transferee have assumed and/or acquired the same in place of such Obligor and
          such Lender; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the other Finance Parties and the Transferee shall acquire the same rights and
          benefits and assume the same obligations between themselves as they would have
          acquired and assumed had such Transferee been an original party to the Finance
          Documents as a Lender with the rights, benefits and obligations acquired or
          assumed by it as a result of such transfer; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          such Transferee shall become a party to this Agreement as a Lender, </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>provided that, such transfer shall be
conditional upon the performance by the Administrative Agent of all &#147;know your
customer&#148; or other checks relating to any person that it is required to carry out
where the transfer is to a new Lender. </FONT></P>

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<A NAME=A259></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.6 &nbsp;&nbsp;&nbsp;&nbsp;Transfer Fee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On the date upon which a transfer
takes effect pursuant to Clause 31.5&nbsp;(<I>Transfer Certificate</I>) the Transferee in
respect of such transfer shall pay to the Administrative Agent for its own account a
transfer fee of US$3,000. </FONT></P>

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<A NAME=A260></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>31.7 &nbsp;&nbsp;&nbsp;&nbsp;Disclosure of
Information </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any Lender may disclose to any of its
Affiliates, to any actual or potential assignee or Transferee, to any person who may
otherwise enter into contractual relations with such Lender in relation to this Agreement
or any person to whom, and to the extent that, information is required to be disclosed by
any applicable Law, such information about the Obligors, the Group and (if applicable) the
Leaseback Group as such Lender shall consider appropriate. Provided that the Parent
Guarantor may require such Lender to obtain from its relevant Affiliate or such actual or
potential assignee or transferee or such other person, a confidentiality undertaking in
substantially the form previously delivered to the Parent Guarantor by the Lenders being
original parties to this Agreement in relation to such information concerning the Group
and (if applicable) the Leaseback Group which has been supplied to such Lender on a
confidential basis. </FONT></P>

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<A NAME=A261></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COSTS AND EXPENSES </FONT></H1>

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<A NAME=A262></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.1 &nbsp;&nbsp;&nbsp;&nbsp;Transaction Costs </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Borrowers shall, from time to
time on demand of the Administrative Agent, reimburse the Administrative Agent, the
Security Trustee and each of the Lead Arrangers for all costs and expenses (including
legal fees and disbursements) reasonably incurred by them in connection with the
negotiation, preparation and execution of the Finance Documents, the completion of the
transactions therein contemplated and primary syndication of the Facilities (including
publicity expenses). </FONT></P>

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<A NAME=A263></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.2 &nbsp;&nbsp;&nbsp;&nbsp;Preservation and
Enforcement Costs </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Borrowers shall, from time to
time on demand of the Administrative Agent, reimburse each Finance Party for all costs and
expenses (including legal fees and disbursements) reasonably incurred in or in connection
with the preservation and/or enforcement of any of the rights of such Finance Party under
the Finance Documents. </FONT></P>

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<A NAME=A264></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.3 &nbsp;&nbsp;&nbsp;&nbsp;Stamp Taxes </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Borrowers shall pay all stamp,
registration, documentary and other taxes (including any penalties, additions, fines,
surcharges or interest relating thereto) to which any of the Finance Documents or any
judgment given in connection therewith is or at any time may be subject and shall, from
time to time on demand of the Administrative Agent, indemnify the Finance Parties against
any liabilities, costs, claims and expenses resulting from any failure to pay or any delay
in paying those taxes. The Administrative Agent shall be entitled (but not obliged) to pay
those taxes (whether or not they are its primary responsibility) and to the extent that it
does so, claim under this Clause 32.3. </FONT></P>

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<A NAME=A265></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.4 &nbsp;&nbsp;&nbsp;&nbsp;Amendments and
Waivers </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If an Obligor requests any amendment
or waiver in accordance with Clause 37 (<I>Amendments</I>), the relevant Obligor shall, on
demand of the Administrative Agent, reimburse the Finance Parties for all costs and
expenses (including legal fees and disbursements) reasonably incurred by any of the
Finance Parties in responding to or complying with such request. </FONT></P>

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<A NAME=A266></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.5 &nbsp;&nbsp;&nbsp;&nbsp;Lenders&#146;
Indemnity </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any Obligor fails to perform any
of its obligations under this Clause 32 (<I>Costs and Expenses</I>), each Lender shall
indemnify and hold harmless each of the Administrative Agent, the Lead Arrangers and/or
the Security Trustee from and against its Proportion (as determined at all times for these
purposes in accordance with paragraph (c) of the definition of &#147;Proportion&#148;) of
any loss incurred by any of them as a result of such failure and the relevant Obligor
shall forthwith reimburse each Lender for any payment made by it pursuant to this Clause
32.5. </FONT></P>

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<A NAME=A267></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.6 &nbsp;&nbsp;&nbsp;&nbsp;Value Added Tax </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          All amounts expressed to be payable under any Finance Document by any Obligor to
          a Finance Party shall be exclusive of any VAT. If VAT is chargeable on any
          supply made by a Finance Party to any Obligor under any Finance Document
          (whether that supply is taxable pursuant to the exercise of an option or
          otherwise), that Obligor shall pay to that Finance Party (in addition to and at
          the same time as paying that consideration) an amount equal to the amount of the
          VAT as further consideration. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          No payment or other consideration to be made or furnished to any Obligor
          pursuant to or in connection with any Finance Document may be increased or added
          to by reference to (or as a result of any increase in the rate of) any VAT which
          shall be or may become chargeable in respect of any taxable supply. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Where a Finance Document requires any party to reimburse a Finance Party for any
          costs or expenses, that party shall also pay any amount of those costs or
          expenses incurred referable to VAT chargeable thereon. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A268></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>32.7 &nbsp;&nbsp;&nbsp;&nbsp;Indemnity Payments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Where under any Finance Document an
Obligor has an obligation to indemnify or reimburse any Finance Party in respect of any
loss or payment, the calculation of the amount payable by way of indemnity or
reimbursement shall take account of the likely tax treatment in the hands of that Finance
Party (as determined by it) of the amount payable by way of indemnity or reimbursement and
of the loss or payment in respect of which that amount is payable. </FONT></P>

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<A NAME=A269></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>33. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;REMEDIES AND WAIVERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No failure to exercise, nor any delay
in exercising, on the part of the Finance Parties or any of them, any right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right or remedy prevent any further or other exercise thereof or the
exercise of any other right or remedy. The rights and remedies provided in this Agreement
are cumulative and not exclusive of any rights or remedies provided by Law. </FONT></P>

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<A NAME=A270></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICES AND DELIVERY
OF INFORMATION </FONT></H1>

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<A NAME=A271></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34.1 &nbsp;&nbsp;&nbsp;&nbsp;Writing </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each communication to be made under
this Agreement shall be made in writing and, unless otherwise stated, shall be made by fax
or letter. </FONT></P>

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<A NAME=A272></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34.2 &nbsp;&nbsp;&nbsp;&nbsp;Giving of Notice </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject to Clause 34.3 (<I>Use of
Websites</I>) and to Clause 34.4 (<I>Electronic Communication</I>), any communication or
document to be made or delivered by one person to another pursuant to this Agreement shall
in the case of any person other than a Lender or the Leaseback Borrower (unless that other
person has by 15 days&#146; written notice to the Administrative Agent specified another
address) be made or delivered to that other person at the address identified with its
signature below or, in the case of a Lender, at the address from time to time designated
by it to the Administrative Agent for the purpose of this Agreement (or, in the case of a
Transferee at the end of the Transfer Certificate to which it is a party as Transferee)
or, in the case of the Leaseback Borrower, at the address designated in the applicable
Novation Deed or such other address as may from time to time be designated by it to the
Administrative Agent for such purpose (by notice to the Administrative Agent at least 15
days prior to which such address is to take effect for such purpose) and shall be deemed
to have been made or delivered (in the case of any communication made by fax) when
despatched and the transmission report of the sender indicates that the fax transmission
has been received by the addressee or (in the case of any communication made by letter)
when left at the address or (as the case may be) 5 days after being deposited in the post
postage prepaid in an envelope addressed to it at that address provided that any
communication or document to be made or delivered to the Administrative Agent shall be
effective only when received by the Administrative Agent and then only if the same is
expressly marked for the attention of the department or officer identified with the
Administrative Agent&#146;s signature below (or such other department or officer as the
Administrative Agent shall from time to time specify for this purpose). Any communication
which would otherwise be deemed to have been received on a day which is not a Business Day
shall be deemed to have been received on the next succeeding Business Day. </FONT></P>

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<A NAME=A273></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34.3 &nbsp;&nbsp;&nbsp;&nbsp;Use of Websites </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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               Without prejudice to the obligation of each Obligor when providing information
               to a Lender to do so (in each case) through the Administrative Agent, any
               information required to be delivered to the Lenders, may be delivered to those
               Lenders (the &#147;<B>Website Lenders</B>&#148;) who accept such method of
               communication by posting the relevant information onto an electronic website
               designated by the Parent Guarantor and the Administrative Agent (the
               &#147;<B>Designated Website</B>&#148;) if: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Administrative Agent expressly agrees (after consultation with each of the
               Lenders) that it will accept communication of the information by this method; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               both the Parent Guarantor and the Administrative Agent are aware of the address
               of, and any relevant password specifications for, the Designated Website; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the information is in a format previously agreed between the Parent Guarantor
               and the Administrative Agent. </FONT></TD>
               </TR>
               </TABLE>
               <BR>



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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=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               If any Lender (a &#147;<B>Paper Form Lender</B>&#148;) does not agree to the delivery of such
information electronically then the Administrative Agent shall notify the Parent Guarantor
accordingly and the Parent Guarantor shall supply the information to the Administrative
Agent (in sufficient copies for each Paper Form Lender) in paper form.</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The Administrative Agent shall supply each Website Lender with the address of,
               and any relevant password specifications for, the Designated Website following
               designation of that website by the Parent Guarantor and the Administrative
               Agent. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(c)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The Administrative Agent shall, as soon as reasonably practicable after becoming
               aware of the occurrence of such event, notify the other parties to this
               Agreement if: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Designated Website cannot be accessed due to technical failure; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the password specifications for the Designated Website change; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any new information which is required to be provided under this Agreement is
               posted onto the Designated Website; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any existing information which has been provided under this Agreement and posted
               onto the Designated Website is amended; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(v)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               it becomes aware that the Designated Website or any information posted onto the
               Designated Website is or has been infected by any electronic virus or similar
               software. </FONT></TD>
               </TR>
               </TABLE>
               <BR>



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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=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               If the Administrative Agent notifies the other parties to this Agreement under paragraph
(c)(i) or paragraph (c)(v) above, all information to be provided by any Obligor under this
Agreement after the date of that notice shall be supplied in paper form unless and until
the Administrative Agent and each Website Lender is satisfied that the circumstances
giving rise to the notification are no longer continuing.</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any Website Lender may request, through the Administrative Agent, one paper copy
          of any information required to be provided under this Agreement which is posted
          onto the Designated Website. The relevant Obligor shall comply with any such
          request within 10 Business Days. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A274></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>34.4 &nbsp;&nbsp;&nbsp;&nbsp;Electronic
Communication </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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any communication to be made between the Administrative Agent and a Lender or
          between an Obligor and the Administrative Agent under or in connection with the
          Finance Documents may be made by electronic mail or other electronic means, if
          the Administrative Agent, the relevant Lender and/or the Parent Guarantor (as
          the case may be): </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          agree that, unless and until notified to the contrary, this is to be an accepted
          form of communication; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          notify each other in writing of their electronic mail address and/or any other
          information required to enable the sending and receiving of information by that
          means; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          notify each other of any change to their address or any other such information
          supplied by them. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Any electronic communication made between the Administrative Agent and a Lender
          or between the Administrative Agent and an Obligor will be effective only when
          actually received in readable form and in the case of any electronic
          communication made by a Lender or an Obligor to the Administrative Agent only if
          it is addressed in such a manner as the Administrative Agent shall specify for
          this purpose. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<A NAME=A275></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>35. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ENGLISH LANGUAGE</FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each communication and document made
or delivered by one party to another pursuant to this Agreement shall be in the English
language or (if requested by the Administrative Agent) accompanied by a translation of it
into English certified (by an officer of the person making or delivering the same) as
being a true and accurate translation of it. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>36. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PARTIAL INVALIDITY </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If, at any time, any provision of
this Agreement is or becomes illegal, invalid or unenforceable in any respect under the
Law of any jurisdiction, such illegality, invalidity or unenforceability shall not affect: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           the legality, validity or enforceability of the remaining provisions of this
          Agreement; or</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the legality, validity or enforceability of such provision under the Law of any
          other jurisdiction.</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>37.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>AMENDMENTS</B> </FONT></P>

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<A NAME=A276></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37.1 &nbsp;&nbsp;&nbsp;&nbsp;Amendments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Except as provided in Clauses 37.2
(<I>Consent</I>), 37.3 (<I>Technical Amendments</I>) and 37.5 (<I>Guarantees and
Security</I>), the Administrative Agent, if it has the prior written consent of an
Instructing Group, and the Obligors affected thereby, may from time to time agree in
writing to amend this Agreement or to waive, prospectively or retrospectively, any of the
requirements of this Agreement and any amendments or waivers so agreed shall be binding on
all the Finance Parties and all the Obligors. </FONT></P>

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<A NAME=A277></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37.2 &nbsp;&nbsp;&nbsp;&nbsp;Consent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An amendment or waiver relating to
the following matters shall not be made without the prior written consent of each Lender
affected thereby: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any increase in the Commitment of such Lender; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a reduction in the proportion of any amount received or recovered (whether by
          way of set-off, combination of accounts or otherwise) in respect of any amount
          due from an Obligor under this Agreement to which any Lender is entitled; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a decrease in the Margin, or the principal amount of, any Advance or any
          interest payment, fees or other amounts due under this Agreement to any Lender
          from an Obligor or any other party to this Agreement; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any change in the currency of account; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the deferral of the date for payment of any principal, interest, fee or any
          other amount due under this Agreement to any Lender from an Obligor or any other
          party to this Agreement; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the deferral of the Maturity Date; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the obligations of the Parent Guarantor or (subject to Clause 37.5
          (<I>Guarantees and Security</I>)) any other Guarantor, under Clause 24
          (<I>Guarantee and Indemnity</I>); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any reduction to the percentage set forth in the definition of Instructing
          Group; or </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a change to any provision which contemplates the need for the consent or
          approval of all the Lenders. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A278></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37.3 &nbsp;&nbsp;&nbsp;&nbsp;Technical Amendments </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notwithstanding Clause 37.1
(<I>Amendments</I>), the Administrative Agent may determine administrative matters and
make technical amendments arising out of manifest errors on the face of this Agreement,
where such amendments would not prejudice or otherwise be adverse to the position of any
Lender under this Agreement, without reference to the Lenders. </FONT></P>

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<A NAME=A279></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37.4 &nbsp;&nbsp;&nbsp;&nbsp;Amendments
affecting the Administrative Agent </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notwithstanding any other provision
of this Agreement, the Administrative Agent shall not be obliged to agree to any amendment
or waiver if the same would: </FONT></P>


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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=2><B>(i)</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          amend or waive any provision of Clause 25 (<I>Administrative Agent and
          Obligors&#146; Agent</I>), Clause 32 (<I>Costs </I> <I>and Expenses</I>) or this
          Clause 37 (<I>Amendments</I>); or</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(ii)</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          otherwise amend or waive any of the Administrative Agent&#146;s rights under
          this Agreement or subject the Administrative Agent to any additional obligations
          under this Agreement.</FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A280></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>37.5 &nbsp;&nbsp;&nbsp;&nbsp;Guarantees and
Security </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The release of a Guarantor from any
of its obligations under Clause 24 (<I>Guarantee and Indemnity</I>) or a release of any
Security under the Security Documents, in each case, other than in accordance with the
terms of this Agreement, shall require prior consent of all the Lenders, provided that the
Administrative Agent or the Security Trustee (as applicable) in its discretion shall be
permitted to effect any such release (excluding, for the avoidance of doubt, a release of
the Parent Guarantor from any of its obligations under Clause 24 (<I>Guarantee and
Indemnity</I>)) to the extent required in connection with: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the Permitted Sale and Leaseback; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the sale or other disposal to a third party of a Collateral Vessel (or of a
               Subsidiary Guarantor) or a total loss of a Collateral Vessel, subject to (x)
               receipt by the Administrative Agent on the Disposal Date or the Total Loss Date
               (as the case may be) of the prepayment required to be made by the relevant
               Borrower in respect of the same or (y) a determination by the Administrative
               Agent that no such prepayment is required, in each case, pursuant to and in
               accordance with Clause 8.1 (<I>Total Loss or </I> Sale); or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(c)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               the substitution of a Collateral Vessel pursuant to and in accordance with
               Clause 19.12(b) (<I>Disposal of </I> <I>Assets and Collateral Vessel
               Substitution</I>). </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>38.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>THIRD PARTY RIGHTS</B> </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               A person which is not a party to this Agreement (a &#147;<B>third
               party</B>&#148;) shall have no right to enforce any of its provisions except
               that: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               a third party shall have those rights it would have had if the Contracts (Rights
               of Third Parties) Act 1999 had not come into effect; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               each of Clause 12.2 (<I>Tax Indemnity</I>), Clause 14 (<I>Increased Costs</I>)
               and Clause 25.9(b) (<I>Exclusion of </I> <I>Liability</I>) shall be enforceable
               by any third party referred to in such clause as if such third party were a
               party to this Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               The parties to this Agreement may without the consent of any third party vary or
               rescind this Agreement. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>39.</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>COUNTERPARTS</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Agreement may be executed in any
number of counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument. </FONT></P>

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<A NAME=A281></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>40. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;GOVERNING LAW </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Agreement shall be governed by,
and construed in accordance with, English Law. </FONT></P>

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<A NAME=A282></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;JURISDICTION </FONT></H1>

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<A NAME=A283></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41.1 &nbsp;&nbsp;&nbsp;&nbsp;Courts of England </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each of the parties to this Agreement
irrevocably agrees for the benefit of each of the Finance Parties that the courts of
England shall have exclusive jurisdiction to hear and determine any suit, action or
proceedings, and to settle any disputes, which may arise out of or in connection with this
Agreement (respectively &#147;<B>Proceedings</B>&#148; and <B>&#147;Disputes</B>&#148;)
and, for such purposes, irrevocably submits to the jurisdiction of such courts. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A284></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41.2 &nbsp;&nbsp;&nbsp;&nbsp;Waiver </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each of the Obligors irrevocably
waives any objection which it might now or hereafter have to Proceedings being brought or
Disputes being settled in the courts of England and agrees not to claim that any such
court is an inconvenient or inappropriate forum. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A285></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41.3 &nbsp;&nbsp;&nbsp;&nbsp;Service of Process </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each of the Obligors which is not
incorporated in England agrees that the process by which any Proceedings are begun may be
served on it by being delivered in connection with any Proceedings in England, to Teekay
Shipping (UK) Limited at 49 St. James Street, London SW1A 1JT or its registered office for
the time being. If the appointment of the person mentioned in this Clause 41.3 ceases to
be effective in respect of any of the Obligors, the relevant Obligor shall immediately
appoint a further person in England to accept service of process on its behalf in England
and, failing such appointment within 15&nbsp;days, the Administrative Agent shall be
entitled to appoint such person by notice to the relevant Obligor. Nothing contained in
this Agreement shall affect the right to serve process in any other manner permitted by
Law. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A286></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41.4 &nbsp;&nbsp;&nbsp;&nbsp;Proceedings in
Other Jurisdictions </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nothing in Clause 41.1 (<I>Courts of
England</I>) shall (or shall be construed so as to) limit the right of the Finance Parties
or any of them to take Proceedings against any of the Obligors in any other court of
competent jurisdiction nor shall the taking of Proceedings in any one or more
jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether
concurrently or not) if and to the extent permitted by applicable Law. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A287></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>41.5 &nbsp;&nbsp;&nbsp;&nbsp;Waiver of Immunity </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the extent that any Obligor may in
any jurisdiction claim for itself or its assets or revenues immunity from suit, execution,
attachment (whether in aid of execution, before judgment or otherwise) or other legal
process and to the extent that in any such jurisdiction there may be attributed to itself,
its assets or revenues such immunity (whether or not claimed), such Obligor irrevocably
agrees not to claim, and irrevocably waives, such immunity to the full extent permitted by
the laws of such jurisdiction. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>This Agreement has been entered
into on the date stated at the beginning of this Agreement.</B> </FONT></P>

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

<PRE>
                                                    <B>SCHEDULE 1</B>

                                             <B>LENDERS AND COMMITMENTS</B>

<I><B>Tranche A</B></I>

- ------------------------------------------------------------------- --------------------------------------------
                              <B>Lender</B>                                                <B>Commitment</B>
- ------------------------------------------------------------------- --------------------------------------------
Nordea Bank Norge ASA, Grand Cayman Branch                                         US$32,000,000
- ------------------------------------------------------------------- --------------------------------------------
DnB NOR Bank ASA                                                                   US$32,000,000
- ------------------------------------------------------------------- --------------------------------------------
HSBC Bank plc                                                                      US$24,000,000
- ------------------------------------------------------------------- --------------------------------------------
ING Bank N.V.                                                                      US$24,000,000
- ------------------------------------------------------------------- --------------------------------------------
Danish Ship Finance (Danmarks Skibskreditfond)                                     US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Deutsche Schiffsbank Aktiengesellschaft                                            US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Dresdner Bank AG in Hamburg                                                        US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Fokus Bank ASA                                                                     US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Landesbank Hessen-Thuringen Girozentrale                                           US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Lloyds TSB Bank plc                                                                US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
NIB Capital Bank N.V.                                                              US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
The Royal Bank of Scotland plc                                                     US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Scotiabank Europe plc                                                              US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
Vereins- und Westbank AG                                                           US$18,240,000
- ------------------------------------------------------------------- --------------------------------------------
The Governor and Company of the Bank of Ireland                                    US$12,800,000
- ------------------------------------------------------------------- --------------------------------------------
Skandinaviska Enskilda Banken AB (publ.)                                           US$12,800,000
- ------------------------------------------------------------------- --------------------------------------------
Total:                                                                            US$320,000,000
=================================================================== ============================================


<I><B>Tranche B</B></I>

- ------------------------------------------------------------------- --------------------------------------------
                              <B>Lender</B>                                                 <B>Commitment</B>
- ------------------------------------------------------------------- --------------------------------------------
Nordea Bank Norge ASA, Grand Cayman Branch                                         US$18,000,000
- ------------------------------------------------------------------- --------------------------------------------

DnB NOR Bank ASA                                                                   US$18,000,000
- ------------------------------------------------------------------- --------------------------------------------
HSBC Bank plc                                                                      US$13,500,000
- ------------------------------------------------------------------- --------------------------------------------
ING Bank N.V.                                                                      US$13,500,000
- ------------------------------------------------------------------- --------------------------------------------
Danish Ship Finance (Danmarks Skibskreditfond)                                     US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Deutsche Schiffsbank Aktiengesellschaft                                            US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Dresdner Bank AG in Hamburg                                                        US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Fokus Bank ASA                                                                     US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Landesbank Hessen-Thuringen Girozentrale                                           US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Lloyds TSB Bank plc                                                                US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
NIB Capital Bank N.V.                                                              US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
The Royal Bank of Scotland plc                                                     US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Scotiabank Europe plc                                                              US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
Vereins- und Westbank AG                                                           US$10,260,000
- ------------------------------------------------------------------- --------------------------------------------
The Governor and Company of the Bank of Ireland                                     US$7,200,000
- ------------------------------------------------------------------- --------------------------------------------
Skandinaviska Enskilda Banken AB (publ.)                                            US$7,200,000
- ------------------------------------------------------------------- --------------------------------------------
Total:                                                                            US$180,000,000
=================================================================== ============================================

</PRE>
<BR>
<BR>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A289></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 2 <BR><BR>FORM OF TRANSFER
CERTIFICATE</FONT></H1>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To:      Nordea Bank Finland Plc,
New York Branch (as the <B>"Administrative Agent"</B>)</FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TRANSFER CERTIFICATE </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This Transfer Certificate relates to
an agreement (the &#147;<B>Credit Facility Agreement</B>&#148;) dated 1 September 2004 and
made between Teekay Shipping Corporation (the &#147;<B>Parent Guarantor</B>&#148;), Teekay
Nordic Holdings Incorporated (as the <B>&#147;Original Borrower</B>&#148;), Nordea Bank
Finland Plc, New York Branch (as the &#147;<B>Bookrunner</B>&#148;), Nordea Bank Finland
Plc, New York Branch and DnB NOR Bank ASA (as the &#147;<B>Lead Arrangers</B>&#148;), the
Administrative Agent, Nordea Bank Finland Plc, New York Branch (as the &#147;<B>Security
Trustee</B>&#148;), the vessel owning entities named therein (as the &#147;<B>Subsidiary
Guarantors</B>&#148;) and the persons named therein as lenders (as from time to time
amended, varied, novated or supplemented). </FONT></P>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Terms defined in the Credit Facility Agreement shall, subject to any contrary
          indication, have the same meanings in this Transfer Certificate. The terms
          &#147;Lender&#148;, &#147;Transferee&#148;, &#147;Lender&#146;s
          Participation&#148; and &#147;Portion Transferred&#148; are defined in the
          Schedule to this Transfer Certificate. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Lender: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               confirms that the details in the Schedule to this Transfer Certificate are an
               accurate summary of the Lender&#146;s participation in the Credit Facility
               Agreement and the Interest Periods or Terms (as the case may be) for existing
               Advances as at the date of this Transfer Certificate; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               requests the Transferee to accept and procure the transfer to the Transferee of
               the Portion Transferred by countersigning and delivering this Transfer
               Certificate to the Administrative Agent at its address for the service of
               notices designated to the Administrative Agent in accordance with the Credit
               Facility Agreement. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Transferee requests the Administrative Agent to accept this Transfer
          Certificate as being delivered to the Administrative Agent pursuant to and for
          the purposes of Clause 31.5 (<I>Transfer Certificate</I>)&nbsp;of the Credit
          Facility Agreement so as to take effect in accordance with the terms of it on
          the Transfer Date or on such later date as may be determined in accordance with
          the terms of it. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Transferee confirms that it has received a copy of the Credit Facility
          Agreement together with such other information as it has required in connection
          with this transaction and that it has not relied and will not rely on the Lender
          to check or enquire on its behalf into the legality, validity, effectiveness,
          adequacy, accuracy or completeness of any such information and further agrees
          that it has not relied and will not rely on the Lender to assess or keep under
          review on its behalf the financial condition, creditworthiness, condition,
          affairs, status or nature of any Obligor. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Transferee undertakes with the Lender and each of the other parties to the
          Credit Facility Agreement that it will perform in accordance with their terms
          all those obligations which by the terms of the Credit Facility Agreement will
          be assumed by it after delivery of this Transfer Certificate to the
          Administrative Agent and satisfaction of the conditions (if any) subject to
          which this Transfer Certificate is expressed to take effect. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Lender makes no representation or warranty and assumes no responsibility
          with respect to the legality, validity, effectiveness, adequacy or
          enforceability of the Credit Facility Agreement, any other Finance Document or
          other document relating to it and assumes no responsibility for the financial
          condition of any Obligor or for the performance and observance by any Obligor of
          any of its obligations under the Credit Facility Agreement, any Finance Document
          or any other document relating to it and any and all such conditions and
          warranties, whether express or implied by Law or otherwise, are excluded. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Lender gives notice that nothing in this Transfer Certificate or in the
          Credit Facility Agreement (or any other Finance Document or other document
          relating to it) shall oblige the Lender (a) to accept a re-transfer from the
          Transferee of the whole or any part of its rights, benefits and/or obligations
          under the Credit Facility Agreement transferred pursuant to this Transfer
          Certificate or (b) to&nbsp;support any losses directly or indirectly sustained
          or incurred by the Transferee for any reason whatsoever (including the failure
          by any Obligor or any other party to the Credit Facility Agreement (or any
          document relating to it) to perform its obligations under any such document) and
          the Transferee acknowledges the absence of any such obligation as is referred to
          in (a)&nbsp;and (b)&nbsp;above. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 3-TNR" FSL="Default" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          This Transfer Certificate and the rights, benefits and obligations of the
          parties under this Transfer Certificate shall be governed by and construed in
          accordance with English Law. </FONT></TD>
          </TR>
          </TABLE>
          <BR>






<!-- MARKER FORMAT-SHEET="Page Rule Single" FSL="Default" -->
     <HR ALIGN=LEFT WIDTH=15% SIZE=1 NOSHADE>
<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;delete
as appropriate.</FONT></TD></TR>
</TABLE>
<BR>

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



<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A291></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Schedule </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Lender: <BR><BR>2.</B>&nbsp;&nbsp;&nbsp;&nbsp; <B>Transferee:<BR><BR> 3.</B>&nbsp;&nbsp;&nbsp;&nbsp; <B>Transfer Date:</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Lender&#146;s Participation</B>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Interest Period/Term</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>Portion Transferred</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Commitment</B> <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portion Transferred</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.</B>&nbsp;&nbsp;&nbsp;&nbsp;
          <B>Outstandings</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp; <B>Term</B> <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;Portion Transferred</B> </FONT></P>



<!-- MARKER FORMAT-SHEET="Page Rule Single" FSL="Default" -->
     <HR ALIGN=LEFT WIDTH=15% SIZE=1 NOSHADE>
<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>* &nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Details of the Lender&#146;s Available Commitment should not be completed after the
applicable Termination Date.</FONT></TD></TR>
</TABLE>
<BR>

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

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>[<I>Lender</I>]</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          <B>[<I>Transferee</I>]</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;By:
          </FONT></P>


<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;Date:
          </FONT></P>


<!-- MARKER FORMAT-SHEET="Page Rule Single" FSL="Default" -->
     <HR ALIGN=LEFT WIDTH=100% SIZE=1 NOSHADE>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A292></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Administrative Details
of Transferee and its Facility Office </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A293></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Facility Office Address: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A294></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Contact Name: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A295></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Account for Payments: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A296></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fax: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<A NAME=A297></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Telephone: </FONT></P>

<BR>
<BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B><I>[to be printed onto Transfer
Certificate by the Administrative Agent following delivery]</I></B></FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent hereby
acknowledges the transfer effected by this Transfer Certificate and confirms that such
transfer took effect on [the Transfer Date referred to above]/[[date] (notwithstanding
paragraph 3 of this Schedule)]. </FONT></P>

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<A NAME=A298></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent </FONT></H1>

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<A NAME=A299></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By: </FONT></P>

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<A NAME=A300></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: </FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 3 <BR><BR>PART I &#151; CONDITIONS
PRECEDENT TO FIRST DRAWDOWN </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=2><B>1.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Corporate Documents</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In relation to each Original Obligor
and each Charterer which is required to enter into a Security Document pursuant to this
Agreement: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a copy of its up to date constitutional documents and, if applicable, a good
          standing certificate;</FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a copy of resolutions of the board of directors of such Original Obligor (or to
          the extent applicable, in the case of each Subsidiary Guarantor, resolutions of
          its sole member) or (as applicable) such Charterer (and in the case of each
          Charterer being a corporation, a resolution of its shareholders) approving the
          execution, delivery and performance of each of the Transaction Documents to
          which it is party and the terms and conditions of it and authorising a named
          person or persons to sign each Transaction Document to which it is party and any
          documents to be delivered by such Original Obligor or Charterer (as the case may
          be) pursuant to it, together with copies of any powers of attorney or other
          instruments of authority required in connection therewith; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a duly completed certificate of a duly authorised officer of such Original
          Obligor or (as applicable) such Charterer in the form attached in Part III of
          Schedule 3 (<I>Form of Officer&#146;s Certificate</I>) (subject to the necessary
          amendments to such form contemplated therein). </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>2.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Authorisations</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A copy of each Necessary
Authorisation as is, in the opinion of counsel to the Administrative Agent, necessary to
render the Finance Documents to which any Original Obligor or Charterer (as applicable) is
party legal, valid, binding and enforceable, to make the Finance Documents admissible in
evidence in such Original Obligor&#146;s or Charterer&#146;s (as the case may be)
jurisdiction of incorporation and in England and to enable such Original Obligor or
Charterer (as the case may be) to perform its obligations thereunder. </FONT></P>


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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=2><B>3.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Initial Appraisal Packages and Insurance Report</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Initial Appraisal Packages in respect of each of the Collateral Vessels
          (demonstrating that the aggregate Market Value of all Collateral Vessels is
          equal to at least US$715,000,000); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          An insurance report prepared by Bank Assure addressed to the Finance Parties (or
          accompanied by written confirmation that such report may be relied upon by them)
          relating to the insurance maintained in respect of the Collateral Vessels. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>4.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Financial Statements</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Copies of the Original Consolidated
Financial Statements of the Group. </FONT></P>


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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=2><B>5.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Finance Documents</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Original duly executed copies of: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          this Agreement; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          the Security Trust Deed; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          the Initial Security Documents, together with all documents required to be
          delivered pursuant thereto. </FONT></P>


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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=2><B>6.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Process Agent</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Written confirmation from the process
agent <B>(a)</B> referred to in Clause 41.3 (<I>Service of Process)</I> and <B>(b)</B>
appointed by each Charterer which is to enter into a Security Document, in each case, in
respect of its acceptance of such appointment as process agent. </FONT></P>


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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=2><B>7.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Legal Opinions</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>


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<A NAME=A306></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An opinion of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          White &amp; Case, legal advisers to the Administrative Agent and the Lead
          Arrangers on matters of English law; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Watson, Farley &amp; Williams, legal advisers to the Parent Guarantor on matters
          of Marshall Islands law; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Kluge Advokatfirma, legal advisers to the Administrative Agent and the Lead
          Arrangers on matters of Norwegian law. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>in each case addressed to the
Administrative Agent (for itself and on behalf of the Finance Parties). </FONT></P>


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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=2><B>8.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Collateral Vessels</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Evidence that the mortgage entered into or to be entered into by each Subsidiary
          Guarantor has been (or will be simultaneously with the making of the Advances to
          be made on the initial Drawdown Date) duly registered and/or recorded as a valid
          first priority ship mortgage in favour of the Security Trustee in respect of the
          relevant Collateral Vessel in accordance with the laws of the relevant
          jurisdiction. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Evidence that the relevant Collateral Vessel: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is (or will be simultaneously with the making of the Advances to be made on the
               initial Drawdown Date) definitively and permanently registered in the name of
               the applicable Subsidiary Guarantor in full compliance with Clause 19.14
               (<I>Registration</I>) (including the provision of certificates of ownership from
               appropriate authorities); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is in the absolute and unencumbered ownership of such Subsidiary Guarantor, save
               as contemplated by the Finance Documents; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               has a classification which complies in all respects with Clause 19.7
               (<I>Classification</I>); and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               without prejudice to paragraph 3(b) (<I>Initial Appraisal Packages and Insurance
               Report</I>) above, is insured in accordance with the Finance Documents and all
               requirements therein in respect of insurances for the time being applicable have
               been complied with. </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Copies of the Documents of Compliance and of the Collateral Vessel&#146;s Safety
          Management Certificate in respect of each Collateral Vessel (together with any
          other relevant details of the applicable safety management system relating to
          such Collateral Vessel which the Administrative Agent may reasonably require). </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          The results of maritime registry searches relating to each Collateral Vessel. </FONT></P>


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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=2><B>9.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Relevant Third Party
Charters</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Copies of each of the Relevant Third
Party Charters. </FONT></P>


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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=2><B>10.</B></FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>
          Other Evidence</B></FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any other documents or other evidence
that the Administrative Agent may reasonably require, by notice to the Parent Guarantor. </FONT></P>

<BR>
<BR>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART II &#151;
CONDITIONS SUBSEQUENT DOCUMENTS </FONT></H1>


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<A NAME=A310></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Legal Opinions </FONT></H1>

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<A NAME=A311></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An opinion of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Higgs &amp; Johnson, legal advisers to the Administrative Agent and the Lead
          Arrangers on matters of Bahamian law; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para (List) Hang Lvl 3-TNR" FSL="Default" -->
     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
          <TR VALIGN=TOP>
          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Kluge Advokatfirma, legal advisers to the Administrative Agent and the Lead
          Arrangers on matters of Norwegian law. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART III &#151; FORM OF
OFFICER&#146;S CERTIFICATE </FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To:      Nordea Bank Finland Plc, New York Branch
 (as the "<B>Administrative Agent</B>")</FONT></P>


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<A NAME=A313></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Sirs, </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We refer to an agreement (the
&#147;<B>Credit Facility Agreement</B>&#148;) dated 1 September 2004 and made between
Teekay Shipping Corporation (the &#147;<B>Parent Guarantor</B>&#148;), Teekay Nordic
Holdings Incorporated (as the &#147;<B>Original Borrower</B>&#148;), Nordea Bank Finland
Plc, New York Branch (as the &#147;<B>Bookrunner</B>&#148;), Nordea Bank Finland Plc, New
York Branch and DnB NOR Bank ASA (as the &#147;<B>Lead Arrangers</B>&#148;), the
Administrative Agent, Nordea Bank Finland Plc, New York Branch (as the &#147;<B>Security
Trustee</B>&#148;), the vessel owning entities named therein (as the &#147;<B>Subsidiary
Guarantors</B>&#148;) and the persons named therein as lenders (as from time to time
amended, varied, novated or supplemented). Terms defined or construed in the Credit
Facility Agreement have the same meanings and constructions when used in this Certificate. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, [name], [a][an] [Director][General
Partner][Officer] of [name of Obligor/Charterer] of [address] (the <B>&#147;Relevant
Company</B>&#148;): </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CERTIFY</B> that: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          attached to this Certificate marked &#147;<B>A</B>&#148; is a true, correct,
          complete and up-to-date copy of the Relevant Third Party Charter to which the
          Relevant Company is a party. <I>[Include in Certificate for each Obligor </I>
          <I>or the relevant Charterer (as applicable) where a Relevant Third Party
          Charter is in place to which the </I> <I>Charterer is a party or in respect of
          Collateral Vessel owned by such Obligor (as the case may be).]</I> </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          attached to this Certificate marked &#147;<B>B</B>&#148; are true, correct,
          complete and up-to-date copies of all constitutional documents and, if
          applicable, a good standing certificate relating to the Relevant Company; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          attached to this Certificate marked &#147;<B>C</B>&#148; is a true, correct,
          complete and up-to-date copy of resolutions of the Relevant Company approving
          the execution, delivery and performance of each of the [applicable] Transaction
          Documents [to which it is party] and the terms and conditions thereof and
          authorising a named person or persons to sign each such Transaction Document and
          any documents to be delivered by the Relevant Company pursuant to it, together
          with copies of any powers of attorney or other instruments of authority required
          in connection therewith; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [attached to this Certificate marked &#147;<B>D</B>&#148; is a true, correct,
          complete and up-to-date copy of a resolution of the [shareholders][sole member]
          of the Relevant Company approving the execution, delivery and performance of the
          Transaction Documents to which it is party and the terms and conditions
          thereof]; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [attached to this Certificate and marked &#147;<B>E</B>&#148; is a true, correct
          and complete copy of all relevant Necessary Authorisations required in relation
          to the Transaction Documents pursuant to the Finance Documents and each such
          Necessary Authorisation remains in full force and effect];*** </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [attached to this Certificate marked &#147;<B>F</B>&#148; is a true, complete
          and correct copy of the acceptance by the relevant agent in England of its
          appointment as agent of the Relevant Company for the purpose of accepting
          service of process. I confirm that such agent&#146;s appointment remains in
          force as at the date of this Certificate;] <I>[Process agent appointment
          required in relation to each Obligor and each </I> <I>Charterer being party to a
          Security Document.]</I> </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [attached to this Certificate marked &#147;<B>G</B>&#148; are true, complete and
          correct copies of the Documents of Compliance and of the Safety Management
          Certificate relating to the Collateral Vessel owned by the Relevant Company
          (together with any other relevant details of the applicable safety management
          system relating to such Collateral Vessel which have been requested by the
          Administrative Agent prior to the delivery of this Certificate);] <I>[Include
          where Relevant Company is (or is to become) a Subsidiary </I> <I>Guarantor or
          where Officer&#146;s Certificate to be delivered in respect of a New Vessel.]</I> </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [The Collateral Vessel owned by the Relevant Company: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is (or will be concurrently with the making of the Advances to be made on the
               initial Drawdown Date) definitively and permanently registered in the name of
               the applicable Subsidiary Guarantor in full compliance with Clause 19.14
               (<I>Registration</I>) (as evidenced by the provision of certificates of
               ownership from appropriate authorities); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is in the absolute and unencumbered ownership of such Subsidiary Guarantor, save
               as contemplated by the Finance Documents; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               has a classification which complies in all respects with Clause 19.7
               (<I>Classification</I>); and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is insured in accordance with the Finance Documents and all requirements therein
               in respect of Insurances for the time being applicable have been complied with.]
               <I>[Include where Relevant </I> <I>Company is (or is to become) a Subsidiary
               Guarantor or where Officer&#146;s Certificate to be </I> <I>delivered in respect
               of a New Vessel.]</I> </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the entry into and performance of the Finance Documents by the Relevant Company
          will not breach any borrowing or other Indebtedness limit to which the Relevant
          Company is subject; [and] </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(j)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [the execution, delivery and performance of the Finance Documents to which the
          Relevant Company is a party and the performance by the Relevant Company of its
          obligations thereunder and under any other agreement or document executed
          pursuant thereto does not breach any agreement binding on the Relevant Company.] </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>[<B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The following persons were the duly elected and qualified directors and officers
          of the Relevant Company, holding the respective offices set forth opposite their
          names on the date of the adoption of the resolutions described in paragraph (c)
          above and on the date hereof: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Name</B> </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Position</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]]</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2>[<B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          [The Relevant Company has no directors [or officers].] [The following persons
          are the duly elected and qualified officers of the Relevant Company on the date
          hereof.] </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Name</B> </FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Position</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=25%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</FONT></TD>
               <TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]]</FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>[<B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Relevant Company is authorised to issue 500 shares with a par value of $1.00
          per share, [all] of which have been issued to the Parent Guarantor and are so
          held on the date of the adoption of the resolution described in paragraph [(d)]
          above and on the date hereof.] </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following signatures are the true
signatures of the persons who have been authorised to sign the relevant Finance Documents
on behalf of the Relevant Company and to give notices and communications, [(including
Drawdown Requests)]<SUP>*</SUP>, under or in connection with the Finance Documents on
behalf of the Relevant Company. </FONT></P>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Name</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Position</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Signature</B><BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]<BR><BR>[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</FONT></P>

<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<A NAME=A316></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signed:
_______________________ </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Director][General Partner][Officer]
</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date:     &nbsp;&nbsp;        [&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>*</SUP> Include in respect of
the Original Borrower. </FONT></P>


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




<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, [name], a
[Director/Secretary/General Partner/Officer] of the Relevant Company, certify that the
persons whose names and signatures are set out above are duly authorised signatories of
the Relevant Company and that the signatures of each of them above are their respective
signatures. </FONT></P>




<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signed:
_______________________ </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Director/Secretary/General Partner/Officer]
</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR"  -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date:     &nbsp;&nbsp;        [&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;]</FONT></P>


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


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART IV &#151; INITIAL
SECURITY DOCUMENTS</FONT></H1>



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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B> </FONT></TD>
                    <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Assignments in respect of the rights of each Subsidiary Guarantor to or under
                    (i) the Insurances (ii) the requisition proceeds (iii) the Earnings and (iv) in
                    the case of each Collateral Vessel being subject to a Relevant Third Party
                    Charter entered into by a Charterer incorporated in Norway, the benefit of the
                    assignments referred to in paragraph 2(ii) below. </FONT></TD>
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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B> </FONT></TD>
                    <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Assignments (including in respect of Earnings) by the relevant Charterer in
                    favour of (i) the Security Trustee or (ii) where such Charterer is incorporated
                    in Norway, the relevant Subsidiary Guarantor, in relation to each Relevant Third
                    Party Charter. </FONT></TD>
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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.</B> </FONT></TD>
                    <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Share pledges/charges in respect of the entire issued share capital or limited
                    liability company interest (as applicable) of each Subsidiary Guarantor. </FONT></TD>
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                    <BR>

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                    <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B> </FONT></TD>
                    <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                    Vessel mortgage and (if required in the relevant jurisdiction) deed of covenant
                    in respect of each of the Collateral Vessels (subject to Clause 19.23
                    (<I>Collateral Vessel</I> <I>Provisions</I>)) incorporating the Collateral
                    Vessel Provisions and providing <I>inter alia</I> for the maintenance of
                    insurances by the bareboat charterer in respect of such Collateral Vessel and
                    the naming of the Security Trustee as sole loss payee (in respect of a total
                    loss).
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 4<BR><BR>FORM OF DRAWDOWN
REQUEST </FONT></H1>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>From:    Teekay Nordic Holdings Incorporated (the "<B>Original
Borrower</B>")</FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To:      Nordea Bank Finland Plc, New York Branch (the "<B>Administrative
Agent</B>")</FONT></P>

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<A NAME=A321></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: <B>[<B>&#149;</B>]</B></FONT></P>

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<A NAME=A322></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Sirs, </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We refer to an agreement (the
&#147;<B>Credit Facility Agreement</B>&#148;) dated 1 September 2004 and made between
Teekay Shipping Corporation (the &#147;<B>Parent Guarantor</B>&#148;), the Original
Borrower, Nordea Bank Finland Plc, New York Branch (as the &#147;<B>Bookrunner</B>&#148;),
Nordea Bank Finland Plc, New York Branch and DnB NOR Bank ASA (as the &#147;<B>Lead
Arrangers</B>&#148;), the Administrative Agent, Nordea Bank Finland Plc, New York Branch
(as the &#147;<B>Security Trustee</B>&#148;), the vessel owning entities named therein (as
the &#147;<B>Subsidiary Guarantors</B>&#148;) and the persons named therein as lenders (as
from time to time amended, varied, novated or supplemented). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Terms defined or construed in the
Credit Facility Agreement shall have the same meanings and constructions when used in this
request. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We give you notice that, pursuant to
the Credit Facility Agreement, we wish the Lenders to make an Advance <B>[</B>by way of a
Rollover Advance<B>]*</B> on the following terms: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          Amount US$<B>[<B>&#149;</B>]</B> </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          Portion of such Advance from: Tranche A <B>[<B>&#149;</B>]</B>; Tranche B<B> [<B>&#149;</B>]</B>; </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          Interest Period/Term <B>[</B>1/3/6<B>]</B> month<B>[</B>s<B>]</B>; and </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B>&nbsp;&nbsp;&nbsp;&nbsp;
          Proposed date of such Advance (or if that day is not a Business Day, the next
          Business Day), </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We confirm that, at the date of this
Request, the representations and warranties referred to in Clause 4.1(e) <I>(Conditions to
each Advance</I>) of the Credit Facility Agreement are true and that no Default has
occurred and is continuing <B>[</B>and no Default<B>]</B>/<B>[</B>Event of
Default<B>]<SUP>*</SUP></B><SUP></SUP> would result from the making of the Advance to
which this Drawdown Request relates. </FONT></P>
<BR>
<BR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>*</SUP> Applicable if Drawdown
Request relates to a Rollover Advance. </FONT></P>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The proceeds of this drawdown should
be credited to <B>[</B><I>insert account details<B></B></I><B>]</B>. </FONT></P>

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<A NAME=A323></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Yours faithfully </FONT></P>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
_______________________ </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For and on behalf of: </FONT></P>

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<A NAME=A324></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY NORDIC HOLDINGS
INCORPORATED </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 5<BR><BR>ASSOCIATED COSTS RATE</FONT></H1>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Associated Costs Rate is an addition to the interest rate to compensate
          Lenders for the cost of compliance with (a) the requirements of the Bank of
          England and/or the Financial Services Authority (or, in either case, any other
          authority which replaces all or any of its functions) or (b) the requirements of
          the European Central Bank or (c) the requirements of the National Central Bank
          in such Lender&#146;s jurisdiction.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>On the first day of each Interest Period (or as soon as possible thereafter) the
          Administrative Agent shall calculate, as a percentage rate, a rate (the
          &#147;<B>Additional Cost Rate</B>&#148;) for each Lender, in accordance with the
          paragraphs set out below. The Associated Costs Rate will be calculated by the
          Administrative Agent as a weighted average of the Lenders&#146; Additional Cost
          Rates (weighted in proportion to the percentage participation of each Lender in
          the relevant Loan) and will be expressed as a percentage rate per annum.</FONT></TD>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Additional Cost Rate for any Lender lending from a Facility Office in a
          Participating Member State will be the percentage notified by that Lender to the
          Administrative Agent as the cost of complying with the minimum reserve
          requirements of the European Central Bank.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Additional Costs Rate for a Lender lending from a Facility Office in the
          United Kingdom shall be calculated as follows:</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <U>E  x  0.01</U>&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per cent per annum<BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
300<BR></FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>where:</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 </FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>E</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
is designed to compensate the Lenders for amounts payable under the Fees Rules and is
calculated by the Administrative Agent as being the average of the most recent rates of
charge supplied by the Lenders to the Administrative Agent pursuant to paragraph 5 below
and expressed in pounds per &pound;1,000,000. </FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>For the purposes of paragraph 4 of this Schedule, &#147;Fees Rules&#148; means
          the rules on periodic fees contained in the FSA Supervision Manual or such other
          law or regulation as may be in force from time to time in respect of the payment
          of fees for the acceptance of deposits.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> If requested by the Administrative Agent, each Lender shall, as soon as
          practicable after publication by the Financial Services Authority, supply to the
          Administrative Agent, the rate of charge payable by that Lender to the Financial
          Services Authority (calculated for this purpose by that Lender as being the
          average of the Fee Tariffs applicable to that Lender for that financial year)
          and expressed in pounds per &pound;1,000,000 of the Tariff base of that Lender.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> For the purposes of paragraph
 5 of this Schedule:</FONT></TD>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               &#147;<B>Fee Tariffs</B>&#148; means the fee tariffs specified in the Fees Rules
               under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero
               rated fee required pursuant to the Fees Rules but taking into account any
               applicable discount rate); and </FONT></TD>
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               <BR>

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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               &#147;<B>Tariff Base</B>&#148; has the meaning given to it, and will be
               calculated in accordance with, the Fees Rules of the Tariff Base of that Lender. </FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Lender shall supply any information required by the Administrative Agent
          for the purpose of calculating its Additional Cost Rate. In particular, but
          without limitation, each Lender shall supply the following information in
          writing on or prior to the date on which it becomes a Lender: </FONT></TD>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)</FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                its jurisdiction of incorporation and the jurisdiction of its Facility Office;
          and </FONT></TD>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b)</FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                 any other information that the Administrative Agent may reasonably require for
          such purpose. </FONT></TD>
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               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each
Lender shall promptly notify the Administrative Agent in writing of any change to the
information provided by it pursuant to this paragraph.</FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                  </FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>9.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The rates of charge of each Lender for the purpose of E above shall be
          determined by the Administrative Agent based upon the information supplied to it
          pursuant to paragraph 6 above.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>10.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> The Administrative Agent shall have no liability to any person if such
          determination results in an Additional Cost Rate which over or under compensates
          any Lender and shall be entitled to assume that the information provided by any
          Lender pursuant to paragraphs 3 and 6 above is true and correct in all respects.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>11.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent shall distribute the additional amounts received as a
          result of the Associated Costs Rate to the Lenders on the basis of the
          Additional Cost Rate for each Lender based on the information provided by each
          Lender pursuant to paragraphs 3 and 6 above.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>12.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any determination by the Administrative Agent pursuant to this Schedule in
          relation to a formula, the Associated Costs Rate, an Additional Cost Rate or any
          amount payable to a Lender shall, in the absence of manifest error, be
          conclusive and binding on all parties to this Agreement.</FONT></TD>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>13.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Administrative Agent may from time to time, after consultation with the
          Borrowers and the Lenders, determine and notify to all parties to this Agreement
          any amendments which are required to be made to this Schedule in order to comply
          with any change in law, regulation or any requirements from time to time imposed
          by the Financial Services Authority or the European Central Bank (or, in any
          case, any other authority which replaces all or any of its functions) and any
          such determination shall, in the absence of manifest error, be conclusive and
          binding on all parties to this Agreement.</FONT></TD>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 6<BR><BR>PART I &#151; PERMITTED
SALE AND LEASEBACK </FONT></H1>



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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> A sale-and-leaseback transaction in respect of the Tranche A Vessels structured
          primarily to achieve tax efficiency for the purposes of the tax arrangements of
          the Group, whilst preserving the interests of the Lenders in relation to the
          Credit Facility.</FONT></TD>
</TR>
</TABLE>
<BR>



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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=2><B>2.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> A limited partnership (the &#147;<B>Leaseback Borrower</B>&#148;) to be
          established <B>(a)</B> in a jurisdiction and with a constitutional,
          administrative and legal structure which is satisfactory to the Administrative
          Agent and <B>(b)</B> with a member of the Group as a general partner.</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>3.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Leaseback Borrower (and/or new special purpose companies owned or to be owned by
          Leaseback Borrower established in a suitable tax jurisdiction for chartering the
          Tranche A Vessels) to acquire the Tranche A Vessels and/or Subsidiary Guarantors
          being owners of the Tranche A Vessels (&#147;<B>Relevant Subsidiary </B>
          <B>Guarantors</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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Acquisition to be funded by equity investment in, and debt provided to,
          Leaseback Borrower (as a percentage of acquisition price) substantially as
          follows: (i) pursuant to the transfer of the loan from the Lenders under Tranche
          A (70%) and (ii) a combination of equity from CanCo (Investor) and debt from the
          Parent Guarantor (in each case, fully subordinated to the rights of each of the
          Finance Parties under the Finance Documents) (30%).</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>5.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Leaseback Borrower and/or Relevant Subsidiary Guarantors to enter into long-term
          time charters (each a <B>&#147;Time Charter</B>&#148;) in respect of the Tranche
          A Vessels with a subsidiary of the Parent Guarantor, which provide for charter
          payments (net of taxes) in amounts which are at least sufficient to meet the
          payment obligations of the Leaseback Borrower falling due under the Credit
          Facility Agreement as well as other reasonable costs and expenses associated
          with the operation of the Tranche A Vessels. Time Charters to be assigned in
          favour of the Lenders.</FONT></TD>
</TR>
</TABLE>
<BR>



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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=2><B>6.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Leaseback Borrower, or its respective vessel owning subsidiaries, to enter into
          management agreements (each a &#147;<B>Management Agreement</B>&#148;) with the
          Parent Guarantor or a subsidiary thereof for the technical management of the
          Tranche A Vessels. Such Management Agreements to be assigned in favour of the
          Lenders. </FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART II &#151; FORM OF
ACCESSION NOTICE</FONT></H1>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THIS ACCESSION NOTICE</B> is
entered into on
<B>[</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>]</B>
by <B>[</B><I>insert name of relevant Substitute Vessel Owner<B></B></I><B>]</B> (the
&#147;<B>Relevant Subsidiary</B>&#148;) and Teekay Shipping Corporation by way of a deed
in favour of each of the Finance Parties (as defined in the Credit Facility Agreement
referred to below). </FONT></P>

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<A NAME=A330></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BACKGROUND </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=2><B>A</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> By an agreement (the &#147;<B>Credit Facility Agreement</B>&#148;) dated 1 September 2004
and made between Teekay Shipping Corporation (the &#147;<B>Parent Guarantor</B>&#148;),
Teekay Nordic Holdings Incorporated (as the &#147;<B>Original </B> <B>Borrower</B>&#148;),
Nordea Bank Finland Plc, New York Branch (as the &#147;<B>Bookrunner</B>&#148;), Nordea
Bank Finland Plc, New York Branch and DnB NOR Bank ASA (as the &#147;<B>Lead
Arrangers</B>&#148;), Nordea Bank Finland Plc, New York Branch (as the
&#147;<B>Administrative Agent</B>&#148;), Nordea Bank Finland Plc, New York Branch (as the
&#147;<B>Security Trustee</B>&#148;), the vessel owning entities named therein (as the
&#147;<B>Subsidiary Guarantors</B>&#148;) and the persons named therein as lenders (as
from time to time amended, varied, novated or supplemented), the Lenders agreed to provide
the Credit Facility to the Original Borrower on the terms and subject to the conditions
thereof. Terms defined or construed in the Credit Facility Agreement shall have the same
meanings and constructions when used in this Notice.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>


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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=2><B>B</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Pursuant to and in accordance with the terms of the Credit Facility Agreement, the
Relevant Subsidiary is to become a party to the Credit Facility Agreement as a Guarantor.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>



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<A NAME=A331></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOW THIS DEED WITNESS AS
FOLLOWS: </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=2><B>1.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  The Relevant Subsidiary is a company duly organised under the laws of
          <B>[<I>insert relevant jurisdiction</I>]</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  The Relevant Subsidiary confirms that it has received from the Parent Guarantor
          a true and up-to-date copy of the Credit Facility Agreement and of the other
          Finance Documents.</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>3.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  The Relevant Subsidiary undertakes, upon its becoming a Guarantor, to perform
          all the obligations expressed to be undertaken under the Credit Facility
          Agreement and the other Finance Documents by a Guarantor and agrees that it
          shall be bound by the Credit Facility Agreement and the other Finance Documents
          in all respects as if it had been an original party thereto as an Original
          Guarantor. [Provided that <B>[</B><I>make such exceptions (if any) as may be
          necessary to limit the obligations of Relevant </I> <I>Subsidiary to ensure that
          such obligations are enforceable in accordance with applicable local
          law<B></B></I><B>]]</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  The Parent Guarantor and the Relevant Subsidiary confirm that <B>(a)</B> no
          Default has occurred and is continuing or will result from the execution and
          delivery of this Accession Notice and <B>(b)</B> each of the representations
          made in Clause 16 (<I>Representations and Warranties</I>) is true and will
          continue to be true, in each case, in respect of such Relevant Subsidiary,
          following the accession of the Relevant Subsidiary to the Credit Facility
          Agreement as a Guarantor pursuant to this Accession Notice (or in the case of
          any such representation which expressly relates to a given date or period
          (following such accession), such representation is true in respect of that date
          or period in relation to the Relevant Subsidiary).</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>5.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   The Relevant Subsidiary confirms that it has appointed
          <B>[</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>]</B> of
          <B>[</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>]</B> to be its
          process agent for the purposes of accepting service of Proceedings in England on
          it. </FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>6.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>   The Relevant Subsidiary&#146;s administrative details for the purposes of the
          Credit Facility Agreement are as follows:</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B></B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    Address:<BR><BR>Contact:<BR><BR>Telephone No:<BR><BR>
Fax No:<BR><BR>E-mail:</FONT></TD>
</TR>
</TABLE>
<BR>



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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=2><B>7.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    This Accession Notice and the rights, benefits and obligations of the parties
          under this Accession Notice shall be governed by and construed in accordance
          with English law. </FONT></TD>
</TR>
</TABLE>
<BR>



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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=2><B>8.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    This Accession Notice has been executed as a Deed by the Parent Guarantor and
          the Relevant Subsidiary and signed by [?] on the date written at the beginning
          of this Accession Notice.</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=30%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THE COMMON SEAL</B> of<BR><B>[<I>Name of Relevant Subsidiary</I>]</B>
<BR>was hereunto affixed in the<BR>presence of:</FONT></TD>
<TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)<BR>)<BR>)<BR>)<BR>)<BR><BR>
</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.........................................................
</FONT></TD>
</TR>
</TABLE>
<BR>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=30%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director</FONT></TD>
<TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)<BR>
</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>.........................................................
</FONT></TD>
</TR>
</TABLE>
<BR>
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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=30%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director/Secretary</FONT></TD>
<TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)</FONT><BR>
</TD>
</TR>
</TABLE>
<BR>
<BR>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>OR</I><BR><BR><B>EXECUTED</B> as a <B>DEED</B>
by<BR><BR><I><B>[Name of Relevant Subsidiary]</B></I><BR><BR>acting by
</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=30%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THE COMMON SEAL</B> of<BR>TEEKAY SHIPPING CORPORATION
<BR>was hereunto affixed in the<BR>presence of:</FONT></TD>
<TD WIDTH=70%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>)<BR>)<BR>)<BR>)<BR>)<BR><BR></FONT>
</TD>
</TR>
</TABLE>
<BR>
<BR>


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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;...................................................<BR>&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>[</B><I>insert name of director</I><B>]</B><BR>
</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Director/Secretary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;...................................................<BR>&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>[</B><I>insert name of director/secretary</I><B>]</B><BR><BR>
</FONT></TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=100%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>OR</I><BR><BR><B>EXECUTED</B> as a <B>DEED</B> by<BR>
<BR>TEEKAY SHIPPING CORPORATION<BR><BR><BR><BR>acting by<BR><BR><BR><BR><B>THE ADMINISTRATIVE AGENT</B><BR><BR>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH<BR><BR><BR><BR>By:
</FONT></TD>
</TR>
</TABLE>
<BR>
<BR>
<BR>
<BR>
<BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART III &#151; ACCESSION DOCUMENTS</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=2><B>1.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Corporate Documents</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In relation to an Additional Obligor
or (where indicated) (x) a Subsidiary Guarantor which is to acquire a New Vessel and (y)
any Charterer which is required to enter into a Security Document in respect of a Relevant
Third Party Charter relating to such New Vessel under this Agreement, a copy of: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          its up-to-date constitutional documents and, if applicable, a good standing
          certificate in respect thereof (including in respect of such Charterer); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a board resolution (or in the case of the Leaseback Borrower, other appropriate
          approval) approving the execution and delivery of the relevant Accession Notice,
          its accession to the Credit Facility Agreement as a Borrower and/or Guarantor
          (as the case may be) and the performance of its obligations under the Finance
          Documents and authorising a named person to sign such Accession Notice and any
          other documents to be delivered by it pursuant thereto, together with copies of
          any powers of attorney or other instruments of authority required in connection
          therewith; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in the case of any such Subsidiary Guarantor or Charterer (as the case may be),
          a board resolution approving the execution and delivery of the Finance Documents
          to be entered into in relation to such New Vessel and authorising a named person
          to sign such Finance Documents and any other documents to be delivered by it
          pursuant thereto, together with copies of any powers of attorney or other
          instruments of authority required in connection therewith; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if applicable, a copy of a shareholders&#146; resolution of the shareholders of
          such Additional Obligor, Subsidiary Guarantor or Charterer (as applicable)
          approving the execution, delivery and performance of the Transaction Documents
          to which it is party or which are to be entered into in relation to a New Vessel
          (as the case may be) and the terms and conditions thereof; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          a duly completed certificate, of a duly authorised officer of such Additional
          Obligor, Subsidiary Guarantor or Charterer (as the case may be) in the form of
          Part III of Schedule 3 (<I>Form of Officer&#146;s </I> <I>Certificate</I>)
          (subject to the necessary amendments to such form contemplated therein). </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>2.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Legal Opinions</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to the scope of
Clause 20.2(d)(iv) (<I>Conditions</I>), opinions (if any) required by the Administrative
Agent from such legal advisers as may be acceptable to it as to relevant Law (including in
relation to any tax matters applicable to such Additional Obligor or Subsidiary Guarantor
and any Security required to be provided under this Agreement by or in respect of such
Additional Obligor, Charterer or New Vessel). </FONT></P>


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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=2><B>3.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Necessary Authorisations</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A copy of any Necessary Authorisation
as is in the opinion of counsel to the Lenders necessary to render the Transaction
Documents to which such Additional Obligor, Subsidiary Guarantor or Charterer is (or is to
be) party legal, valid, binding and enforceable to make the Transaction Documents to which
such Additional Obligor, Subsidiary Guarantor or Charterer is (or is to be) party
admissible in evidence in such Additional Obligor&#146;s, Subsidiary Guarantor&#146;s or
Charterer&#146;s jurisdiction of incorporation and (if different) in England and to enable
such Additional Obligor, Subsidiary Guarantor or Charterer to perform its obligations
thereunder. </FONT></P>


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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=2><B>4.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Security Documents</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At least 2 original copies of any
Security Documents required by the Administrative Agent pursuant to Clause 20.2(d)(iii)
(<I>Conditions</I>) duly executed by the Additional Obligor, Subsidiary Guarantor or
Charterer (as the case may be) together with all documents required to be delivered
pursuant to it. </FONT></P>


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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=2><B>5.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Process Agent</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Written confirmation from the process
agent referred to in the relevant Accession Notice, in the case of an Additional Obligor,
or appointed by the Charterer which is required to enter into a Security Document pursuant
to this Agreement in respect of a Collateral Vessel owed by such Additional Obligor, in
each case, that it accepts its appointment as process agent. </FONT></P>


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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=2><B>6.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Collateral Vessels</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To the extent required by the
Administrative Agent, in respect of any Collateral Vessel owned by, or to be acquired in
connection with, the accession or novation of such Additional Obligor to this Agreement or
any New Vessel: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          evidence that the mortgage entered into or to be entered into by such Additional
          Obligor or Subsidiary Guarantor (as the case may be) has been duly registered
          and/or recorded as a valid first priority ship mortgage in favour of the
          Security Trustee in respect of the relevant Collateral Vessel in accordance with
          the laws of the relevant jurisdiction; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          evidence that the relevant Collateral Vessel: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is definitively and permanently registered in the name of the applicable
               Additional Obligor or Subsidiary Guarantor (as the case may be), is in full
               compliance with Clause 19.14 (Registration) (including the provision of
               certificates of ownership from appropriate authorities); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is in the absolute and unencumbered ownership of such Additional Obligor or
               Subsidiary Guarantor, save as contemplated by the Finance Documents; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               has a classification which complies in all respects with Clause 19.7
               (<I>Classification</I>); and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               is insured in accordance with the Finance Documents and all requirements therein
               in respect of Insurances for the time being applicable have been complied with; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          copies of the Documents of Compliance and of the Collateral Vessel&#146;s Safety
          Management Certificate in respect of the relevant Collateral Vessel (together
          with any other relevant details of the applicable safety management system
          relating to such Collateral Vessel which the Administrative Agent may reasonably
          require); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           the results of maritime registry searches relating to the relevant Collateral
          Vessel.</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>7.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Additional Appraisal Package</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each Additional Appraisal Package for
the time being required to be delivered pursuant to Clause 17.6 (<I>Additional Appraisal
Package</I>). </FONT></P>



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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=2><B>8.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Relevant Third Party
Charters</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In respect of any New Vessel, copies
of any Relevant Third Party Charters relating thereto. </FONT></P>



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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=2><B>9.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&#147;Know your
Customer&#148; Checks</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In respect of each Additional
Obligor, all documents and other evidence relating to it which are required for the
purposes of Clause 17.11 (<I>&#147;Know your Customer&#148; Checks</I>). </FONT></P>




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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=2><B>10.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Other Evidence</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Such other documents or other
evidence which the Administrative Agent may reasonably require. </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PART IV &#151; FORM OF
NOVATION DEED</FONT></H1>


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<A NAME=A356></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOVATION DEED </FONT></H1>

<BR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To:      Nordea Bank Finland Plc, New York Branch (the "<B>Administrative
Agent</B>")</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>From:    (1) [<I>name of Leaseback Borrower</I>] (the "<B>Leaseback Borrower</B>")
<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Teekay Nordic Holdings Incorporated
(the &#147;<B>Original Borrower</B>&#148;)<BR><BR>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;(3)  Teekay Shipping Corporation (the &#147;<B>Parent
Guarantor</B>&#148;)</FONT></P>
<BR>





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<A NAME=A357></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Sirs, </FONT></P>

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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=2><B>1.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          We refer to an agreement (the &#147;<B>Credit Facility Agreement</B>&#148;)
          dated 1 September 2004 and made between the Parent Guarantor, the Original
          Borrower, Nordea Bank Finland Plc, New York Branch (as the
          &#147;<B>Bookrunner</B>&#148;), Nordea Bank Finland Plc, New York Branch and DnB
          NOR Bank ASA (as the &#147;<B>Lead Arrangers</B>&#148;), the Administrative
          Agent, Nordea Bank Finland Plc, New York Branch (as the &#147;<B>Security
          Trustee</B>&#148;), the vessel owning entities named therein (as the
          &#147;<B>Subsidiary Guarantors</B>&#148;) and the persons named therein as
          lenders (as from time to time amended, varied, novated or supplemented). Terms
          defined or construed in the Credit Facility Agreement have the same meanings and
          constructions when used in this Deed. The Leaseback Borrower, the Parent
          Guarantor and the Original Borrower are referred to in this Deed as the
          <B>&#147;Relevant Obligors</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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Relevant Obligor confirms that <B>(a)</B> the conditions set out in Clause
          20.2 (<I>Conditions</I>) in relation to the Permitted Sale and Leaseback have
          been satisfied or will be satisfied immediately upon the occurrence of the
          Leaseback Completion Date <B>(b)</B> no Default has occurred and is continuing
          or will result from the completion of the Permitted Sale and Leaseback and
          <B>(c)</B> each of the representations made in Clause 16 (<I>Representations and
          Warranties</I>) is true and will continue to be true, in each case, in respect
          of the Leaseback Borrower, following the completion of the Permitted Sale and
          Leaseback (or in the case of any such representation which expressly relates to
          a given date or period following such completion, such representation is true in
          respect of that date or period in relation to the Leaseback Borrower). </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>3.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          For the purposes of the Permitted Sale and Leaseback, the Original Borrower
          wishes to procure the transfer to the Leaseback Borrower (and the Leaseback
          Borrower wishes to accept such transfer) of the Tranche A Obligations by signing
          this Deed and delivering the same to the Administrative Agent. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>4.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Each Relevant Obligor requests the Administrative Agent to accept this Deed as
          being delivered to the Administrative Agent pursuant to and in accordance with
          Clause 21.2 (<I>Novation of Leaseback Borrower</I>) so as to take effect in
          accordance with the terms thereof on the Leaseback Completion Date. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>5.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Leaseback Borrower undertakes with each of the other parties to the Credit
          Facility Agreement that it will <B>(a)</B> perform in accordance with the terms
          thereof all those obligations which will be assumed by it under the Credit
          Facility Agreement from the Leaseback Completion Date and <B>(b)</B> satisfy
          each of the conditions (if any) subject to which this Deed is expressed to take
          effect. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>6.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Parent Guarantor confirms (for itself and as Obligors&#146; Agent for the
          other Obligors) that, notwithstanding the occurrence of the Leaseback Completion
          Date, the Parent Guarantor&#146;s guarantee and indemnity obligations and the
          guarantee and indemnity obligations of the other Obligors pursuant to Clause 24
          (<I>Guarantee and Indemnity</I>) of the Credit Facility Agreement will apply to
          all of the obligations of the Leaseback Borrower under the Finance Documents in
          all respects in accordance with the terms of the Credit Facility Agreement as if
          the Leaseback Borrower had been party to the Credit Facility Agreement as the
          Original Borrower. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>7.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          The Leaseback Borrower&#146;s administrative details for the purposes of the
          Credit Facility Agreement are as follows: </FONT></TD>
          </TR>
          </TABLE>
          <BR>



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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=2><B></B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>    Address:<BR><BR>Contact:<BR><BR>Telephone No:<BR><BR>
Fax No:<BR><BR>E-mail:</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>8.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          This Deed and the rights, benefits and obligations of the parties under this
          Deed shall be governed by and construed in accordance with English Law. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>9.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          This Deed has been executed and delivered as a deed by the Leaseback Borrower,
          the Original Borrower and the Parent Guarantor. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A359></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Yours faithfully, </FONT></P>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A360></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE LEASEBACK BORROWER </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>[<I>Applicable Signature Block for
Leaseback Borrower when executing a deed</I>]</B> </FONT></P>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A361></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE ORIGINAL BORROWER </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A362></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY NORDIC HOLDINGS
INCORPORATED </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>[<I>Applicable Signature Block for
Original Borrower when executing a deed</I>]</B> </FONT></P>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A363></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE PARENT GUARANTOR </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A364></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION </FONT></P>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A365></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Acknowledged by the
Administrative Agent: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A366></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE ADMINISTRATIVE AGENT </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A367></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH </FONT></P>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A368></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By: </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<A NAME=A369></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 7</FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<A NAME=A371></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM OF COMPLIANCE
CERTIFICATE </FONT></H1>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To:      Nordea Bank Finland Plc, New York Branch
 (the "<B>Administrative Agent</B>")<BR><BR>From:    Teekay Shipping Corporation (the "<B>Parent Guarantor</B>")<BR>
<BR><BR>Date:    [<B>&#149;</B>]<BR><BR></FONT></P>


<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A372></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Sirs, </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We refer to an agreement (the
&#147;<B>Credit Facility Agreement</B>&#148;) dated 1 September 2004 and made between
Teekay Nordic Holdings Incorporated (as the &#147;<B>Original Borrower</B>&#148;) the
Parent Guarantor, Nordea Bank Finland Plc, New York Branch (as the
&#147;<B>Bookrunner</B>&#148;), Nordea Bank Finland Plc, New York Branch and DnB NOR Bank
ASA (as the &#147;<B>Lead Arrangers</B>&#148;), the Administrative Agent, Nordea Bank
Finland Plc, New York Branch (as the &#147;<B>Security Trustee</B>&#148;), the vessel
owning entities named therein (as the &#147;<B>Subsidiary Guarantors</B>&#148;) and the
persons named therein as lenders (as from time to time amended, varied, novated or
supplemented). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Terms defined or construed in the
Credit Facility Agreement have the same meanings and constructions in this Certificate. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We attach the relevant calculation
details applicable on the last day of our financial [year][quarter] ending [<B>&#149;</B>] (the
&#147;<B>Relevant Period</B>&#148;) which confirm that: </FONT></P>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Free Liquidity [was at all times equal to or greater than/fell below]
          $100,000,000. Therefore the condition contained in Clause 18(a) (<I>Financial
          Condition</I>) [has/has not] been complied with in respect of the Relevant
          Period. </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Available Credit [was at all times equal to or greater than/fell below] 7.5% of
          Total Debt. Therefore the condition contained in Clause 18(b) (<I>Financial
          Condition</I>) [has/has not] been complied with. </FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A373></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signed:
&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;&#133;..... </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Duly
authorised representative of <BR><BR><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;TEEKAY SHIPPING
CORPORATION</B></FONT></P>

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


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 8</FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMMITMENT REDUCTION SCHEDULE </FONT></H1>


<PRE>

 <B>Commitment Reduction      <U>                Tranche A             </U>            <U>            Tranche B&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
         Date
(months following date     <U>Commitment (US$)</U>          Tranche A          <U>Commitment (US$)</U>          Tranche B
  <U>of this Agreement)</U>                                 Commitment                                   Commitment
                                                  <U>Reductions (US$)</U>                             <U>Reductions (US$)</U></B>

           0                   320,000,000                                   180,000,000
           6                   311,813,920              8,186,080            175,395,330              4,604,670
          12                   303,441,095              8,372,825            170,685,616              4,709,714
          18                   294,877,265              8,563,830            165,868,462              4,817,154
          24                   286,118,073              8,759,192            160,941,416              4,927,046
          30                   277,159,061              8,959,011            155,901,972              5,039,444
          36                   267,995,672              9,163,389            150,747,566              5,154,406
          42                   258,623,244              9,372,429            145,475,574              5,271,991
          48                   249,037,006              9,586,237            140,083,316              5,392,258
          54                   239,232,083              9,804,923            134,568,047              5,515,269
          60                   229,203,485             10,028,598            128,926,960              5,641,086
          66                   218,946,109             10,257,376            123,157,187              5,769,774
          72                   208,454,737             10,491,372            117,255,790              5,901,397
          78                   197,724,031             10,730,706            111,219,768              6,036,022
          84                   186,748,531             10,975,501            105,046,048              6,173,719
          90                   175,522,652             11,225,879             98,731,491              6,314,557
          96                   164,040,682             11,481,970             92,272,884              6,458,608
          102                  152,296,780             11,743,902             85,666,939              6,605,945
          108                  140,284,970             12,011,810             78,910,296              6,756,643
          114                  128,000,000             12,284,970             72,000,000              6,910,296
          120                            0            128,000,000                     (0)            72,000,000

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

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


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 9</FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COLLATERAL VESSELS</FONT></H1>



<PRE>

<I>Tranche A Vessels</I>
<BR>
<B>Vessel&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Yard               Type               dwt               Flag</B>
<B>Owner</B>
<BR>
<B><U>Suezmax - Shuttle Tankers</U></B>
<BR>
Navion               2003                  Samsung            DH                 147,500           Bahamas
Stavanger
(Navion
Stavanger
L.L.C.)
<BR>

<B><U>Aframax - Shuttle Tankers</U></B>
<BR>
Nordic               1999                  Samsung            DH                 103,895           Bahamas
Marita
(Nordic
Marita
L.L.C.)
<BR>
Nordic               1997                  Imabari            DH                 106,506           Bahamas
Svenita
(Nordic
Svenita
L.L.C.)
<BR>
Nordic               1992                  Tsuneishi          DH                 108,153           NIS
Savonita
(Nordic
Savonita
L.L.C.)
<BR>
Nordic               1992                  Tsuneishi          DH                 106,877           Bahamas
Torinita
(Nordic
Torinita
L.L.C.)
<BR>
Nordic               1992                  Dalian             DH                 97,068            NIS
Yukon
(Nordic
Yukon
L.L.C.)
<BR>
Nordic               1987                  Dalian             DH                 80,745            NIS
Trym
(Nordic
Troll &amp;
Trym L.L.C.)
<BR>
<BR>
<B><U>Aframax - Conventional Tankers</U></B>
<BR>
Falster Spirit       1995                  Hyundai            DH                 95,416            Bahamas
(Falster
Spirit L.L.C.)
<BR>
Poul Spirit          1995                  Onomichi           DH                 105,351           Bahamas
(Poul Spirit
L.L.C.)
<BR>
Senang Spirit        1994                  Imabari            DH                 95,649            Bahamas
(Senang
Spirit
L.L.C.)
<BR>
Torben Spirit        1994                  Onomichi           DH                 98,662            Bahamas
(Torben
Spirit L.L.C.)
<BR>
Samar Spirit         1992                  Onomichi           DH                 98,640            Bahamas
(Samar Spirit
L.L.C.)
<BR>


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

<PRE>


<I>Tranche B Vessels</I>
<BR>
<B>Vessel&nbsp; and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Year  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          Yard               Type               dwt               Flag</B>
<B>Owner</B>
<BR>

<BR>
<B><U>Suezmax - Shuttle Tankers</U></B>
<BR>
Nordic                2004                 Samsung            DH                 151,294           Bahamas
Brasilia                                                                                           (with
(Nordic                                                                                            Brazilian
Brasilia                                                                                           bareboat
L.L.C.)                                                                                            registry
                                                                                                   option)
<BR>
Nordic Spirit         2001                 Samsung            DH                 151,294           Bahamas
(Nordic                                                                                            (with
Spirit                                                                                             Brazilian
L.L.C.)                                                                                            bareboat
                                                                                                   registry
                                                                                                   option)
<BR>
<BR>
<B><U>Aframax - Shuttle Tankers</U></B>
<BR>
Petroatlantic         2003                 Samsung            DH                  92,995           Bahamas
(Petroatlantic
L.L.C.)
<BR>
Petronordic           2002                 Samsung            DH                  92,995           Bahamas
(Petronordic
L.L.C.)
</PRE>
<BR>
<BR>
<BR>



<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A376></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 10 </FONT></H1>




<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COLLATERAL VESSEL
PROVISIONS </FONT></H1>
<BR>


<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-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=2><B>1.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>DEFINITIONS</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A378></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In this Schedule 10
(<I>Collateral Vessel Provisions</I>): </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Approved Brokers</B>&#148;
means the insurance brokers appointed by the Subsidiary Guarantor as approved, in writing,
from time to time by the Security Trustee (such approval not to be unreasonably withheld
or delayed). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Approved Currency</B>&#148;
means dollars or any other currency approved, in writing, from time to time by the
Security Trustee. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Collateral Vessel</B>&#148;
means, for the purpose of this Schedule 10, the collateral vessel from time to time
legally and beneficially owned by the Subsidiary Guarantor. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Damage Notification
Event</B>&#148; means any circumstance or event in connection with or in relation to the
Collateral Vessel which gives rise to any claim or aggregate claims against the relevant
insurers, before any adjustment for any relevant franchise or deduction, which exceeds
$5,000,000 or the equivalent in any other currency. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Affiliate</B>&#148; means an agent or employee of the Subsidiary Guarantor or a person in
a contractual relationship with the Subsidiary Guarantor in respect of the Collateral
Vessel (including, without limitation, the operation of or the carriage of cargo of the
Collateral Vessel). </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Approvals</B>&#148; means any present or future permit, licence, approval, ruling,
variance, exemption or other authorisation required under the applicable Environmental
Laws. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental
Claim</B>&#148; means any and all enforcement, clean-up, removal, administrative,
governmental, regulatory or judicial actions, orders, demands or investigations instituted
or completed pursuant to any Environmental Laws or Environmental Approvals together with
any claims made by any third person relating to damage, contribution, loss or injury
resulting from any Environmental Incident. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A379></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Environmental
Incident&#148; means: </FONT></H1>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any release of Environmentally Sensitive Material from the Collateral Vessel; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any incident in which Environmentally Sensitive Material is released from a
          vessel other than the Collateral Vessel and which involves a collision between
          the Collateral Vessel and such other vessel or some other incident of navigation
          or operation, in either case, in connection with which the Collateral Vessel is
          actually or potentially liable to be arrested, attached, detained or injuncted
          and/or where any guarantor, any manager (or any sub-manager of the Collateral
          Vessel) or any of its officers, employees or other persons retained or
          instructed by it (or such sub-manager) are at fault or allegedly at fault or
          otherwise liable to any legal or administrative action; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          any other incident in which Environmentally Sensitive Material is released
          otherwise than from the Collateral Vessel and in connection with which the
          Collateral Vessel is actually or potentially liable to be arrested and/or where
          any guarantor, any manager (or any sub-manager of the Collateral Vessel) or any
          of its officers, employees or other persons retained or instructed by it (or
          such sub-manager) are at fault or allegedly at fault or otherwise liable to any
          legal or administrative action. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmental Laws</B>&#148;
means all present and future laws, regulations, treaties and conventions of any applicable
jurisdiction which: </FONT></P>

<!-- 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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          have as a purpose or effect the protection of, and/or prevention of harm or
          damage to, the environment; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          relate to the carriage of Environmentally Sensitive Material or to actual or
          threatened releases of Environmentally Sensitive Material; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          provide remedies or compensation for harm or damage to the environment; or </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          relate to Environmentally Sensitive Materials or health or safety matters. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Environmentally Sensitive
Material</B>&#148; means (i) oil and oil products and (ii) any other waste, pollutant,
contaminant or other substance (including any liquid, solid, gas, ion, living organism or
noise) that may be harmful to human health or other life or the environment or a nuisance
to any person or that may make the enjoyment, ownership or other territorial control of
any affected land, property or waters more costly for such person to a material degree. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Excess Risks</B>&#148;
means, in relation to the Collateral Vessel, the proportion of claims for general average,
salvage and salvage charges not recoverable under the hull and machinery policies in
respect of the Collateral Vessel as a consequence of the excess of the value at which the
Collateral Vessel is assessed for the purposes of such claims is over the Collateral
Vessel&#146;s insured value. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Insurers</B>&#148; means the
underwriters or insurance companies with whom any of the Obligatory Insurances is effected
and any protection and indemnity or war risks association in which the Collateral Vessel
may at any time be entered. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>ISM Code</B>&#148; means the
International Safety Management Code for the Safe Operation of Ships and for Pollution
Prevention adopted by the International Maritime Organisation. </FONT></P>

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<A NAME=A380></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Law</B>&#148; means any: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          common or customary law; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          constitution, decree, judgment, legislation, order, ordinance, regulation,
          statute, treaty or other legislative measure in any jurisdiction; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          present or future directive, regulation, practice, concession or requirement
          which has the force of law and which is issued by any governmental body, agency
          or department or any central bank or other fiscal, monetary, regulatory,
          self-regulatory or other authority or agency. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Mortgage</B>&#148; means the
first preferred mortgage in respect of the Collateral Vessel to be granted by the
Subsidiary Guarantor in favour of the Security Trustee. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Obligatory
Insurances</B>&#148; means, in relation to the Collateral Vessel, any policy or contract
of insurance and any entry in a protection and indemnity or war risks association which
are now or may hereafter be taken out or effected by or on behalf of the Subsidiary
Guarantor pursuant to Clauses 6.1, 6.2 and 6.4 herein or the provisions of any other
Finance Document in respect of the Collateral Vessel or its increased value, Earnings or
profits, and all the benefits thereof including all claims thereunder and returns of
premium. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Policy</B>&#148; means, in
relation to the Obligatory Insurances, any binder, contract, slip, note, certificate of
entry, record or any other document evidencing the contract of the Obligatory Insurance or
its terms. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Required Insurance
Amount</B>&#148; means, in respect of the Collateral Vessel, an aggregate amount equal to
not less than the greater of the Market Value of the Collateral Vessel and 110 per cent of
the Outstandings, pro rata in respect of the Collateral Vessel. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Requisition
Compensation</B>&#148; means any monies or other compensation receivable from any
government (whether civil, military or de facto) or public or local authority in relation
to the Collateral Vessel or any part thereof in the event of its requisition for title,
confiscation, restraint, detention, forfeiture or compulsory acquisition or seizure or
requisition for hire (to the extent that a total loss occurs during such requisition for
hire) by or under the order of any such government or public or local authority. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Security Period</B>&#148;
means the period beginning on the date of Mortgage and ending on the date upon which the
Security Trustee is satisfied that: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          none of the Finance Parties is under any obligation (whether actual or
          contingent) to make advances or provide other financial accommodation to the
          Borrower under any of the Finance Documents; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          all secured obligations (however defined in the Security Documents to which the
          Subsidiary Guarantor is a party) have been unconditionally and irrevocably paid
          and discharged in full. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;<B>Shipper</B>&#148; shall
include any person (except for the Subsidiary Guarantor or any person, firm or company
acting on its behalf) who is or becomes a party to any contract of affreightment. </FONT></P>


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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=2><B>2.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>REPRESENTATIONS AND WARRANTIES</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor makes the
representations and warranties set out in this Clause 2 and acknowledges that the Security
Trustee (for the benefit of the Finance Parties) has entered into the Security Documents
in reliance on the following: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          it is the sole, legal and beneficial owner of all of sixty-four sixty-fourth
          shares in the Collateral Vessel, free and clear of all Encumbrances except for
          Permitted Liens, the Mortgage and, if applicable, any deed of covenants; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Collateral Vessel has been registered under a Pre-Approved Flag and is in
          full compliance with such flag regulations; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Collateral Vessel is not (i) under arrest, detention or any similar action
          or (ii) in the possession of any person (other than the Collateral Vessel&#146;s
          master and/or crew); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          it has not, save for any Security Document to which it is a party, assigned or
          otherwise created any Encumbrance over its rights, title, interest in and
          benefit to any of the Earnings, the Requisition Compensation or the Obligatory
          Insurances (or any part thereof); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Collateral Vessel is insured in accordance with the provisions of Clause 6
          (<I>Obligatory Insurances</I>) and the Obligatory Insurances are valid and in
          full force and effect; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Collateral Vessel is classified to the highest classification for vessels of
          a similar type to the Collateral Vessel by a Pre-Approved Classification
          Society, free from any recommendation or requirement of such classification
          society which has not been complied with in accordance with, and in the time
          required (as extended or modified by such classification society from time to
          time) by, that classification society; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          neither its entry into, nor the performance by it of its obligations under the
          Security Documents to which it is a party shall: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               give rise to or oblige it to create any Encumbrance in favour of any person
               other than the Security Trustee; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               confer any person with the right to require either payment in respect of any
               obligation which has not matured or repayment (whether full or partial) in
               respect of any indebtedness; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               require it to withdraw the Collateral Vessel from service under, or terminate,
               any charter or contract of affreightment in respect of the Collateral Vessel; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          it and (to the best of its knowledge) its Environmental Affiliates have complied
          with the provisions of all Environmental Laws and have obtained and are in full
          compliance with all requisite Environmental Approvals except where
          non-compliance or failure to obtain Environmental Approvals does not and will
          not have a Material Adverse Effect; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          neither it nor (to the best of its knowledge) its Environmental Affiliates has
          received notice of any Environmental Claim that alleges that either it or its
          Environmental Affiliate is not in compliance with all Environmental Laws or
          Environmental Approvals, where such non-compliance has or will have a Material
          Adverse Effect; </FONT></TD>
          </TR>
          </TABLE>
          <BR>



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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=2><B>(j)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          no Environmental Claim has been made, threatened or is pending against it or to
          the best of its knowledge, its Environmental Affiliates in connection with the
          Collateral Vessel; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(k)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          there has been no Environmental Incident except where such incident does not and
          will not have a Material Adverse Effect and no person has claimed that an
          Environmental Incident has occurred in respect of the Collateral Vessel. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>3.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INSURANCE COVENANTS</B></FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor covenants
with the Security Trustee (for the benefit of the Finance Parties) that, at all times,
during the Security Period it shall: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          execute all such documents (including, without limitation, any guarantees and/or
          indemnities required by any protection and indemnity or war risks association)
          and ensure such documents remain in full force and effect and do all such things
          as may be necessary to confer the Security Trustee with the benefit of the
          Obligatory Insurances including, without limitation, at the request of the
          Security Trustee: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               notify the insurers of the Security Trustee&#146;s interest in the Collateral
               Vessel and the Obligatory Insurances by notices in the forms set out in the
               relevant Security Documents to which it is a party; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               ensure that the Obligatory Insurances contain loss payable and, if applicable,
               notices of cancellation clauses substantially in the forms set out in the
               relevant Security Documents to which it is a party (or in such form as may be
               approved from time to time, in writing, by the Security Trustee); </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly upon effecting the Obligatory Insurances, give written notice to the
          Security Trustee stating the full particulars (including, without limitation,
          the dates and amounts of the Obligatory Insurances) thereof; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          punctually pay all premiums, calls, contributions or other sums payable in
          respect of the Obligatory Insurances and upon request by the Security Trustee
          promptly produce the receipts paid by it in respect of the Obligatory
          Insurances; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          within thirty days following a request by the Security Trustee (such request not
          to be made more than once in any calendar year unless additional insurances have
          been effected pursuant to Clause 4(h) <I>(Operational Covenants</I>)), provide
          the Security Trustee with a detailed report signed by an independent and
          reputable firm of marine insurance brokers or consultants appointed by it and
          approved by the Security Trustee detailing the Obligatory Insurances and stating
          that, in the reasonable opinion of such firm, the Obligatory Insurances are
          adequate, each such report to be prepared at the expense of the Subsidiary
          Guarantor if the Security Trustee has reasonable grounds for inquiring about the
          adequacy of such Obligatory Insurances, but otherwise at the expense of the
          Security Trustee; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not alter materially or agree to any material alteration of any of the
          Obligatory Insurances without the prior written consent of the Security Trustee
          or consent or agree to any act or omission which might invalidate or render
          unenforceable any of the Obligatory Insurances in whole or in part or waive any
          of its rights under or in respect of any of the Obligatory Insurances; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          cause the Approved Brokers and the managers of any protection and indemnity or
          war risks association in which the Collateral Vessel may be entered: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to hold to the order of the Security Trustee in accordance with customary market
               practice the originals of all Policies (and the benefit of such Obligatory
               Insurances) and upon request deliver certified copies of the same to the
               Security Trustee; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to deliver to the Security Trustee a letter or letters of undertaking in the
               form customarily provided by the relevant protection and indemnity club in a
               form acceptable to the Security Trustee together with a copy of the club&#146;s
               certificate of entry (if the relevant protection and indemnity club has
               confirmed that it will deliver the same); and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               in the event that the Collateral Vessel enters United States of America waters
               (or the territorial waters of any other country which requires special
               certification) to provide to the Security Trustee with such evidence as the
               Security Trustee may reasonably require that the Collateral Vessel has a valid
               and current certificate of financial responsibility for pollution by oil and/or
               any other Environmentally Sensitive Material issued by the relevant certifying
               authority in relation to the Collateral Vessel; </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly notify the Security Trustee:</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               if any underwriter, insurance company or protection and indemnity or war risks
               association cancels any of the Obligatory Insurances or ceases to be
               underwriters for any purpose whatsoever in connection with that Obligatory
               Insurance; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               of any material alteration to any of the Obligatory Insurances or any failure to
               pay any premium, call, contribution or other amounts due or any failure to renew
               any of the Obligatory Insurances (other than entry in a protection and indemnity
               association) at least seven days before the expiry of that Obligatory Insurance
               and one day before expiry of the entry in the protection and indemnity
               association; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               of any other act, omission or event of which would or might render invalid or
               unenforceable any of the Obligatory Insurances in whole or in part; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(h</B>) </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, without the prior written consent of the Security Trustee, settle,
          compromise or abandon any claim, give notice of abandonment in respect of the
          Collateral Vessel under any of the Obligatory Insurances other than a claim
          under protection and indemnity insurance or, so long as no Event of Default
          shall have occurred and be continuing, a claim of less than $5,000,000 (or the
          equivalent thereof in any other currency) arising otherwise than out of a total
          loss of the Collateral Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          do all things necessary and provide all documents, evidence and information to
          the Security Trustee to enable the Security Trustee to collect or recover any
          moneys which may at any time, become payable in respect of any of the Obligatory
          Insurances; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(j)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          in the case of the Obligatory Insurances in respect of protection and indemnity
          risks, provide for all moneys payable thereunder arising out of a claim to be
          paid in accordance with a loss payable clause in the relevant form set out in
          the relevant Security Document to which it is a party, and pay or settle, in
          full, any liability to which a claim relates or, as the case may be, reimburse
          any relevant insured which has settled that claim; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(k)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          ensure that all payments made to the Security Trustee (or such person as the
          Security Trustee may direct) by or on behalf of the insurers under any of the
          Obligatory Insurances shall be made without any set-off, counterclaim,
          deductions or condition whatsoever; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(l)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not do (or permit to be done) or omit to do any act or thing which would or
          might enable the cancellation of any of the Obligatory Insurances or render any
          of the Obligatory Insurances invalid, void, voidable or unenforceable or render
          any sum paid under any of the Obligatory Insurances repayable in whole or in
          part; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(m)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          take all necessary action and comply with all requirements which may from time
          to time be applicable to the Obligatory Insurances, and ensure that the
          Obligatory Insurances are not made subject to any exclusions or qualifications
          without the Security Trustee&#146;s prior written consent, such consent not to
          be unreasonably delayed or withheld; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(n)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not make any changes relating to the classification, classification society,
          manager or operator of the Collateral Vessel without the prior written consent
          of the insurers and the Security Trustee other than in accordance with clause 19
          (<I>Covenants</I>) of the Credit Facility Agreement; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(o)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if the Collateral Vessel is trading to the United States of America, during such
          time, make all quarterly or other voyage declarations which may be required by
          the protection and indemnity risks association in respect of the Collateral
          Vessel in order to maintain cover for such trading to the United States of
          America and the Exclusive Economic Zone (as defined in the United States Oil
          Pollution Act 1990 or any other applicable legislation) in respect of the
          Collateral Vessel; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(p)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not do any act nor voluntarily suffer nor permit any act to be done whereby any
          of the Obligatory Insurances shall or may be suspended or avoided (in whole or
          in part) and it shall not without obtaining the prior written consent of the
          relevant insurers and the Security Trustee employ or allow the employment of the
          Collateral Vessel otherwise than in conformity with the terms and conditions of
          the Obligatory Insurances. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>4.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>OPERATIONAL COVENANTS</B></FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor covenants
with the Security Trustee (for the benefit of the Finance Parties) that, at all times,
during the Security Period it shall: </FONT></P>


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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          maintain the registration of the Collateral Vessel under a Pre-Approved Flag or
          under such other flag as may be approved by the Security Trustee, in writing,
          such approval not to be unreasonably withheld or delayed, and it shall not cause
          or permit to be done any act or omission whereby the registration of the
          Collateral Vessel at any one time would or might be defeated or imperilled;</FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not knowingly cause or permit the Collateral Vessel to be operated in any manner
          or employed in any trade or business contrary to or unlawful under the laws,
          regulations, treaties and conventions (and all rules and regulations issued
          thereunder) from time to time applicable to the Collateral Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          maintain and preserve, at its own expense, the Collateral Vessel in a seaworthy
          condition and in good working order and repair (ordinary wear and tear excepted)
          and in such condition to ensure that the Collateral Vessel is free of
          recommendation or requirement which has not been complied with within any time
          limit specified by such person (as such requirement or recommendation may be
          extended or modified from time to time) or, if no such time limit is specified,
          as soon as reasonably practicable; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          comply with all laws, regulations and requirements (statutory or otherwise) from
          time to time applicable in the jurisdiction where the Collateral Vessel is
          registered and/or in the jurisdictions where the Collateral Vessel trades and/or
          is operated from and take all action as is necessary to ensure that it receives
          certification of compliance with those laws, regulation and requirements; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          submit the Collateral Vessel on a regular basis to all periodical or other
          surveys as the classification society in which the Collateral Vessel is entered
          may require and at the request of the Security Trustee provide the Security
          Trustee with copies of all classification certificates of the Collateral Vessel
          and its machinery and of all damage or survey reports issued in connection
          therewith; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly notify the Security Trustee of any substantial change in the structure
          of the Collateral Vessel or any other modification which might involve material
          alteration to the Collateral Vessel provided that it shall not without the prior
          written consent of the Security Trustee, cause or permit to be made any change
          or modification which may result in a change to the type of the Collateral
          Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly notify the Security Trustee of any change of the name or port of
          registry of the Collateral Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not cause or permit the Collateral Vessel to enter into, trade to, or within the
          territorial waters of any country where the Obligatory Insurances on the
          Collateral Vessel may be jeopardised or imperilled unless it has first taken out
          or effected, at its own cost and expense, such additional insurances as the
          Security Trustee and the relevant insurers may require and as shall be necessary
          or customary for first class ship-owners trading vessels with or within the
          territorial waters of such country and if required by the Security Trustee, it
          shall assign those insurances in favour of the Security Trustee (in form and
          substance satisfactory to the Security Trustee); </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          ensure that all repairs to or replacements of any damaged or worn or lost parts
          of equipment are effected in such manner (both as regards workmanship and
          quality of materials) so not as to diminish in any material way the value of the
          Collateral Vessel and not to remove any material part of, or any item of,
          equipment installed on the Collateral Vessel unless the part or item so removed
          is replaced by a suitable part or item which is in the same condition and value
          as or better condition and value than the part or item removed, is free from any
          Encumbrance other than in favour of the Security Trustee and becomes upon
          installation on the Collateral Vessel the property of the Subsidiary Guarantor
          and subject to the security constituted by the Mortgage or, if applicable, any
          deed of covenants to which it is a party provided, that the Subsidiary Guarantor
          or any person on its behalf may not install equipment owned by a third party
          unless the equipment can be removed without any risk of damage to the Collateral
          Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(j)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, other than those already in existence and fully disclosed to the Security
          Trustee prior to or on the date of the Credit Facility Agreement, enter into any
          agreement or arrangement whereby the Earnings may be shared or pooled with any
          other person, except with the prior written consent of the Security Trustee,
          which consent shall not be unreasonably withheld provided that the Subsidiary
          Guarantor assigns or procures that the Security Trustee obtains an assignment of
          the benefit of such Earnings in favour of the Security Trustee in form and
          substance satisfactory to the Security Trustee; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(k)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, without the prior written consent of the Security Trustee, sell, assign or
          transfer, or enter into any agreement to sell, assign or transfer, all or part
          of the Collateral Vessel to any other person other than in circumstances where
          the proceeds of such sale, assignment or transfer will be applied as
          contemplated by clause 8.2 (<I>Application of Mandatory Prepayments</I>) of the
          Credit Facility Agreement; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(l)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          (and it procures that its Environmental Affiliates shall) comply in all material
          respects with the ISM Code, all Environmental Laws, all Environmental Approvals
          and all other laws or regulations applicable to it and/or the Collateral Vessel
          including, without limitation, requirements relating to its establishment of
          financial responsibility, the management of its business and its ownership,
          operation, use and maintenance of the Collateral Vessel and its operation and/or
          its carriage of cargo except where such non-compliance does not or will not have
          an adverse effect on the value or utility of the Collateral Vessel and provide
          evidence of its compliance with such laws, regulations and/or approvals upon the
          request of the Security Trustee; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(m)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not employ or operate or allow the employment or operation of the Collateral
          Vessel in any manner contrary to any law, regulation or approval including,
          without limitation, the ISM Code in any applicable jurisdiction or in breach of
          any United States of America, European Union or United Nations sanctions; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(n)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not permit or allow to occur any discharge, release, leak, migration or other
          escape of any Environmentally Sensitive Material into the environment on, under
          or from any property owned, leased, occupied or controlled by it (including,
          without limitation, the Collateral Vessel), where such discharge, release, leak,
          migration or other escape would or might have a Material Adverse Effect; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(o)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          upon the request of the Security Trustee, conduct and complete all
          investigations, studies, sampling, audits and testings reasonably required by
          any known Environmental Incident that would or might have a Material Adverse
          Effect; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(p)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly notify the Security Trustee by an effective and prompt mode of
          communication upon receiving notice of or becoming aware of any of the following
          events: </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any circumstance or event which is or is likely to constitute a Damage
          Notification Event; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any event as a result of which the Collateral Vessel has become or might, with
               the passage of time or otherwise, become a total loss; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any requirement or recommendation made in relation to the Collateral Vessel by
               any insurer or classification society or by any competent authority which is not
               complied with within the time limit (as extended or modified by such insurer or
               classification society) and/or in the manner required by that insurer,
               classification society or competent authority; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iv)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any levy of any distress on or any arrest, condemnation, confiscation,
               requisition for title or use, compulsory acquisition, seizure, detention or
               forfeiture of the Collateral Vessel (or any part thereof), any exercise or
               purported exercise of any lien or claim on or against the Collateral Vessel, any
               Earnings or any Requisition Compensation and (save in the case of any compulsory
               acquisition or requisition for title or use in respect of the Collateral Vessel)
               procure within 30 days the release of or discharge the lien or claim on or
               against the Collateral Vessel, any Earnings or any Requisition Compensation by
               providing adequate bail, security or otherwise as the circumstances may require; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(v)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any Environmental Claim pending, or made against it or any of its Environmental
               Affiliates or in connection with the Collateral Vessel which has or will have a
               Material Adverse Effect; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(vi)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any claim for breach of the ISM Code being made against it or any of its
               Environmental Affiliates, any manager or otherwise in connection with the
               Collateral Vessel; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(vii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any other matter, event or incident, actual or threatened, the effect of which
               would or might lead to the ISM Code not being complied with in all material
               respects; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(viii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any known Environmental Incident which has or will have a Material Adverse
               Effect; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ix)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any death, sickness, injury of any third party, or any loss or damage to any
               property of any third party caused by, or in connection with, the Collateral
               Vessel (or any part thereof) which might reasonably be expected to give rise to
               a loss which constitutes a Damage Notification Event; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(x)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               any other event which might reasonably have a Material Adverse Effect on its
               ability to punctually and fully perform its obligations hereunder or under any
               of the Finance Documents; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(q)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly submit to the protection and indemnity association in accordance with
          such association&#146;s requirements such quarterly or other declarations in
          respect of cargo voyages to the United States of America and any other
          jurisdiction which requires declaration in respect of cargo voyages; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(r)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not represent to any third parties nor hold out any of the Finance Parties as
          having any operational interest in or carrying any cargo or passengers on the
          Collateral Vessel or as being in any way connected or associated with any such
          cargo or passengers or with the operation of the Collateral Vessel; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(s)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not pledge the credit of any of the Finance Parties for any maintenance,
          service, repairs, dry-docking or modification in respect of the Collateral
          Vessel or for any other purpose whatsoever; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(t)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not sell or purport to sell (save as permitted under the Credit Facility
          Agreement) or execute a bill of sale of in respect of the Collateral Vessel or
          any interest therein; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(u)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly pay and discharge or cause to be paid and discharged in full: </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               all liabilities which give or may give rise to maritime or possessory liens on
               or claims enforceable against the Collateral Vessel, any Earnings or any of the
               Obligatory Insurances; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               all taxes, assessments, governmental charges, fines, penalties, dues and other
               amounts due and payable in respect of the Collateral Vessel, any Earnings or any
               of the Obligatory Insurances; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               all other outgoings whatsoever in respect of the Collateral Vessel. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>5.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>MAINTENANCE OF
SECURITY COVENANTS</B></FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor covenants
with the Security Trustee (for the benefit of the Finance Parties) that, at all times,
during the Security Period it shall: </FONT></P>



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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          do everything necessary under all
applicable laws for the purpose of perfecting the Security Documents and maintaining the
Collateral Vessel as a good and valid security including, without
limitation, at all times:  </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               keep on board the Collateral Vessel together with the Collateral Vessel&#146;s
               papers, a certified copy of the Mortgage, any mortgage book or other document of
               record as may be required by law to be kept on board the Collateral Vessel and
               cause to be recorded therein or thereon the particulars relating to the Mortgage
               or any other document as may be required by law and exhibit the same to the
               Security Trustee (including its representatives and nominees) and any person
               having a legal interest in or any business arrangement in connection with the
               Collateral Vessel; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               place and keep prominently in the chart room and in the master&#146;s cabin of
               the Collateral Vessel a framed notice printed in plain type of such size that
               the paragraph of reading matter shall cover a space not less than six inches
               wide and nine inches high reading as follows: </FONT></TD>
               </TR>
               </TABLE>
               <BR>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A383></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF MORTGAGE </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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B></B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               <B>This vessel is subject to a first priority mortgage in favour of Nordea Bank </B> <B>Finland
Plc, New York Branch, as security trustee. Under the terms of the said </B> <B>first
priority mortgage neither the owner nor any master nor any charterer of </B> <B>the vessel
nor any other person has the right, power or authority to create, </B> <B>incur or permit
to be placed on the vessel any lien whatsoever other than for </B> <B>the crew&#146;s
wages or salvage.&#148;; </B>and</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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               ensure that the interest of the Finance Parties in the Collateral Vessel is duly
               noted and/or recorded to the maximum extent permitted by applicable law with the
               registry where the Collateral Vessel is registered; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          promptly (and in any event within 45 days of the relevant event) replace any
          notice as referred to in Clause 5(a)(ii) above that becomes illegible, lost,
          damaged or destroyed for any reason; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, without the prior written consent of the Security Trustee, abandon (save in
          the case of extreme inclement weather) the Collateral Vessel or any part
          thereof; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, without the prior written consent of the Security Trustee (which consent
          shall not be unreasonably withheld or delayed), let or agree to let the
          Collateral Vessel (or any part thereof) on demise charter (excluding, for the
          purposes of this clause, any Bareboat Charters); </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, without the prior written consent of the Security Trustee (which shall not
          be unreasonably withheld), appoint any person to act as manager of the
          Collateral Vessel other than in accordance with clause 19 (<I>Covenants</I>) of
          the Credit Facility Agreement; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          do all such acts and execute all such documents as may be reasonably required by
          the Security Trustee to ensure the payment to the Security Trustee of any
          Requisition Compensation and any other moneys owed to the Subsidiary Guarantor
          in respect of any requisition for use or hire of the Collateral Vessel by or on
          behalf of any government or other authority; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not cause or permit the Collateral Vessel to be employed in any manner which
          will or may render it liable to confiscation, forfeiture, seizure, condemnation
          or destruction or any other similar action; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          take all reasonable steps necessary to prevent any threatened arrest, detention,
          seizure, condemnation or any other similar action of the Collateral Vessel and
          to prevent any material risk of forfeiture of the Collateral Vessel and/or any
          risk of criminal liability to any of the Finance Parties by the adequate
          provision of bail, security or otherwise as the circumstances may require; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          not, without the prior written consent of the Security Trustee, save for any
          Security Document to which it is a party, assign, charge, mortgage or otherwise
          create (or concur in the creation of or permit to exist) any Encumbrance (in
          part or in whole) other than Permitted Liens over the Collateral Vessel, the
          Requisition Compensation, the Obligatory Insurances or the Earnings. </FONT></TD>
          </TR>
          </TABLE>
          <BR>



<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-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=2><B>6.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>OBLIGATORY INSURANCES</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6.1 </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Subsidiary Guarantor shall ensure that the Collateral Vessel is, at all times, during
the Security Period, insured against: </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(a)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               fire and marine risks (including hull and machinery, hull interest and freight
               interest insurance) and war risks in an amount equal to at least the Required
               Insurance Amount; and </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               protection and indemnity risks (including pollution and Excess Risks) in
               accordance with usual practice for a &#147;full entry&#148; in respect of the
               full value and full tonnage of the Collateral Vessel, </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B></B> </FONT></TD>
               <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               such insurance to be expressed in an Approved Currency and arranged through the Approved
Brokers and to be on such terms and with such insurers or insurance companies (or, in the
case of war risks and protection and indemnity risks, such war risk or protection and
indemnity associations) as may be approved, in writing, by the Security Trustee from time
to time (such approval not to be unreasonably withheld or delayed).</FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2>6.2 </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Subsidiary Guarantor shall effect and maintain oil pollution insurance cover in
respect of the Collateral Vessel in an amount equal to US$1,000,000,000 in respect of each
incident (such insurance shall include cover taken out or effected under Clause 6.1
insofar as insurance risks are concerned) or where (in the reasonable opinion of an
Instructing Group, which shall take into consideration the price at which such cover can
be effected) such insurance cannot be obtained in the international insurance market
following due diligence (other than where the absence of available cover is caused by a
history of accidents and/or spillage in respect of the Collateral Vessel and/or the
Subsidiary Guarantor) such insurance shall be in an amount equal to at least
US$500,000,000 in respect of each incident (or such other amount as may be agreed by the
Instructing Group). </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>6.3 </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
If the Subsidiary Guarantor fails to take out or maintain any Obligatory Insurance
required to be effected by it pursuant to the provisions of Clauses 6.1 and 6.2, the
Security Trustee, for and on behalf of the Subsidiary Guarantor, may (but shall not be
obliged to) effect any such insurance (without prejudice to any other right of the
Security Trustee arising hereunder or under any other Finance Document) and the Subsidiary
Guarantor will on demand promptly pay to the Security Trustee the amount of any payment
made in connection therewith, together with interest thereon at the rate and in the manner
specified in clause 23.2 (<I>Default Rate</I>) of the Credit Facility Agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>6.4 </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Without prejudice to the Subsidiary Guarantor&#146;s continuing obligations under this
Clause 6, it shall, at least seven days before the expiry of any Obligatory Insurances
(other than entry in a protection and indemnity association) and at least one day before
the expiry of any entry in the protection and indemnity association (or within such
shorter period as the Security Trustee may from time to time agree) taken out or effected
by it or on its behalf in respect of the Collateral Vessel confirm, in writing, to the
Security Trustee that the same has been renewed in accordance with the terms hereunder and
promptly provide certified copies of the terms and conditions of the renewal. </FONT></TD>
</TR>
</TABLE>
<BR>

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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=2>6.5 </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Without prejudice to Clause 3(h) (<I>Insurance Covenants</I>), provided that no Event of
Default shall have occurred and be continuing, the Subsidiary Guarantor may settle or
compromise a claim arising out of any event or circumstance which does not constitute a
total loss or a Damage Notification Event of or in respect of the Collateral Vessel.
Further, where in accordance with Clause 5(f) (<I>Maintenance of </I> <I>Security
Covenants</I>) any Requisition Compensation has been paid to the Security Trustee (to the
extent that it is entitled to retain the same) the Security Trustee shall, provided that
the Subsidiary Guarantor is in compliance with its obligations under the Transaction
Documents to which it is a party, release such proceeds to the Subsidiary Guarantor. </FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>7.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>BAREBOAT CHARTER INSURANCE</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor agrees that
if the Collateral Vessel is subject to a Third Party Bareboat Charter or other demise
charter, it shall procure that: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the relevant bareboat charterer of the Collateral Vessel complies, in a manner
          satisfactory to the Security Trustee, in all respects with the provisions of
          Clause 6 (<I>Obligatory Insurances</I>) in respect of the Obligatory Insurances
          relating to the Collateral Vessel; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the relevant bareboat charterer assigns to the Security Trustee all of its
          rights, title, interest in and benefit to the insurances taken out or effected
          by it or on its behalf relating to the Collateral Vessel upon terms satisfactory
          to the Security Trustee. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>8.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CHANGES TO OBLIGATORY INSURANCES</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If following a review of the
Obligatory Insurances, the Security Trustee determines that such Obligatory Insurances are
inadequate to protect the Finance Parties&#146; interest in the Collateral Vessel by
reason of changes to the insurance market (other than changes permitted hereunder) having
regard to comparable insurances effected by owners and operators of vessels of a similar
type and age to the Collateral Vessel, the Security Trustee may by notice to the
Subsidiary Guarantor require the Subsidiary Guarantor, at its own cost and expense, to
promptly take such actions as in the reasonable opinion of the Security Trustee are
necessary to remedy such inadequacies. </FONT></P>


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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=2><B>9.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>APPLICATION OF INSURANCE MONEYS</B></FONT></TD>
</TR>
</TABLE>
<BR>

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<A NAME=A386></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.1 Prior to an Event of
Default </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Prior to the occurrence of an Event
of Default which is continuing, the proceeds of any claim under any of the Obligatory
Insurances (other than in respect of a total loss or a Damage Notification Event) shall be
applied, in full, by the Subsidiary Guarantor in or towards making good the loss or damage
in respect of which such proceeds have been paid (and in the event that the proceeds of
any claim are received by the Security Trustee, such proceeds (provided that the
Subsidiary Guarantor is not in breach of any of its obligations under any Finance Document
to which it is a party) shall be paid by the Security Trustee to the Subsidiary Guarantor
in reimbursement of moneys expended by it for such purpose upon providing evidence
satisfactory to the Security Trustee that such sums have been or are to be applied for
such purpose). </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.2 After the occurrence of an Event of Default</FONT></P>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon the occurrence of an Event of
Default which is continuing, the Subsidiary Guarantor shall ensure that the proceeds of
any claim in respect of protection and indemnity insurance shall be paid directly by the
relevant insurers to the person to which the liability covered by such insurance was
incurred. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A387></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9.3 General </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Without prejudice to the terms of
clause 8.2 (<I>Application of Mandatory Prepayments</I>) of the Credit Facility Agreement,
all monies held, received or recovered by the Security Trustee, as a consequence of a
total loss or a Damage Notification Event in respect of the Collateral Vessel or an Event
of Default shall be applied by the Security Trustee in accordance with the provisions of
clause [ ] of the Security Trust Deed. </FONT></P>


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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=2><B>10.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SUBSIDIARY GUARANTOR&#146;S CONTINUING OBLIGATIONS</B></FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notwithstanding anything contained in
this Schedule 10: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Subsidiary Guarantor shall remain liable under each charter and each
          contract of affreightment in respect of the Collateral Vessel to perform all the
          obligations assumed by it thereunder; and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Security Trustee shall not be obliged: </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to assume or be under any obligation in any manner to perform or fulfil any
               obligations (including making any payments) of the Subsidiary Guarantor or any
               of its Environmental Affiliates under or pursuant to any charter or contract of
               affreightment in respect of the Collateral Vessel; </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(ii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to enforce against any charterer or Shipper any term or condition of any charter
               or contract of affreightment in respect of the Collateral Vessel; or </FONT></TD>
               </TR>
               </TABLE>
               <BR>

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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=2>&nbsp;</FONT></TD>
               <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(iii)</B> </FONT></TD>
               <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
               to make any enquiries as to the nature or sufficiency of any payment received by
               the Security Trustee. </FONT></TD>
               </TR>
               </TABLE>
               <BR>


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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=2><B>11.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>PROVISION OF INFORMATION</B></FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor agrees that
it shall, at all times, during the Security Period: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          provide the Security Trustee with any information regarding the Collateral
          Vessel (including, without limitation, the employment, the position and the
          engagements of the Collateral Vessel) as reasonably requested by the Security
          Trustee together with details of the Earnings, payments and amounts due to the
          master and crew, all towages and salvages and copies of all contracts for the
          employment of or any other matters concerning the Collateral Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          provide to the Security Trustee on request copies of the classification
          certificates of the Collateral Vessel and all machinery, damage and/or survey
          reports on the Collateral Vessel and of any charter and any contract of
          affreightment entered into by or on behalf of it in respect of the Collateral
          Vessel; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          (i) ensure that the Security Trustee, its surveyors and/or other persons
          appointed by it will be permitted upon giving reasonable notice (and so as not
          to interrupt the trade of the Collateral Vessel) to board and have full and
          complete access to inspect the Collateral Vessel, its cargo and its logs; and </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          keep full, proper and up-to-date books of account in respect of the Collateral
          Vessel, or procure that the managers of the Collateral Vessel do so, and permit
          the Security Trustee upon giving reasonable notice to inspect, copy and make
          extracts from the same, or procure that the said managers do so, and provide
          evidence satisfactory to the Security Trustee that the wages and allotments and
          the insurance, tax (including PAYE) and pension contributions of the master and
          crew are being promptly and regularly paid in such amounts as required to fully
          discharge any due and payable liabilities. </FONT></TD>
          </TR>
          </TABLE>
          <BR>


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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=2><B>12.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SECURITY TRUSTEE POWERS</B></FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Upon the occurrence of any Event of
Default which is continuing, the Security Trustee shall be entitled (and the Subsidiary
Guarantor agrees that the Security Trustee shall be so entitled), without notice or
further demand, to immediately exercise all the powers and remedies conferred on it under
such documents and in accordance with applicable law as mortgagee and chargee of the
Collateral Vessel including, without limitation, the right: </FONT></P>

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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=2><B>(a)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to take possession of the Collateral Vessel and exercise all the rights and
          powers of a mortgagee; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(b)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to recover and collect all freights, passage moneys, remuneration for salvage or
          towage services, hire moneys and all other income or earnings then due or to
          become due to the Subsidiary Guarantor in respect of the Collateral Vessel and
          to give a good receipt therefor on behalf of the Subsidiary Guarantor; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(c)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to require that all Policies relating to any of the Obligatory Insurances
          (including details of and correspondence concerning outstanding claims) be
          delivered to such adjusters and/or brokers and/or other insurers as the Security
          Trustee may nominate; </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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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=2><B>(d)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to collect, recover, compromise and give a good discharge for all claims then
          outstanding or thereafter arising under any of the Obligatory Insurances and to
          take over or institute or pursue all proceedings in connection therewith (as the
          Security Trustee in its absolute discretion thinks fit) and to permit the
          Approved Brokers through whom collection or recovery is effected to charge and
          retain the usual brokerage therefor; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(e)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to recover, defend, discharge, compound, release or compromise claims including,
          without limitation, those which (i) have given or may give rise to any charge or
          lien on the Collateral Vessel, (ii) have priority over the Mortgage or (iii) are
          or may be enforceable by proceedings against the Collateral Vessel; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(f)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to sell the Collateral Vessel or any share therein (whether as mortgagee,
          attorney-in-fact for the Subsidiary Guarantor or otherwise), with or without the
          benefit of any charter or other engagement, by public auction or private
          contract, at any place in the world, with or without advertisement (but in the
          case of a sale by private contract, the Security Trustee shall give prior
          notification thereof to the Subsidiary Guarantor), for cash, on credit or
          otherwise and upon such terms as the Security Trustee in its absolute discretion
          may determine with the power to postpone any sale and to execute legal bills or
          bills of sale in respect of a sale and without being answerable for any loss
          incurred by any sale or resulting from any postponement thereof unless such loss
          has occurred due to the gross negligence or wilful misconduct of the Security
          Trustee, and at any public sale to purchase the Collateral Vessel and to set off
          the purchase price of the Collateral Vessel against the secured obligations
          (howsoever defined in the Mortgage or, as the case may be, any deed of
          covenants); </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(g)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          to manage and, for such purpose, to appoint and/or remove any manager of the
          Collateral Vessel and to insure the Collateral Vessel on such terms and with
          such insurers and against such risks as the Security Trustee may in its absolute
          discretion think fit, and to maintain and repair the Collateral Vessel and to
          hold, lay up, lease, charter, operate or otherwise use the Collateral Vessel in
          such manner and for such period as the Security Trustee in its absolute
          discretion deems expedient and to do all acts and things incidental or conducive
          thereto in all respects as if the Security Trustee were the owner of the
          Collateral Vessel without being responsible for any loss thereby incurred unless
          such loss has occurred due to the gross negligence or wilful misconduct of the
          Security Trustee; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(h)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          order the Collateral Vessel to proceed forthwith at the Subsidiary
          Guarantor&#146;s risk and expense to a port or place nominated by the Security
          Trustee and require the Subsidiary Guarantor to give the necessary instructions
          to the master and/or crew of the Collateral Vessel to comply with any such
          instructions of the Security Trustee and if the Subsidiary Guarantor fails to
          give such instructions for any reason whatsoever the Security Trustee shall have
          the right and power to give such instructions directly to the master and/or
          crew; </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=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>(i)</B> </FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          recover from the Subsidiary Guarantor on first demand, all losses, expenses,
          payments and disbursements (including, without limitation, legal fees) incurred
          reasonably<B> </B>by the Security Trustee in respect of or, incidental to the
          exercise by it of any of its powers under the Mortgage or, as the case may be,
          the Deed of Covenants together with interest thereon at the rate as set out in
          clause 23.2 (<I>Default Rate</I>) of the Credit Facility Agreement from the date
          when such losses, expenses, payments or disbursements (including, without
          limitation, legal fees) were incurred by the relevant Finance Party until the
          date of reimbursement whether before or after judgment. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Notwithstanding the terms of this
Clause 12, the Security Trustee shall be under no duty to enquire as to the sufficiency of
any payment received by it in relation to the Collateral Vessel or to take any action to
recover amounts due or to enforce its rights and powers in relation thereto. </FONT></P>


<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-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=2><B>13.</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>ENVIRONMENTAL INDEMNIFICATION</B></FONT></TD>
</TR>
</TABLE>
<BR>


<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Subsidiary Guarantor shall
defend, indemnify and hold harmless each of the Finance Parties and any of its employees,
agents, officers and directors from and against any claims, demands, penalties,
disbursements, fines, liabilities, settlements, damages, costs or expenses of whatever
kind or nature, known or unknown (including, without limitation, legal fees), contingent
or otherwise, arising out of or in any way related to Environmentally Sensitive Material
in, transported, stored or carried upon or forming a part of or discharge from the
Collateral Vessel or in relation to any Environmental Laws, Environmental Approvals or
Environmental Claims. </FONT></P>

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

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<A NAME=A391></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATORIES </FONT></H1>
<BR>


<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<A NAME=A392></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE PARENT GUARANTOR </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<A NAME=A393></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY SHIPPING
CORPORATION </FONT></P>

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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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<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=2>THE ORIGINAL BORROWER</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TEEKAY NORDIC HOLDINGS
INCORPORATED</FONT></P>


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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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<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=2>THE BOOKRUNNER</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH</FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>HANS KJELSRUD</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          437 Madison Avenue<BR>New York, NY 10022<BR>USA</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 421 4420</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Hans Chr. Kjelsrud</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 318 9634</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          hans.kjelsrud@nordea.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<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=2>THE LEAD ARRANGERS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH</FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>HANS KJELSRUD</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          437 Madison Avenue<BR>New York, NY 10022<BR>USA</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 421 4420</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Hans Chr. Kjelsrud</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 318 9634</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          hans.kjelsrud@nordea.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DNB NOR BANK ASA</FONT></P>


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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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>ASTRID PRESTNES NORDTORP</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Stranden 21<BR>0250 Oslo<BR>Norway</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
           + 47 22 48 20 20</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Astrid Prestnes Nordtorp</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          + 47 22 94 91 29</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          astrid.prestnes.nordtorp@dnbnor.no</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<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=2>THE ADMINISTRATIVE AGENT</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH </FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>HANS KJELSRUD</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          437 Madison Avenue<BR>New York, NY 10022<BR>USA</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 421 4420</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Hans Chr. Kjelsrud</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 318 9634</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          hans.kjelsrud@nordea.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<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=2>THE SECURITY TRUSTEE</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDEA BANK FINLAND PLC,
NEW YORK BRANCH </FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>HANS KJELSRUD</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          437 Madison Avenue<BR>New York, NY 10022<BR>USA</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 421 4420</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Hans Chr. Kjelsrud</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 212 318 9634</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          hans.kjelsrud@nordea.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<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=2>THE SUBSIDIARY GUARANTORS</FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NAVION STAVANGER L.L.C.</FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC MARITA L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC SVENITA L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC SAVONITA L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>



<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC TORINITA L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC YUKON L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC TROLL &amp; TRYM
L.L.C.</FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FALSTER SPIRIT L.L.C.</FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>POUL SPIRIT L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SENANG SPIRIT L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TORBEN SPIRIT L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SAMAR SPIRIT L.L.C.</FONT></P>


<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC BRASILIA L.L.C.</FONT></P>

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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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDIC SPIRIT L.L.C.</FONT></P>

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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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>



<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PETROATLANTIC L.L.C.</FONT></P>

<!-- 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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<BR>
<BR>
<BR>
<BR>
<BR>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PETRONORDIC L.L.C. </FONT></P>

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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=2><B>By:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>GREG ROMANIUK</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=2><B>Address:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          c/o Teekay Shipping (Canada) Ltd.<BR>Suite 2000<BR>Bentall 5<BR>550 Burrard Street<BR>Vancouver<BR>British
Columbia V6C 2K2<BR>Canada</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=2><B>Attention:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          Director, Finance</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=2><B>Fax:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 681 3011</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=2><B>Telephone:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          +1 604 683 3529</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=2><B>Email:</B> </FONT></TD>
          <TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          greg.romaniuk@teekay.com</FONT></TD>
          </TR>
          </TABLE>
          <BR>
<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=2>THE LENDERS </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORDEA BANK NORGE ASA,
GRAND CAYMAN BRANCH </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>HANS CHR. KJELSRUD</B></FONT></P>

<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DNB NOR BANK ASA </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ASTRID PRESTNES
NORDTORP</B></FONT></P>
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>HSBC BANK PLC </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ADAM BYRNE</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ING BANK N.V. </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PAUL BROSNAHAN</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>HUGH BAKER</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->

<BR>
<BR>
<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<A NAME=A499></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DANISH SHIP FINANCE
(DANMARKS SKIBSKREDITFOND) </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ERIK I. LASSEN</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>CHRISTIAN BEHNKE</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>



<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEUTSCHE SCHIFFSBANK
AKTIENGESELLSCHAFT </FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>MALTE SCHULTE-TRUX</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>LARS BOHLIG</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>


<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DRESDNER BANK AG IN
HAMBURG</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>DOROTHEE MILEWSKI</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>D. QIAN</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>

<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FOKUS BANK ASA</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>BENT R. EIDEM</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>

<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LANDESBANK
HESSEN-TH&Uuml;RINGEN GIROZENTRALE</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NORBERT SCHUSTER</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NEIL HENNESSY</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>

<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>LLOYDS TSB BANK PLC</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>DAVID SUMMER</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ANTHONY STEVENS</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>

<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NIB CAPITAL BANK N.V.</FONT></P>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>J. L. NIEUWENHUISEN</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>C. MULDER</B></FONT></P>
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<!-- MARKER FORMAT-SHEET="Head Major Left Bold-TNR" FSL="Project" -->
<BR>
<BR>
<BR>


<BR>
<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE ROYAL BANK OF
SCOTLAND PLC</FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>ROBERT JAMES MANNERS</B></FONT></P>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCOTIABANK EUROPE PLC</FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>DAVID SPARKES</B></FONT></P>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VEREINS- UND WESTBANK AG</FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NICOLINI HELFER</B></FONT></P>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE GOVERNOR AND COMPANY
OF THE BANK OF IRELAND </FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>JOHN HARTIGAN </B></FONT></P>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SKANDINAVISKA ENSKILDA BANKEN AB
(PUBL.) </FONT></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>BEARTE B E</B></FONT></P>
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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>PER FR LICH</B></FONT></P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>form20fexhibit_suppagreement.htm
<DESCRIPTION>EXHIBIT - SUPPLEMENTAL AGREEMENT
<TEXT>
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<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DATED 30 September 2004 </FONT></H1>
<BR>
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<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NORSK TEEKAY HOLDINGS
LTD<BR>(as borrower)</FONT></H1>

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<A NAME=A005></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; and &#151; </FONT></H1>

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<A NAME=A006></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DNB NOR BANK ASA<BR>(as arranger)</FONT></H1>

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<A NAME=A008></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; and &#151; </FONT></H1>

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<A NAME=A009></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE SEVERAL BANKS<BR>(as banks)</FONT></H1>

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<A NAME=A011></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#151; and &#151; </FONT></H1>

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<A NAME=A012></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DNB NOR BANK ASA <BR>(as facility agent and
security trustee)</FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECOND SUPPLEMENTAL
AGREEMENT TO <BR>A SECURED REDUCING
REVOLVING LOAN<BR>FACILITY AGREEMENT DATED
26 JUNE 2003<BR>AS AMENDED BY A FIRST
SUPPLEMENTAL AGREEMENT<BR>DATED 17 NOVEMBER 2003<BR></FONT></H1>

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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>One, St Paul's Churchyard<BR>London EC4M 8SH<BR>Telephone
+44 (0)20 7329 4422<BR>Fax +44 (0)20 7606 0822<BR>DX No. 64 Chancery Lane<BR><U>www.shlegal.com</U></FONT></P>

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<P ALIGN="Left"><FONT FACE="Times New Roman, Times, Serif" SIZE=3><B>STEPHENSON HARWOOD</B></FONT></P>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CONTENTS </FONT></H1>

<PRE>
                                                                                                            <B>Page</B>
<BR>
1        Interpretation.......................................................................................2


2        Conditions...........................................................................................3


3        Representations and Warranties.......................................................................6


4        Amendments to Loan Agreement.........................................................................6


5        Confirmation and Undertaking........................................................................10


6        Communications, Law and Jurisdiction................................................................10


7        Miscellaneous.......................................................................................10

Schedule 1...................................................................................................11
            The Banks........................................................................................11

Schedule 2...................................................................................................14
            The Vessels......................................................................................14

</PRE>
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<A NAME=A022></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SUPPLEMENTAL AGREEMENT </FONT></H1>

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<A NAME=A023></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dated: 30 September 2004 </FONT></H1>

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<A NAME=A024></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BETWEEN:- </FONT></H1>

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          <TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(1)</FONT></TD>
          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>NORSK TEEKAY HOLDINGS LTD</B> which is a company incorporated according to
          the law of the Marshall Islands with its registered office at c/o Trust Company
          Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH-96960 and
          its principal place of business at TK House, Bayside Executive Park, West Bay
          Street &amp; Blake Road, Nassau, The Bahamas (the &quot;<B>Borrower</B>&quot;);
          and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the banks and financial institutions listed in Schedule 1, each acting through
          its office at the address indicated against its name in Schedule 1 (together
          &quot;<B>the Banks</B>&quot; and each a &quot;<B>Bank</B>&quot;); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>DNB NOR BANK ASA</B>, acting as facility agent and security trustee through
          its office at Stranden 21, P.O. Box 1171 Sentrum, N-0107 Oslo, Norway (in that
          capacity &quot;<B>the Agent</B>&quot;); and </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          <TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          <B>DNB NOR BANK ASA</B>, acting as arranger and underwriter through its office
          at Stranden 21, P.O. Box 1171 Sentrum, N-0107 Oslo, Norway (in that capacity
          &quot;<B>the Arranger</B>&quot;) </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>SUPPLEMENTAL TO </B>a Secured
Reducing Revolving Loan Facility Agreement dated 26 June 2003 (the &quot;<B>Original
</B>Agreement&quot;) as amended by a first supplemental agreement dated 17 November 2003
(the &quot;<B>First Supplement</B>&quot; and together with the Original Agreement the
&quot;<B>Loan Agreement</B>&quot;) each made between the Borrower, the Banks and others
(the &quot;<B>Original Banks</B>&quot;), the Arrangers (as defined therein) and the Agent
(in its former name of Den norske Bank ASA), on the terms and subject to the conditions of
which each of the Original Banks made available to the Borrower its respective Commitment
of an aggregate principal amount not exceeding five hundred and fifty million Dollars
($550,000,000) (the &quot;<B>Facility</B>&quot;). </FONT></P>

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<A NAME=A025></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>WHEREAS:- </FONT></H1>

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          The Borrower wishes to restructure the Facility to enhance the financial
          flexibility of the Guarantor and the Borrower and has requested the consent of
          the Banks to such restructuring. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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          The Banks, the Arranger and the Agent have agreed to consent to such
          restructuring and have agreed to amend the Loan Agreement accordingly on the
          terms and subject to the conditions contained in this Supplemental Agreement. </FONT></TD>
          </TR>
          </TABLE>
          <BR>

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<A NAME=A026></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IT IS AGREED THAT:- </FONT></H1>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Interpretation</B></FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.1</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In this Supplemental Agreement:-</FONT></TD>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Confirmation
Deed</B>&quot; means a deed of amendment and confirmation to be signed by the Guarantor in
respect of the Guarantee in form and substance satisfactory to the Agent. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Effective
Date</B>&quot; means the date on which the Agent confirms to the Borrower that all of the
conditions referred to in Clause 2.1 have been satisfied, which confirmation the Agent
shall be under no obligation to give if an Event of Default or Potential Event of Default
shall have occurred. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Intercompany
Agent</B>&quot; means DnB NOR Bank ASA in its capacity as agent under the Intercompany
Loan Amendment and Restatement and the Intercompany Loan Agreement (as redefined in clause
4.1.5 hereof). </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Intercompany
Loan Amendment and Restatement</B>&quot; means the amendment and restatement of the
Intercompany Loan Agreement made or to be made between the Borrower, the Purchaser and the
Intercompany Agent on terms acceptable to the Majority Banks. </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=2>
&quot;<B>Navion
Clipper Mortgage Transfer</B>&quot; means the transfer of the Bahamas ship mortgage over
m.v. &quot;NAVION CLIPPER&quot; in favour of the Intercompany Agent and the Borrower
executed or to be executed in favour of the Agent. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Navion
Saga Mortgage Transfer</B>&quot; means the transfer of the Bahamas ship mortgage over m.v.
&quot;NAVION SAGA&quot; in favour of the Intercompany Agent and the Borrower executed or
to be executed in favour of the Agent. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>New
Guarantees</B>&quot; means the guarantees to be granted by the Vessel Owners in favour of
the Intercompany Agent. </FONT></TD>
</TR>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>New
Security Documents</B>&quot; means together this Supplemental Agreement, the New
Guarantees, the Confirmation Deed and the Qualifying Security Assignment. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>the
Qualifying Mortgages</B>&quot; means the first priority statutory ship mortgages over the
Vessels together with deeds of covenants collateral thereto to be granted by the Vessel
Owners in favour of the Intercompany Agent (or, in the case of the mortgages and deeds of
covenant for &quot;NAVION CLIPPER&quot; and &quot;NAVION SAGA&quot; only, in favour of the
Intercompany Agent and the Borrower) (each a &quot;<B>Qualifying Mortgage</B>&quot;). </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Qualifying
Security Assignment</B>&quot; means the deed of assignment of the Qualifying Security
Documents to be executed by the Borrower, the Vessel Owners and the Intercompany Agent in
favour of the Agent. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Qualifying
Security Documents</B>&quot; means together the New Guarantees and the Qualifying
Mortgages. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Trust
Deed</B>&quot; means the deed made or to be made between the Borrower and the Intercompany
Agent setting out the terms and conditions upon which the Intercompany Agent will hold the
Qualifying Security; </FONT></TD>
</TR>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Vessel
Owners</B>&quot; means Navion Offshore Loading AS of Norway and Navion Shipping Ltd.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Vessels</B>&quot; means those vessels listed in Schedule 2, each of which is owned by a Vessel Owner.</FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.2</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All words and expressions defined in the Loan Agreement shall have the same meaning when
used in this Supplemental Agreement unless the context otherwise requires, and clause 1.2
of the Original Agreement shall apply to the interpretation of this Supplemental Agreement
as if it were set out in full.</FONT></TD>
</TR>
</TABLE>
<BR>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Conditions</B></FONT></TD>
</TR>
</TABLE>
<BR>


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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Before Clause 4 of this Supplemental Agreement shall take effect, the Borrower shall
deliver or cause to be delivered to or to the order of the Agent the following documents
and evidence:-</FONT></TD>
</TR>
</TABLE>
<BR>


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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
A certificate from a duly authorised officer of each of the Borrower and the Guarantor
confirming that none of the documents delivered to the Agent pursuant to Clauses 3.1.1 and
3.1.3 of the Original Agreement have been amended or modified in any way since the date of
their delivery to the Agent, or copies, certified by a duly authorised officer of the
Borrower or the Guarantor as the case may be as true, complete, accurate and neither
amended nor revoked, of any which have been amended or modified. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Such evidence as the Agent may reasonably require that each Vessel Owner was duly
incorporated in its country of incorporation and remains in existence and, where
appropriate, in good standing, with the power to enter into, and perform its obligations
under the Qualifying Security Documents including (without limitation) a copy, certified
by a director, officer or the secretary of the Vessel Owner in question as true, complete,
accurate and unamended, of all documents establishing or limiting the constitution of such
Vessel Owner. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.3</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
A copy, certified by a director, officer or the secretary of each of the Borrower, the
Guarantor and the Vessel Owners as true, complete, accurate and neither amended nor
revoked, of a resolution of its directors and, where required, a resolution of the
shareholders (together, where appropriate, with signed waivers of notice of any
directors&#146; or shareholders&#146; meetings) approving, and authorising or ratifying
the execution of, those of the New Security Documents and the Qualifying Security
Documents to which the Borrower, the Guarantor or the relevant Vessel Owner (as the case
may be) is or is intended to be a party and all matters incidental thereto. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.4</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
A certificate signed by a duly authorised officer of each of the Borrower, the Guarantor
and each Vessel Owner setting out the names of its directors, officers and shareholders
together (where appropriate) with an official certificate of good standing or equivalent
certificate in respect of each issued by its company registry. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.5</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The power of attorney, notarially attested and legalised where required, of each of the
Borrower, the Guarantor and each Vessel Owner under which any documents are to be executed
or transactions undertaken by it. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.6</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Qualifying Security Assignment duly executed and all notices of assignment to be
issued pursuant thereto, duly executed and served on the relevant recipients and duly
acknowledged where appropriate. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.7</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Navion Clipper Mortgage Transfer and the Navion Saga Mortgage Transfer each duly
executed and registered with the Bahamas Maritime Authority in London together with a
transcript of the register in respect of each of m.v. &quot;NAVION CLIPPER&quot; and m.v.
&quot;NAVION SAGA&quot; evidencing due registration of the relevant Qualifying Mortgages
in favour of the Agent. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.8</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 The Confirmation Deed duly executed by the Guarantor.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.9</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 The Intercompany Loan Amendment and Restatement duly executed by all parties thereto
together with written confirmation from the Intercompany Agent that all conditions
precedent referred to therein have been satisfied. </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.10</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 The Trust Deed duly executed by the parties thereto.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.11</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 Payment  to the  Agent on behalf  of each of the  Banks of a  restructuring  fee as separately agreed.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.12</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 The documents and evidence listed in clause 3.4 (other than those listed in clauses 3.4.1
and 3.4.2) of the Original Agreement in relation to the Vessels.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.13</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 The originals of the Qualifying Security Documents duly executed and registered delivered
to the Agent.</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.14</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 Confirmation of the Shares Charge and the Assignment.</FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1.15</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 Confirmation satisfactory to the Agent that all legal opinions required by the Agent on
behalf of the Finance Parties will be given in substantially the form required by the
Agent.</FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The Borrower undertakes to deliver or to cause to be delivered to the Agent, on or as soon
as practicable after the Effective Date, the following additional documents and evidence:-</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 The  documents and evidence  listed in clause 3.5 of the Original  Agreement in relation to the Vessels; and</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 Such legal opinions as the Agent shall require.</FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All documents and evidence delivered to the Agent pursuant to this Clause shall:-</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 be in form and substance acceptable to the Agent;</FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 be  accompanied,  if  required  by the  Agent,  by  translations  into the  English language, certified in a manner acceptable to the Agent;</FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3.3</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 if required  by the Agent,  be  certified,  notarised,  legalised  or attested in a manner acceptable to the Agent.</FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Representations and
Warranties</B></FONT></TD>
</TR>
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<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Each
of the representations and warranties contained in clause 4 of the Original Agreement as
amended by the First Supplement (other than that contained in Clause 4.6) shall be deemed
repeated by the Borrower at the date of this Supplemental Agreement and at the Effective
Date (in addition to the dates on which they are deemed repeated under the Original
Agreement), by reference to the facts and circumstances then pertaining, as if references
to the Security Documents included the New Security Documents and as if references to the
Intercompany Loan Agreement included the Intercompany Loan Amendment and Restatement. </FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Amendments to Loan Agreement</B></FONT></TD>
</TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
With effect from the Effective Date the Loan Agreement shall be read and construed as though:-</FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the definitions set forth in Clause 1.1 of this Supplemental Agreement were incorporated
in clause 1.1 of the Original Agreement in alphabetical order and any existing definitions
renumbered accordingly;</FONT></TD>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the definition of &quot;<B>Qualifying Security Date</B>&quot; contained in clause 1.1 of
the Original Agreement and throughout the Loan Agreement were deleted; </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.3</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the definition of &quot;<B>Margin</B>&quot; set forth in Clause 1.1 of the Original
Agreement were deleted and replaced with the following:- </FONT></TD>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;<B>Margin</B>&quot;
means sixty five basis points (65bps) per annum.&quot;</FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.4</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the definition of &quot;<B>Security Documents</B>&quot; set forth in clause 1.1 of the
Original Agreement included the New Security Documents but excluded the Cash Call
Guarantee; </FONT></TD>
</TR>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.5</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the definition &quot;<B>Intercompany Loan Agreement</B>&quot; set forth in clause 1.1 of
the Original Agreement referred to the Intercompany Loan Agreement as amended and restated
by the Intercompany Loan Amendment and Restatement. </FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.6</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
clause 7.2 of the Original Agreement were deleted and replaced with the following:-</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;7.2
<B>Commitment Commission</B> The Borrower shall pay to the Agent Commitment Commission in
Dollars at the rate of thirty five basis points (35bps) per annum on any undrawn and
uncancelled part of the Facility. The Commitment Commission will accrue from day to day on
the basis of a 360 day year and the actual number of days elapsed and shall be paid
quarterly in arrears from the Effective Date until the Commitment Termination Date with a
pro rata payment being due and payable on the Commitment Termination
 Date.&quot;</FONT></TD>
</TR>
</TABLE>
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<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.7</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
clause  10.1.1  of the  Original  Agreement  were  deleted  and  replaced  with the following:-</FONT></TD>
</TR>
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<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&quot;10.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>no third party rights</B> without the Majority Banks prior written consent create or
permit to arise or continue any Encumbrance on or over all or any part of the Vessels or
their Earnings or Insurances except for Permitted Liens or Encumbrances arising in
connection with the financing of the organic compound equipment provided on a non-recourse
basis to the Borrower (the &quot;VOC Equipment&quot;); nor&quot;-</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.8</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the definitions of Minimum Rating, Qualifying Security, Cash Call Amount, Cash Call
Guarantee, Permitted Borrowings and NIBD, clauses 10.1.2, 10.1.4, 10.1.5, 10.2.3, 10.3,
10.4, 10.5, 10.6 and 10.7, together with Schedule 3, of the Original Agreement were
deleted; </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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.9</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the reference in the last line of clause 10.2.3 of the Original Agreement to &quot;Clause
10.3&quot; were amended to read &quot;Clause 10.4&quot;; </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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.10</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the following new clauses were inserted in the Loan Agreement:-</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=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&quot;10.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Valuations </B>Deliver to the Agent a Valuation of each of the Vessels on the due date
for delivery of the financial statements of the Guarantor and on such other occasions as
the Agent may reasonably request.</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=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.4</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Guarantor&#146;s Financial Covenants</B> At any time during the Facility Period, the
Borrower shall procure that:-</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the Guarantor maintains Free Liquidity of not less than one hundred million
          Dollars ($100,000,000); 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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
the aggregate of the Guarantor&#146;s Free Liquidity and undrawn committed
          revolving credit lines (excluding undrawn committed revolving credit lines with
          less than 6 months to maturity) shall not be less than seven point five per cent
          (7.5%) of the Total Debt.</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=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Dividends</B> Provided that the Intercompany Indebtedness shall at all times be equal
to or greater than the Indebtedness and no Event of Default has occurred and is continuing
the Borrower may:-</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5.1</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
pay  any  dividends  or  make  any  other   distributions   to shareholders;</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.5.2</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
make any loan or other  similar  financial  support  available
to any third party or any member of the Navion 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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Intercompany Loan</B> Once every six months, and on the written request of the Agent,
the Borrower shall deliver a certificate to the Agent confirming the amount outstanding
under the Intercompany Loan Agreement, which shall at all times be at least equal to the
aggregate of the Facility Outstandings and all unpaid interest, costs and expenses
hereunder.</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=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Drawdown Notice</B> The form of drawdown notice attached as Schedule 5 of the Loan
Agreement shall be modified by adding an extra paragraph as follows:</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=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD WIDTH=80%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
We hereby represent and warrant that, immediately following the advance of the Drawing
referred to in this Drawdown Notice, the amount outstanding under the Intercompany Loan
Agreement shall be equal to or greater than the Facility Outstandings.&quot;</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.11</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
a new clause 12.2.18 were inserted as follows:-</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&quot;12.2.18
<B>Intercompany Loan Agreement</B> if any default (other than on the part of the
Intercompany Agent) occurs under the Intercompany Loan Agreement or if the Intercompany
Agent is removed (or steps are taken to try to remove it) from its position as agent
thereunder or if the Borrower (i) obstructs the Intercompany Agent from performance of its
delegated duties or (ii) attempts to revoke the authority and discretion it has granted to
the Intercompany Agent, under clause 10.3(b) of the Intercompany Loan Agreement&quot;.</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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.1.12</FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 the  Commitments  and  Proportionate  Shares of the Banks  shall be  amended to the
                                amounts and percentages set out in Schedule 1.</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>5</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Confirmation and Undertaking</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%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.1</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In consideration of the agreement of the Banks and the Agent contained in this
Supplemental Agreement, the Borrower confirms that all of its obligations under or
pursuant to each of the Security Documents to which it is a party remain in full force and
effect, despite the amendments to the Loan Agreement made in or pursuant to this
Supplemental Agreement, as if all references in any of the Security Documents to the Loan
Agreement (however described) were references to the Loan Agreement as amended and
supplemented by this Supplemental Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.2</FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The definition of any term defined in any of the Security Documents shall, to the extent
necessary, be modified to reflect the amendments to the Loan Agreement made in or pursuant
to this Supplemental Agreement.</FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>6</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Communications, Law and Jurisdiction</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=2>
The
provisions of clauses 16 and 19 of the Original Agreement shall apply to this Supplemental
Agreement as if they were set out in full and as if references to the Loan Agreement were
references to this Supplemental Agreement. </FONT></TD>
</TR>
</TABLE>
<BR>


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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=2><B>7</B></FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
<B>Miscellaneous</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=2>
Clauses
17.7, 18.2, 18.20 and 18.21 of the Original Agreement shall (mutatis mutandis) apply to
this Supplemental Agreement. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>IN WITNESS </B>of which the
parties to this Supplemental Agreement have executed this Supplemental Agreement the day
and year first before written. </FONT></P>
<BR>
<BR>
<BR>
<BR>
<BR>
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<A NAME=A037></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Schedule 1 </FONT></H1>

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<A NAME=A038></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Banks </FONT></H1>
<PRE>
<B>The Banks</B>                                         <B>The Commitments</B>          <B>The Proportionate Shares (%)</B>

Citibank N.A.                                      $34,166,666.67                     7.45%
33 Canada Square
London E14 5LB
Fax: +44 207 500 5806
Attention: Processing Unit, Loans

DnB NOR Bank ASA                                   $86,666,666.63                    18.91%
Stranden 21
P.O.Box 1171 Sentrum
N-0107 Oslo
Norway
Fax no:  +47 22 482894
Attention: Credit Administration, Shipping

Nordea Bank Norge ASA                              $31,666,666.67                     6.91%
P.O.Box 1166 Sentrum
0107 Oslo
Norway
Fax no: +47 22 484 278
Attention: International Loan Administration

The Governor and Company                           $31,666,666.67                     6.91%
of the Bank of Scotland
Marine Finance Group
Corporate Banking
New Uberior House
11 Earl Grey Street
Edinburgh EH3 9BN
Fax no: +44 131 659 0387
Attention: Douglas Newton

Fortis Capital Corp                                $31,666,666.67                     6.91%
Three Stamford Plaza
301 Tresser Boulevard
Stamford, CT06901
United States of America
Fax no: +1 203 705 5896
Attention: Shipping Department

HSBC Bank plc                                      $31,666,666.67                     6.91%
8 Canada Square
London
E14 5HQ
Fax no: +44 207 991 4895
Attention: Transport &amp; Logistics, Shipping Corporate, Investment Banking and Markets

ING Bank N.V.                                       $31,666,666.67                    6.91%
Weena 501
3000 DA Rotterdam
The Netherlands
Fax no: +00 3110 444 6879
Attention: Betty Van der Ploeg

Lloyds TSB Bank plc                                 $31,666,666.67                    6.91%
Structured Asset Finance
25 Gresham Street
London
EC2V 7HN
Fax no: +44 207 356 2398
Attention: Head of Ship Finance

Scotiabank Europe Plc                              $31,666,666.67                     6.91%
33 Finsbury Square
London
EC2A 1BB
Fax no:+44 207 454 9019
Attention: Robyn Harrington/David Stuart

Skandinaviska Enskilda Banken AB (publ)            $31,666,666.67                     6.91%
8 Kungstradgardsgatan
106 40 Stockholm
For administration matters:
Fax no: +47 2282 7006
Attention: Anne Geelmugden
KV 108 FCA
Fax no: +46 8611 0384
Attention: Shafi Quraishi
For credit matters:
Rosenkratz Gate 22
No-0123 Oslo
Norway
Fax no: +47 2282 7104
Attention: Per Olav Bucher-Johannessen

Calyon                                             $22,500,000                       4.91%
For administration matters:
9. Quai, du President Paul Doumer F-92400
92920 Paris La Defense Cedex
France
Fax no: +33 141 89 1934
Attention: Middle Office/Shipping/Mr A. Souto/M. Godet-Couery
For credit matters:
122 Leadenhall Street
London EC3V 4QH
Fax no: +44 207 894 2307
Attention: Daniel Quirk/Marc Etcheberry

HSH Nordbank AG                                    $22,500,000                       4.91%
Gerhardt-Hauptmann-Platz 50,
D-20095 Hamburg
Federal Republic of Germany
Fax no: +49 431 900 34307
Attention: Franke Hay

NIB Capital Bank N.V.                              $22,500,000                       4.91%
Carnegieplein 4, 2517 KJ, The Hague
PO Box 380, 2501 BH The Hague
The Netherlands
Fax no: +31 70 342 5577
Attention: Transportation &amp; Energy

Vereins-und Westbank AG                         $14,166,666.67                       3.09%
Alter Wall 22
D-20457 Hamburg
Federal Republic of Germany
Fax no: +49 40 3692 3696
Attention: Ms Eike Wilde

</PRE>
<BR>
<BR>
<BR>
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<A NAME=A061></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Schedule 2 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold 1-TNR" FSL="Default" -->
<A NAME=A062></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Vessels </FONT></H1>
<PRE>
<B>Vessel</B>                                               <B>Flag</B>                  <B>Vessel Owner</B>
NAVION CLIPPER                                       Bahamas               Navion Offshore Loading AS
NAVION NORVEGIA                                      NOR                   Navion Offshore Loading AS
NAVION EUROPA                                        NOR                   Navion Offshore Loading AS
NAVION BRITANNIA                                     NOR                   Navion Offshore Loading AS
NAVION SCANDIA                                       NOR                   Navion Offshore Loading AS
NAVION HISPANIA                                      NOR                   Navion Offshore Loading AS
NAVION OCEANIA                                       NOR                   Navion Offshore Loading AS
NAVION ANGLIA                                        NOR                   Navion Offshore Loading AS
NAVION SAGA                                          Bahamas               Navion Offshore Loading AS
NAVION SCOTIA                                        NIS                   Navion Offshore Loading AS
NAVION DANIA                                         NIS                   Navion Shipping Ltd
</PRE>
<BR>
<BR>
<BR>
<BR>
<PRE>
<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>NORSK TEEKAY HOLDINGS LTD</B>                            )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>CITIBANK N.A.</B> (as a Bank)                            )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>DNB NOR BANK ASA</B> (as a Bank)                         )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>NORDEA BANK NORGE ASA</B> (as a Bank)                    )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>THE GOVERNOR AND COMPANY OF</B>                          )
<B>THE BANK OF SCOTLAND</B> (as a Bank)                     )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>FORTIS CAPITAL CORP</B> (as a Bank)                      )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>HSBC BANK PLC</B> (as a Bank)                            )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>ING BANK N.V.</B> (as a Bank)                            )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>LLOYDS TSB BANK PLC</B> (as a Bank)                      )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>SCOTIABANK EUROPE PLC</B> (as a Bank)                    )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>SKANDINAVISKA ENSKILDA</B>                               )
<B>BANKEN AB</B> (publ) (as a Bank)                         )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>CALYON</B>                                               )
(as a Bank) in the presence of:-                     )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>HSH NORDBANK AG</B> (as a Bank)                          )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>NIB CAPITAL BANK N.V.</B> (as a Bank)                    )
in the presence of:-                                 )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>VEREINS-UND WESTBANK AG</B>                              )
(as a Bank) in the presence of:-                     )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>DNB NOR BANK ASA</B>                                     )
(as the Arranger) in the presence of:-               )



<B>SIGNED</B>                                               )
by                                                   )
duly authorised                                      )
for and on behalf of                                 )
<B>DNB NOR BANK ASA</B>                                     )
(as the Agent) in the presence of:-                  )

</PRE>




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